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Oral Answers to Questions
(10 years, 4 months ago)
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Diana Johnson (Kingston upon Hull North) (Lab)
1. What assessment he has made of the effectiveness of sentencing policy in tackling the problem of violent and extreme online pornography.
The Minister for Policing, Criminal Justice and Victims (Damian Green)
Offenders convicted of possession of extreme pornographic images, including violent pornographic images, face a custodial sentence of up to three years. Sentencing in individual cases is at the discretion of the courts. Although there are only a small number of convictions for that offence each year, I believe that it is effective in tackling the proliferation of these images.
Diana Johnson
Is not the problem that existing legislation on violent pornography has been too narrowly interpreted, with only 310 prosecutions in the past three years? Rape Crisis South London has said that there is evidence of the easy availability of serious sexual violence on rape porn sites. I know that the Government are about to ban realistic rape porn online, but not staged child rape scenes. Why not, as the Prime Minister promised, bring online and offline in line?
Damian Green
We agree with the hon. Lady’s underlying point that the current offence is too narrow. That is why we are legislating to extend the terms of the existing offence to criminalise the possession of images depicting rape and other non-consensual penetrative sexual activity. As she knows, we introduced provisions in the Criminal Justice and Courts Bill to criminalise the possession of such images, and those provisions received broad cross-party support at the Commons Committee stage. I hope that she and those on the Opposition Front Bench will continue to welcome that.
Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)
When considering sentencing policy for those guilty of observing or engaging in violent behaviour, will the Minister reconsider the Department’s policy of moving violent offenders such as Michael Wheatley to open prisons like Standford Hill in Kent? He will be aware of a pattern of absconding that has taken place in Ford open prison in my constituency, including by Derek Passmore and Paul Flint, both of whom were convicted of murder, and one of whom had already absconded from an open prison.
Damian Green
I am sure that many Members across the House will share my hon. Friend’s concern about people absconding. As we have heard, the number of people absconding from open prisons has, of course, gone down, but I hope he is reassured that we are in the process of making the conditions for those sent to open prison tougher, both in qualifying to go to open prisons, and in the punishments received for breaking the terms.
Jeremy Lefroy (Stafford) (Con)
2. What assessment he has made of the consequences of the establishment of the new single family court for the operation of the justice system; and if he will make a statement.
The Minister of State, Ministry of Justice (Simon Hughes)
The family justice review produced recommendations that were implemented on 22 April, producing the largest ever change in the family justice system in our lifetime, and I pay tribute to all those from the president of the family division downwards who delivered that. The purpose was to have a single united family court that can sit anywhere with any level of judge, to ensure that cases are dealt with more quickly in the interests of children and families, and that children’s needs are always put first in all family proceedings.
Jeremy Lefroy (Stafford) (Con)
I thank my right hon. Friend for that answer. Will he explain how the reforms that he is taking through at the moment will ensure that cases, particularly those involving the most vulnerable children, will be dealt with efficiently, quickly and justly?
Simon Hughes
There are two major changes that will lead to a speedier and more just outcome, particularly for children. The first is a requirement that all cases involving care proceedings will be dealt with in 26 weeks, or half a year—only a couple of years ago, it was double that—and if there has to be an exception in the interests of justice, that will be made. Secondly, experts’ reports will not be commissioned and take up a huge amount of time unless that is necessary in the interests of the child. The process will be speedier, and children will have certainty much more quickly, as will their families and local authorities.
Ian Lucas (Wrexham) (Lab)
But is not the Minister aware that the withdrawal of legal aid in family cases has caused a massive increase in litigants in person, which will undercut and undermine any move towards shorter times for dealing with these cases? The Government have undercut and undermined their own policy, and strangled it at birth.
Simon Hughes
That is very easy rhetoric from the hon. Gentleman, but the evidence does not support it. The evidence is that there were always litigants in person in the family courts, and the time it is taking for cases outside the public system to be dealt with has not fundamentally changed. They take on average between 16 and 18 weeks now, as they did before. In addition, legal aid has been retained for most of the important issues. In particular, legal aid is available for people to be assessed for mediation, and for mediation. For those who go to mediation, seven out of 10 have a successful outcome, which means that they do not need to contest their matrimonial matters in the court.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
The single court is a good idea, and I am pleased that the Government are taking it forward, but a considerable body of evidence from solicitors who specialise in family law suggests that judges are under huge pressure to allow contact too early in cases, even in those with safeguarding issues such as alcohol abuse and violence. How will the Minister make sure that family courts are closely monitored to ensure that vulnerable children are not put at unnecessary risk?
Simon Hughes
I respect the right hon. Gentleman’s expertise in this area. I was speaking to the court in Cardiff about these issues only on Thursday last week. One protection is that the 26-week norm can be extended in the interests of justice in every case. Secondly, from the president downwards, there is a regular review of exactly what is happening. There will be report backs, as well as a public report back to Parliament on a regular basis, and regular reviews to make sure that vulnerable children in the sort of families he describes are not put at risk. The whole purpose is to ensure that fewer children are at risk and more children are protected and cared for better.
Hugh Bayley (York Central) (Lab)
3. With reference to the statement by the Under-Secretary of State for Justice in Westminster Hall on 12 March 2013, Official Report, column 30WH, that his Department would facilitate a meeting between people from York and others with the university of Leicester to discuss the arrangements for reburial of the mortal remains of King Richard III, when that meeting will take place and which Minister or official from his Department will attend it.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
As the hon. Gentleman will be aware, arrangements for the meeting were put on hold in the light of litigation brought by the Plantagenet Alliance Ltd. The judicial review was heard by the Administrative Court on 13 and 14 March, and I look forward to receiving its judgment.
Hugh Bayley
I understand the reason for the delay, but it is self-evident to me that a decision about the burial of a former Head of State of this country should be taken by the Government of the day, not delegated—as in the case of King Richard III—to archaeologists at Leicester university. Will the Secretary of State give the House an assurance that when the sub judice rule has passed, he will consult widely—including with those from the north of England who believe that King Richard should be reburied in York—before taking a final decision on the basis of advice about where the burial should take place?
Kevin Brennan (Cardiff West) (Lab)
A hearse, a hearse, my kingdom for a hearse!
Mr Speaker
Order. The issue is not sub judice. There are ministerial decisions involved, but there is no question of sub judice. I also appeal to the House for a degree of calm and restraint. We are discussing the burial of the mortal remains of a former monarch, to which fact, Mr Brennan, you should pay obeisance.
Chris Grayling
You are quite right, Mr Speaker, that these issues are not sub judice. Of course, it is hardly surprising that the hon. Member for York Central (Hugh Bayley) is a keen advocate for the city he represents, but I shall not pass further comment on this matter before the court judgment is reached.
Jonathan Ashworth (Leicester South) (Lab)
I am the hon. Member for Leicester, and I am a keen advocate for my city. Will the Secretary of State confirm that the dig for Richard III was well advertised, and the relevant licence granted by the Ministry of Justice was very specific that, should Richard be found, his remains should be buried in Leicester?
Chris Grayling
We are hearing the divisions in the House about an important strategic issue. I fear that I shall stick with my position that it would not be appropriate for me to comment further until the court case has reported.
Mr David Amess (Southend West) (Con)
4. What steps he has taken to protect legal aid for vulnerable people.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
One of the key objectives of the reform of legal aid is to improve its sustainability to make sure it remains available to protect vulnerable people. Legal aid continues to be available in cases where people’s life or liberty are at stake; where they are at risk of serious physical harm, or immediate loss of home; or where their children may be removed.
Mr Amess
The pursuit of justice can be an extremely expensive matter. Everyone understands that the economic times we live in mean that there have to be constraints on legal aid, but will my right hon. Friend assure me that he is engaging with the legal profession on the implementation of the reforms?
Chris Grayling
I give my hon. Friend that assurance. We shall continue to look at the impact of the changes we have put in place. It is not our intention to disadvantage the most vulnerable in our society. We have taken a number of steps in the reforms to protect them and we will continue to review the changes we have made to understand their impact.
Mr David Hanson (Delyn) (Lab)
Now that a Cameron appears to have woken up to the impact of legal aid cuts and refused to take part in a trial last week because of a lack of defence, will the Secretary of State review that case and that judgment and tell the House how many cases he expects to be stayed as a result of legal aid cuts? What conditions does he have in place to ensure that those whose cases are stayed have a proper trial?
Chris Grayling
I fear this may be a repeat performance. That case is now subject to appeal, and it would not be appropriate for me to comment before the appeal hearing is held.
Mr David Ruffley (Bury St Edmunds) (Con)
The Secretary of State will be aware of the recent case of a triple murderer who sued the Ministry of Justice for more than £800 because of alleged damage to his personal effects, including a nose hair clipper that went missing. Was legal aid allowed for the prisoner to bring that case? If so, was it a good use of taxpayers’ money?
Chris Grayling
I can reassure my hon. Friend that while I share his revulsion, the availability of legal aid was not a part of that case. The reforms we have put in place mean that prisoners cannot access legal aid for such cases, or indeed for a wide range of cases relating to conditions in the prisons they are kept in. I do not believe the taxpayer should be funding such court cases.
Ms Margaret Ritchie (South Down) (SDLP)
In Northern Ireland, leading lawyers and the Law Society have stated that the cuts handed down by Westminster and implemented by the Justice Minister will severely hinder the public’s ability to access the justice system. What discussions has the Secretary of State had with his ministerial counterpart in Northern Ireland on the impact of this policy?
Chris Grayling
I have indeed discussed legal aid funding pressures with my counterpart in Northern Ireland, who said to me that he faces similar challenges in balancing a tough budget. The reality is that we all face difficult financial challenges and we sometimes have to take difficult decisions to meet them.
Mr Andy Slaughter (Hammersmith) (Lab)
The Secretary of State is taking legal aid from vulnerable people and imposing a residence test that would not have been met by the women at Yarl’s Wood detention centre sexually assaulted by guards, the family of Jean Charles de Menezes, the Gurkhas refused entry to the UK, or care home residents such as those in Winterbourne View or on the recent “Panorama” programme. Which of those would he be most proud to leave without help or representation?
Chris Grayling
Of course, these changes do not affect the support we provide at inquests. My challenge to the Opposition is this: they have yet to give us any clear answers on how they would bring down the cost of legal aid. They campaigned at the previous general election for reductions in legal aid costs. They continue to oppose the difficult changes we have made, but offer no alternative suggestions.
Sheila Gilmore (Edinburgh East) (Lab)
5. What assessment he has made of the consequences for future decisions by employment and support allowance tribunals of the provision by the judiciary to the Department for Work and Pensions and appellants of reasons for their decisions in appeals.
The Minister of State, Ministry of Justice (Simon Hughes)
I appreciate the hon. Lady’s interest in this subject. Last year, a pilot scheme was introduced in four places around the country where employment and support allowance appeals had the summary reasons issued at the time of the appeal judgment. This was extended in March across the country in relation to all ESA and personal independence payment appeals. There is no current plan to make a further assessment, but the Ministry of Justice supports fully what is a Department for Work and Pensions initiative.
Sheila Gilmore
I thank the Minister for that answer, but this is a hugely important issue for many individuals who face great stress and anxiety in going through the appeal processes. Will the Minister not commit to evaluating both the pilots and the ongoing process properly, so we can understand fully whether they are working and whether further improvements are needed?
Simon Hughes
We shall of course watch what happens. We expect the process to be extended this year to many other forms of appeal in the social security system. The evidence will show whether it informs people and we do not have as many appeals in the future because the decisions will have been got right in the first place. The level of appeals that she highlighted in a question on a previous occasion—nearly 45%—will then disappear. My objective is to get decisions right in the first place. The stress to which she refers should be removed from many people. They should not need to have to go to appeal to get the right decision.
Stephen Mosley (City of Chester) (Con)
One of the biggest problems that I face as a constituency Member of Parliament is the time that it takes for ESA appeals to go ahead. It is good news that the delay has been reduced from an average of 23 weeks to 18, but what is the Minister doing to ensure that appeals speed up even more in the future?
Simon Hughes
Members on both sides of the House will have shared my hon. Friend’s experience, which is principally a matter for my colleagues in the Department for Work and Pensions. It will certainly be helpful if the right decisions are made more often in the first place, but we must ensure that tribunals, particularly the Social Security Appeals Tribunal, have enough resources to be able to deal with cases as soon as possible after receiving the information that they require. Often the problem is collecting the data that will enable an appeal to be heard. The present situation is not acceptable, and we need to reduce the delay between initial decisions and appeals.
Dr Julian Huppert (Cambridge) (LD)
The Ministry of Justice faces large costs as a result of appeals against decisions made but by not just the DWP but the Home Office. Ensuring that the right decisions were made would save the MOJ a huge amount of money. Will my right hon. Friend consider applying the “polluter pays” principle, so that the Department that has caused an excessive number of appeals pays some of the MOJ’s costs? That would give Departments an incentive to make the right decisions.
Simon Hughes
My hon. Friend has mentioned that idea to me before, and I find it attractive. I have not had a formal discussion about it with the Secretary of State, but I imagine that he may instinctively find it attractive as well. We certainly expect our colleagues in other Departments to make decisions correctly, and not to incur costs that will be borne by our Department, and hence by the taxpayer, by getting those decisions wrong. I shall willingly engage in discussions with my right hon. Friend the Secretary of State, and with other Departments that ought to be bearing the burden of decisions that they got wrong in the first place.
Glyn Davies (Montgomeryshire) (Con)
6. What his policy is on ensuring that legal aid is targeted at people with a strong connection to the UK.
David Mowat (Warrington South) (Con)
10. What his policy is on ensuring that legal aid is targeted at people with a strong connection to the UK.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
The Government believe that individuals should have a strong connection with the UK in order to benefit from the civil legal aid scheme, and we consider the residence test that we propose to be a fair and appropriate way in which to demonstrate that connection.
Glyn Davies
Will my right hon. Friend put an end to the availability of legal aid in relation to cases brought in the United Kingdom irrespective of any connection with this country, which encourages people to bring their disputes here?
Chris Grayling
I very much agree with my hon. Friend, although I do not think that Labour Members do, judging by the noises that they have been making. I think that the position is very simple. Our taxpayers pay the costs of civil legal aid, and I do not believe that people should be able to come to this country and have immediate access to our civil legal aid system. The test that we propose is designed to change that. I find it interesting that it is being challenged in court, but I am determined that British taxpayers should not be required to pay for legal aid for people who have no right to it because they have not earned it.
David Mowat
According to a written answer that I was given recently, two firms of lawyers that specialise in suing active servicemen, Public Interest Lawyers and Leigh Day, have received £10 million in legal aid in the last three years, and the Ministry of Defence has subsequently spent many more millions on defending those cases. No other country in the world would pay lawyers to sue its own army. When we will stop doing so?
Chris Grayling
My proposed residence test would mean that such cases were no longer possible. I think it important for there to be restraints on our legal aid system. I personally find some of the things that we have read about the inquiry into the cases brought as a result of action in Iraq extremely disturbing. I have asked my officials to examine in great detail what has happened, and to consider whether there are appropriate actions for us to take.
Jeremy Corbyn (Islington North) (Lab)
Will the Lord Chancellor think for a moment about the logic of his case? Surely all those who come before the courts have a right of representation, a right of access, and a right to have their cases heard. If the Lord Chancellor’s logic had been applied in the past, the Mau Mau people, who suffered the most grievous maltreatment by British armed forces in the 1950s, would never have had a chance to bring their case before the courts in this country, and would never have had any hope of securing justice.
Chris Grayling
The hon. Gentleman and I have always differed on these matters. It is important to deal with historical wrongs, but I do not believe that we should encourage British law firms to deal with cases from other parts of the world, at enormous cost to the taxpayer, when in the end—as in the case of the Iraqi situation—there are serious question marks over those cases. I think we need a system that makes our legal aid available to British people, but not to people in the rest of the world.
John Healey (Wentworth and Dearne) (Lab)
Many people with a strong connection to the UK face homelessness which is prevented only by the threat of launching judicial review proceedings. Does the Secretary of State accept that, as Shelter and other housing groups say, his changes to legal aid will make that much more difficult? Will he publish data to show the impact of the changes?
Chris Grayling
I guess it comes down to whether we believe that somebody should come to this country and make a contribution first. Our proposals exclude those who are refugees who are seeking refuge in this country, but they are set out in that way because, I think, people who come to this country should make a contribution before they can start taking money out of the state system for other means of support.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
18. Does my right hon. Friend agree that, as well as targeting legal aid on those with a strong tie to the UK, we should not make it available to those fighting weak cases that they would not pursue if they were spending their own money but will pursue if they are spending taxpayers’ money?
Chris Grayling
That issue applies particularly to judicial review. The proposals set out in the Bill currently before the House would set an appropriately high bar that will do precisely what my hon. Friend says. There must be a bona fide strong case that goes forward to the courts before the taxpayer will pay the bill.
Sadiq Khan (Tooting) (Lab)
I welcome the Justice Secretary’s reassurance, in answer to the question of my hon. Friend the Member for Hammersmith (Mr Slaughter), that families like those of Jean Charles de Menezes and Jimmy Mubenga would get legal aid at inquests even though they are not British citizens. But can he explain to the House how it is in the public interest, and somehow good, for the women at Yarl’s Wood detention centre who were sexually assaulted by guards, for the Gurkhas refused entry to the UK or for care home residents like those at Winterbourne View to be denied legal aid?
Chris Grayling
What divides us is the fact that the Government must take hard decisions. The Labour party has argued for reductions in legal aid; it had plans for reductions in legal aid in its manifesto but now, in opposition, it is trying to prevent reductions in legal aid. That is, I am afraid, another example of the Labour party saying one thing and doing another.
Mr Julian Brazier (Canterbury) (Con)
May I draw my right hon. Friend’s attention to the Select Committee report on the impact on our armed forces of this deluge of cases? May I urge him to look again at the £10 million that went to those law firms who deliberately suppressed evidence that their clients were part of a terrorist organisation?
Chris Grayling
Let us be absolutely clear: in relation to the inquiry to which my hon. Friend refers, what has happened in those cases appears to have been untoward to say the least. If the taxpayer has ended up paying a large amount of money for a case brought on a false premise, I will want to take the strongest possible action, including looking at taking financial measures against the firms involved.
Kerry McCarthy (Bristol East) (Lab)
8. What recent assessment he has made of the effect of recent changes to criminal legal aid on law firms and access to justice.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Recent changes have been made to criminal legal aid because of the imperative to make savings across the Department. We are committed to ensuring the sustainability of the changes that we are making, and to reviewing them a year after implementation of the respective new arrangements.
Kerry McCarthy
I recently met solicitors from a couple of small firms based in Bristol that deliver criminal legal aid work, and they told me that not only the 17% cut in fees over two years, but in particular the changes to the duty solicitor contract, will put them out of business. May I urge the Secretary of State to look at the smaller firms who will not be likely to win such contracts, and at the impact that will have on the representation of people who live in places such as Bristol?
Chris Grayling
We looked at these issues carefully and took two steps that I hope will help on this front. The most important step was that we are allowing those small firms to bid as consortia so that they can share contracts as long as they cover for each other to ensure the duty work is provided. We also did detailed work with external consultants to ensure that we identified how big a contract needed to be to be sustainable, so that we have sustainable contract size and the option for small firms to bid in consortia. That is the best way of delivering changes that I know are painful but, of course, were in the hon. Lady’s party’s manifesto.
Crispin Blunt (Reigate) (Con)
When my right hon. Friend is drawing comparisons about the costs of cases, will he try to make sure that the income that will be expected to accrue to the various barristers taking part in those cases is considered, rather than the totality of costs, as it can be difficult to make a sensible judgment about what is fair and unfair?
Chris Grayling
My hon. Friend is right to say that we have to be very careful. Of course the gross fees that are cited include VAT and chambers’ fees, but those barristers also derive benefits from being self-employed that counteract some of the reductions they experience, because they can offset many other parts of their expenditure and overheads against tax in a way that employed people would not be able to do.
Andy McDonald (Middlesbrough) (Lab)
How many more serious fraud trials in the pipeline are struggling to secure legal representation for the defence, in a way similar to the case that collapsed last week, where the judge was forced, in effect, to abandon the trial because of Government legal aid changes?
Chris Grayling
As I said, given that this case is subject to appeal, I do not think it would be appropriate for me to comment further on it.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
What is the Lord Chancellor going to do about the fact that senior counsel are not prepared to take on the defence roles in very complex cases, given that he has a case to put about cost saving and they have points to put about complexity? Talks will surely have to take place, and brinkmanship on either side will not serve the interests of justice.
Chris Grayling
We are taking the financial decisions we are taking for a simple imperative: we have to make an extremely difficult budget add up. We are applying the changes we are applying to those at the higher end of the income scale. I am confident that through the public defender service and other routes we will be able to meet the needs of cases, as and when they arise, and of course PDS advocates were available for these cases.
Alistair Burt (North East Bedfordshire) (Con)
Will my right hon. Friend also look at the impact on the criminal legal aid budget and access to local justice of decisions such as that made by the judicial business group in Bedfordshire to move criminal cases from Bedford magistrates courts to Luton, thus, in effect, closing the magistrates courts? The move was opposed by local lawyers, local law firms and magistrates; it was an administrative decision designed to skirt democratic accountability. Does he agree that it could have an impact on costs, which should be part of the decision-making process?
Chris Grayling
I am aware that a number of decisions of this kind are being taken by local committees. Of course such decisions can also mean civil cases moving into those same court buildings, which brings justice closer to communities in matters such as tribunal cases. I am aware of the issues in Bedfordshire to which my right hon. Friend refers. Where changes of this kind occur I have asked my Department to examine possible uses of technology, for example giving access to courts for witnesses. I know he is discussing this matter with the Minister who has responsibility for courts and will continue to do so.
Greg Mulholland (Leeds North West) (LD)
11. What assessment he has made of the adequacy of the powers of the Judicial Conduct Investigations Office.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
The Judicial Conduct Investigations Office is an independent office that supports both me and the Lord Chief Justice with our joint responsibility for judicial discipline. Following public consultation, the JCIO introduced new rules and regulations governing judicial discipline on 1 October 2013. I am satisfied that it has the appropriate powers to carry out its function effectively.
Greg Mulholland
I thank the Secretary of State for that answer. The judicial conduct cases the JCIO has examined are there for all to see, but does he share the concern of some of my constituents that where judicial misconduct has been proven there is no direct mechanism to challenge decisions made as a result of it in a court?
Chris Grayling
Clearly I would have to know about the individual cases in order to give a detailed answer to that question, but where a judge is found to have committed an act of misconduct in relation to a case, I would, of course, expect the person involved to take appropriate legal advice. My experience so far is that we have a good process that deals with these issues promptly and sensitively, and the work of the office is handled pretty well.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
12. What steps he is taking to promote literacy in prisons; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
Improving prisoners’ literacy is a key objective of education in custody. Where literacy needs are identified, prisoners are offered teaching and support as a priority. That can take place in classrooms, through peer mentoring, in libraries, at work and during other prison activities.
Tom Blenkinsop
New Government rules limit the number of books a prisoner is allowed to have at any one time to 12, which means that prisoners studying for Open university courses or other qualifications will not get hold of the required study material. Prisoners are much less likely to reoffend when they have taken educational courses, especially when they have completed them. What contingencies has the Secretary of State put in place to ensure that his rules do not undermine the educational outcomes of prisoners?
Jeremy Wright
Let me start with where I agree with the hon. Gentleman: it is undoubtedly the case that education aids rehabilitation, and where people want to engage in education we support them wherever we can. However, I should point out to him that the changes to the incentives and earned privileges scheme do not affect the number of books prisoners are allowed to have in their cells—that remains 12. Prisoners also have unrestricted access, within sensible safeguards which he would understand on the nature of books it is right to have in prisons, to the library as and when they need it. There is, therefore, no difficulty with prisoners having access to books, and where there is a specific requirement for a particular book that is not in the library, every effort is made to get the prisoner that book.
Jenny Chapman (Darlington) (Lab)
As ever, the Minister is being infuriatingly reasonable, but we do know that opportunities for purposeful activity are plummeting owing to overcrowding and falling staff numbers. That makes the ban on having books sent in to inmates all the more senseless, and the Labour party has already committed to reverse the ban. Will the Minister explain why having a ban on books being sent in to prison in any way aids rehabilitation?
Jeremy Wright
The hon. Lady is being uncharacteristically unreasonable. We are not banning prisoners having access to books. As I have just explained to the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), there really is no difficulty with prisoners having access to books. If only that were the biggest problem we face in connection with literacy in prisons, but it is not. What she must consider is whether she is really going to allow people to send into prison unrestricted packages, which, as long as they say “Books” on the outside, she will be prepared to accept at face value. If that is the case, she will have a rude awakening. This is a sensible restriction on packages coming into prison, but it is no restriction on prisoners being able to read or to study, which they can do now and will continue to be able to do.
Mr Philip Hollobone (Kettering) (Con)
13. How many foreign nationals are in prison in England and Wales; and how many such people come from (a) non-EU countries with which the UK has compulsory prisoner transfer agreements and (b) EU member states which are signatories to the EU prisoner transfer agreement?
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
As of 2 May, there were 10,516 foreign national offenders in custody. There are 798 prisoners from non-EU countries with whom we have compulsory prisoner transfer arrangements, and 4,162 from EU member states. All EU member states will be subject to the EUPTA, but 10 countries have not yet implemented it.
Mr Hollobone
All those people should be serving out their sentences in their home countries, and it is costing British taxpayers just south of £400 million a year to pay for their board and lodging. Yet in a written answer I received on 7 April, the Ministry of Justice confirmed that in the past five years, only five individuals have been compulsorily transferred to prisons in their own countries.
Jeremy Wright
My hon. Friend is absolutely right that, wherever possible, these people should be serving their sentences in their own countries. He knows, from conversations on this subject that he and I have had, that huge effort is put into ensuring that they do so, but he knows too that this is not a straightforward matter. Many of those whom we would wish to transfer back to their own countries seek to resist that transfer. That is precisely why he and I are in favour of changes in the Immigration Bill, which will make it much more difficult for prisoners repeatedly to appeal their deportation, so that they can be transferred back to their own country. He will support it, I will support it, and I hope it will shortly become law.
Mrs Emma Lewell-Buck (South Shields) (Lab)
14. What his strategy is for supporting victims of crime.
The Minister for Policing, Criminal Justice and Victims (Damian Green)
The Government are committed to providing timely and effective support to help victims of crime to cope and recover. We have implemented a new victims code that tells people what to expect at every stage of the criminal justice process. More money than ever before—up to £100 million—will be made available to provide victims with the support they need, with the majority of services commissioned locally by police and crime commissioners. We are also piloting pre-trial cross-examination to help vulnerable victims and witnesses give their best possible evidence, without subjecting them to the full atmosphere of the courtroom. The first cross-examinations were recorded last week.
Mrs Lewell-Buck
I thank the Minister for his response. He has just reiterated what he said in March, which was that the Government plans for victim support and for supporting families of pre-2010 homicide victims will be dealt with by PCCs. However, I am a little confused because in a recent letter to me, the Minister seems to suggest that that will no longer be the case. Will the Minister please clarify his new position and explain what has changed his mind?
Damian Green
Most services will be commissioned by PCCs, but I am absolutely determined that the families of pre-2010 homicide victims should not be disadvantaged in any way, which is why I have made the decision that, if necessary, there will be back-up from a national fund so that no victims will lose out.
Chris Skidmore (Kingswood) (Con)
Victims of crime, the families of Ross and Clare Simons who were tragically killed by a disqualified dangerous driver with a raft of previous convictions, would like to thank the Secretary of State for his support for their campaign, Justice for Ross and Clare—as well as Members of this House who took part in a Backbench Business debate on dangerous driving in January—as shown by his significantly increasing sentences for those who kill or maim while driving dangerously while disqualified. What will be the legislative timetable for putting those sentences into law?
Damian Green
I am grateful for the support offered by my hon. Friend for the announcement made today by my right hon. Friend the Secretary of State. The short answer to his question is the start of next year.
Dan Jarvis (Barnsley Central) (Lab)
We all want a criminal justice system with victims at its heart, but will the Minister confirm that although police reports of child abuse, domestic violence and sexual offences are all rising, the number of cases going to court is falling, that rape cases last year were up but rape convictions were down, and that some victims, including a 24-year-old woman who was sexually assaulted in Hull last March, are having to endure the agony of waiting more than a year for justice? What action will the Minister take to ensure that victims feel that the system is working for them rather than against them?
Damian Green
The Government have taken a significant number of actions. The hon. Gentleman asked about domestic violence. The Home Secretary has commissioned Her Majesty’s inspectorate of constabulary to conduct a comprehensive review, and as result of that review, she has written to every police force to seek their support for the Home Office’s strategy to address HMIC’s findings. He talks about rape victims, and he will know that the 2014 to 2016 rape support fund has provided funding to 80 rape support centres across England and Wales, and that this year the Ministry of Justice is providing funding for two extra rape support centres on top of the 13 set up since 2010.
Rehman Chishti (Gillingham and Rainham) (Con)
In relation to supporting victims of crime and their families, I am delighted that the Secretary of State has now increased the sentence for those who cause death on the road while disqualified from two years to 10 years, which formed part of my Driving Whilst Disqualified (Repeat Offenders) Bill. Linked to that, the Secretary of State said that he would review sentencing for other road traffic matters. When is that likely to start, when will it be complete and will victims be able to have a say?
Damian Green
I am grateful for the support of my hon. Friend, who has campaigned long and effectively on this matter. The actions he wishes to see are in the process of being taken now.
Mr Robert Buckland (South Swindon) (Con)
16. What plans he has to reform the criminal law in relation to child neglect.
The Minister for Policing, Criminal Justice and Victims (Damian Green)
Child cruelty is an abhorrent crime which should be punished severely. Every child should be able to grow up in a safe environment. We are considering ways in which the criminal law can most effectively support that, and we will set out our conclusions and next steps in due course.
Mr Buckland
I thank my right hon. Friend for that answer. May I urge him to introduce proposals in the next Session of Parliament that will bring the criminal law of England and Wales into line with the family law of England and Wales and recognise all types of significant abuse, including emotional abuse, which is, I am afraid, all too prevalent in the lives of many of our young children?
Damian Green
I am grateful for the information and campaigning verve that my hon. Friend has brought to this issue. As he knows, I have been speaking to Action for Children and other bodies that are campaigning on the issue and, as I said, he will have our conclusions in due course.
Mark Pritchard (The Wrekin) (Con)
17. What his policy is on the role of chaplains in prisons; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
We strongly support a vibrant and flourishing prison chaplaincy. Chaplaincy teams facilitate religious practice across the faith traditions, providing pastoral care to prisoners and staff, religious teaching and courses. Chaplaincy contributes to the deradicalisation, resettlement and rehabilitation agendas.
Mark Pritchard
Will the Minister join me in thanking all prison chaplains for the important work they do in restorative and rehabilitative justice? Will he also commit today to write to all prison governors in both the private and public sectors to remind them that the Government are committed to the chaplaincy service and that chaplains should have unfettered access to prisoners?
Jeremy Wright
I am grateful to my hon. Friend for that question and I know that he takes a considerable interest in this matter. I shall certainly consider including a reference to the chaplaincy in one of our regular communications to governors. He will know that there are in the order of 350 employed prison chaplains and many hundreds more who attend on a sessional basis. I know that they will appreciate his support and that of many other Members of this House.
Kevin Brennan (Cardiff West) (Lab)
I know that the Minister understands the important part that chaplaincies play in the provision of music education in prisons. I thank him for undertaking to meet Billy Bragg and me to talk about some of the unintended consequences, perhaps, of the new restrictions that are being put in place. Has he had a chance to look at the recent Westminster Hall debate on this subject?
Jeremy Wright
I have, and I apologise again to the hon. Gentleman that I was not able to attend the debate myself. I look forward to meeting him. He, of course, is concerned about a specific issue with regard to the types of instrument that can be kept in a prisoner’s cell, but he is right to refer to the music that is made in communal settings, including as part of religious services, which—and I entirely agree with him—contributes to rehabilitation.
Mr Gary Streeter (South West Devon) (Con)
19. How much legal aid was granted last year to non-UK citizens.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
We do not, as I discovered when I took the job, rather to my surprise, currently have data on the nationality or residence status of legal aid recipients. I think that in the future, individuals should in principle have a strong connection to the UK in order to benefit from civil legal aid.
Mr Streeter
I am grateful to my right hon. Friend for his answer. It is quite a surprise, perhaps, that we have not kept a record of that in the past, but I am very grateful to him for the changes that he has made to the residence test, which should mean that whatever figure we spent on non-nationals last year, it will be saved for the British taxpayer looking forward. My constituents will welcome that.
Chris Grayling
We hear the chuckles from the Labour party, but let us face it: I had the same experience at the Department for Work and Pensions. The reality is that, Labour opened the door to immigration on a scale we had not seen before in this country. They kept absolutely no record of where state money was going. The reality is that they mismanaged things; we are picking up the pieces.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Although it has been mentioned a couple of times, I should like to confirm to the House that we have announced today that disqualified drivers who cause death or serious injuries on the roads will face tougher sentences. Those who cause death will face up to 10 years in prison rather than the current maximum of two years, and we will also take action to address the current gap in the law for disqualified drivers who cause serious injury, by introducing a new offence that will carry a penalty of up to four years’ imprisonment. These much tougher sentences reflect the impact of these very serious offences on victims and their families. We will bring forward legislative proposals to give effect to these important changes as soon as possible. We will also launch a full review of all driving offences and penalties, to ensure that people who endanger lives and public safety are properly punished.
The majority of Members of the House will support the changes. I pay tribute to the determined work of Mandy Stock and her local MP, my hon. Friend the Member for Gloucester (Richard Graham), in bringing this important matter to the public’s attention.
Michael Connarty
Mr Speaker, you probably noticed that the Secretary of State did not answer the question, which was about the responsibilities of his Department. It was a statement. If he had outlined his responsibilities, I might have asked him, as I will anyway, why, when I ask him and his Department what his priorities are for provisions to contribute to the Modern Slavery Bill, which is under scrutiny in draft in this House, he transfers the question to the Home Office. When are we going to get an answer from his Department about its responsibilities and its contribution to dealing with the experience of victims of trafficking and abuse and of slavery in this country?
Chris Grayling
The reason that the hon. Gentleman’s question was transferred to the Home Office is that the Modern Slavery Bill is a Home Office responsibility. But I would say to him that, in terms of the support that we provide through victims’ finances, we are spending more on support for victims of modern slavery than this country has ever done before.
Mr Robert Buckland (South Swindon) (Con)
T4. I refer the House to my declaration in the Register of Members’ Financial Interests. I welcome the decision of my right hon. Friend the Lord Chancellor, in agreement with the Criminal Bar Association, to postpone the latest round of cuts to criminal legal aid fees. I urge him to use the opportunity granted for a thoroughgoing review of the system of graduated fees and very high-cost cases, to eliminate bureaucracy and restore greater fairness to the system.
Chris Grayling
I expressed a willingness to work with the criminal Bar to try to create a more streamlined, more efficient, less expensive system. It is a matter of regret to me that the criminal Bar continues to decline to take important cases, and that is a matter that we are addressing hard at the moment.
Sadiq Khan (Tooting) (Lab)
The hon. Member for Ribble Valley (Mr Evans), whom I have notified of this question, had private means so he could afford the best defence, and justice, in his case, was done; but he finds himself more than £100,000 out of pocket. That has caused him publicly to question his support for the Government’s legal aid plans, which have led to a two-tier justice system. What advice does the Lord Chancellor give to anyone charged with a serious criminal offence who is not fortunate enough to have their own private means, to help them get a fair trial?
Chris Grayling
My advice to such people is simple: to apply for criminal legal aid. In a serious case such as the one to which the right hon. Gentleman refers, they will have access to a QC, who will represent them.
Sadiq Khan
That is not the experience. The CPS has a QC and two barristers, but all people get on legal aid is a junior barrister. That leads to a two-tier criminal justice system. In answer to a previous question the Justice Secretary said that he could not answer questions about Operation Cotton because it is sub judice. I understand what sub judice is. My question is simple. How many other cases are similarly affected by applications to stay the trial because a fair trial cannot take place? The answer is not sub judice.
Chris Grayling
These are matters for the courts. I have no idea how many cases are subject to a request for a stay because those requests do not come to me personally. Two years ago Labour attacked our changes to civil legal aid. The hon. Member for Hammersmith (Mr Slaughter) attacked our changes to civil legal aid, saying that we should be looking for reductions in criminal legal aid instead. Two years later the Opposition have conveniently forgotten that and have changed their position totally. That is a party that says one thing and does another.
Mr David Amess (Southend West) (Con)
T5. Further to the answer that my right hon. Friend gave to the first topical question, I know that he is committed to ensuring the end of modern-day slavery, but will he update the House on the progress of his Department in ensuring that victims get access to the justice system and to legal aid?
Chris Grayling
Victims funding is enormously important. Through the various changes that we have made to the levy on those who are convicted of offences, we have provided far more funding for the support of victims than we ever had before. A couple of weeks ago we announced an additional £13 million worth of funding to ensure what my hon. Friend talked about a moment ago—that we could provide support to those families who are victims of pre-2010 homicides. I have made it clear to the Home Secretary that from the victims funding that I have available, I am also prepared to make additional support available if it is necessary to support victims of modern slavery and human trafficking.
Julie Hilling (Bolton West) (Lab)
T2. I am pleased to see that the Government are planning to do more about banned driving, but when will they do anything about the travesty of many thousands of people driving legally with more than 12 points on their licence, including a person in Liverpool driving with 47 points and a woman in Bolton with 27 points?
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
The whole House will share the hon. Lady’s concern about these cases, where a large number of points are accumulated by someone who does not end up being disqualified. She will know that courts have discretion not to disqualify in those cases and we cannot affect individual decisions in individual cases. However, as she knows, we will conduct a review of driving offences ranging more widely than the changes that we have announced today, and I think what she has described is a good candidate for inclusion in that review.
Tim Loughton (East Worthing and Shoreham) (Con)
T7. Will the Secretary of State consider following the example of Conservatives in the Canadian Parliament in putting forward a victims Bill of Rights in order to put the rights of victims ahead of the rights of criminals and put on a statutory basis a right to information, a right to protection, a right to participation and a right to restitution?
The Minister for Policing, Criminal Justice and Victims (Damian Green)
I am grateful to my hon. Friend for his suggestion. He will know that we now have a more all-embracing victims code than ever before. Also, with reference to getting the views of victims, tomorrow sees the first meeting of the victims panel so that the Secretary of State and I can hear face to face the experience of those who are victims and what they want to happen to future victims in the system.
Andy McDonald (Middlesbrough) (Lab)
T6. How many books, to the nearest thousand, sent to prisoners in 2013 were intercepted and found to include contraband?
Jeremy Wright
The hon. Gentleman will not be shocked to learn that I do not have that figure in front of me. As I said to his hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), the Opposition need to think carefully about what they are really worried about. If they are worried about prisoners having access to books, I have reassured them that they do not need to worry about that. If, however, they are worried, as the shadow Secretary of State told us he was, about the influx of drugs and other contraband substances into prisons, they might want to reflect on the sense of restricting packages as they come into prisons. That is what we are proposing to do. What are they going to do?
Dr Julian Lewis (New Forest East) (Con)
What progress have the Government made towards their aim of greater honesty in sentencing so that the public at large and victims of crime in particular know that when a sentence is handed out, the time served will correspond to a greater degree to the sentence handed out?
Chris Grayling
As you know, Mr Speaker, I believe that in an ideal world 10 years would mean 10 years. I do not have the resource to deliver that immediately because of the financial constraints upon us, but I have started by ending automatic early release for the most violent and unpleasant offenders in our society so that they can no longer expect to be released automatically halfway through their sentence, and have a possibility of release ahead of time only if they are demonstrably no longer a threat to the public as assessed by the Parole Board.
Mr Jim Cunningham (Coventry South) (Lab)
T8. A number of solicitors in Coventry have written to me to protest about the cuts to legal aid there and the effects that they will have on justice. What representations has the Minister received regarding the effect of legal aid reform on victims of trafficking and domestic violence?
Chris Grayling
We have excluded victims of trafficking and domestic violence from our legal aid reforms.
Duncan Hames (Chippenham) (LD)
The Government were due to publish before March their response to the public consultation on their proposed changes to the Office of the Public Guardian and supervision of deputies. When will this happen so that we can better protect the vulnerable people whose best interests are meant to be served by them?
The Minister of State, Ministry of Justice (Simon Hughes)
I am grateful for my hon. Friend’s continuing interest in this issue. I hope that we will be able to publish something before we break for the summer and elicit responses after that.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Has the Secretary of State looked at the damages awarded to triple killer Kevan Thakrar? Does he have any plans to change the rules so that serious offenders cannot profit from such compensation claims?
Chris Grayling
I regarded that as wholly unacceptable. It is a case that we defended in court, but, unfortunately, the judge reached a different view. I can assure the hon. Gentleman that I have made sure that there is no possibility of somebody in that position receiving legal aid to pursue such a case. I have also asked my officials to look at any other ways we have to make it more difficult for prisoners to pursue such a case.
Miss Anne McIntosh (Thirsk and Malton) (Con)
The Government have rightly said that they wish to speed up the placing of children in adoption, but will they confirm that that will not be at the expense of proper legal representation on legal aid for natural mothers who do not wish to give up their children for adoption?
Simon Hughes
The reforms are absolutely clear in wanting to do two things. The first is to ensure that cases are considered properly and in a timely way, and that is the joint concern of the Department for Education and the Ministry of Justice. The second is to ensure that all those who need to be represented in child-related cases have the adequate resources. I hope that that will give my hon. Friend the reassurance that she needs.
Robert Flello (Stoke-on-Trent South) (Lab)
Will the Minister join me in congratulating Superintendent Derek Lockie on and, especially thanking him for, his outstanding work for victims and victims’ organisations during his time leading the Victims’ Commissioner’s office? But does the Minister agree that the loss of such a talented and fiercely independent lead in that office is a matter of great concern?
Damian Green
I am happy to share the hon. Gentleman’s tribute to, I assume, his constituent, Mr. Lockie, but I do not share his worries because I know that independence and feistiness are still more than fully available in the Victims’ Commissioner’s office in the form of the Victims’ Commissioner, whom I look forward to both working with and being held to account by in the coming years.
Philip Davies (Shipley) (Con)
Does the Minister accept that most of the public think that open prisons are for people such as Lester Piggott rather than people serving 13 life sentences? Given that in a recent parliamentary answer that I received it emerged that 643 people are serving life sentences in open prisons, will he go back and assess each and every one of those cases to ensure that the open prison is the appropriate place for those prisoners, because I do not believe it is?
Jeremy Wright
I assure my hon. Friend that proper reviews of each of those people are carried out, not just by us but, on a great many occasions, by the Parole Board too, to ensure that people are suited for open prisons. For those offenders who will be released one day, we have a choice to release them either straight from the closed estate or from the open estate. The objective here, which he and I will both agree on, is to ensure that when someone is released from custody the risk to the public is as low as it can possibly be. In each and every case, that is what we seek to do. In the particular case that has been raised already this afternoon, as he knows we will look very carefully at the circumstances of this temporary release.
Lilian Greenwood (Nottingham South) (Lab)
My constituent Dr Heather Peto had her whistleblowing and discrimination case struck out by an employment tribunal judge because, she contends, the respondents’ lawyers deliberately withheld documents adverse to their case. Will the Minister advise me on how my constituent can request a police investigation, given that employment tribunal rules do not permit their judges to refer such matters to the police and the police will investigate only on the basis of just such a referral?
Damian Green
As with any other citizen of this country, if the hon. Lady’s constituent has evidence of criminal behaviour, she should take it to the police directly.
James Morris (Halesowen and Rowley Regis) (Con)
Does the Secretary of State agree that now is the time to introduce a mandatory prison sentence for those caught in possession of a knife so that we can send the strongest signal that carrying knives is unacceptable and will be punished?
Chris Grayling
As my hon. Friend knows, this is an area where our party has wanted change for a considerable time, and where I personally want change. Policy options are currently under consideration by the Government.
John Healey (Wentworth and Dearne) (Lab)
The Justice Secretary will want to see all court buildings used to their fullest and most efficient extent, so will he permit social security appeals to be heard in the Rotherham court buildings so that people no longer have to travel to Sheffield, Barnsley or Doncaster to seek justice?
Chris Grayling
The essence of the court reforms we announced six weeks ago is that we should have more flexible court buildings, using technology and new ways of working. I obviously cannot comment on the specific situation the right hon. Gentleman describes, but if he writes to me, I will happily look into the matter.
Nick de Bois (Enfield North) (Con)
The Secretary of State has long been aware of the campaign run by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) and me on mandatory sentencing for knife crime possession. He has had the privilege of meeting Yvonne Lawson, whose son Godwin Lawson was tragically killed in 2010, and who has now devoted much of her life to mentoring and educating young children away from knife crime. Does the Secretary of State understand that she believes that mandatory sentencing for second offences would be a significant deterrent?
Chris Grayling
I pay tribute to my hon. Friend and to his constituent for the work they have done in this area. There is clearly an overwhelming view across the House in favour of change.
Greg Mulholland (Leeds North West) (LD)
I, too, warmly welcome the announcement on increased sentences for disqualified drivers. Will the Secretary of State seriously consider another common-sense move as part of the review: making it a presumption that licences will be taken away as a condition of bail for anyone charged with killing as a result of criminal driving?
Chris Grayling
My hon. Friend makes an important point. I invite him to take part in the review that we will be carrying out and to talk to my Department about these issues, because I am very sympathetic to what he says.
The Proposed Closure of the Santander Branch on Downing Drive (Evington, Leicester)
Keith Vaz (Leicester East) (Lab)
I would like to present a petition, signed by 1,059 residents of Evington in Leicester, opposing Santander’s intention to close the local branch in Downing drive. Evington is one of the very last urban villages in the city of Leicester, and the bank’s decision to close the branch will have serious consequences for local people. They will need to go into the city centre to withdraw or bank their money. I will shortly be arranging a meeting with the chief executive of Santander. The petitioners, led by Hakim Khalifa, Irene Johnstone, Anna Wills, Malcolm Taylor, Anup Patny, Richard Harrison, Ken Richardson, Peter Brooks and Donald Nolan, and supported by the two councillors Dipak Bajaj and Baljit Singh have this to say:
The Petition of residents of Leicester East,
Declares that the proposed closure of the Santander Branch on Downing Drive in Evington will have an extremely negative impact on elderly residents in the area who use the branch.
The Petitioners therefore request that the House of Commons urges the Department for Business, Innovation and Skills to meet with representatives of Santander to examine the impact of branch closures on local residents.
And the Petitioners remain, etc.
[P001347]
Extension of the Tyne and Wear Metro to Washington
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I am pleased to be able to present this petition asking the House of Commons to urge the Government to examine the feasibility of extending the Tyne and Wear Metro to Washington and bringing the Leamside railway line back into use. The petitioners and I believe that doing so would boost jobs and growth in Washington, and indeed in the wider region. The petition is accompanied by one along the same lines collected by Adam Robson from Washington, which as of today has been signed by 1,585 people on the change.org website.
The petition states:
The Petition of residents of the United Kingdom,
Declares that the Petitioners believe that the extension of the Tyne and Wear Metro to Washington is a vital, yet missing, part of the region’s transport system, and further that such an extension would make a significant contribution to the economic development of the town.
The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to seriously explore the feasibility of extending the Tyne and Wear Metro to the town of Washington, utilising the old Leamside railway line.
And the Petitioners remain, etc.
[P001346]
AstraZeneca (Pfizer Bid)
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Dr Julian Huppert (Cambridge) (LD)
(Urgent Question): To ask the Secretary of State for Business, Innovation and Skills if he will make a statement on the bid from Pfizer for AstraZeneca and the resulting effect on the economy, employment and skills in the United Kingdom.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
The life sciences industry is of paramount importance to the UK as part of the Government’s industrial strategy, which is securing long-term investment in key sectors where we are global leaders. We are committed to ensuring that we are at the forefront of life sciences research and development, with high-quality jobs, manufacturing and decision making in the UK.
There has been much comment and debate in the press recently on this important issue. I stress, however, that Pfizer has not yet made a formal bid to take over AstraZeneca. The Government must, and will, approach it from the position of even-handed neutrality and recognise that it is ultimately a matter for the shareholders of both companies. I assure the House that I and my colleagues across Government engaged early with both companies to ensure that the outcome is positive for the UK, precisely to avoid the failures of previous Governments in such situations.
The Opposition are calling for changes to the law, but we are operating within the framework that they introduced in 2002, when they removed Ministers from decision making about mergers, apart from in a few specified public interest areas. I note that they chose not to reform the regime in response to the Cadbury-Kraft merger. One of the Government’s options would be to consider using our public interest test powers. That would be a serious step, and not one that should be taken lightly. I am open-minded about that, while stressing that we are operating within serious European legal constraints.
In conclusion, I want to assure the House that we are alive to the national interest considerations in this regard. We see the future of the UK as a knowledge economy, not a tax haven. Our focus is on what is best for the UK: securing great British science, research and manufacturing jobs and decision making in the life sciences sector.
Dr Huppert
I thank my right hon. Friend for his response. This would be the biggest ever takeover of a British firm and deserves careful scrutiny. Will he tell us what has been learned from the failures of the Kraft-Cadbury takeover, which did not safeguard UK jobs? What powers does he have under current legislation to intervene in this area?
The Pfizer proposals are driven largely by tax law. What certainty does my right hon. Friend have that the USA would not simply change its tax code and that Pfizer would return to the US, jeopardising any benefit to the UK? Has Pfizer asked for any changes to our tax laws, including the patent box? What representations have the Government received from other countries, such as China, the US and Sweden? What international hurdles does he anticipate for a deal such as this, including at European Union and global level?
Pfizer’s board has given a written assurance that it will keep some research and development and advanced manufacturing in the UK, with an opt-out should circumstances significantly change. How broad is that opt-out and what consequences would Pfizer face if it broke its assurances? Given Pfizer’s history in Sandwich, what confidence does my right hon. Friend have in its commitment to the UK?
Both Pfizer and AstraZeneca currently have sites in the Cambridge cluster owing to our excellent research environment. AstraZeneca has announced plans to concentrate its R and D in Cambridge and to move its global headquarters to our successful cluster, bringing 2,000 jobs. People are already transferring to a site in the constituency of the Leader of the House of Commons, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley). What does the Secretary of State think would happen to those proposals if the takeover happened? Many other parts of the country would also be affected. I have been contacted by my hon. Friends the Members for Cheadle (Mark Hunter) and for Macclesfield (David Rutley), and the right hon. Member for Leicester East (Keith Vaz), among others. What does the Secretary of State think will be the consequences of these proposals for the UK’s science and skill base? Does he share my concern about the uncertainty for the industry and people’s jobs? What assessment has he made of Pfizer’s and AstraZeneca’s relative investment in R and D?
What assessment has my right hon. Friend made of the increased risk to the UK of there being fewer pharmaceutical companies here? What discussions has he had with the Secretary of State for Health about the medical consequences of the merger and potential delays in life-saving drugs? Finally, does he agree that companies can become too big to innovate?
Vince Cable
I congratulate my colleague, who is representing Cambridge very effectively on this issue, as indeed is the Leader of the House of Commons, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley). I recognise my hon. Friend’s expertise and his pioneering work on cancer drugs in the life sciences industry. I will deal specifically with the Cambridge question because it has obviously been at the centre of the discussion.
It may be useful to read the relevant sentence from the open letter that Pfizer sent to the Prime Minister, bearing in mind that this is a proposal and has not been agreed with the Government—we have not accepted the terms of the letter. The issue of binding obligations remains to be addressed. The letter states:
“Pfizer commits to complete the construction of the currently planned AstraZeneca Cambridge campus, creating a substantial R&D innovation hub in Cambridge and the wider scientific community, which will include core research units, laboratory based scientific support lines and European clinical development and regulatory functions.”
My hon. Friend is concerned about decision making, not just research, and the letter continued:
“Pfizer will base key scientific leadership in the UK who will lead all European and certain global R&D functions based in Cambridge.”
We have had similar conversations with AstraZeneca to ensure that it is similarly committed.
On my hon. Friend’s wider concerns, he made a perfectly valid point about the United States tax regime. Of course, we have no certainty about how the US would respond, which is why I stressed in my introduction that we must view the issue from the point of view of industry strategy rather than tax. Having said that, the fact that Britain has a competitive and attractive tax environment is a positive good, and we should celebrate that.
My hon. Friend mentioned three anti-trust jurisdictions, but there are almost certainly others. This proposal involves two big, complex international companies and a variety of jurisdictions will have to assess it.
On the relative merits of the two companies, I do not propose to treat this as a beauty parade, but it is fair to say that there have been very substantial redundancies from both companies in recent years, of roughly the same order of magnitude. On the positive side, they are very considerable investors and collaborators.
On the NHS points, I have established from the Health Secretary that there are no urgent life-threatening issues in relation to drugs. On competition, there is potentially an issue for the new Competition and Markets Authority and the European competition authorities, and that is where plurality would need to be addressed.
Mr Chuka Umunna (Streatham) (Lab)
Let us be clear: the issue is not whether this prospective takeover is a foreign one but whether the transaction will be good for jobs and growth in the UK; will protect Britain’s knowledge, research and skills base; and represents a long-term investment in the UK. With that in mind, may I ask the Secretary of State four questions?
First, Pfizer has said that it is committed to making a long-term investment in the UK through this purchase. Similar assurances were given to other companies acquired by Pfizer in the US and Sweden, yet subsequently research facilities were shut down and thousands of high-skilled jobs lost. Why should we believe that the same fate will not befall AstraZeneca?
Secondly, Pfizer says it is committed to investing in R and D, but John LaMattina, who served for over 30 years as Pfizer’s president of global R and D, is clear: this transaction will lead to “dramatic cuts” in R and D. Surely this supports the case for the immediate independent assessment of the deal that the Leader of the Opposition has called for.
Thirdly, the main rationale for this transaction appears to be tax. Sir David Barnes, former chief executive officer of AstraZeneca, wrote to us both—the Secretary of State and me—last night. He said that while companies should manage their tax affairs efficiently, the use of tax inversion proposed by Pfizer is a
“narrow basis on which to build an enduring and constructive business partnership.”
What guarantees has the Secretary of State received that if the tax position changes in the US, investment here will not be withdrawn?
Fourthly, the Secretary of State said that the Government have a neutral view. Why, then, on Friday, just hours after the AstraZeneca board rejected Pfizer’s advances for a third time, was he going round saying that Pfizer’s commitments were “welcome and encouraging”? Why was the Conservative party chairman talking of the deal being a
“great Anglo-American tie-up”?
The fact is that over the past week the Government have compromised the AstraZeneca board, leading the chairman to urge the Prime Minister to adopt a neutral position.
The bottom line is this: the assurances the Government have extracted from Pfizer are simply not worth the paper they are written on, are they? If I am wrong, why, less than three days after giving them, did Pfizer’s CEO say yesterday that following the completion of the AstraZeneca takeover, the company could be split into three parts, all of which could subsequently be flogged off?
Vince Cable
I have already dealt with some of the hon. Gentleman’s points, particularly in relation to the tax regime.
Specifically on neutrality, I made it very clear in any comments I made to the media that of course, as a result of conversations that we had with both companies, assurances given in writing were welcome. It would have been absurd to reject them; of course they were welcome. However, I also made it very clear that we needed to study the small print and that there was an issue about how these obligations were made binding. Of course, those issues now need very clearly to be addressed.
I am perfectly happy to take advice and lectures from anybody about how to handle this very difficult and sensitive issue, but the one example that we have in front of us of what to avoid is what happened in the Kraft-Cadbury merger. First, the then Government made no attempt at neutrality and said from the outset that there was going to be huge opposition to the takeover. Secondly, they failed to stop it, having said they were going to do so, and they sought no assurances of any kind, in writing or verbal; indeed, my predecessor has acknowledged that. We are trying to learn from their experiences.
We have taken up a position of neutrality. We acknowledge that there are very serious legal constraints, but I am keeping all options open on that front. We are seeking to locate this whole debate within our industrial future rather than in terms of tax advantage, and I made that very clear in my introduction.
Laura Sandys (South Thanet) (Con)
In his negotiations with Pfizer, has my right hon. Friend been given assurances that its current investment in Sandwich, which is growing at present, is secure and will be part of future discussions?
Vince Cable
I am well aware of the very constructive role the hon. Lady played when the original redundancies were announced. Indeed, despite the very large job losses, there is still a significant presence on the site to which she refers. The securing of that continued presence, which is substantial, and decision making would be a key part of any future discussion we have with the company.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
I agree with the Secretary of State that we must learn the lessons of the Kraft-Cadbury takeover. Does he agree that one of those lessons is that we cannot necessarily take the assurances of the takeover company literally? If the evidence from the Select Committee investigations demonstrates that we may not be able to do that, will the Secretary of State undertake to ensure that the Government will intervene?
Vince Cable
I am not making any assurances at this stage; I am merely keeping the options open. I am surprised to hear the hon. Gentleman say that the Government received assurances on Kraft-Cadbury, because our study of the record suggests that the then Secretary of State acknowledged that no such assurances were ever given.
David Rutley (Macclesfield) (Con)
I am grateful to my right hon. Friend the Secretary of State for his statement, for which I also called. AstraZeneca is Macclesfield’s largest employer, with 2,000 highly skilled workers based at the site, so I recognise the concerns of local residents about the potential implications of Pfizer’s bid. With that in mind, what steps are being taken fully to determine the impact the bid could have on the UK’s life sciences sector? In particular, what steps are being taken to safeguard those highly skilled advanced manufacturing and packaging jobs in Macclesfield?
Vince Cable
I acknowledge the strong representation the hon. Gentleman has made to me before today, and that of my hon. Friend the Member for Cheadle (Mark Hunter) on the exact same issue. I will quote again from Pfizer’s letter to the Prime Minister, with all the provisos and conditions I suggested before. It says:
“Pfizer will actively look to locate manufacturing operations of the combined company in the UK, subject to the timing of the UK Patent Box proposals, and will retain substantial commercial manufacturing facilities in Macclesfield.”
Andrew Miller (Ellesmere Port and Neston) (Lab)
I will not say anything to prejudge the inquiries the Science and Technology Committee intends to make on this matter, but may I tell the Secretary of State that that quote from the letter to the Prime Minister differs from what the chairman said to me over the telephone? I do not doubt the Secretary of State’s word, but the situation is moving very fast and we need to recognise that. In the light of that, does he agree with me and the noble Lord Heseltine that he ought to apply a national interest test?
Vince Cable
I have tried to answer that question already. There is a public interest test. The hon. Gentleman uses the phrase “national interest test,” but the Opposition spokesman, the hon. Member for Streatham (Mr Umunna), was quite right to stress in his introduction that this is not a nationalism issue. I think we are all agreed on that. There are some excellent overseas companies in this country, such as Tata, Nissan and BMW, and they make a massive contribution. It is not an issue of nationality. Of course, both the companies under discussion are international companies in their different ways.
On applying the test, there is a question about whether it would be desirable to extend a public interest test in that way. My predecessor made it very clear in his comments to the Business, Innovation and Skills Committee that he rejected it on principle. I am not doing that, but it is worth recalling the practical problems involved, as set out by the hon. Member for Wrexham (Ian Lucas) when he held the key post in the Department. He said that
“it would need clearance by the European Commission. They would have to be satisfied that the consideration was legitimate and compatible with the objectives of the European Treaty, in particular in relation to the free movement of capital.”
We have to bear that in mind.
Mr John Redwood (Wokingham) (Con)
I would like the Secretary of State to clarify the legal position, because it seems to me that, under the law the previous Government introduced, Ministers were going to stay out of all these decisions, which would be trusted to an independent body; and that, under the 2004 European Union merger regulation that they signed up to, this is clearly a concentration that falls to be determined by Brussels regulation, not by this elected House of Commons. I therefore find it very surprising that the Opposition are demanding the Secretary of State intervene, when he might end up in an illegal position if he tried to do so.
Vince Cable
It is precisely because of the legal position that I have been studiously neutral on this matter. It is fair to say that there are elements of ambiguity—it is not absolutely clear—but the main position is exactly as the right hon. Gentleman described it: under the legislation we inherited from the Labour party, Ministers do not engage with decisions except in three very specific areas of public interest.
Mr Jack Straw (Blackburn) (Lab)
May I first say to the Secretary of State that whatever the defects of the 2002 legislation, which we have learned from experience, this Government have done absolutely nothing in four years to change that legislation, so I assume that they consent to it? Secondly, there is nothing in the legislation that, in the words of the Daily Mail today, requires the British Government or certainly the Prime Minister to go
“grovelling to an overseas corporation”.
Does the Secretary of State not accept that there has been a very sharp contrast between the neutral stand that he has tried to take and that of his fellow Ministers, including the Prime Minister, who have been supine in their approach to Pfizer?
Vince Cable
They have not been supine at all. My senior colleagues in government have been engaged in discussions with both companies, making the points about the national interest that I have stressed today.
I want to counter the point that the Government did absolutely nothing in response to the history of Kraft-Cadbury. One of the first things I did when I came into this job was to initiate a process that led the Takeover Panel to introduce very substantial reforms—the put up, shut up provision, which is the reason why we now have a 26 May deadline; the requirements for consultation; the requirements that directors have to take a long-term view in making decisions of this kind; and, crucially, the requirements of transparency. My opposite number has called in the press for transparency to be introduced, but it is already there: it was one of the changes introduced when this Government came into power.
Richard Harrington (Watford) (Con)
I am sure that my right hon. Friend the Secretary of State is aware that, in 2013, British companies were the second largest foreign investor in the US, with $36.5 billion of institutional investment. What message would it send to institutional investors from all over the world if, despite appropriate assurances from a company, the UK Government found a way to scupper a deal of this magnitude against the wishes of the shareholders?
Vince Cable
That is why I have stressed—it is fair to say that the Opposition spokesman has also stressed it—that we must not approach this matter in a nationalistic way, let alone in an anti-American way. One of the most difficult tasks I have undertaken in this Government was talking to General Motors to try to persuade it to invest heavily in the British car industry. We have no wish whatever to compromise our reputation for being open to good foreign investors.
Roberta Blackman-Woods (City of Durham) (Lab)
The Secretary of State may not have concerns about the impact of the proposed takeover on Britain’s science base, but many others do, including the chancellor of Cambridge university, Lord Sainsbury, and some prominent AstraZeneca investors. Will the Secretary of State say a bit more about why he does not agree with them?
Vince Cable
I do not know the basis on which the hon. Lady invented that question. From the outset of my statement and in all my subsequent comments, I have made it very clear that the interests of British science—R and D and the jobs associated with it—are absolutely at the centre of our concerns. As it happens, I have spoken to Lord Sainsbury, and I am aware of his concerns. I have spoken to other leading members of the scientific community—we are also aware of their concerns—and they acknowledge that we are working as best we can within the constraints we have to secure a good outcome for British science.
George Freeman (Mid Norfolk) (Con)
The life sciences and biopharma industry is in a period of transformation or restructuring worldwide, which is why there has been such strong support for the UK’s life science strategy and its groundbreaking steps to invest in genomics, the patent box, the catalyst fund and early access to innovative medicines. All those measures helped to ensure that Pfizer and AstraZeneca, when they closed their old plants, moved to Cambridge, England, not Cambridge, Massachusetts. May I suggest that rather than embrace the Opposition’s opportunistic calls for protectionist emergency legislation—the shadow Business Secretary dismissed such a step in 2012—we should instead seek to enter into a long-term, 10-year, R and D agreement with Pfizer-AstraZeneca based on accelerating the measures that we have put in place, which will show that we are in favour of business coming to the UK through incentives, not penal legislation?
Vince Cable
I think that is a very good statement of where we are. We are indeed trying to encourage business. We are looking 10 years ahead—that is the whole point of the industrial strategy and indeed why it is successful and why business welcomes it. To use my hon. Friend’s word, there is no question of protectionism in this area.
Mr Michael Meacher (Oldham West and Royton) (Lab)
Will the Secretary of State emphasise that the Government can and should intervene under the Enterprise Act 2002 in order to protect the public interest, given that AstraZeneca is a key national champion in the key pharmaceutical sector in which Britain is a world leader? Does he accept that this issue should be settled not on the basis of the tax inversion interests of a US multinational or an indiscriminate open market ideology, but solely on the basis of preserving and strengthening the UK’s scientific base and highly skilled British jobs—promises to preserve which have often been dishonoured by previous predators?
Vince Cable
There is nothing in the Enterprise Act 2002 —in retrospect, this is probably regrettable—that refers in any way to the issues that the right hon. Gentleman has described. I was part of those debates; I think he probably was, too. The only areas in which a public interest intervention is allowed under that legislation relate to national security and media plurality. Subsequently, banks were added; as they were overwhelmingly domiciled in the UK, that fell outside European legislation. Those are the very narrow grounds on which the existing legislation allows intervention.
Mr Douglas Carswell (Clacton) (Con)
Does my right hon. Friend agree that Britain benefits enormously from the free movement of investment and ideas? It is why all that R and D is happening in Cambridge and elsewhere in the first place. Will he therefore rule out any of the economic nativism being called for by some in this House and rule out any attempt to frustrate this deal on protectionist grounds?
Vince Cable
As I have already said, I would certainly rule out intervention on protectionist grounds, but I am not ruling out intervention, because we need to look at all the options available to us.
Mr Pat McFadden (Wolverhampton South East) (Lab)
I agree with the Secretary of State when he says that this issue should not be decided on the basis of whether the proposed takeover comes from a foreign company. There is enough narrow nationalism in British politics without our adding to it here. However, there is a question of whether companies keep their promises. The right hon. Gentleman has referred several times to Kraft and Cadbury. Kraft broke its word when it said that it would keep open the Somerdale factory and then announced, after the bid had gone through, that it was going to close it. The question now is how does the right hon. Gentleman know and how can he ensure that, if the takeover goes through, Pfizer will keep its promises on R and D and the British science base?
Vince Cable
Should this proceed—as I said at the outset, we have not yet had a formal bid—it will obviously be a matter for negotiation. I am sure that the right hon. Gentleman would not want me to go into exactly what is being said in the discussions at the moment. Negotiations will clearly happen to make sure that any obligation is binding. I am sure that Pfizer itself would want to ensure that any obligations are clear and binding. Just to reinforce the point about nationality, which the right hon. Gentleman rightly stressed at the outset, we are talking about two international companies. I think we all acknowledge that AstraZeneca is an admirable company. It is Anglo-Swedish, with a Swedish chairman, a French chief executive and an international shareholder base. Pfizer is predominantly an American company and has a British chief executive. We are talking about international companies.
Mr Mark Prisk (Hertford and Stortford) (Con)
The Secretary of State is absolutely right to keep his options open—certainly at this stage. He is right, too, to learn the lessons from the appalling way in which the Kraft-Cadbury deal was handled. Following on from the remarks of my hon. Friend the Member for Mid Norfolk (George Freeman) about research and development, will my right hon. Friend give us some assurance that using purchasing power as part of a long-term industrial strategy is the intelligent way not to pick winners but to make sure that we have the key base of skills that we need for the future?
Vince Cable
That is an interesting new angle. I believe my hon. Friend is talking about NHS purchasing, which we have not considered in this context. We have always made it very clear—there are, of course, European rules on this matter—that public procurement cannot be used in a protectionist manner. We need to be very careful of that, but we are aware that public procurement can be used to secure strategic long-term investment. We are already seeing that on the railways, for example.
Katy Clark (North Ayrshire and Arran) (Lab)
If the Secretary of State reaches the view that it is not in the strategic and economic interests of the UK for the takeover to go ahead, but he believes the existing legislation to be inadequate, will he bring forward legislation to stop the takeover taking place?
Vince Cable
As I have said several times, I am keeping the options as wide as possible. I have also suggested that because of the European framework within which such matters are embedded, it would be rather difficult to do that.
Crispin Blunt (Reigate) (Con)
My constituents’ experience of Pfizer from hosting the development and occupation of its award-winning headquarters at Walton Oaks is that it is a model corporate citizen. What is energising some people in the House is that this is a fantastic vote of confidence in the United Kingdom, which gives us the possibility of hosting the world’s leading research-based pharmaceutical company.
Vince Cable
I am sure that it is a vote of confidence, but I am equally sure that the companies are motivated by hard-headed commercial considerations. We should therefore be motivated by the hard-headed considerations of the national interest.
Mr Gordon Marsden (Blackpool South) (Lab)
The Secretary of State refers to Pfizer’s assurances, but he must remember that Pfizer has pulled jobs and investment out of Sandwich not once, but twice: first in manufacturing and now in R and D. The chief executive of Pfizer has said on the record that he views the UK as
“an attractive place to do science and manufacturing.”
However, after the way that it has treated the workers in Sandwich, is that not a bit like Dracula saying, “I like the look of that blood bank”?
Vince Cable
I am aware that there were very sore feelings about the redundancies at Sandwich. The Government had to mobilise a taskforce to rescue the situation on the ground and it is now quite a successful part of the UK. We accept that there was hurt, but that is not unique to Pfizer. As I said in an earlier answer, a roughly equal number of redundancies has been made by both companies. That is not because of their corporate philosophies, but because their patents have run out and they have not developed the pipeline of new projects that is necessary to sustain growing employment.
David Morris (Morecambe and Lunesdale) (Con)
I was interviewed on “The World at One” this afternoon and was asked whether there would be a political gain for the Chairs of the Select Committees. I said that I serve on two Select Committees, both of which have Labour Chairs who are excellent. What disturbs me is that the Leader of the Opposition has gone on the record to say that we must look into the matter. Why has he suddenly said that about this particular company, when takeovers happen all the time in the City?
Vince Cable
I was slightly puzzled as to why the Leader of the Opposition made it a party political point that there would be a Select Committee inquiry. As I understand it, Select Committees are the property of the House. I am very happy to engage with either or both of the Committees. Indeed, we have already had extensive discussions with the Business, Innovation and Skills Committee about the legacies of Kraft-Cadbury and the takeover legislation. Those matters were thoroughly inquired into.
Angela Smith (Penistone and Stocksbridge) (Lab)
Does the Secretary of State agree that the way in which the Government have approached the takeover—appointing two civil servants to negotiate directly with Pfizer—is unprecedented?
Vince Cable
That is a bizarre criticism. We have talked to Pfizer and AstraZeneca on a neutral basis. Those conversations have been conducted by Ministers. The Prime Minister, the Deputy Prime Minister, the Chancellor, the Minister for Universities and Science and I have all been involved. Of course the Government have civil servants to carry out their instructions. I am baffled as to why the hon. Lady regards that as a problem.
Nadhim Zahawi (Stratford-on-Avon) (Con)
I commend the Secretary of State for his level-headed scrutiny of the proposed takeover. The Opposition lose their credibility when they play politics with such matters. May I ask him about his conversations with AstraZeneca? It claims that there are a number of gems in the company, which might mean that the business has been undervalued. Valuations are, of course, up to the shareholders, but those gems in the portfolio hold the prospect of R and D and jobs. What conversations has he had about those new products and what would happen to them?
Vince Cable
If the bid proceeds, I guess that we will need to have detailed discussions with both companies about the specifics, which would go beyond the broad commitments that Pfizer has offered in its open letter. I recognise that there is an awful lot more detail to be confronted.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
I know it is not a matter of nationality, but I remind the Secretary of State of the adage, “Beware of a Scotsman on the make”—even if Ian Read left Scotland in 1978. Pfizer is in trouble. Its profits have dropped by 15% to £1.3 billion, and every time it takes over a company it is to seize a product. It was Lipitor—an anti-cholesterol drug—from Warner-Lambert; with Wyeth it was Enbrel, an arthritis drug, and then it shut Wyeth’s research. It shut its own research. There can be no guarantees that this company is after anything other than a tax haven. What can and will the Secretary of State do to stop that?
Vince Cable
I am obviously not going to give a running commentary on share prices today and tomorrow, but I repeat that throughout the industry, the big pharmaceutical companies have all been retrenching and creating redundancies because of the way technology has evolved. In fact, much of the dynamism in that industry—which I see frequently on my visits to universities—is through small spin-out companies. The nature of the industry is changing, and it is not just Pfizer that has been responsible for redundancies.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Will the Business Secretary confirm that both European competition authorities and the British authority will test this process against the consumer interest? It cannot be in the consumer interest for research to be limited or for existing production lines in this country to be closed down.
Vince Cable
The European Commission must make up its own mind about whether it wishes to investigate this matter, but it will do so from the standpoint of competition policy, which implicitly takes into account consumer benefit.
Ann McKechin (Glasgow North) (Lab)
In assessing the credibility of Pfizer’s claim, does the Secretary of State intend to consult trade union representatives of the many workers of AstraZeneca, who are obviously deeply concerned about their future?
Vince Cable
I am always happy to meet trade union representatives. I have already made this point briefly, but changes introduced to the takeover panel operations in 2010, when I came into the Government, include additional provision for consultation with the work force. I hope that the parties concerned recognise and act on that.
Stephen Phillips (Sleaford and North Hykeham) (Con)
If this takeover were to go ahead, what steps can and will my right hon. Friend take with his colleagues to ensure that members of AstraZeneca pension funds and their entitlements are properly protected?
Vince Cable
That is a new one and I will reflect on it. It is probably an issue for my colleagues in the Department for Work and Pensions and for the Pension Protection Fund, but I thank my hon. and learned Friend for raising the issue and I will certainly follow it up.
Paul Blomfield (Sheffield Central) (Lab)
AstraZeneca has pointed out today that its profits could double over the next decade as a result of new drugs resulting from its investment in research and development. In contrast, Pfizer has a strategy of cutting dramatically its investment in research and development. What impact does the Secretary of State think that the takeover could have on UK research capacity?
Vince Cable
The hon. Gentleman is making an exaggerated contrast between the two companies, but he is right to say that AstraZeneca has an ambitious and attractive long-term investment plan. We have encouraged that as part of the industrial strategy, and we want to see it fulfilled.
Mr Philip Hollobone (Kettering) (Con)
Will the Secretary of State confirm that if the public interest test is applied, it will ultimately be a decision for the European Commission?
Vince Cable
I have already quoted a former Labour Minister, the hon. Member for Wrexham (Ian Lucas), explaining the key role that the European Commission applies in this area.
Steve McCabe (Birmingham, Selly Oak) (Lab)
My constituents may be a bit perplexed at the inability of people to move on. The Cadbury parent company, Mondelez, has a pretty good track record in investment in R and D, and it will probably not thank us for dragging it into a debate four years later. Surely the real question about the Cadbury takeover is whether, if the price hits the right level, shareholders will sell. There is little any Government can do about that.
Vince Cable
Of course, that is the mechanics of a takeover in the market, and I acknowledge that, at the end of the day, shareholders have to make that choice. It is also fair to point out to the hon. Gentleman, as a Birmingham MP, that I think the Kraft-Cadbury story as it has evolved is not as simple as has often been portrayed. Kraft has committed itself to R and D work, although the takeover itself was not very satisfactory from a national interest point of view.
David Mowat (Warrington South) (Con)
Two years ago, the incoming management of AstraZeneca announced the closure of the science park in Cheshire with the loss of 2,000 science-based jobs. The majority of those jobs will not transfer to Cambridge, resulting in a reduction in the UK’s capability. Can the Secretary of State confirm that he does not consider the completion of the botched move to Cambridge to be a prerequisite for this deal?
Vince Cable
My hon. Friend is right that among the redundancies that had been announced in AstraZeneca a substantial number were from the Cheshire site, with more from the campus in Loughborough. As I understand it, a substantial number of staff are moving to Cambridge as part of the commitment made to the Cambridge development, and everybody concerned sees the success of the Cambridge campus as critical to the future of that company.
Mr William Bain (Glasgow North East) (Lab)
Since Pfizer took over rival company Wyeth in 2009, investment in research and development has halved. Without credible assurances from the Secretary of State, what will prevent the same from happening here, weakening our science base and putting at risk the long-term future of the British economy?
Vince Cable
As I have said many times before, we are primarily concerned about the need to protect jobs, investment and the life sciences sector, and we will do everything we can to make sure that happens, within the constraints under which I operate. We are well aware of the history of that company, but not only of that company.
Jeremy Lefroy (Stafford) (Con)
The public interest in the potential AstraZeneca takeover is rightly being looked at by my right hon. Friend, as one of the parties is a UK entity. Will the Government take a similar interest in the potential takeover of a multinational such as Alstom, which has substantial operations of vital public interest in the UK, but neither the bidder nor the multinational target is based in the UK?
Vince Cable
I have asked about the potential implications of the General Electric takeover for Alstom in the west midlands and—as far as we can establish—it has no negative implications. The GE-Alstom takeover is an interesting example. My French opposite number took strong exception to it, but has accepted that in reality the French Government had no alternative but to go along with it.
Kevin Brennan (Cardiff West) (Lab)
In answer to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), the Secretary of State said that any assurances given by Pfizer, were this deal to go ahead, would have to be binding. Can he clarify for the House in exactly what way he would be able to make them legally binding?
Vince Cable
My civil servants and I are devoting much thought to precisely that question. I am sure that the hon. Gentleman would not want me to spell out all the gory details.
Stephen Mosley (City of Chester) (Con)
I am a small, but long-term shareholder in AstraZeneca. Today’s questions have been focused on the effects on AstraZeneca and Pfizer itself. What has not been considered is that the takeover represents a £60 billion investment in the UK economy, and that money will then be reused to create new companies, jobs, investment and growth. Has my right hon. Friend made any assessment of the overall effect on the economy of this big cash injection?
Vince Cable
Of course, we will take that into account as part of our assessment in the national interest. Our starting point is the strength of the UK science base and our manufacturing industry, but there are positive potential implications for tax and for the flow of capital.
Mr Andrew Love (Edmonton) (Lab/Co-op)
I understand the constraints on the Secretary of State, but is he not concerned about the track record of Pfizer in this area—significantly less research and development than AstraZeneca, recent cuts and the closure of the Sandwich plant, with all the broken promises that that entailed? Does that not lead him to think that the Government should have a role in this matter, and will he invoke a public interest test to achieve that?
Vince Cable
Of course there is a role for Government, which is why my colleagues and I have been talking to the two companies and why we are trying to obtain the strongest possible commitment to the UK science base.
Guy Opperman (Hexham) (Con)
Many might think that this is a difficult blue pill to swallow from Pfizer, but two of the biggest companies in Northumberland are overseas-owned and brilliantly run. Does the Secretary of State agree that we do not want to go back to the dark ages of protectionism? The reality is that if this were a British company taking over an overseas company, none of us would be complaining.
Vince Cable
I am sure that is right. As a country, we have made great advances in taking a mature approach to foreign ownership, and a key turning point was when I was an adviser in my Department—I do not claim cause and effect—in the late 1970s and the issue of Japanese investment first arose. The Government of the time decided it was in the national interest. It broke a taboo, and foreign investment has been of great benefit to this country.
Tim Loughton (East Worthing and Shoreham) (Con)
It is odd that the Secretary of State questions the sustainability of the favourable tax regime in the UK, because it is precisely down to this Government’s progressive tax reform that overseas businesses want to invest and innovate in the UK. Glaxo is not the only player, although it is investing £140 million in my constituency, which is a sign of confidence. When assessing the bid and its impact on Pfizer jobs, will the Secretary of State look more widely at the impact of the UK pharmaceutical sector as a whole on the skills base and the supply chain?
Vince Cable
I went out of my way in several of my answers to stress the positive and important role played by our tax regime, both in respect of corporation tax and the patent box. The hon. Gentleman is right that in terms of industrial strategy we are concerned about the supply chain. That is being looked at in considerable detail, as it is in several other manufacturing industries. It is highly relevant in this context.
Mr Rob Wilson (Reading East) (Con)
Individual takeovers such as this one are extremely important and should be looked at and questioned, but does the Secretary of State agree that the bigger picture is that a large number of very important companies are queuing up to come to the UK and provide good, quality jobs and growth? Is that not the key issue today?
Vince Cable
The hon. Gentleman is absolutely right and that is a good summary. I stress that we need to be concerned about outcomes rather than processes. The outcomes are about good jobs, expansion, a strong science base and decision making.
Pupils at Risk of Educational Disadvantage
Chris Skidmore (Kingswood) (Con)
I beg to move,
That leave be given to bring in a Bill to require the Secretary of State to create a pupil characteristic known as pupils at risk of educational disadvantage; to require schools to establish individual education plans for pupils so identified and to monitor the educational progress of such pupils during their school career; to require certain information about such pupils to be published at a national level and to be included in reports compiled by Ofsted; and for connected purposes.
I wish to cast the House’s mind back 15 years. In 1999, the social exclusion unit in No. 10 Downing street came up with a particular term, an acronym, to define a group of young people: those not in education, employment or training, otherwise known as NEETs. In creating such a term, the unit did not just create another piece of jargon. The term helped policy makers for the next 15 years to focus on solutions for a particular group of young people who desperately needed attention. Today, it is unthinkable that we would not judge a Government on their strategy to tackle the country’s NEET population. It is not the term itself that matters, but the conscious creation of a definition of a section of the population that has previously been without a voice. That in itself creates a question to which we, as policy makers, then need to search for answers. A lens has been formed through which we can view a landscape that has been previously obscured.
The only problem with defining NEETs as an at-risk group of young people who should be monitored—with public policy held accountable for a reduction in the NEET population, as the 2004 public service agreement target attempted to achieve—is that the focus is centred on the output, rather than on how the simple outcome of becoming a NEET could ever have happened in the first place. By the time young people are not in education, employment or training, attempting to find a solution to their desperate problems, while genuine and entirely correct, fails to understand the real question: why were they allowed to fall into that situation? How could the school they once attended have let this happen? What did that school do to prevent this from happening? If schools failed, why are we not holding up a mirror to them and saying clearly, “Do you think this is acceptable and why have you failed your pupils in this way?”
The truth, tragically, is that we know which pupils are at the greatest risk of becoming NEET from an early age—usually from 11, if not before. It is said that the strongest indicator of whether a young person will be a NEET is their GCSE results. Just a quarter of current NEETs have obtained the benchmark five good GCSEs. Those are today’s NEETs, but what about the NEETs of the future? For pupils born in this millennium—after 2000—who are due to choose their GCSE options this year, 120,000 are already at risk of becoming NEETs simply because they are already underperforming at key stage tests and not mastering the basics in the three R’s. Just 8% of pupils who fail to obtain level 4 at key stage 2 tests will go on to obtain five good GCSEs five years later. At level 3 key stage 2, just 13% of pupils will go on to obtain grade C in GCSE maths. More worryingly, 40% of pupils who obtained level 4 maths in key stage 2 do not go on to achieve a grade C five years later. Those two statistics indicate that we know that pupils have a problem from an early age, but it is a problem that we prefer to hide until the inevitable outcome of educational failure becomes horrendously real: a young person without the qualifications that he or she needs, and unable to find work.
I believe that we need a new characteristic that should be monitored in all schools, to which schools should be held accountable, and that schools should report data to the Department for Education so that we can better understand the scale of the challenge. Introducing a new category of pupils “at risk of educational disadvantage” that will apply from a much earlier age will help us to deal with the problem of at-risk groups who are not currently defined. Pupils’ progress through school must be charted far more accurately, and not merely for the purpose of understanding whether they have achieved their potential. For some pupils, the risk and the consequences of educational failure are simply too great to ignore. In education, accountability matters. Those who turn their backs on testing are, in truth, turning their backs on the importance of ensuring that the pupils who need help the most are given that help.
First, we must introduce a measure that will allow aspirations to be redefined and the bar to be raised. The present Government have recognised the value of creating new data sets and performance measures as means of raising standards in schools. The introduction of the English baccalaureate, or EBacc, is one example. I believe that the EBacc will, in time, be recognised as one of the most important education measures that the Government have introduced. The number of history GCSE entries is the highest it has been for 16 years, the number of modern languages entries has risen by 18%, the number of entries in the separate sciences is the highest it has been for 16 years, and the number of geography entries is the highest it has been for nine years.
Following the introduction of the pupil premium, targeted support has been available for an entire cohort who are deemed to be eligible for free school meals. I realise that many schools, if not the majority, will already be tracking and monitoring the progress of pupils who are recognised to be at risk of educational disadvantage. This is not unlike what happened in the case of the pupil premium. A research report by Hannah Carpenter, commissioned by the Department for Education and published in July 2013, showed that 90% of schools were already targeting pupils who were considered to be disadvantaged, but that did not mean that the introduction of the premium was wasted. Eighty per cent. of schools said that they had enhanced their existing support or introduced new levels of support, and more than three quarters of schools had encouraged families to register for free school meals. Those were welcome outcomes, achieved simply through the introduction of another lens.
The value of targeted support through the pupil premium is accepted, but that measure alone tends to place weight on economically based barriers to learning. I am thinking particularly of the bar that has been set for the definition of a “free school meals” pupil as one from a household whose income is less than £16,300 per annum, or which is receiving income support. We should recognise that free school meals status is no parallel indicator, or proxy, for educational disadvantage, although there is a close correlation. A great many economically deprived families remain outside the formal definition of the free school meals category. We need to think about what it means to be educationally disadvantaged. To put it simply, all pupils who are at risk of educational failure—failure to achieve the basics, or failure to achieve their potential—must in future be targeted, regardless of their economic status. Creating the category of “at risk of educational disadvantage” for pupils at an early age would help to raise their profile.
Given that “progress 8” measures are to be introduced in 2016, now is the ideal time to introduce the national benchmark that I propose, with new accountability measures to assess the progress made by pupils in eight subjects. Attainment at key stage 4 would be compared with what pupils were predicted to achieve when they left primary school aged 11. Under current proposals, pupils who score 29 points in their key stage 2 tests will be expected to achieve eight C grades at GCSE. Schools will be monitored for their ability to improve the level of progress that pupils will make in those eight subjects. That will become the new floor target for all schools, so if pupils make an average of half a grade less progress than expected in their eight subjects, their schools will be judged to be underperforming.
No doubt schools will also be expected to continue formally to monitor and record the performance of free school meals pupils. However, I hope that the formal introduction of a new category of pupils—those whom we know from key stage 2 to be at risk of educational disadvantage—will enable us to begin to create a renewed awareness of the causes and consequences of educational failure, and, above all, of the need for early intervention to prevent it from happening in the first place.
Question put and agreed to.
Ordered,
That Chris Skidmore, Mr Robert Buckland, Justin Tomlinson, Andrew Percy and Paul Uppal present the Bill.
Chris Skidmore accordingly presented the Bill.
Bill read the First time; to be read a Second time on Thursday 15 May and to be printed (Bill 204).
Wales Bill
(10 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:08 - The House divided: - Ayes: 0 / Noes: 0 - Question accordingly negatived.
19:17 - The Committee divided: - Ayes: 6 / Noes: 265 - Question accordingly negatived.
21:06 - divided: - Ayes: 5 / Noes: 260 - Question accordingly negatived.
Hywel Williams (Arfon) (PC)
I beg to move amendment 32, in page 6, line 20, after ‘description’, insert ‘, a tax credit of any description’.
This amendment would allow the Welsh Government, by resolution of the National Assembly for Wales, to introduce new tax credits.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Amendment 33, in line 32, leave out ‘, each House of Parliament and’.
This amendment would enable the Welsh Government, by resolution of the National Assembly for Wales, to introduce a new tax without the need for approval by resolution of both Houses of Parliament.
Amendment 40, in page 7, line 13, at end insert—
‘(10) In the event that the power to add new devolved taxes under Section 116C, or the power to add new devolved taxes under Section 80B of the Scotland Act 1998 is used, the Chancellor of the Exchequer must undertake a review of the benefits of symmetry in the devolution of taxes between Wales and Scotland.’.
Clause 6 stand part.
Government amendment 20.
Clause 7 stand part.
Amendment 7, in clause 14, page 19, line 5, at end add—
‘(3) The Secretary of State shall review the historical volatility of stamp duty land tax revenues in Wales, and place a copy of the review in the Library of the House of Commons.’.
Clause 14 stand part.
Clause 15 stand part.
That schedule 2 be the Second schedule to the Bill.
Clause 16 stand part.
Amendment 8, in clause 17, page 20, line 29, at end add—
‘(3) The Secretary of State shall review the historical volatility of landfill tax revenues in Wales, and place a copy of the review in the Library of the House of Commons.’.
Clause 17 stand part.
Clause 18 stand part.
Amendment 42, in clause 28, page 29, line 34, leave out paragraph (2)(b).
Amendment 43, in line 36, at end insert—
‘( ) Part 2, except the referendum-related provisions and sections 19 and 20, will come into force the day after the Secretary of State has laid a report before each House of Parliament on the further legislative steps needed to move to a model of reserved powers for the National Assembly for Wales; the report must be laid within six months of this Act receiving Royal Assent.’.
Hywel Williams
Recommendation 11 of the cross-party commission on devolution in Wales states that the National Assembly should be given a power to introduce specified taxes and any associated tax credits in Wales. This recommendation was not included in the Bill. That might have been merely an oversight by the Government, although those of us who are a little more sceptical suspect that they deliberately omitted it from the Bill. Whatever may be the case, amendment 32 seeks to align the Wales Bill more closely with the Silk commission recommendations.
We in Plaid Cymru welcome the inclusion of an ability to introduce specified new taxes. We note that the Silk commission recommendation 11 states that the Welsh Government should retain the revenue from these new taxes without a deduction from the block grant. I hope the Government will ensure that that is indeed the case. Perhaps the Minister will confirm that when replying to the debates.
Although the issue of Barnett was not within the remit of the Silk commission or this Bill, it is a closely related issue and I hope we will be able to debate at least some of it when we look at new clauses. It is important not least because Labour, if I correctly understand its position, has said that Barnett reform is a necessary condition before it will support greater financial powers for Wales. That is a significant statement on its part, I think.
The ability to vary income tax and access to potential borrowing for investments that can boost the economy and create jobs in Wales are the central tenets of this Bill, but there are several areas within the Bill that, if fully developed, could bring real benefits to the Welsh economy. That is why, in addition to the ability to introduce new specified taxes, the ability to introduce associated tax credits is so important. Although much careful research and preparation would be needed before introducing a new tax and associated tax credits, and it would be unwise to pre-judge where and when that might be done, at least giving the Welsh Government the ability to do this would give them much more freedom to act and take greater responsibility for developing our economy, which hon. Members on both sides of the House wish to see. We could raise the revenue, where necessary, and provide tax credits in order to stimulate activity or to provide assistance wherever it was felt necessary, be it for individuals, businesses or areas of industry.
The amendment aims to preserve the integrity of the original cross-party Silk recommendations. For Plaid Cymru it makes perfect sense, and I urge hon. Members on both sides of the House to support it. Should we not press the amendment to a vote, or were we to do so and it were to fall, Government Members might consider tabling their own similar amendments on Report. Given that the principle of new taxes has been conceded in the Bill and that tax credits could be introduced, we would wish that to be the case.
Mr Mark Harper (Forest of Dean) (Con)
I will speak in more detail in my speech about why I do not agree with the hon. Gentleman’s amendment 33, but may I ask him to clarify whether he envisages the definition of a “Welsh taxpayer” for any of these new taxes being the one set out in clause 8, proposed section 116E? That is relevant to my constituents, who might inadvertently be caught by any of these new taxes.
Hywel Williams
The hon. Gentleman raises a point that was made at an earlier time. He has outlined particular difficulties faced by his constituents, with which I have a great deal of sympathy. I might as well concede that this is a probing amendment and I would be interested to hear what he has to say later in the debate. We have a great deal of sympathy with hon. Members across the House who point to the border as a particular problem area; as has been said in the earlier debate, so many of our population live just over the border and vice versa, so I entirely concede that we need to take this issue seriously.
Paragraph 4.6.8 of the Silk commission’s first report states:
“In addition to the use of taxes to achieve policy outcomes in devolved areas, credits can also be applied so that activities are effectively subsidised. While existing tax credits such as the working tax credits (and in future the Universal Tax Credit) should remain UK wide, the Welsh Government should be able to introduce its own credits in relation to devolved taxes and through use of devolved grants and subsidies to promote investment and getting people into work.”
That is a laudable aim and I urge hon. Members on both sides of the House to support us in order to fulfil it.
Amendment 33 would enable the Welsh Government, by a resolution of the National Assembly for Wales, to introduce a new tax without the need for approval by a resolution of both Houses of Parliament. Obviously, Plaid Cymru’s starting position is that Wales should be an independent country and that it should be for the people of Wales, through our own democratic institutions, to decide how its taxes are structured. However, the amendment would simply tidy the process of bringing in the new tax credits should the Welsh Government, through the National Assembly, decide to do so. I need not remind Members who represent Welsh constituencies or who are interested in the smooth functioning of democracy of the disastrous bureaucratic and constitutional nightmare that was the legislative competence order system. I was involved in that as a member of the Welsh Affairs Committee. Before the successful 2011 referendum on full primary law-making powers, the Government of Wales Act 2006 provided for further devolution, on paper. The reality, I am afraid, was that it came to resemble a Kafkaesque constitutional quagmire when the powers were to be devolved. The Welsh Affairs Committee, reporting in 2010, stated that requests for extra powers from the Welsh Assembly Government, as it was named then, too often disappeared into the black hole of Whitehall.
Mr Mark Williams (Ceredigion) (LD)
We agree that we have, on the one hand, the extreme of the LCO system and, on the other, the reserved powers model, which we will come to later in this group. The hon. Gentleman would, I think, subscribe to the reserved powers model.
Hywel Williams
The hon. Gentleman surmises correctly. The model is clearer, more elegant and more easily understandable, and we will be able to debate it later.
Going back to the LCO process, the hon. Gentleman will recall, as he participated in those long debates on LCOs—
Wayne David (Caerphilly) (Lab)
As the world expert on LCOs, I certainly concur with the hon. Gentleman about the cumbersome system. It is far better that legislative powers are solely with the National Assembly for Wales. Does he agree that despite the faults of the legislative competence order, the House succeeded in improving substantially the suggestions that came from the Welsh Government regarding LCOs and what happened to the legislative process afterwards?
Hywel Williams
I certainly do not want to rehearse the discussions and arguments we had on LCOs. LCOs were a curate’s egg—occasionally they went through without touching the sides. I remember chairing the LCO on mental health, which lasted for two sessions. The LCO on the Welsh language took rather longer.
Mr Mark Williams
Will the hon. Gentleman remind the House—I think he did some specialised work on this—of the number of hoops we had to go through to achieve legislative competence orders and of the fact that that did nothing to enhance democracy, which, mercifully, this Bill is seeking to remedy?
Hywel Williams
I thank the hon. Gentleman for that point. The contrast between what I propose now and the LCO system is extreme. I think I counted 27 individual stages, but it might have been 28 or 26—the figure is lost in the mists of time. It was an extremely complicated business. To be fair, Members on both sides of the House made positive contributions. I pay tribute to the hon. Member for Aberavon (Dr Francis), who is not in his place, for his skilled chairmanship. We got a lot through, but it was against the odds.
There is a danger that matters get lost in process, are ignored by the government machinery and do not progress at good speed. If we repeated the LCO process, we would be repeating a mistake and would unnecessarily create a drag on the smooth functioning of democracy. Surely the Members of the Assembly, through scrutiny, have, in partnership with the Treasury, the ability to carry out the requisite research, impact assessments and consultation. I hope that that ability is there. The need for a lengthy process of resolution in each of the Houses of Parliament when there is so often a strain on time—perhaps not at the moment, but often there is a strain on time—is surely a bar to the swift adoption of the system once the requisite preparatory work has been carried out in Wales. Surely if a matter is devolved, it should be devolved, and devolved fully and without the Government in Westminster seeking to keep their oar stuck in. As with many of our amendments that were considered in Committee last week, we say that it should be for the people of Wales, through their democratically elected institutions and representatives, to decide on the matters that have been devolved without being harried back and forth. The Government have conceded that Wales should have the power to introduce new taxes, and we are arguing for tax credits as well, as did Silk. That should be done without strings being attached that could prove a restriction and impediment.
Finally, let me return to the LCO process, which operated in much the same way as the new tax process is designed to operate. The Assembly used to submit a request for more powers, which was then scrutinised by the Select Committee on Welsh Affairs before its final approval by MPs and peers. There is no proposal in this case of scrutiny by the Welsh Affairs Committee, and one does not have to be a constitutional expert and/or an accountant to see what a tremendous drag and immensely time-consuming process that might be. At the time, the critics of the LCO procedure maintained that it was cumbersome and opaque, and they were proved right. Sir Jon Shortridge, the former head of the civil service in Wales, said that Wales was often seen as “a complication too far” by London. The Welsh Affairs Committee also said that there was “an unacceptable lack of transparency” in the Whitehall clearance process.
All this talk of the Government of Wales Act 2006 and the 2011 referendum reminds me that Westminster always relinquishes its grip on power with a clenched fist. Where it can, it will inevitably introduce roadblocks or constitutional caveats that mean that the power on offer is never fully recognised at first despite the overwhelming majority of people in Wales being in favour of devolving more powers.
For the smooth functioning of democracy and to save Members’ time in this place in the future, I strongly urge hon. Members to support our amendment should it come to a vote and impress on the Government the need to learn from the mistakes of the past and streamline the process of introducing new taxes and tax credits in Wales.
Mr Harper
It is a pleasure to serve with you in the Chair, Ms Primarolo. After the earlier exchange, I feel left out by not having experienced the pleasures of legislative consent orders. They sound absolutely fascinating and were clearly invented by the hon. Member for Caerphilly (Wayne David) so that he could be the self-proclaimed world’s greatest expert in them. I am feeling very left out indeed, but let us return to the matter in hand.
I want to say a little about this group of amendments and new clauses. The hon. Member for Arfon (Hywel Williams) reassured me on one point by saying that he shared my concerns, but I shall talk about that in a moment.
When I read amendment 32, which would allow the Welsh Government to introduce tax credits by resolution of the National Assembly, I wondered whether, as tax credits are an instrument of welfare policy, it would effectively amount to the devolution of that policy. That was perhaps a little unfair, but the hon. Gentleman did go on to talk about universal credit and other areas of welfare policy, suggesting that he would like to see them devolved to the Welsh Government. I do not think I would.
I understand the hon. Gentleman’s view, as he wants an independent Wales and to devolve absolutely everything, but if we devolved every area of tax and spending—welfare spending is, of course, the single largest area of Government expenditure—that would in effect create an independent country. I accept that that is the hon. Gentleman’s ultimate goal, but I suspect that in this Chamber today it is a goal that is not shared by anyone other than his right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd). It certainly is not shared more widely. I would not support it and the hon. Gentleman set out clearly in his opening remarks why this measure on tax credits is a Trojan horse to smuggle through the changes to welfare policy more generally that I, for one, would not want to see introduced.
Amendment 33, also tabled by the hon. Member for Arfon and his colleagues—I am glad to see the right hon. Member for Dwyfor Meirionnydd in his place—concerns a new tax. I asked the hon. Gentleman a question about a matter of concern to me. I said on Second Reading and on the first day in Committee that I was content with the definition of a Welsh taxpayer as set out in the Bill, but this proposal fills me with concern for two reasons. First, it does not say anything about whether the definition of a Welsh taxpayer would remain the same, and I set out in earlier debates my concerns about companies in my constituency employing residents of both England and Wales and the increased complexity. I raised that with the Exchequer Secretary to the Treasury, who was able to reassure me that Her Majesty’s Revenue and Customs would be able to look at such things when it reports both to this House and to the Assembly.
Owen Smith (Pontypridd) (Lab)
The hon. Gentleman is making an interesting contribution. I agree about the need to consider the impact in other parts of Britain, including Northern Ireland, of asymmetry in taxation. He says he is sanguine about the prospect of these powers being exercised in Wales, but would he be sanguine about lower taxes for higher rate taxpayers potentially attracting to Wales higher rate taxpayers who contribute to the local economy of the Forest of Dean?
Mr Harper
I have a couple of responses. First, because I was present for our interesting debate on the first day of Committee, I know that the so-called lockstep provisions in the Bill mean—this is my understanding; I am sure the Exchequer Secretary will correct me if I am wrong—that it would be impossible to reduce the higher rate of taxation without also reducing the other rates in lockstep.
I would be delighted if taxes generally were reduced. Government raise too much money and spend too much of people’s money, and I am very pleased that in his recent Budget the Chancellor was able to increase the personal allowance again to allow my constituents to keep more of their money. I think they generally spend it better than even the Exchequer Secretary can spend it. I want my constituents to keep more of their money and keep his grubby mitts off it, but of course we have challenges to deal with, such as the deficit that we inherited, so increasing those tax cuts will not be possible. Cutting taxes generally would be helpful, and if cutting taxes in Wales meant that we saw lower taxes across the United Kingdom, that would be an entirely welcome prospect.
Owen Smith
Cutting taxes in Wales would not necessarily lead to lower taxes across the whole of the UK. The hon. Government is right about the lockstep provisions being designed to mitigate the effect of cutting taxes only for the wealthiest. However, if taxes were cut, as the Secretary of State has said he wants to do, for taxpayers in Wales, would that not be a potential disbenefit to the hon. Gentleman’s part of the world, should people move in order to avail themselves of those lower tax rates in Wales?
Mr Harper
No. That would create pressure on the Chancellor to make sure that tax rates were lowered. I am grateful to note that the hon. Gentleman appears to have become a convert to lower taxes and that will lead to an interesting conversation with members of his shadow team, who appear to be wedded to higher taxes. Creating an incentive to put downward pressure on taxation not just in Wales but across the United Kingdom would be welcome. There are many pressures from interest groups and from individuals campaigning for Government to spend more money. We all know that there is no such thing as Government money; there is only money belonging to taxpayers. It is either money belonging to taxpayers today that we relieve them of or, if we borrow money, we relieve future taxpayers of money. Lower taxes mean that people keep more of their own money. I am very content with that. I just want to make sure that it works properly.
On the point about higher rate tax, I had an entire debate in Westminster Hall on this to make it clear that I thought the priority for the Treasury when cutting taxes was to focus on those on median incomes—those in the middle. That is why I welcomed the changes to the personal allowance in the Budget, which in the context of the changes that we have made over the past four years deliver more of the benefit to those on middle and lower incomes than those at the higher end. My priority is focusing on those on middle incomes.
David T. C. Davies (Monmouth) (Con)
My hon. Friend is making a logical case to give the Assembly powers over taxes, but is not the reality that the Assembly will not behave in a logical fashion? Rather than cutting taxes, as he presumes and as even the hon. Member for Pontypridd (Owen Smith) seems to be suggesting, the Assembly will ratchet up taxes at all levels, and my hon. Friend will benefit enormously because many talented and wealthy people in Wales will cross the border, go and live in his constituency and pay their taxes there, leaving us bereft of the money that we could be spending on public services.
Mr Harper
I am grateful for the intervention from my hon. Friend, who chairs the Welsh Affairs Committee. He has put me in two minds. I am not sure whether to welcome his pessimism about the way he thinks the Welsh Assembly Government and the Welsh Assembly will behave, and look forward to the incredible opportunities that he sets out. If the Welsh Government do not learn from history and if they think it sensible to raise taxes, whether landfill taxes, stamp duty land tax or income tax, the flipside of the proposal from the hon. Member for Pontypridd (Owen Smith) is that rather than attracting people to go and work and live in Wales, the effect may be the one that my hon. Friend suggests.
If any businesses currently located in Wales want to relocate to the Forest of Dean, they will be made incredibly welcome. I will personally talk to the local council to smooth their way, and if residents want to come and live in the Forest of Dean, they will find a very good quality of life. If they want to pay their taxes in England, I certainly will not stop them. It seems that I can have it both ways. If the Welsh Assembly behaves in the way my hon. Friend fears, it will be good for my constituency. But to be serious for a moment, he puts his finger on it: he worries about the impact on Wales. I trust to some extent the good sense of voters in Wales.
By not devolving the tax powers that are set out clearly in the clauses that we are debating today, one of the problems is that the Welsh Assembly Government have to worry only about spending money, not about raising it, which leads to the consequences that my hon. Friend sets out. The Welsh Assembly Government do not have to think carefully about the price to be paid. If politicians’ minds are focused on the price to be paid, whether it is individuals choosing to leave Wales or entrepreneurs choosing either not to set up their businesses in Wales or to move existing businesses to more hospitable parts of the United Kingdom, that will concentrate minds well, even if the Government there are not of that mind to start off with. It may also create political opportunities for parties that do behave in such a way to make inroads in the Welsh Assembly elections and in parliamentary elections to this House.
Owen Smith
The hon. Gentleman is being generous with his time, even if he is slightly misrepresenting what I said earlier. The proposal to cut taxes in Wales rested on the prospect of a Conservative Government, led by his Front-Bench spokesmen’s colleagues in Wales. As he is talking about inward investment and business investment, would he like to take this opportunity to congratulate the Welsh Government on a 244% increase in foreign direct investment into Wales, higher than in any other part of Britain?
Mr Harper
I always congratulate people on bringing investment into the United Kingdom. I am sure that the Welsh Government work hard to do that. But I am also sure that those businesses are mindful of the competitive corporation tax regime created by my right hon. Friend the Chancellor, which has provided a good base in the United Kingdom from which to do business. That competitive corporation tax regime does not just benefit companies in England; it also benefits companies in Wales, Scotland and Northern Ireland. That competitive tax regime is one that we want to see go further.
Alun Cairns (Vale of Glamorgan) (Con)
I cannot let the shadow Secretary of State for Wales get away with championing the success of inward investment and talking in percentage terms. We need to recognise the low base and the Welsh Government’s poor performance in recent years in attracting inward investment. Clearly, any growth needs to be recognised, but we also need to recognise the failure over the last decade, which compares significantly with the previous record.
The Second Deputy Chairman of Ways and Means (Dawn Primarolo)
Order. We are now going just a touch wide of the amendments, which are specifically about new powers and the process for them. The hon. Member for Forest of Dean (Mr Harper) is also ranging quite widely, so I would be grateful if he addressed the amendments.
Mr Harper
I will not dwell at any length on my hon. Friend’s point, but it is always interesting to get that perception of the facts on the record, which is slightly different from that set out by the shadow Secretary of State.
The Minister will doubtless talk about new clause 20 —this probably comes back to the amendment tabled by the hon. Member for Arfon—which limits the ability that otherwise might be there for the Welsh Government to interfere with how HMRC operates, and how they use their powers, unless it is specifically for devolved taxes. I am pleased that it contains the condition that the Treasury has to consent to the provision. I think that this is the response to the concern I raised in my question to the hon. Gentleman on amendment 33, which is that even if the tax falls directly on Welsh taxpayers, there may be effects that range more widely, either on businesses located in England, or businesses that hire people from Wales. The Treasury having to consent to that enables a UK-wide perspective to be applied, allowing Members of this House who represent English constituencies that will be impacted by the tax to have a democratically accountable mechanism for speaking to Treasury Ministers, raising those concerns on behalf of their constituents, and allowing the Treasury to take them into account. I am pleased that that Treasury backstop provision remains there and I would not want to see it removed.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
The hon. Gentleman might be worrying too much about something that is fairly straightforward. In fact, just outside Chester there is a pub that has one bar in Wales and one in England, and it seems to be doing rather well.
Mr Harper
I do not doubt that businesses can operate in that way. What I do not want to see is businesses that today are operating perfectly happily, attracting customers from both sides of the border, finding that the Government’s intervention will impose a complicated regime. We all know the refrain, “I’m from Whitehall and I’m here to help you”—I assume that “I’m from Cardiff Bay and I’m here to help you” is greeted with the same warm delight in Wales. If they happen to have land on both sides of what is currently not a border, as far as they are concerned, I do not want them suddenly to be faced with a complicated taxation regime that will require them to hire expensive accountants to deal with it.
My plea to the Minister is therefore this: recognising that we would have to deal with that land in different ways, can we ensure that whatever administrative system is put in place is as straightforward as possible, and not just for HMRC, but for my constituents and those in the constituency of my hon. Friend the Member for Monmouth (David T. C. Davies) who might operate on both sides of the border?
Notwithstanding my concerns about some of the amendments that have been tabled, I generally welcome the devolution of these taxation powers to the Welsh Assembly, because I think that democratic institutions that spend money also ought to raise it.
Owen Smith
It is a pleasure to serve under your chairmanship, Ms Primarolo. I rise to speak to amendment 40 to clause 6, which stands in my name and that of my hon. Friend the Member for Llanelli (Nia Griffith); amendments 7 and 8 to clauses 14 and 17 respectively, which deal with minor taxes; and amendment 43 to clause 28, which relates to reserved powers. It is also worth bearing in mind the amendment to clause 28 that we tabled last week, on what we described as the fair funding lock, which is relevant to that part of my remarks today.
All these amendments relate to the theme of stability and symmetry. Our contention is that although devolution has, for all sorts of reasons—historical, political appetite and timing—developed in an asymmetrical fashion across the UK, which has often been desirable and necessary, on both sides of the House we recognise that it is potentially undesirable for that degree of asymmetry to continue in future. It is undesirable because with it has come a certain instability in our devolution settlement. It is not a pressing problem of instability that has in any way threatened the existence of the UK, until recent months and years, but it is increasingly problematic. That instability and asymmetry has traditionally been exploited by nationalists in Wales and Scotland in good faith and with good intentions, from their perspective, but has led them to ratchet up demands for new and varied powers in Wales and Scotland, setting one part of Britain against another in seeking to extract benefit from their objectives of independence for Wales and Scotland through asymmetry of the settlement.
In recent months, another party has joined them in seeking to divide some parts of Britain from others and to separate people in one country of Britain from those in another for party political gain and ideology. That is the Conservative party, which has recently become a zealous if late convert to the cause of tax devolution and competition, and sees an ideological and legitimate benefit for a party that believes in low taxation, the Laffer curve and the logic behind the comments by the hon. Member for Forest of Dean (Mr Harper). It thinks that, from a relatively low political base in Wales, it has the potential to expand its presence by arguing that it is a low-taxation party in Wales.
I was intrigued to hear how sanguine the hon. Member for Forest of Dean is about the prospect of his constituents enjoying higher tax rates than those on the Welsh side of the border in the unlikely event of a Conservative Government in Wales. I am not sure that his constituents would be as sanguine as he is about the difference of a few yards making a 10% difference, potentially, in the tax rate enjoyed by them, compared with their neighbours.
Guto Bebb (Aberconwy) (Con)
I suspect that my hon. Friend the Member for Forest of Dean (Mr Harper) was relaxed because he had read the hon. Gentleman’s speech at the Llandudno conference in which he said that the 4,000 taxpayers in Wales who are currently paying the 45% rate should be paying a 50% rate.
Owen Smith
I will happily restate for the record our view that we ought to have a fair rate of taxation in Britain. That is why we have pledged that the next Labour Government will reintroduce a 50p rate in Wales and throughout the UK. Our proposal is directly relevant to the amendment, which is about symmetry between the powers enjoyed in Wales and in Scotland—
Owen Smith
I will give way in a moment, if the hon. Gentleman will calm down. I will finish my point and then the Floor will be his.
We want to future-proof the legislation so that, in the event of a Labour Government in Britain—we have already pledged in Scotland to take forward the Scottish devolution proposals and to extend the amount of income tax that can be devolved and the powers relating to that tax—the Chancellor would be forced to consider the benefits of symmetry and extending it throughout the UK.
Guto Bebb
Was the hon. Gentleman not rabble-rousing in his speech at Llandudno when he made it clear that a Labour Government in Wales would have the right to increase the tax rate to 50%? If he is concerned about tax competition, surely a 50% rate in Wales and a 45% rate in the rest of the UK would be problematic for the Welsh economy.
Owen Smith
I am not sure I was rabble-rousing. I would never describe the representatives of the Welsh Labour party as a rabble, although they may have been roused by my speech, and I trust they were. It is fair to say that they were reported as having been roused by my speech and I thank the hon. Gentleman for drawing that to the Committee’s attention. I am happy to repeat the view I expressed in that speech: that our worry is that the Conservative party has an established track record of cutting taxes for the wealthiest people, not just in Wales but throughout the UK, and is increasingly happy to support them and to act on their behalf. In the event of the Labour party winning the trust of people across Britain and winning the next election, we would like a Welsh Government to give the Welsh people, through their Assembly, the ability to deliver a progressive rate of taxation in Wales in keeping with the progressive values of the Welsh people. There is nothing wrong with that.
Mr Harper
I want to come back to the hon. Gentleman’s point about whether I would be relaxed about delivering a lower rate of tax. Depending on whether there would then be a reduction in revenues, and that had some consequences, I would have no problem with a lower rate of tax. One of the things my constituents find annoying about the current settlement is that they see money being spent without there being any connection with its having to be raised; it all just comes from the centre. I think that if the taxing and the spending are connected, constituents will be relaxed about it. Given what the hon. Gentleman said, if a Labour Government remain in Wales there is clearly no prospect of lower taxes in any event.
Owen Smith
I do not accept the premise of the hon. Gentleman’s remarks. Taxpayers in Wales elect a National Assembly that has a democratic mandate to exercise its powers in respect of taxation, just as his Government do currently. I have never accepted the argument that the only way to give accountability to the National Assembly is through its having powers to raise taxes as well as spend them. I accept that intellectually there is a clear line to be drawn between taxation and representation, and that an increased level of financial accountability is afforded if taxes are being raised as well as spent. That is why we do not oppose that aspect of the Bill. Let me be clear, though, that Labour does not favour—as do, clearly, the hon. Gentleman and his hon. Friends on the Treasury Bench—tax competition within Britain. We are believers in the Union and in the ability to pool risk and share rewards across Britain. That fundamental belief is undermined, in my view and that of the Opposition, by tax competition that would see lower rates set in Wales compared with those in England, Scotland or Northern Ireland.
We are sanguine about supporting these tax powers, given the correlation the Government have drawn with borrowing, which we think absolutely vital. We are equally sanguine about the fact that Wales—given that Scotland has already moved on to this perspective as a result of the Scotland Act 2012, passed by this Government—ought to enjoy similar powers. However, we will not go on to say that we need to cut taxes in Wales to undercut England, because we do not believe in Wales undercutting the English.
Mr Harper
Is there not a point about symmetry? The hon. Gentleman seems to be saying that the three parts of the UK with devolved Administrations need to move together in terms of the powers they have and the decisions they make. Surely the logic of devolution, particularly in the way that his party delivered it, was that there was a different settlement in those three parts of the UK. I accept that avoiding asymmetry might be a desirable outcome, but is it not a bit late for him to take that view, given the three different types of devolution that his party delivered in government?
Owen Smith
That is precisely what I said in my opening remarks. We have a tradition of asymmetry that results from history and the relative degree of appetite for these powers in Wales, Scotland and Northern Ireland at the point at which we introduced them. Given that the Conservative and Unionist party is increasingly exploiting that asymmetry for narrow party political ends and risking tax competition within Britain, we worry that we need to move towards a more symmetrical system. In truth, that is what this Bill does. It puts Wales and Scotland on a more symmetrical footing in respect of taxation policy. It puts Wales on precisely the same footing that Scotland will be on after 2016. We support that. Our amendment says that if Scotland were to go further, as it would be likely to do under a Labour Government, we would afford people in Wales the ability to move to a similar position.
Guto Bebb
I think the hon. Gentleman is either confused or has been misreported. The speech he made in Llandudno specifically stated that Wales would have the power independently to reinstate the 50% tax rate. If he is concerned about tax competition, then surely he can see that a 50% tax rate in Wales—whereas it is 45% over the border, 45 minutes from my constituency—would create a disadvantage for Welsh taxpayers.
Owen Smith
I have not been misrepresented or misreported—that is precisely what I said and in no way, shape or form is it confused. It is a reflection of our abiding concern that the Tory party seeks to cut taxes for the wealthiest people in Wales. That is not a progressive tax system and it does not reflect the views and values of the people of Wales. Therefore, if we were in power in Westminster and Scotland took on greater tax powers, we would afford the Welsh people a similar opportunity.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The hon. Gentleman said a moment ago that he did not believe that Wales should undercut England. In other words, he does not believe that Wales should have a lower level of income tax than England. Does he also believe that Wales should not have a higher level of income tax than England?
Owen Smith
No. That is why I said what I said and why we have tabled amendment 40. In the event of further cuts by a Tory Government to the taxes of the wealthiest people in Wales and England, we would afford the Welsh people the ability to set a more progressive rate and to reintroduce the 50p rate in Wales, just as we propose to do across the rest of the UK.
We are, of course, discussing a hypothetical point to an extent, because in the event of there being a Labour Government in Westminster—which is the only way Wales would enjoy these additional powers, unless the Secretary of State intends to amend the Bill—we would reintroduce the 50p rate right across the UK. The issue would then be a moot point in Wales.
Mr Gauke
This might be a hypothetical point, but it is interesting and revealing that, while the shadow Secretary of State is ruling out ever using income tax powers in Wales to reduce taxes, he is certainly not ruling out using them to increase taxes. As he is well aware, under the powers in the Bill, if he increased taxes at the additional rate, he would also increase the basic rate.
Owen Smith
Indeed. That should come as no surprise to anyone. The Exchequer Secretary, in his rather tortuous remarks, is attempting to put words into my mouth. I said in my speech in Llandudno—I say it again today—that in the event of a Labour Government in Westminster, we would afford the Welsh people the ability to put up the top rate of tax and reinstate the 50p rate in Wales. That is very simple.
Owen Smith
I will give way in a moment. We are not talking about increasing the basic rate or the top rate; we are talking about increasing the additional rate of tax. [Interruption.] No, it is called the additional rate.
Owen Smith
From a sedentary position, the Exchequer Secretary draws a distinction between the higher rate and the top rate. I fully accept that what I mean is the higher rate, by which I mean the 40% rate, as opposed to the additional rate of 45%.
Wayne David
Does my hon. Friend agree that the essential point is that, although we have asymmetrical devolution in the United Kingdom—there is a great deal of variation between the devolution settlements in Scotland, Wales and Northern Ireland—we still have one British economy? Having variation is one thing, but having huge divergence is something else altogether.
Owen Smith
The essential point we are making is that we, unlike the Conservative party, are not in favour of tax competition. We are not in favour of one part of the UK undercutting another, but the Secretary of State and the Tory party are. It is very simple.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
Leaving aside the escape route that the hon. Gentleman has prepared for himself with his hypothetical point, is he not recommending tax competition?
Owen Smith
No, I am not recommending tax competition. If the hon. Gentleman would like a further tutorial later, I will happily give him one on tax policy or anything else he likes.
None of the changes would of course come into effect unless what Labour has referred to as the triple lock is met. First, as the Bill lays out, we would need certainty that Wales was not worse off. We still have serious questions about whether Wales would be worse off—versus the Barnett formula and the block grant that we currently enjoy—if tax powers are taken. Secondly, we would need to be absolutely certain that there was fair funding for Wales, hence our fair funding lock. We are not talking about it today, but we did so briefly during the first day in Committee. For the changes to apply, Welsh Ministers would need to be satisfied that funding arrangements were fair before they triggered a referendum on exercising the powers. Thirdly, we would of course need such a referendum. As I said earlier, if the powers were exercised, they would be designed to mitigate the dangers of further Tory tax cuts for the wealthiest.
Amendments 7 and 8 on minor taxes and their volatility are probing amendments, unlike amendment 40, which we will push to a vote. Fundamentally, we broadly support the provisions—we certainly support the borrowing associated with the devolution of such powers and taxes to Wales—but we have significant concerns about how the powers will work, about the volume of these taxes and about how the Government have drawn a causal link between the devolution of these taxes and borrowing powers. The hon. Member for Forest of Dean raised other questions about the workability of the taxes and the manner in which they would be deployed.
On the connection drawn between powers and borrowing, I said on Second Reading and on previous occasions that the Government have yet to explain why they arrived at a rationale for associating powers with borrowing that is different from the one used in the Scotland Act. The Exchequer Secretary will know that the Scotland Act drew a connection between the capital budget for Scotland in respect of borrowing and the amount of borrowing allowed each year. The overall capital budget for Scotland is £2.3 billion, so borrowing of £220 million per year is allowed up to that ceiling. Why this Bill draws a different line between these taxes and the amount of borrowing has never been explained, and we remain convinced that the figure was just plucked out of thin air. If the Minister wanted to explain where the figure of £500 million came from and the basis from which it was derived, we would be very grateful.
As an indication of how the amount of money is significant—we support it—but perhaps not enough, Jane Hutt, the Minister for Finance, has announced only today an important package of funding on infrastructure, including £220 million for a new specialist cancer hospital at Velindre. I am sure all hon. Members welcome that, but it is a measure of how little £500 million buys these days. It is therefore incumbent on the Government to explain how they arrived at that figure.
We understand that the Government have made provision in the Bill such that the amount of money will not go down, even in the event of a reduction in the amount of taxes taken by the Welsh Assembly—that is guarded against—but the Minister will know that stamp duty and landfill taxes are especially volatile. In particular, stamp duty land tax is extraordinarily volatile year on year. For example, in Wales during the past five years it has been between £55 million and £130 million. Indeed, that difference of 60% occurred in just one year.
Mr Harper
On the capital borrowing level of £500 million—I think the hon. Gentleman was asking how the Government had arrived at that figure—I may be wrong, but I believe I touched on this on Second Reading. In the “Wales Bill: Financial Empowerment and Accountability” document, there is a quite extensive section on how the Government arrived at that figure. It was partly through allowing the Welsh Assembly Government to proceed with improvements to the M4. Is the hon. Gentleman seeking further details on that, because I thought the document was quite comprehensive?
Owen Smith
The point I was making—I hesitate to repeat it—was that there is a clear rationale in the Scotland Act 2012: a percentage of the overall capital budget for Scotland could be drawn down every year up to a maximum that was equal to the amount of the capital budget. The difference for Wales is that we have a direct line drawn with respect to the amount of taxes. We heard the Government describe it on Second Reading as relatively generous, because the overall amount of landfill tax and stamp duty land tax is around £200 million a year on average and the amount of borrowing is £500 million, so it could be seen as a 2:1 benefit for Wales. However, as I say, a different justification was used for Scotland, and it has never been clear from where that £500 million figure was derived. I suspect that the £500 million was a read-across from the £500 million previously enjoyed by the Welsh Development Agency, but if the Minister would like to tell us otherwise, we would be grateful.
Landfill tax is less volatile than stamp duty land tax, but in 2009-10 its yield fell by £100 million across the UK and by several million pounds in Wales. The whole point about landfill tax is that it is designed to reduce. As the amount of recycling done by local authorities in particular increases, the revenue from landfill tax will reduce; it is a disincentivising tax. It strikes me as particularly curious to attach a direct line between that particular tax and stamp duty, given its volatility, and the amount of borrowing, given that the Government now concede that the amount required by Wales is significant.
On the complexity of these taxes, I thought that the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) provided an interesting example of the pub in Chester, which has one bar in one country and another bar in the other. Having sampled the warm welcome of hostelries in Chester, I know that that is an excellent pub doing extremely well, but if the landlord came to sell it, how exactly would the Treasury decide which room was in which country and in which country the relative rate of stamp duty land tax or whatever tax it is in a devolved Administration or devolved setting in Wales would be paid?
There are no estimates of the number of houses in Wales in similar circumstances. Many properties are on one side of the border, but the land attached to them, included when the house is sold, is on the other side of the border. Our view is that the Treasury ought to have done a little more homework on just how many properties will be affected and what the relative degree of difficulty would be in implementation. I see the Exchequer Secretary shaking his head. We know that businesses were consulted on the potential complexities of different rates of income tax, but to my knowledge, no analysis has been undertaken by the Treasury in respect of stamp duty land tax or landfill tax, which I think is a bit remiss on the Treasury’s part.
Amendment 43 on reserved powers simply calls on the Secretary of State to issue a report
“on the further legislative steps needed to move to a model of reserved powers for the National Assembly for Wales”.
The hon. Member for Aberconwy (Guto Bebb), who is no longer in his place, referred to the conference in Llandudno that was addressed by my right hon. Friend the Member for Doncaster North (Edward Miliband), who made a further announcement about our intention to move to a symmetrical model of devolution as between Wales and Scotland.
In effect, that would mean that powers would be assumed to be devolved to the Welsh Assembly unless they were specifically reserved to the UK Parliament. That would hold many benefits for Wales. In particular, it would stop a Conservative Secretary of State, such as the one that we have currently, continually referring Welsh legislation to the Supreme Court. On three occasions, the Secretary of State has either sought to refer or succeeded in referring legislation to the Supreme Court, at a cost of about £150,000 a time. We do not know precisely how much it has cost. The Exchequer Secretary must know, so it would be good if he told us.
Mr Harper
The Secretary of State will no doubt correct me if I am wrong, but it seems to me that all he is doing in referring matters to the Supreme Court is ensuring that the legislative balance between this place and the Welsh Assembly is upheld, and that the legislation that sets out that balance is not trespassed upon. To follow the hon. Gentleman’s logic, he is presumably saying that if, God forbid, he were ever Secretary of State and the Welsh Assembly Government tried to move the devolution settlement unilaterally, he would simply acquiesce and not defend the rights of this place or the primary legislation that it has passed.
Owen Smith
That was the justification that the Secretary of State used at the time and he would no doubt use it again today. Our view and the view of many people in Wales is that what he did in respect of the Agricultural Wages Board was a party political attempt to tie the hands of the Welsh Assembly by arguing that it was employment legislation and not legislation that related to agriculture, which is devolved to Wales. Many of the learned counsel who offered their opinions on the matter backed the view of the National Assembly for Wales. We will wait to see what the ruling is. My point is simply that a shift from the conferred powers model to a reserved powers model would militate against such apparent confusion on the part of the Secretary of State and ensure that we had greater clarity about where the line lies between the powers of this House and the powers of the National Assembly.
Mr Mark Williams
I concur with much of what the hon. Gentleman has said about reserved powers. However, does he agree that the issue is less about party politics than about the clarity in the devolved settlement? That is why some parties are committed to having the reserved powers model in our manifestos. That is the conclusion that most people have reached after Silk II.
Owen Smith
Indeed; the hon. Gentleman’s party and my party are committed to having that in our manifestos. We see significant benefits in putting Wales in a symmetrical position to Scotland in respect of powers and in tying the hands of future Conservative Secretaries of State who might employ the same argument to tie the hands of the Welsh Assembly Government.
Mr Williams
Will the hon. Gentleman concede that Silk II found that the issue was about the clarity in the devolution settlement, rather than about party political motives and posturing?
Owen Smith
Absolutely; Silk said precisely that. I am saying today for the clarity of the Committee that we believe that the current Government employed the argument for party political purposes. They attempted to stop the Welsh Government doing what they wanted to do, which was to maintain the Agricultural Wages Board for Wales. That would have had significant benefits for some of the lowest paid workers in Wales. On that basis, I believe we can say firmly that Wales would be better off if we moved to a reserved powers model, with the greater clarity and additional safeguards that it would bring.
Finally, Madam Chair—[Interruption.] I beg your pardon, Sir Roger; I did not see you slip into the Chair, but it is a great pleasure to serve under your chairmanship once more. On the background to these clauses, we did not have much chance to discuss the so-called fair funding lock. The ability of the Welsh Labour Ministers in Cardiff Bay to determine whether they think the funding settlement for Wales is fair and adequate, in advance of their moving to adopt any of the powers of income tax—or any of the other taxes—is an important test. I hope that the Government will rise to that challenge at some point in the future.
Wayne David
I rise to support amendment 7. I recognise that it is a probing amendment, but it is nevertheless important to discuss the volatility of stamp duty land tax revenues in Wales. I will also speak to amendment 43 and the need to move to a reserved powers model for the National Assembly for Wales. I am aware that those two issues are not really related, but both are in this group of amendments, and in my view both are extremely important.
As the Silk report states, stamp duty land tax is a “relatively volatile tax”. Indeed, as the director of CBI Wales said only last year, SDLT raised about £210 million in Wales in 2007, but only £115 million in 2008-09. That is a relatively small amount, accounting for about 2% of the Welsh block grant, but a variation from £115 million to £210 million in two years is not insignificant. As Silk himself stated, the devolution of stamp duty land tax could pose potential risks for the Welsh budget.
Let me be clear: I am in favour of the devolution of stamp duty land tax, but I would like reassurance from the Minister about precisely how that volatility will be managed. The essential point is that devolving SDLT has consequences for the block grant, which would be reduced by the amount of SDLT collected in Wales. I would like a fuller and clearer explanation from the Minister about exactly how the block grant offset will be determined. Will borrowed resources be used to meet any shortfall when the receipts from land tax are less than expected? Does the Minister agree with the Silk report that the value of the deduction should be decided between the UK and Welsh Governments, and not by the UK Government unilaterally? I suggest that the deduction should take into account the volatility of the tax and the forecast revenue in Wales. I would therefore like specific reassurances from the Minister that these admittedly esoteric but nevertheless extremely important issues will be clearly addressed, so that we know precisely what we have before us.
My second point is about whether we move from a conferred powers model of devolution for Wales to a reserved powers model. In my view, there is no perfect model of devolution. In Northern Ireland and Scotland there is a reserved powers model, but—let us be honest—those models have their problems. We will all have heard about Scotland and Antarctica. For those who are not au fait with that problem, there was an issue of whether Antarctica was included in the devolution model for Scotland. It was not on the reserved powers list, and therefore the assumption was that it was devolved to Scotland in issuing licences and permits for people to operate in Antarctica when they were based in Scotland. Of course, that was an oversight by drafters, and it was put right retrospectively. I simply cite that example to show that there is no perfect model of devolution. We can cite other difficulties that arose when Scotland adopted the reserved powers model, but the fact that no model is perfect does not mean that a reserved powers model for Wales would not be a huge step forward. It would be a huge step forward, because we have heard—very eloquently—from the shadow Secretary of State about numerous examples of issues that have been taken to the Supreme Court by the Wales Office. At root, the problem is a lack of clarity, which would not exist if we had more clearly defined the reserved powers model.
We are all concerned about the Conservative party’s determination to prevent the Welsh Government from introducing measures to protect Welsh agriculture workers, and the case for moving to a reserved powers model has been well put by the UK’s Changing Union project. Under the title “The benefits of a ‘Reserved powers’ model of devolution”, it said:
“A ‘Reserved powers’ model of devolution would benefit Wales and the UK as a whole. A ‘Reserved powers’ model would provide much greater clarity about the legislative powers of the National Assembly for Wales. This will benefit civil society organisations, politicians, civil servants and the general public—in short the democratic process as a whole. A ‘Reserved powers’ model would place the relationship between Cardiff and London on a more stable, adult footing and help reduce the number of unnecessary disputes”—
which have been alluded to already in this debate—
“between the two levels of government. A ‘Reserved powers’ model of devolution for Wales would place Welsh devolution on the same footing as devolution for Scotland and Northern Ireland making it far more likely the UK will be able to develop more effective mechanisms to manage intergovernmental relations between central government and the devolved territories.”
That is an effective summation of the strong case for moving to a reserved powers model. I emphasise that there is no ideal model of devolution. Inevitably, devolution is a dynamic, but if we had this model, it would be far better than what we have at the moment.
Mr Mark Williams
Would the hon. Gentleman add to that list the availability of maximum flexibility in the future? We had the Government of Wales Act 1998, the Government of Wales Act 2006 and we now have this Bill. This piecemeal, step-by-step approach to what some of us would like to see—home rule in a federal Britain—is going on and on, but a reserved powers model would give us greater opportunities for flexibility.
Wayne David
Home rule, of course, was championed by Keir Hardie, who was the first Labour Member of Parliament, representing Merthyr and Aberdare. Home rule is very important and we must look at mechanisms to enhance that principle and take it forward. A reserved powers model would provide flexibility, but it would also provide greater coherence, stability and clarity. On those principles, it is superior to what we have at the moment, but—as I have said—there is no such thing as perfect devolution. Whatever the nature of the devolution settlement, we will always need to discuss, debate and even argue about some issues. On balance, however, I think a reserved powers model would be the right choice.
Do the Government recognise that a cross-party consensus is emerging in Wales that a reserved powers model would be superior to what we have at the moment? I ask the Conservative Minister not to dig his heels in on this, but to recognise that there is a constitutional consensus and that it means something. It is one of the essential underpinnings of a progressive view on devolution. For goodness’ sake, do not give the impression that his opposition to a reserved powers model is all about trying to prevent what we would see as progressive measures to protect agriculture workers in Wales. He is genuinely concerned about constitutional stability and flexibility, as has been said, and about achieving something approaching a cross-party consensus on the way forward for devolution. That is why the amendment is very important indeed. In some ways, it takes us beyond the parameters of the Bill, but nevertheless, if the House were to support it, it would give an important indication of how we all see devolution moving forward. It is therefore very important that we support the second amendment, amendment 43 to clause 28.
Mr Gauke
It is a great pleasure to serve under your chairmanship, Sir Roger, and to respond to the debate.
Part 2 of the Bill introduces a provision to devolve taxes to the Welsh Assembly. Clause 6 introduces a new part 4 to the Government of Wales Act 2006 and confers the required competence on the Assembly to legislate on devolved taxes, including their collection and management. Clause 6 also allows for further taxes to be devolved to the Assembly via an Order in Council and makes it clear that officials working in any body set up by the Assembly to administer the devolved taxes can be designated as civil servants if the Assembly so chooses. This applies whether the body only collects and manages devolved taxes, or is additionally responsible for the existing devolved subject of local government finance, including council tax and business rates.
Clause 7 makes amendments to the commissioners for revenue and customs Acts to allow Her Majesty’s Revenue and Customs to administer devolved taxes on behalf of the Assembly. The clause also amends HMRC’s information powers to allow it to share information with the Welsh Government in relation to devolved taxes.
Clauses 14 to 16 and schedule 2 provide for a devolved tax to replace stamp duty land tax on land transactions in Wales, in line with the recommendation of the Silk commission. Clauses 17 and 18 provide for a devolved tax to replace the existing tax on disposals of waste to landfill sites in Wales, again as recommended by the Silk commission.
Let me address Government amendment 20. In devolving tax powers, our intention is that the Assembly should have a free hand in choosing how it wants its devolved taxes to be administered and by whom. We do, however, recognise that HMRC has many years—indeed, if one includes its predecessor organisations many centuries—of experience in administering taxes within the UK, so we want the Assembly to be able to use HMRC’s services for these purposes if it wishes to do so. The proposed legislation in clause 7 provides for this.
As set out in the Command Paper, though, we believe that this should be on the basis of mutual agreement. The Assembly should not be compelled to use HMRC to administer its devolved taxes, but neither should the commissioners for HMRC be compelled to take on this role. At present, the 2006 Act would allow an Act of the Assembly to modify an existing function of HMRC or confer a new function on HMRC without the consent of the UK Government.
Amendment 20, therefore, amends parts 2 and 3 of schedule 7 to the 2006 Act to make it clear that the Assembly can only confer functions on HMRC and, once conferred, modify those functions if they relate to a devolved tax and the Treasury consents to it. The amendment ensures that the Assembly has the option of using HMRC to administer its devolved taxes, but puts appropriate safeguards in place for the UK Government in recognition of the vital role HMRC plays in collecting tax throughout the UK. I therefore hope that hon. Members will support the amendment.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Will the Minister give us any idea of how long he expects the process of seeking the Treasury’s consent to take, and how long it will be before the Welsh Government can use whatever powers it decides to confer?
Mr Gauke
All I can say at this stage is that we would consider any such request in good faith. We want to work in a constructive manner, and I believe that the UK Government have a record of doing that when dealing with the Welsh Government. Our amendment certainly does not constitute an attempt to delay matters. The Assembly has the option of using HMRC, but it is not compelled to do so. We think it reasonable, if the Welsh Government wish to use HMRC, for its commissioners and the UK Government to make a proper assessment of the overall impact on the UK.
Jonathan Evans (Cardiff North) (Con)
I hear what my hon. Friend says about the use of HMRC, but I think that my constituents would be keen to know whether the tax office in Llanishen in Cardiff in my constituency is likely to be the location where its work is done.
Mr Gauke
I am sure that my hon. Friend is right. As I have said, our intention is to work constructively. It will be for the Assembly to choose whether to make use of HMRC’s expertise, which is obviously considerable, but should it wish to do so, I think it reasonable for the UK Government to reserve the right to ensure that no demands are placed on HMRC that could disrupt the important work that it does throughout the United Kingdom, including in Wales.
Amendment 40, tabled by the hon. Member for Pontypridd (Owen Smith), seeks to place a duty on the Chancellor of the Exchequer to review
“the benefits of symmetry in the devolution of taxes between Wales and Scotland”
whenever a tax is devolved to either. It requires the Government to assess whether a tax that is being devolved to Wales should also be devolved to Scotland, and vice versa. I understand the intention of the amendment, but it fails to take into account the fact that key principles of tax devolution already exist. The UK Government have adhered to those principles, and we would expect future Governments to do so. They state that any changes should be evidence-based, and should be considered in a UK context. An assessment of the UK context would include an assessment of whether symmetry with the other devolved Administrations was desirable.
The amendment seeks to impose an unnecessary statutory basis on a process that the Government would undertake as a matter of course when considering the case for devolving further taxes to either Scotland or Wales. It could, indeed, lengthen the process of devolving new taxes in the future by placing a superfluous statutory requirement on the Government. I do not believe that it is necessary, or would improve the procedure for adding new taxes that is set out in the Bill. It may well be that the hon. Gentleman simply wants to probe Ministers to establish whether this or a future Government would take the issue of symmetry into account, but I do not find the argument for a statutory basis persuasive.
Owen Smith
We are indeed keen to ensure that the Chancellor has a statutory obligation to consider the benefits of symmetry across the piece on a statutory footing, but let me take up the Minister’s reference to the need for an evidence base to support taxation policy. Does he agree that it would have been wise of the Treasury to undertake some form of detailed behavioural analysis of the impact of tax competition in respect of income tax, or indeed any analysis of the impact that stamp duty land tax or landfill tax might have on behaviour?
Mr Gauke
I shall deal with stamp duty land tax and landfill tax later in my speech. As for income tax, I am tempted to explain to the hon. Gentleman yet again about the lockstep attributes of our reforms. He has expressed concern about tax competition, but it seems to me from his earlier remarks that he does not believe in it, and that, if he had a chance to seek greater tax competitiveness for any part of the United Kingdom, including Wales, he would not do so. Indeed, he seems to be advocating a policy of “tax uncompetitiveness” for Wales. However, I must not detain the Committee too long on that subject.
Wayne David
I realise that the Minister wants to make progress, and I know that he has rejected the suggestion that there should be an analysis of what might happen as a consequence of the Bill, but it would be helpful to have a clear articulation of the Government’s position on tax competition. Does he want tax competition, yes or no?
Mr Gauke
What we want is greater devolution in terms of income tax. When we debated the subject last week, I explained in some detail why we thought that it was a good thing, primarily because it would increase the accountability of the Welsh Government to the Welsh people, which I would expect Members in all parts of the Committee to want.
Amendments 32 and 33 were tabled by members of Plaid Cymru. Clause 6 introduces an important new power to devolve further tax powers to the Assembly via an Order in Council. The power has a broad scope, and can apply to brand-new taxes and to existing UK-wide taxes. The clause sets out the process for making such an order, which would need to be approved by both the House of Commons and the other place, as well as by the Assembly. Amendment 33 would remove Parliament from the process, so that the order would need to be passed only by the Assembly.
We recognise that it is important to give the Assembly and the Welsh Government the economic levers that are needed to generate growth in the Welsh economy, including the ability to introduce new taxes. We also recognise that—although this would depend on the proposal under consideration—if we are to proceed in a timely manner, it would be advantageous to be able to devolve further taxes without requiring primary legislation. However, a balance needs to be struck. Tax devolution should not be at the expense of reducing the overall tax receipts or competitiveness of the United Kingdom as a whole.
That last point is particularly important. As we stated in the Command Paper that accompanied the Bill, we would assess any proposals for further tax devolution against a number of criteria. For example, we would consider whether any new tax would affect the UK’s wider economic policy, impose disproportionate burdens on businesses or individuals, or create new tax avoidance opportunities. In short, the criteria would ensure that any new tax would not be to the detriment of the UK as a whole.
It is important for the devolution of further tax powers to take place in the constructive and collaborative manner that led to the Bill. It is therefore right for the resulting legislative process similarly to involve both the Assembly and Parliament, so that the proposal can be considered from the perspectives of both Wales and the wider UK. It would not be right for either to be able to legislate to devolve further taxes without the agreement of the other.
Owen Smith
I am grateful to the Minister for giving way to me for the second time. He said a moment ago that the Treasury would be concerned if any reductions in taxes in Wales led to reduced receipts for the Exchequer. Does he not agree with the Secretary of State that a Conservative Government in Wales should cut taxes, or does he think that that would necessarily always lead to higher receipts?
Mr Gauke
That is a matter for the devolved Administration, but the design of the income tax powers is such that we believe that we are striking the right balance.
Amendment 32 seeks to extend the power to tax credits. I know there was a little debate earlier as to whether this was about extending powers over the social security system as such, which is not the intention behind amendment 32. That was made clear by the hon. Member for Arfon (Hywel Williams).
Hywel Williams
I will seek leave to withdraw the amendment standing in my name and those of my party colleagues, but I would like to make a few brief points.
In response to the hon. Member for Forest of Dean (Mr Harper), who suggested our views on tax credits and devolution might be the thin end of the wedge in devolving universal tax credits, I should say that I was quoting from the Silk report that while existing tax credits, such as working tax credits and, in future, universal tax credits, should remain UK-wide, the Welsh Government should be able to introduce their own credits in relation to devolved taxes. That was the point I was making.
The other point I would make is this: the hon. Member for Pontypridd (Owen Smith) said Barnett would not be discussed. There will, I hope, be a debate on new clause 1, which is specifically about that issue.
Finally, we in Plaid Cymru see amendment 40 for what it is, which is an attempt to delay, and we will be voting against it. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 40, page 7, line 13, at end insert—
‘(10) In the event that the power to add new devolved taxes under Section 116C, or the power to add new devolved taxes under Section 80B of the Scotland Act 1998 is used, the Chancellor of the Exchequer must undertake a review of the benefits of symmetry in the devolution of taxes between Wales and Scotland.’.—(Owen Smith.)
Question put, That the amendment be made.
The Committee divided: Ayes 216, Noes 280.
Hywel Williams
I beg to move amendment 36, page 21, line 18, leave out ‘, with the approval of the Treasury,’.
The Temporary Chair (Sir Roger Gale)
With this it will be convenient to discuss the following:
Amendment 37, page 21, leave out lines 26 to 31 and insert—
‘(1) On receipt of notice of an appropriate resolution of the Assembly, the Secretary of State shall by order amend subsection (1A) so as to vary, in the manner indicated by the terms of such resolution, the means by which Welsh Ministers may borrow money.”.’.
These amendments would enable the National Assembly to change the way money for capital expenditure is borrowed, including the issuance of bonds, without the need for consent by the Treasury or Resolution of the House of Commons.
Amendment 35, page 21, line 31, at end insert—
‘(6) The Secretary of State shall make arrangements for an independent report to be compiled on the issuance of bonds by Welsh Ministers.
(7) The Secretary of State shall lay a copy of the report specified in subsection (6) before each House of Parliament within three months of this Act being passed.’.
The Scotland Act 2012 enables the Secretary of State, by order and consent of HM Treasury, to change how Scottish Ministers can borrow money for capital purposes, for example, allowing the issue of bonds. Clause 19(5) of the Wales Bill contains the same provisions. This amendment seeks clarification on the power to issue bonds.
Amendment 34, page 21, line 38, at end insert—
‘and if that amount is more than the amount for which it is substituted it shall not thereafter be reduced below that higher amount’.
This amendment would ensure that when the Secretary of State raises the borrowing for investment limit, it cannot subsequently be reduced.
Amendment 5, page 21, line 38, at end insert—
‘(3B) The figure mentioned in inserted subsection (3A) shall be recalculated on an annual basis to maintain its value in real terms against inflation.’.
Clause 19 stand part.
Clause 20 stand part.
Hywel Williams
Amendments 36 and 37 would enable the National Assembly to change the way that money for capital expenditure is borrowed, including the issuing of bonds, without the need for the consent of the Treasury or a resolution of the House of Commons. Amendment 35 seeks clarification on the power to issue bonds. Amendment 34 would ensure that when the Secretary of State raises the borrowing for investment limit, it cannot subsequently be reduced.
First, on the issuance of bonds, subsection 32(5) of the Scotland Act 2012 enables the Secretary of State, by order, to change the manner in which Scottish Ministers can borrow money for capital purposes—for example, to permit borrowing by the issue of bonds. Subsection (5) of the Wales Bill contains the same provisions. This amendment seeks clarification on the power to issue bonds.
Following the Scotland Act 2012, the legislation left the door open for the Secretary of State to enable the Scottish Government to issue bonds in future. The UK Government later launched a consultation on bond issuance and announced in February of this year that Scotland is to get the power to issue bonds. There is only one problem: it will have that power only in 2015. In the meantime, the small matter of the independence referendum in September might intrude.
Scotland aside, I refer Members to the cross-party Commission on Devolution in Wales. Recommendation 19 ends with the words:
“We also believe that the Welsh Government should be able to issue its own bonds.”
Given that local government throughout the British Isles can issue bonds, it is an anomaly that the devolved nation Governments cannot also do so.
The Silk Commission’s first report stated that
“while bonds may be more expensive at present, a possible future scenario where they may be cheaper or more attractive to the Welsh Government cannot be ruled out. We therefore see no reason in principle for preventing the Welsh Government from being able to issue its own bonds in addition to borrowing from the National Loans Fund and other sources such as commercial banks.”
Our amendment calls for greater clarification and seeks to expedite the ability of the Welsh Government to issue bonds. We need movement on this issue to enable the Government of Wales, should they choose to do so, to drive investment in infrastructure, and so improve our economy.
Hywel Williams
My understanding is that the Treasury would be expected to stand behind those bonds. I readily admit that I am not an expert on this matter, but I understand that that is the case for local government as well.
As I have said, we need movement on this matter to enable the Government of Wales to drive investment in infrastructure, and so improve the economy. Wales should have the same powers as Scotland. The Government parties should be held to their word: they agreed, through their representatives on the Commission on Devolution in Wales, that the Welsh Government should be able to issue bonds.
Amendment 5 is both simple and highly effective and would inflation-proof the borrowing limit in the Bill. We are unsure whether the Government have considered this matter, or whether they intend to put in place any safeguards to protect the amount of borrowing written into the Bill. The £500 million borrowing for investment limit is of course welcome. If the money is used wisely and for targeted investment in infrastructure throughout Wales, it would enable job creation, provide a welcome boost to the Welsh economy and drive up Welsh gross value added so that the economy no longer sits at the bottom of the economic league table of UK nations and regions. However, we are concerned that the value of the £500 million limit, written as it is in the Bill, might be substantially reduced in a relatively short time by inflation. We have tabled amendment 5 to inflation-proof the value of that amount. I hope that this was a simple oversight by the Government, rather than any calculated move to undermine over time the Welsh Government’s ability to make full use of the powers proposed.
Inflation at present is fairly low by recent standards, but in the space of a few short months it could jump. Some of us here can recall the ferocious problems faced by ordinary people when mortgage rates rose to 15%. As a dire warning, I have safeguarded my own copy of the Mansion House speech by the former Chancellor and Prime Minister when he praised the banking industry to the heavens—just before the heavens fell in. Inflation could jump as a result of international problems and recessions elsewhere in the world, and the value of the amount available through this Bill should not be diminished as a result of such inflation.
The powers available to the Welsh Government as a result of this Bill will not come on stream until 2017 and 2018—after the 2016 Welsh general election. If the past five years have taught us anything, it is that it is foolhardy to predict how the economy will look at the end of that time.
The borrowing for investment limit available in this Bill is the amount recommended by the Silk Commission. It is the integrity of the cross-party commission’s recommendation that this amendment seeks to preserve and safeguard, as well as to ensure that Wales has the full resources available to it to maximise the number of jobs and the prosperity created.
Mr Harper
I want to say a few words about clauses 19 and 20 and the overall powers for current and capital borrowing, but let me first touch on the amendments tabled by the hon. Member for Arfon (Hywel Williams). His answer to my question was my reading of the situation, too: the Treasury would, in effect, stand behind any bonds or other such borrowing. That is why, if he were to press the amendments to a vote, I could not support them. If the Treasury is going to stand behind such borrowing, it must have some control over the level of borrowing entered into.
We talked earlier about linking spending and accountability. If Welsh Ministers are to be able to borrow money, they must be accountable for repaying it from a revenue stream, and must be able to persuade the markets, based on the rate of interest they are paying, that they can do so. Alternatively, if the Treasury is going to stand behind such borrowing, Treasury Ministers and this House of Commons must have some control over the level of it. It might be possible to set a framework, and not every individual piece of borrowing might have to be sanctioned, but the Treasury must be in control of the overall level because otherwise, it is a one-way bet: people can just borrow the money and not have to worry about the rates they are paying if they know that the Treasury will pay it back. I can see why a Treasury Minister could not sign up to a blank cheque such as that, but frankly, I do not see why any Member of this House should, either.
In the previous debate, the shadow Secretary of State said that he was not sure how Ministers had come up with the borrowing figures. I briefly alluded to that issue in my intervention, and it was raised by the hon. Member for Swansea East (Mrs James) on Second Reading. Clause 19 amends existing borrowing powers, and clause 20 repeals such powers. Changes are made to current borrowing powers and a new section is inserted that deals with the capital requirements.
I hope you will forgive me, Sir Roger, if I mention an excellent document that is, I suspect, on the Table: the “Wales Bill: Financial Empowerment and Accountability”, published by the Government in March. People often criticise Ministers for not showing their workings—the phrase we used in the previous debate—and although I am financially qualified, I do not think that one has to be to be able to follow the document’s rather sensible reasoning. It deals with the borrowing powers amended in clause 19 and makes it clear that Welsh Ministers have the power to borrow £500 million—the limit previously set in the Government of Wales Act.
Effectively, that is the limit inherited from the previous Government, and within it, the Treasury has agreed that the Welsh Government can borrow up to £200 million each year. As the document says, the Welsh Government’s powers are being extended to comprise both in-year and “across years” current borrowing. As I read it, that extends the Welsh Government’s flexibility to borrow to deal with their current expenditure. The Bill enables Welsh Ministers to borrow money from the national loans fund, to which the hon. Member for Arfon referred, and to deal with differences in the outturn of taxes and receipts for the devolved taxes by borrowing across a number of years. Such “across years” borrowing must be repaid within four years. The overall limit can be varied both upwards and downwards—but not below the initial £500 million limit—through secondary legislation. The £500 million limit inherited from the previous regime is therefore kept in place.
That seems clear, as are the capital borrowing powers. The two taxes we discussed when considering the previous group of amendments—stamp duty land tax and landfill tax—are being devolved. The Government estimate that the revenue stream, which will support the borrowing, will be about £200 million a year. The capital borrowing powers will come in at the same time as the new devolved taxes: in April 2018.
The statutory capital borrowing limit is also set at £500 million—higher, interestingly, than if it had been set solely with reference to the tax-to-borrowing ratio that applies in Scotland. As I said on Second Reading, this is a more generous regime than the one applying to Scotland. The shadow Secretary of State referred in an earlier debate to keeping a symmetrical arrangement between Wales and Scotland. If we did that, using the same tax-to-borrowing ratio, the Welsh Government would be able to borrow only some £100 million. In Scotland, the capital borrowing limit is just over £2 billion, with about £5 billion of tax revenue. The Government have allowed the Welsh Government to borrow £500 million in advance—I think this information was elicited on Second Reading by my hon. Friend the Member for Monmouth (David T. C. Davies), the Chairman of the Welsh Affairs Committee—to enable them to proceed with improvements to the M4, should they choose to do so.
Owen Smith
The hon. Gentleman will know, as he has obviously read all these documents extensively, that the documents on the Scotland Act made no reference to the line drawn between the ratio of funds and taxes to be devolved, and the quantum of borrowing. Instead, a direct line was drawn between the capital budget for Scotland and the amount of borrowing. That was the point I was making, so I presume that he, like me, does not understand why a different rationale is being applied in the Wales Bill from that applied in the Scotland Act.
Mr Harper
I was listening carefully to the shadow Secretary of State but I did not quite follow him. I set out the Scottish Government’s capital borrowing limit, which is £2.2 billion, and they take responsibility for tax revenues of about £5 billion. The ratio between the two is slightly less than 1:2. If we used the same ratio in Wales, the Welsh Government would have a limit of about £100 million. I accept that the Secretary of State for Wales and colleagues in the Treasury have adopted a more generous approach, but I should have thought that the hon. Gentleman, as a Member of Parliament representing a Welsh constituency and as shadow Welsh Secretary, would welcome this asymmetry rather than—if I am following his argument—being critical of it.
Owen Smith
Does the hon. Gentleman accept that if a similar rationale were employed in this Bill to that which was employed in Scotland, the borrowing limit would be nearer £1.3 billion in total—£130 million a year—reflecting the £1.3 billion capital budget in Wales, which, as I say for the fourth time, was the rationale that was employed in respect of the Scotland Act, not the ratio between the borrowing and the amount of devolved taxation, as has been post hoc used as a justification in this Bill?
Mr Harper
I do not follow that argument at all. If I may pick up the point that I was making to the hon. Member for Arfon, the point we were debating on bonds was about repaying the money. If Ministers are going to devolve borrowing power to Welsh Ministers, it must reflect the revenue that Welsh Ministers have some influence over; otherwise, it would amount to enabling Welsh Ministers to borrow money, effectively, against taxes raised by central Government, and there is no accountability there. We then get back to the problem that we started with: Ministers could borrow to spend, no doubt on projects that they would deem to be popular, but there would be no accountability because the money would be largely repaid not through the taxes that had been devolved to Welsh Ministers, but through taxes controlled by Treasury Ministers, and that would set up perverse incentives.
If the Welsh Government are to be given borrowing powers, they should reflect the revenue stream that those Ministers are in control of. If the hon. Member for Pontypridd (Owen Smith) is arguing for more borrowing powers, therefore, he would obviously want to devolve some more taxes to go along with them; otherwise, it is just Welsh Ministers writing cheques on UK taxpayers, which ultimately the Treasury has to stand behind.
As I was saying before I gave way to the hon. Gentleman, my understanding was that the increase in the capital borrowing limit was intended specifically to allow the Welsh Government, in advance of the devolution of an element of income tax, to proceed with improvements to the M4, which I remember from Second Reading would be welcomed by my hon. Friends the Members for Monmouth (David T. C. Davies) and for Vale of Glamorgan (Alun Cairns). I am sure that although the hon. Member for Newport East (Jessica Morden) is being very inscrutable, she would welcome such improvements. Oh no, she is shaking her head—she does not welcome improvements to the M4. That will be news to her constituents; I thought she did.
The Bill also contains a power that enables the UK Government to vary—have I provoked the hon. Lady? No, I have not. It enables the UK Government to vary the overall limit both upwards and downwards. A joint process is in place between the two Governments to ensure a level of convergence. That seems sensible. That limit will be set at a level that the UK Government consider appropriate, based on an assessment of economic and fiscal circumstances and the impact of inflation. Amendment 5 has been tabled by Plaid Cymru. Paragraph 91 of the note that the Government have produced states that among the things the two Governments will consider when looking at the borrowing limit will be the impact of inflation on the real value of the limit. Given that both Governments will be participating in this collaborative process, that should mean that the limit can be kept at a real-terms level. I hope the hon. Member for Arfon will welcome that.
The final area is the independent revenue stream over which the Government have control. I argued earlier that borrowing must be related to the level of income.
The Government’s note explains comprehensively how the current borrowing and capital borrowing powers, which are set out clearly in clauses 19 and 20, were arrived at. I think I have set out clearly why I would not support the amendments tabled by Plaid Cymru on the ability to issue bonds, and the ability to keep borrowing levels at real-terms levels is covered in the Government document. I am happy to support clauses 19 and 20 but not the amendments in the group.
Nia Griffith (Llanelli) (Lab)
We very much welcome borrowing powers for the Welsh Government, as they will help them progress with investment in vital infrastructure projects and foster growth in the Welsh economy. Borrowing powers may also prove useful in enabling match funding to take advantage of European funds.
The Silk commission argued strongly that the Welsh Government should have
“the capacity to borrow for capital investment on a prudent basis subject to limits agreed with HM Treasury”.
These powers are all the more badly needed as the capital budget for Wales has been cut by one third by the current Government.
Alun Cairns
I want to sound a note of caution. I support the intentions of the Bill and I respect the case that has been made for the amendments, but those amendments could be seen as seeking almost limitless borrowing powers. As my hon. Friend the Member for Forest of Dean (Mr Harper) observed, borrowing powers need to be related to the amount of money that can be raised and to repayment. As we learned from the financial crisis of 2008-09, even when financial matters seem to be positive, changes can occur. Limits must therefore be set and a sensible approach adopted to borrowing across the whole of the United Kingdom, and particularly in respect of any institution that has a relatively limited capacity to raise its own funds, given that some of the Opposition parties do not seek to develop innovative and effective ways of using the extended powers granted by the Bill to raise funds by tax competition.
The £500 million capital borrowing limit set in the Bill, supported and approved by the Treasury, is sensible, amounting to £125 million a year. I want to bring an element of reality to the debate. Much of the focus has been on the need to improve the M4 motorway around Newport.
Alun Cairns
I am grateful to my hon. Friend for making that point. It is obvious where Plaid Cymru stands on the matter. The hon. Member for Arfon (Hywel Williams) made his case. I disagreed with it, but it is a respectable case which stands with the party’s politics in general. It seems inconsistent to make strong criticisms of an element of the Bill but not to table amendments seeking to improve the Bill or to make it more relevant, according to the Opposition’s argument.
The priority that has given rise to much of the debate about the need for greater capital spend in Wales is the need for improvement of the M4 around Newport. I pay tribute to the Chancellor and his efforts to encourage the Welsh Government to look positively at the need to improve that link. Many Members have spoken of the need for better infrastructure in and out of south Wales.
I remind the Committee that there was a commitment to such improvement pre-1997, by the then Secretary of State for Wales, my right hon. Friend the Member for Richmond (Yorks) (Mr Hague). That was to be funded entirely out of the Barnett block. The Barnett block at that time was £7 billion. It has now grown to about £15 billion. The shadow Welsh Secretary argues that Welsh projects cannot be funded without a significant increase in capital borrowing for such projects. Pre-devolution, without borrowing powers, those projects were to be funded out of the Barnett block as it was.
Guto Bebb
My hon. Friend makes an important point in relation to the proposed improvements to the M4. It should be noted that when the Bill was announced, the Secretary of State made it clear that this borrowing power should be for the M4 and also the A55. The Welsh Labour Government in Cardiff keep talking about the M4 and forgetting about the A55 and the needs of north Wales.
Alun Cairns
I am grateful to my hon. Friend for making that point. As a strong champion of north Wales he, along with the Secretary of State, will always ensure that improvements to the A55 are considered at the highest level.
Mr Llwyd
I, too, stake a claim to represent north Wales. On a point of clarification, the present Foreign Secretary was in post in Wales in 1997, before devolution. Now there is a £15 billion block, but that is to deal with health, transport and myriad other things which the old Welsh Office—not the Wales Office—did not have to deal with.
Alun Cairns
I am grateful to the right hon. Gentleman for making that point, but we will have to disagree. The Welsh Office at the time had exactly those responsibilities for transport, health and education. In the first Government of Wales Bill, the powers that the Welsh Assembly inherited were the same powers as had been held by the Welsh Office, which subsequently became the Wales Office. Additional powers have subsequently been granted, but they have been minuscule in proportion to the additional funding that has been provided. Out of a much smaller Barnett block grant, there was ambition for major capital projects. That ambition has gone.
I suspect I know why the right hon. Gentleman is a little bit uncomfortable. It is worth running through some of the history of the improvements that are needed in the M4 corridor. The then Secretary of State, my right hon. Friend the Member for Richmond (Yorks), committed to building that road. It was the right hon. Member for Neath (Mr Hain) who cancelled it after the 1997 general election. It was later proposed by the coalition Administration in Cardiff Bay—the coalition between Labour and Plaid Cymru—and the Transport Minister who cancelled it and who said that the Administration could not fund it was Ieuan Wyn Jones, the Plaid Cymru Assembly Member for Anglesey. That demonstrates the priority that the relevant parties have assigned to that much needed infrastructure improvement.
The Chancellor has pointed out on several occasions the need for improvement. He named the project in statements and in the Budget on one occasion to provide encouragement to the Welsh Government to improve this vital artery into south Wales.
Owen Smith
The hon. Gentleman’s argument would have more force were it not for the fact that only today in the Welsh Assembly the Minister for Finance, Jane Hutt, announced £1 billion-worth of further spending on infrastructure, several hundred million pounds on the Heads of the Valleys road, and £200 million on a new cancer hospital at Velindre that will no doubt benefit the hon. Gentleman’s constituents. Far be it from me to suggest that he might be out of date and no longer keeping up with matters in the Assembly, but that would appear to be the case.
Alun Cairns
Not at all. I welcome those announcements. I wish there had been an announcement about improvement to the infrastructure in my constituency, and I wish there was to be improvement to the main infrastructure coming into Wales along the M4 corridor, but today’s announcements are obviously positive. However, we need to underline the delays that take place on that artery, that investment is essential and that borrowing powers need to be granted. Improvement should have taken place well before now. The original commitment was made pre-1997 but the Labour Administration cancelled it and the Welsh-led Labour Administration have not built it since. We should consider the delays, the accident records, the damage to the south Wales economy, and the hauliers based in my constituency who have had to set up on the Avonmouth side of the border because of the lack of investment and ambition over the past 15 years on the part of the Welsh Labour Administration.
Wayne David
Does the hon. Gentleman not accept that borrowing powers are vital because the Welsh Government’s capital budget has been cut by one third because of central Government cuts?
Alun Cairns
The changes to the capital budget are nowhere near the cuts that the last Labour Chancellor proposed to make leading up to the Budget. We need to compare like with like, and we need to consider the financial circumstances at the time. One of my early points was that limitless borrowing powers simply cannot be granted because of the changes in circumstances that take place. The point has already been made that if we are asking the Treasury to stand behind the debt that is being taken on by the Welsh Government, the Treasury obviously needs to be able to support that and a sensible limit needs to be provided. The capital sum of £500 million is sensible, certainly in the first instance, but we need to be pragmatic about that over time.
Finally, the Administration’s infrastructure commitments, particularly the electrification of the Great Western main line, demonstrate the priority placed by the Government on the east-west link along south Wales, which has not been forthcoming since the M4 was cancelled all that time ago.
Paul Murphy (Torfaen) (Lab)
If I was an independent observer listening to the previous two Conservative Members’ contributions to the debate, I would wonder whether they wanted borrowing at all. The hon. Member for Vale of Glamorgan (Alun Cairns) seemed to be very lukewarm on the issue, and questioned whether all this should really come out of the revenue budget. My hon. Friend the Member for Caerphilly (Wayne David) made it perfectly clear: 33% of the capital budget has been cut. There is no question in my view, or in the view of probably all the parties represented in the Assembly, including the hon. Gentleman’s party, but that there is a need for capital spending on infrastructure in Wales, including hospitals, schools and all the rest of it. The hon. Gentleman seems to have a lukewarm attitude towards it.
Paul Murphy
I will give way in a second because I want to refer to what the hon. Member for Forest of Dean (Mr Harper) said. He did not really like the idea of what he termed “popular” capital projects. He gave the impression that the Welsh Government would go round Wales seeking out the most popular issues with which to woo the electorate. That is a complete load of baloney. There is a consensus among Assembly Members about what they want: the M4 relief road is one and the A55 is another, but there are others too, including the Velindre and other hospitals. I absolutely welcome the clause. The Government have done well in introducing it. The Labour Government should have done it. I was Secretary of State for five years and we should have done it then, but things move on and the Government have done the right thing, although I question the mechanics of it.
Alun Cairns
I want to set the record straight. I am merely sounding a note of caution over limitless borrowing powers. The figure of £500 million is sensible and pragmatic, and it needs the Treasury’s support. After the recent financial crisis, we need to recognise the risks of unlimited borrowing.
Paul Murphy
I agree with the hon. Gentleman on that, but I still direct the independent observer, from wherever he or she may come, to the beginning of his speech where he spoke about the benefits of dealing with these things, which the right hon. Member for Richmond (Yorks) (Mr Hague) dealt with before the 1997 general election, out of revenue. That is impossible given the strain on the revenue budget these days in Wales. The capital budget has to come out of a separate pot.
I want to emphasise the points made by my hon. Friends the Members for Pontypridd (Owen Smith) and for Llanelli (Nia Griffith) and others about the calculation of the £500 million.
Mr Harper
I would not have intervened but for the right hon. Gentleman’s accusation that I was lukewarm. I made it quite clear that I very much support clauses 19 and 20 and capital borrowing powers being devolved. I was objecting to the idea that they could be unlimited. That is why I argued against the amendments tabled by Plaid Cymru Members. I argued that there should be a role for the Treasury and this House in making sure that those measures were limited, but I absolutely welcome them and I will support them in the event of a Division this evening.
Paul Murphy
That is good to hear.
I come back to the issue of how this has been calculated. I was Finance Minister in Northern Ireland, where there is a stream of income from the rates. The household and the business rates go to the Northern Ireland Executive. But I do not believe that the way in which the borrowing powers were calculated for the Northern Ireland Executive were based on the fact that they had an income from rates. I certainly do not believe that the Scotland Act, which allowed Scottish Ministers to borrow 10% of the Scottish capital budget in order to fund additional capital projects, had anything at all to do with funding streams. I am not saying that funding streams are unimportant, but why should Scotland and Northern Ireland have separate calculations in order to determine what they can have, while Wales has to go by a different methodology? That is wrong. It is unfair. There should be fairness and equality in determining the capital budgets for Wales, Scotland and Northern Ireland.
The reason is probably that these things were done over a period of years in different ways. But it is not done with any consistency based on revenue streams. I wish that the Government could rethink that. Amendments have not been tabled because the Opposition support the issue of borrowing. The First Minister and other Ministers in Wales have been saying for at least two to three years now that to have borrowing and to increase their capital spending was the single most important thing they wanted. We welcome that, but we question the method by which the £500 million has been arrived at.
Mr Gauke
It is a pleasure to respond to the debate, and I thank all right hon. and hon. Members for their contributions. Clause 19 amends the Government of Wales Act 2006 to extend existing borrowing powers in relation to current spending and give Welsh Ministers new capital borrowing powers, and clause 20 repeals the existing borrowing powers that the Welsh Government inherited from the Welsh Development Agency.
Amendments 5 and 34 relate to the capital borrowing limit set in clause 19. Through the Bill, Welsh Ministers will be given new capital borrowing powers that will enable them to borrow up to £500 million. A non-legislative annual limit of £125 million has also been agreed with the Welsh Government. The Government have been consistently clear that borrowing powers must be commensurate with the level of independent revenue that is available to support the costs of borrowing, and a capital borrowing limit of £500 million is substantial relative to the tax powers that are initially being devolved. As hon. Members have already pointed out, if the same ratio between revenue and the borrowing limit had applied in Wales as in Scotland, the overall capital borrowing limit for Wales would have been closer to £100 million. The limit has been increased to £500 million to enable the Welsh Government to start improvements to the M4, should they choose to do so, in advance of a referendum on income tax devolution, and I hope that that flexibility will have the support of Members on both sides of the House. The Government recognise that the £500 million will not be appropriate for ever, but we believe that the arrangements we are implementing provide a more robust mechanism for reviewing and changing the limit than would be the case under the amendments. Specifically, the Command Paper published alongside the Wales Bill sets out the review process that we will undertake at each spending review, and the Bill makes provision for the limit to be changed through secondary legislation.
The UK and Welsh Governments have previously agreed a joint process to review convergence between Welsh and English funding at each spending review. That process will now be extended to ensure that the capital borrowing limit remains appropriate.
The Command Paper committed to consider not only the impact of inflation, but the economic and fiscal circumstances at the time of each spending review and the size of the independent revenue stream available to the Welsh Government. That means we will be considering a much broader range of factors than proposed by amendment 5. For example, if an element of income tax is devolved in Wales, applying the same ratio as in Scotland could suggest an increased limit for Welsh Ministers of around £1 billion.
Following the joint review process, the Bill contains the power for the UK Government to set out a new limit through secondary legislation. Although we have legislated that the limit cannot be reduced below £500 million, legislating that the limit can only be increased in future is not the right answer and could have unintended consequences. For example, consider the scenario in which the UK and Welsh Governments agree that the borrowing limit should be increased substantially. Under our proposals, the limit could be increased accordingly and, if necessary, reduced in future if fiscal conditions deteriorate.
The problem with amendment 34 is that it would act as a disincentive for future UK Governments to agree to increase the limit when fiscal conditions allow, because they would know that the limit could never subsequently be reduced. The UK Government would understandably be cautious about ever increasing it. We do not think that that is the best outcome for Wales, as it might result in unintended consequences.
The Bill provides a capital borrowing limit of £500 million, robust arrangements for jointly considering the limit with the Welsh Government and the appropriate flexibility for changing the limit in future. I hope that the whole Committee can agree with that approach and urge right hon. and hon. Members not to press amendments 5 and 34.
Amendments 35 to 37 cover the sources of borrowing available to Welsh Ministers to fund capital investment and the related powers and responsibilities that should be devolved. As a result of the Bill, Welsh Ministers will be able to borrow from the national loans fund or from banks to fund additional capital investment. The national loans fund is almost certainly the cheapest way for them to borrow, while borrowing from banks provides flexibility.
However, in the Command Paper published alongside the Bill, the Government explained that if a case for Welsh bonds was made, we are willing to consider it. That remains our position. But it is right that the UK Parliament retains the competence over the sources of borrowing available to the Welsh Government so that the UK Government can properly execute their macro-economic responsibilities. For example, it should be for the UK Parliament, rather than the Welsh Assembly, to decide whether it is appropriate for there to be another entrant into the sterling bonds market. As is consistent with that, although we are providing Welsh Ministers with these important new borrowing powers, it is right that the Treasury retains sufficient control over aggregate levels of public borrowing. I hope that this further explanation of our position will allow hon. Members not to press their amendments.
Let me explain the changes we are making in relation to current borrowing. Welsh Ministers can already borrow for in-year cash management purposes. That enables them to borrow up to £500 million from the national loans fund to manage the flow of funding in and out of the Welsh Consolidated Fund while maintaining a working balance. Clause 19 extends those powers by additionally allowing Welsh Ministers to borrow across years to deal with differences between the full-year forecast and out-turn receipts for devolved taxes. A non-legislative limit of £200 million a year has been agreed with the Welsh Government, within the continuing £500 million overall limit.
Hywel Williams
I am grateful to the Minister for his response on amendment 5 and the point about inflation. However, I think that amendment 35 makes a very reasonable call for an independent report to be compiled on the issuance of bonds and laid before Parliament within three months of the Bill being passed, which would be an aid to all concerned. Therefore, I beg to ask leave to withdraw amendment 36, but I will press amendment 35 to a vote.
Amendment, by leave, withdrawn.
Amendment proposed: 35, page 21, line 31, at end insert—
‘(6) The Secretary of State shall make arrangements for an independent report to be compiled on the issuance of bonds by Welsh Ministers.
(7) The Secretary of State shall lay a copy of the report specified in subsection (6) before each House of Parliament within three months of this Act being passed.’.—(Hywel Williams.)
The Scotland Act 2012 enables the Secretary of State, by order and consent of HM Treasury, to change how Scottish Ministers can borrow money for capital purposes, for example, allowing the issue of bonds. Clause 19(5) of the Wales Bill contains the same provisions. This amendment seeks clarification on the power to issue bonds.
Question put, That the amendment be made.
David T. C. Davies
I beg to move amendment 12, page 23, line 4, at end insert—
‘(1A) In Part 1, in paragraph 9 (Health and health services), after “national health service” insert—
“Organisation and funding (expenditure and income) of the provision of health services in England to people registered with a GP in Wales and the provision of such services in Wales to people registered with a GP in England.”.’.
The Temporary Chairman (Sir Roger Gale)
With this it will be convenient to discuss amendment 13, page 23, line 17, at end insert—
‘(d) the scrutiny of reductions of, and additions to, the block grant to reflect expenditure and income arising from the provision of certain services in England to people resident or otherwise eligible for such services in Wales and the provision of such services in Wales to people resident or otherwise eligible in England.’.
Amendment 14, page 23, line 24, at end insert—
‘(g) a Welsh Minister responsible for a service falling under section 13(d) (definition of budgetary procedures)’.
Government amendment 29.
Clause 21 stand part.
Amendment 17, in clause 22, page 24, line 46, leave out ‘and’.
Amendment 18, in clause 22, page 24, line 46, at end insert—
‘(ae) an estimate of the costs of providing services in Wales to people resident in England; an estimate of the monies received from HM Treasury to fund such provision; and an assessment of the effectiveness of any relevant agreements in place governing cross-border service provision, and’.
This amendment and amendment 17 to Clause 22 are intended to make the operation of agreements that govern cross-border services, such as the NHS protocol, more transparent to residents of both England and Wales.
Clause 22 stand part.
New clause 1—Review of options for Barnett formula reform—
‘(1) The Secretary of State shall make arrangements for a review of options for reforming the Barnett formula in order to meet the objective of calculating the block grant funding for Wales on the basis of need.
(2) The Secretary of State shall lay a copy of the report of the review mentioned in subsection (1) before each House of Parliament within six months of this Act receiving Royal Assent.’.
New clause 3—Cross-border health care—
‘After section 1 of the National Health Service (Wales) Act 2006, insert—
“1A Duty to have regard to impact on services in certain areas
In exercising functions relating to the health service, the Welsh Ministers must have regard to the likely impact of those decisions on the provision of health services to persons who reside in an area of England that is close to the border with Wales.”.’.
This New Clause places a duty on Welsh Ministers to consider the impact of their decisions on the provision of health services to people who reside in England, analogous to a duty already placed on the NHS Commissioning Board in England to consider the impact of its decisions on people residing in Wales and Scotland.
New clause 10—Welsh Government Finance Department—
‘The Welsh Government may, by resolution of the National Assembly for Wales, rename its finance department and this shall be recognised as its official title in all dealings with the Treasury.’.
David T. C. Davies
I am grateful for the opportunity to speak to this amendment because I believe in the national health service. I know that I speak for all members of my political party in saying that we believe in having a truly national health service. The changes I am attempting to insert into the Bill would bring back the national health service that we once had but no longer have. At the moment, contrary to what people think, we have a regionalised health service with different systems in Wales, in Scotland, in England, and in Northern Ireland. It is a sad fact that in Wales, under the leadership of members of the Labour party, the Welsh national health service has been failing patients and letting people down. I care about that.
I also care about the patients who come to see in my surgery. They include Mariana Robinson, who has been speaking out in national newspapers over the past few weeks. I did not ask her to go the press; she came to see me to ask how she could tell the story of the scandalous treatment that she has been receiving. She was treated very well in a nearby hospital in England but then told that she could no longer have that treatment because funding was not available and she would have to be treated in Wales.
Only a few weeks ago, I spoke to a patient who had been suffering from cancer. She had been told that she was terminally ill and would not last more than a few months. She believes that she was, in effect, written off by the national health service in Wales. She found out about experimental treatment in England and accessed it. She is still alive. Her cancer appears to be in remission at the moment, and I wish her all the best. She obviously wants to continue to receive this experimental treatment in the same area, Newcastle, yet she too has been told that there will be no further funding for her.
There has always been a problem in getting cross-border funding, but it seems to have got a lot worse in the past 12 months, when a decision was taken somewhere along the line that meant that virtually anyone with an illness in Wales would have to be treated in Wales. I believe that this is part of the whole National Assembly mindset about doing everything in Wales because it feels that it can do it better.
Mr Mark Williams
Does my hon. Friend agree that we should not characterise this as an issue that affects only the borders of England and Wales? I can think of examples of constituents in Ceredigion who have been unable to access services in Gobowen and Frenchay hospitals for exactly the reasons he suggests.
David T. C. Davies
The hon. Gentleman is absolutely right. He will have to forgive me; I have been looking at this more from the perspective of a Member of Parliament in a border area where many patients find it much easier and quicker to access hospitals in Hereford—as they have for rheumatology, for example—or in Bristol, but it affects the whole of Wales because health care is becoming a more specialised matter. In an area of 3 million people, we will not have all the specialists we would like, and that means that there will always be those who need to travel in order to get access to the best on offer.
Albert Owen (Ynys Môn) (Lab)
In his opening remarks, the hon. Gentleman talked about regional differences. Has he carried out in-depth research on the situation in England, where there are issues with different health boards not being able to fund certain operations and services? Many of my constituents get good access to some of the best specialist treatments in the Liverpool and Manchester areas; Gobowen is a third good example of this. I am not quite clear about how he arrived at his earlier conclusions.
David T. C. Davies
I do not know whether this will surprise the hon. Gentleman, but I have not carried out in-depth research into every single health board in the whole of England. [Interruption.] No sir, I have not. I do not have the time because I am seeing so many constituents who are trying to get these treatments in England, having looked over the border and seen much higher standards of service.
In Wales, 42% of patients wait over six weeks for diagnostic tests; in England, only 1.8% of patients do so. One in seven people in Wales is on a waiting list. People wait three months longer for hip or knee replacements in Wales than they do in England. People are twice as likely to die of a hospital infection in Wales as they are in England. That is an absolutely shocking set of statistics. No cancer drug programme is available in Wales, unlike in England. People have to wait longer for ambulances in Wales than they do in England. I do not need to go and research the details of every single health board in England because I already know that the standard of service is far higher in England. It is not just me saying that: it has come out in reports such as those by the National Audit Office and, recently, the Nuffield Trust.
Owen Smith
The hon. Gentleman is giving an interesting though not entirely factual speech. Does he accept that in respect of cancer waiting times, for example, in his area of Monmouthshire there is a more stringent target for patients starting treatment within 62 days, and a higher proportion of patients meet that target than in England? Further, given that he speaks of information in reports, would he care to reflect on the 10-year study by the Nuffield Trust that concluded only a few weeks ago that everything he has said is untrue—that no one country in Britain is steaming ahead and no one country is lagging behind?
David T. C. Davies
The hon. Gentleman ought to be aware that I was citing the Nuffield Trust when I gave the statistics saying, for example, that 42% of patients in Wales have to wait more than six weeks for diagnostic tests as opposed to 1.8% in England. Of course, diagnostic tests are very important in treating cancer.
When it comes to allocating the blame for this, I do not blame doctors and nurses, and it is something of a fallacy to suggest that any Government Member has done so. I blame the leadership of the NHS in Wales and the decisions that have been taken over a period of years by Ministers in the National Assembly for Wales. If we are going to offer some praise to Labour, I will offer it to the previous Labour Government, who pioneered in England some of the reforms that this coalition Government have built on. That Government were happy to bring the private sector into the health service in England.
I recently spoke to a doctor down in Newport who specialises in conducting tests for bowel cancer. He gets a lot of patients coming to him from England whose treatment is being paid for by the NHS. I suppose that it comes down to specialisation. This is what he does, he is good at it, and it is what he specialises in. He gets people in and out quickly and deals with them efficiently and at a cheaper rate than the NHS would be able to. He gets a lot of patients coming in from England, but none from Wales, because of the dogmatic resistance to any use whatsoever of the private sector.
I am often characterised as being a right-wing Conservative—I suppose I am, and I am quite happy with that—but I do not want a privatised NHS or people having to pay to use the NHS. However, as somebody who has had to use it myself on quite a few occasions, I have no problem whatsoever with whether my treatment comes from somebody employed by the state or by the private sector, as long as I am getting the highest possible standard of treatment. That is a common-sense view that most people would adopt.
Owen Smith
Does the hon. Gentleman think that his constituents should have a lesser standard of cancer care and a lower target, as they do over the border in the neighbouring English constituency, or does he think it is good that in Wales we have a higher standard and a higher set of targets?
David T. C. Davies
I absolutely think that my constituents deserve the highest standard of care possible. There is a very easy way for them to get that, and that is for them to be able to choose it.
Alun Cairns
Does my hon. Friend agree that the shadow Welsh Secretary is being somewhat selective in focusing on one element of cancer care? Once the patient has seen the consultant, there is a regular need for medication, and accessing cancer drugs in Wales is much more difficult than in England because Wales does not have the cancer drugs fund. When we are considering cancer care, we need to look at the whole package rather than just one small element.
David T. C. Davies
My hon. Friend is absolutely right. Labour Members, or at least their colleagues in the National Assembly for Wales, are incredibly reluctant to deal with the issues and go into the detail in the same way as my hon. Friend. We have seen that in the decision of the Assembly’s Health and Social Care Committee to start taking votes on which witnesses they are prepared to listen to and which they are not. As somebody who has chaired a Select Committee for a number of years, I have heard witnesses give all sorts of evidence. I have often sat through whole inquiries in which I have disagreed with virtually every single word of evidence I have heard, but I never try to prevent people from coming in, because I believe that if people have something to say, we should welcome them, and that if I happen to have a different view, I can put it to them and challenge them on the facts. I have never heard of anything as outrageous as a Select Committee, which is supposed to operate in a non-political fashion, taking votes to bar people from giving evidence. That is absolutely disgraceful behaviour.
That is also reflected in the behaviour of some Assembly Ministers, who, rather than make the arguments the hon. Member for Pontypridd (Owen Smith) is trying to make, decry anyone who criticises the NHS as being anti-Welsh. There is nothing anti-Welsh about Members of Parliament for Welsh constituencies trying to demand the best possible health care for their constituents. I also thoroughly welcome the support I have received from the Prime Minister and the Health Secretary, who have rightly spoken out about this issue because they believe it is wrong and disgraceful that people in one part of the United Kingdom receive health care that is so much worse than that received by people in another part of the United Kingdom.
Owen Smith
I am grateful to the hon. Gentleman for giving way; he is being very generous with his time. Would he care to dissociate himself from the Prime Minister’s recent ludicrous description of Offa’s Dyke as a
“line between life and death”?
In the light of the Nuffield Trust report, which suggested that that is absolute nonsense, will the hon. Gentleman dissociate himself from those remarks or will he continue to scaremonger, just as the Prime Minister has done?
David T. C. Davies
When people are twice as likely to die of a hospital infection in Wales than they are in England, I am very happy to associate myself with every single word the Prime Minister says and I hope he will continue to draw attention to the shambolic level of health care we are putting up with in Wales.
David T. C. Davies
I will give way one more time, because I am not afraid to have the debate, unlike members of the Health and Social Care Committee in the Welsh Assembly.
Owen Smith
Excellent. I am grateful that the hon. Gentleman wants to trade facts. Would he like to commend the National Assembly for Wales for the fact that, on cancer and all the major tumour types, the rate of improvement for one and five-year survival times in Wales has been better than that in England?
David T. C. Davies
If the shadow Secretary of State is so confident that things are good in Wales, he will have no problem backing my amendment, because it is very simple. It would mean that any patient in Wales would have the right to seek treatment in England, with the cost of their treatment being deducted from the block grant of the National Assembly for Wales. Similarly, any patient from England who fancied waiting twice as long as their neighbours could seek treatment in Wales and the money could be added to the block grant. This is not about taking powers away from the Welsh Assembly; it is about giving the Welsh Assembly an opportunity to show how confident it really is in the standards of national health care it is delivering. If the hon. Gentleman is so convinced that his colleagues in the Assembly are doing a good job, he will have no problem at all supporting my amendment. It would not result in a problem, would it? There would be no cut in the block grant, because in the hon. Gentleman’s world nobody would try to leave Wales in order to seek treatment in England.
We all know that the reality is that hundreds, even thousands, of people who are currently patients in Wales want to be treated in England. Is it not a disgrace that Mark Drakeford, the Health Minister, is trying to skew the facts by saying, “Well, there are hundreds of people in England receiving treatment in Wales”? There are, but they do not want to have their treatment in Wales. They have set up an action group to demand the right to be repatriated to England, and I am sure my hon. Friend the Member for Forest of Dean (Mr Harper) will address that.
David T. C. Davies
I have given way enough times. I look forward to my amendment receiving the support of Labour Members. It is about creating competition between health services and I do not think there is anything wrong with that. It is about delivering patient choice and, most importantly, it is about recreating a national health service. The Conservative and Unionist party will also be the party of the national health service—the truly national British health service—at the next election, and I look forward to the support of Labour Members.
Mr Llwyd
I wish to speak to my new clauses 1 and 10, which are in this group. I was discomfited by what the hon. Member for Monmouth (David T. C. Davies) said, because, to be honest, he was running Wales down. Thousands and thousands of people who work in the NHS in Wales are doing their best at every single level, from the orthopaedic surgeons to those who clean the wards. There are problems, but there are problems in England as well. I was treated in Gobowen recently, not because I was given preferential treatment, but because the Bala practice happens to refer people to Gobowen for certain orthopaedic problems. I was dealt with promptly and well, and I have nothing but respect for those on that side of the border, as well as for those on our side of the border, which is the point on which the hon. Gentleman is lacking.
David T. C. Davies
I made it very clear in my speech that my criticisms are directed entirely at the leadership of the NHS in Wales and the National Assembly for Wales, not at the doctors and nurses who operate that service. I am happy to put that on record again. With all due respect, the right hon. Gentleman’s party has been very critical of the way in which the NHS has been run in Wales. I hope he is not going to fall into the trap—this is, frankly, the attitude of tyrants—of suggesting that any criticism of something is actually an attack on one’s nation. That is not the case at all and it is a dangerous criticism for him to make.
Mr Llwyd
I have not been uncritical; it is just that I was taken aback by the vehemence of the hon. Gentleman’s speech. I thought he was talking Wales down—that is my point. Everything is not perfect and I do not pretend it is—only a fool would say as much—but it is not half as bad as the hon. Gentleman alleges.
Chris Ruane (Vale of Clwyd) (Lab)
In stressing the positives for Wales, will the right hon. Gentleman welcome the fact that there are 60 nurses per 10,000 patients in Wales and only 50 nurses per 10,000 patients in England?
Guto Bebb
I am grateful to the right hon. Gentleman for giving way. Is it not the case that a Member of Parliament has a responsibility to speak up on behalf of their constituents, including people who work in the health service who, time after time, come to me with complaints? They do so quietly and behind the scenes, because they know their positions will be endangered. We have a responsibility to speak up for patients and NHS staff in Wales, who are very aware of the fact that the standard of service is not appropriate.
Mr Llwyd
I take the hon. Gentleman’s point. He may know that I was very critical of the Welsh Government for going down the track of closing smaller hospitals, leaving nothing in their wake and pretending that care in the community was available when it was not. I am not uncritical. We should voice concerns when they need to be voiced.
New clause 1 stands in my name and those of my hon. Friends the Members for Arfon (Hywel Williams) and for Carmarthen East and Dinefwr (Jonathan Edwards). If accepted, it would require the Government to review the options for reforming the Barnett formula in order to ensure that Wales is funded on the basis of need rather than population share, as is currently the case. Of course, it is out of the scope of this Bill to seek to change the Barnett formula and make sure that Wales is funded on the basis of need, but the issue of fair funding has become an integral part of the public and political discourse on the powers it offers and we seek to highlight its importance.
Although the need for fair funding—as reform of the Barnett formula has become known in Wales—was not set as part of the remit of the Commission on Devolution in Wales, the cynical among us might view that as a ploy by the Government to continue to ignore the ongoing loss to Wales of between £300 million and £400 million per annum, which is an incredibly large sum of money for such a small country.
Earlier, we debated the need for borrowing and the £500 million limit. We are actually undersold £400 million per annum already, and we do not seem to be too concerned about that or, at least, nobody has been in any great rush to address it. I venture to suggest that if that were put right, the £400 million could be very useful to the Welsh Government immediately.
The so-called formula was devised in the 1970s by Joel Barnett MP, who is now Lord Barnett in the other place. He was a Treasury Minister at the time, and he saw that a simple stop-gap means of funding Wales would be to do so on the basis of its share of population—about 5% of the UK total. However, since the 1970s, Wales’s GVA has fallen as a percentage of the UK’s, and Wales now has a higher number of disabled and older people as a percentage of the population than our friends in England. The formula was intended to be only temporary, before a longer-term and more equitable solution could be found. Politicians of all parties recognise that it is unjust and needs reform, except those in government—whoever is in government at the time.
As part of our One Wales coalition Government agreement in the last National Assembly, Plaid Cymru demanded that an independent commission be put together to examine the shortfall in the funding which Wales evidently misses out on each year through how the block grant is currently calculated. The Independent Commission on Funding and Finance for Wales, expertly chaired by the widely respected Gerald Holtham, entirely vindicated what we have said for upwards of 30 years—that Wales has been losing out. Indeed, the £300 million to £400 million figure has been endorsed by another Committee, the Constitutional Committee in the other place, which separately came to a similar conclusion.
Plaid Cymru has been campaigning for reform of the Barnett formula and to secure fair funding for Wales on the basis of need for more than three decades. In all my time in the House, which spans more than two decades, we have returned to this continuing injustice time and again. If I may reminisce for a second or two, I remember asking successive Labour Secretaries of State for Wales why they would not reform the Barnett formula. I do not seek to embarrass my good friend the right hon. Member for Torfaen (Paul Murphy)—he had to stick to his brief at the time—but there is now an acknowledgment that we are underfunded, and that therefore needs to be put right. As in any other part of the UK, we need to ensure fair funding in Wales, which is something that no democrat would deny.
Imagine my surprise when it emerged that the Labour party had put a caveat on devolving income tax powers for Wales, by stating that it would not hold a referendum until fair funding had been secured. The fact that it wilfully ignored the problem and even denied that there was one during 13 years in power in Westminster must be the symptom of a grave case of collective amnesia. The cynical among us would call that expedient, to say the least, while others might be tempted to see it as a roadblock in the path of greater devolution for Wales, put in place by the anti-devolution tendency that appears to be in the ascendancy among Labour Members from Wales at Westminster.
Susan Elan Jones (Clwyd South) (Lab)
How does the right hon. Gentleman marry his last comment with our very strongly stated support for reserved powers, an innovation about which I am very pleased?
Mr Llwyd
I am pleased that the Labour party agreed to the reserved powers model, but I am a little concerned and I will develop my argument about the difference of opinion on when the Barnett formula should be addressed. The hon. Lady’s colleagues in Wales have one view, and her colleagues at Westminster have another. As I have said, the caveat may be a roadblock to further devolution. In fact, according to Labour party policy as it now stands, it will be a roadblock to further devolution.
Chris Ruane
While the right hon. Gentleman is handing out plaudits to the Labour party, will he congratulate it on actually bringing devolution about? It included in its 1997 manifesto that devolution would be put to the people of Wales.
Jonathan Edwards
Is not new clause 1 a credibility test for the Labour party? It has put in place a roadblock on income tax powers, in that their devolution cannot happen until Barnett reform. If it does not support the new clause this evening, that will clearly show that its stipulation is a roadblock to further devolution.
Mr Llwyd
Yes, I agree with my hon. Friend, and not only Plaid Cymru is saying that. In a recent article, Professor Richard Wyn Jones of the Wales governance centre at Cardiff university said that because of the difference of view between Labour colleagues in the National Assembly and those at Westminster, and between Scottish Labour and Scottish Labour Members at Westminster,
“Scottish Labour seem to have no compunction about throwing Wales, one of the poorest parts of the Union, under the bus to shore up their own position… For Wales it is, sadly, a very different story. Yet despite this, the Barnett formula—used to calculate funding for the Scottish and Welsh Governments—operates in a way that ensures per capita levels of public spending is far higher for Scotland than for Wales.”
He develops that theme, referring to the Holtham commission, and continues:
“But what of Welsh Labour? It is surely inconceivable that the Shadow Secretary of State…will have been unaware of the contents of Powers for a Purpose, and its pledge to retain Barnett while rejecting a needs-based replacement. Yet, thus far at least, he has remained resolutely silent in the face of this assault on the long-term interests of Wales.”
And so it goes on: it is a pretty harrowing read, but it underlines the fact that unaligned expert commentators believe that denial of the need to get on with reforming Barnett as soon as possible is undermining the democratic process in Wales and its future.
In our party, at least, we are quite clear. We believe that Wales should be fairly funded on the basis of need, and that the Barnett formula should be recalculated to ensure that Wales does not lose out, potentially on billions of pounds, over the coming decade. We have always maintained that position. However, the thrust of what the Bill offers is, on the whole, a good thing, with greater financial and fiscal powers, despite our disagreement about some of the restrictions and conditions that the Westminster Government have placed on the powers. We are disappointed that they have failed yet again to take the opportunity to address the serious injustice of the lack of fair funding, but the Bill is a means of getting on with the important job of improving the Welsh economy—boosting it and, I hope, creating many jobs in the process through careful investment in infrastructure—because we know that a lot needs to be done.
We know that the Conservative and Lib Dem Government will not commit to reform of the Barnett formula. They have always said that it works, despite the fact that many of their senior figures in Wales have acknowledged that it does not work, but needs reform. This Government can never be trusted to put Wales’s interests first.
Mr Harper
Just to be clear, it is not right that the Government have said they will never amend the Barnett formula. They have said that the work on dealing with the deficit has to be the priority, before the Barnett formula can be looked at. They do not have a closed mind on that—they have another priority, which is the right one of dealing with the deficit—as the right hon. Gentleman is suggesting.
Mr Llwyd
I appreciate the pressures on the Government caused by the large deficit—that is fairly obvious—but it is not as though the Barnett problem has suddenly come out of the ether. It is a case of jam tomorrow, is it not? We have argued our case for 30 or 35 years, but others who are politically unaligned have now said that we are right. It has been on the table for eight or nine years, with very little movement in any direction and no initiative whatever. However, I accept what the hon. Gentleman says about the deficit.
Nia Griffith
The right hon. Gentleman’s new clause deals with Barnett reform, but if it were reformed, what would the position be in Scotland? Is it in his mind that Barnett reform would increase funding for Wales and decrease it for Scotland?
Mr Llwyd
I am in the thankful position of not speaking for Scotland. I have an opinion, however, as I would not like to see our colleagues and friends in Scotland being done down. I pose the question of whether we need a proper root-and-branch approach to the problem—something that will properly deliver. Come September, there may be no need for Barnett reform in Scotland.
Nia Griffith
Does the right hon. Gentleman agree with the Labour party’s announcement this week that we want to increase the funding for Wales, but not reform the Barnett formula as it affects Scotland?
Mr Llwyd
Asking me to say whether I think it is a good thing to increase funding for Wales is a rather strange question. If that ever happens, it will of course be a good thing, but rather than have piecemeal increases in funding, it would be better to have a lasting and proper formula that everybody could understand and that could stand the test of time—unlike the Barnett formula. Whenever I see the noble Lord Barnett—a wonderful character and a very nice man—he turns away. I hope it is not because it is me, but he always turns away, saying “I’m sorry, I’m sorry; the formula was not meant to be in place now”. He acts as if he thinks I am going to jump on top of him! He realises the point himself, so we really need to get stuck in on this issue. I hope that when the Bill is passed, we can reach an all-party consensus by sitting down and seriously having a go at addressing the Barnett crisis. As I say, rather than have a piecemeal approach to the problem, I would prefer a long-standing approach to which everybody could sign up.
Chris Ruane
I thank the right hon. Gentleman for giving way to me a third time. He talks about how Labour has treated Wales. In 1996, the Welsh block amounted to £6.7 billion; by the time Labour left government in 2010, it was £15 billion. Is that not an achievement?
Mr Llwyd
It was raised in line with inflation—[Interruption.] Let me finish. Other responsibilities came to Cardiff—virtually all the agriculture, the environment and various other things came in. [Interruption.] I would like to know the percentage, but I am not in a position to determine one way or another whether it amounted to a substantial increase. I do not think it was substantial: it was clearly above inflation, but other responsibilities had been devolved to Cardiff by that time.
Without trying your patience, Mr Crausby, I would like briefly to speak to Plaid Cymru’s new clause 10. The Silk commission’s recommendation 28—a brief one, you will be pleased to hear—states that the Welsh Government should set up a Welsh Treasury to manage the new powers contained within the report. The new clause extends that arrangement to the Bill. It is a simple but important new clause. In the spirit of our other amendments, it seeks to preserve the integrity of the cross-party Silk commission recommendations.
The commission recommended that if the Welsh Government are to be directly responsible for revenue raised in Wales, as will be the case with the advent of the Bill’s powers, they must develop their finance department into a Welsh Treasury. That is a common-sense approach. If the National Assembly for Wales decides to do this, in accordance with its will, so be it. It would avoid the need for inefficient and perhaps time-wasting tidying-up exercises, such as appear in the first part of the Bill. People in Wales have been referring to “the Welsh Government”—a change of name—so there should be no problem with calling the finance department “the Welsh Treasury”. It is common sense for that to happen. I hope that this simple new clause will be supported by both sides of the Committee.
Guto Bebb
I shall speak briefly to my amendments 12, 13 and 14, of which I am proud. I associate myself, too, not only with the amendment tabled by the Chairman of the Welsh Affairs Committee, my hon. Friend the Member for Monmouth (David T. C. Davies), but with his speech. There was nothing in it that was an attack on Wales. He was simply highlighting a real concern of our constituents that needs to be addressed. I believe that the amendments provide the opportunity to deal with the fact that we need an NHS that serves the people of Wales.
Albert Owen
I take the hon. Gentleman at his word that he is not attacking the NHS in Wales. He has to acknowledge, however, that both his and my constituents already get some of the best specialist treatment over the border in places such as Liverpool, Manchester and Gobowen. That just happens to be a fact of life.
Guto Bebb
That is true; the hon. Gentleman makes a statement of the obvious. Before I was elected, I was proud to support the campaign launched by my right hon. Friend the Secretary of State for Wales, who argued strongly that services in Walton rather than services in Swansea should be provided for people in north Wales. What the hon. Gentleman completely misunderstands is the fact that patient choice has been taken away in Wales. People in Wales can be referred to hospitals in England by a GP, but only if the GP makes that referral on the patient’s behalf. The opportunity to make a choice is not available to patients in Wales—very different from the situation that applies to patients in England.
The situation in respect of patient choice in Wales is simple. Some political parties in Wales argue strongly that patients in Wales should have entirely the same right to choose their preferred hospital as patients in England. For some reason, the so-called party of the national health service in Wales is of the view that that right to choose should be denied.
Nia Griffith
Does the hon. Gentleman not accept that patients in England need a referral from a GP? The way in which the funding is being reformed in England will make things difficult, because some GPs will have to make desperate choices about whose treatment they will fund.
Guto Bebb
The hon. Lady is mistaken. The NHS England website poses the question,
“Can I have a GP in Wales if I live in England?”
The answer is:
“Yes you can, but… Patient choice and the NHS Constitution do not apply to the NHS in Wales.”
In other words, patient choice does apply in England, but it does not apply in Wales.
It is important that this issue is debated, because the Government in Cardiff Bay state that the NHS in Wales is as good as the NHS in England. That is exactly the issue that our amendments highlight. They make it very clear that if patients from England elect to use services in Wales, there will be a corresponding change to the funding block, and if patients from Wales elect to use services in England, there will be a corresponding change to the block. If the confidence in the Welsh NHS that Opposition Members express in the media and on television is genuine, they would see no danger in the amendments. The amendments would simply allow patients from Wales who want to be treated in England and patients from England who want to be treated in Wales to have that choice. They are simply trying to ensure that we have an NHS that is national. Why is that so scary to the so-called party of the NHS? That question needs to be answered in this debate.
Secondly, I want to touch on the comments of the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd). I was genuinely disappointed to hear the comments of my hon. Friend the Member for Monmouth described as an attack on Wales. It is important in a mature democracy that we are able to highlight areas where service levels in Wales are not as good as they should be, because we should aspire to have the best. Whether we are talking about the NHS or education, we have a duty to highlight places where Wales is underperforming. To try to kill off that debate by arguing that all Members who highlight concerns on behalf of their constituents are in some way attacking NHS staff is unacceptable.
I might be suggesting that there is a motive where none exists, but perhaps the defensiveness that was articulated by the right hon. Gentleman reflects the fact that patient choice in Wales disappeared as a result of the “One Wales” Government. According to the House of Commons Library, the “One Wales” Government “eliminated patient choice”. Those are not my words, but the words of the House of Commons Library. It states clearly:
“Patients registered with a GP in Wales do not have a statutory right to choose at which hospital they receive treatment.”
The “One Wales” Government moved from patient choice to patient voice. That was a good soundbite that appealed to people who like poems that rhyme. However, in the Betsi Cadwaladr trust, patient voice meant that if somebody made a complaint, they might get a response in six months. Patient choice, which is what these amendments propose, means that patients in north Wales who feel that they would be better served by electing to be treated at a hospital in England would have that choice.
Mr Llwyd
Does the hon. Gentleman not accept that I do not have people crowding into my office to say that they were badly treated at the hospitals in Llandudno, Bodelwyddan or Wrexham or at Ysbyty Gwynedd, Bangor? People often come in to say, “If you’re in contact with those hospitals, will you please say that the care was excellent and that I have nothing but praise for them?” I do not recognise the problem that he perceives. I am not sure what I am saying about what he is saying, but I do not recognise the problems that he and the hon. Member for Monmouth have highlighted. I do not see those problems every day. If I did, perhaps I would join them.
Guto Bebb
The right hon. Gentleman makes an important point. When somebody tells me a good news story about the NHS in Wales at a public meeting or an event in my constituency, I am the first to applaud. It is important that we highlight success and great performance when it happens in the NHS in Wales. Unfortunately, I get complaints about the service that people have received in Wales far too regularly. Only three weeks ago, I heard from an individual who suffered from prostate cancer. He had an assessment in Wales that said that he did not have cancer. He was suspicious and booked a private appointment in London. Within 12 hours, he was operated on. He is of the view that the decision to go private saved his life. Is it not disgraceful that a patient in Wales has to have the means to go private to ensure that they get the correct diagnosis?
David T. C. Davies
I thank my hon. Friend for giving way and allowing me to put it on the record for the third time that I am criticising not the doctors and nurses in Wales, but the policies of the Labour-run Welsh Assembly Government that are making it difficult for people to see those doctors and nurses quickly enough. That is the problem.
Guto Bebb
I accept that point.
I will conclude my remarks because I wanted to be brief and my hon. Friend the Member for Monmouth has highlighted the main issues. The key issue is that our amendments in no way threaten the Welsh NHS if it is a beacon of success, as is claimed by the Opposition parties. If the good practice that I see on a regular basis in the health service in north Wales is replicated across Wales, the amendments should not strike fear into anybody.
I come back to the individual I saw on Saturday morning while I was out canvassing. As the right hon. Member for Dwyfor Meirionnydd will be aware, a significant portion of my constituents have retired to north Wales to live. They often have family members in the north-west of England. Is it not unfortunate that somebody who is facing a significant operation cannot choose to be treated at a hospital near their family? Medical records show clearly that being in close proximity to one’s family, having the support of one’s family and having a daily visit are often the difference between a quick recovery and a long, drawn-out recovery. However, that choice is not available to patients in Wales simply because they live in Wales.
The amendments are a vote of confidence in a national health service. All parties who claim to support the national health service should support them.
Nia Griffith
The amendments tabled by the hon. Members for Forest of Dean (Mr Harper), for Monmouth (David T. C. Davies) and for Aberconwy (Guto Bebb) claim that a disproportionate number of Welsh patients use NHS services in England. That is totally groundless. In fact, the number of English patients going to Welsh hospitals has increased by 10% since 2010, while the proportion of Welsh patients using English A and E services has fallen in recent years.
Nia Griffith
I am coming on to that. I am talking about patients who live in England and come to have treatment in Wales. The implication is that everybody wants to flee from Wales and nobody wants to go there. That is not true.
The issue of choice is key. We all have constituents who go for specialist treatments in England. We all know of emergency cases that have been taken to special care baby units and to hospitals as far away as London. There are obviously issues of funding. Funding does change hands. Amendment 13 suggests that that should be done through the block fund, but it is done from health board to health board.
The hon. Member for Aberconwy ignores the reforms that are being suggested in England, which will mean that instead of a GP making a referral to the hospital that they consider will provide the best treatment for their patient, they will have to consider the GP surgery’s budget and might not be able to afford the treatment. There are hospital consultants in England who are terrified that their services will not be brought in by certain GP practices because of the immense pressure of trying to provide a huge range of services with a limited budget. That is terrifying. Soon someone will not be able to compare like with like, and there will not be a similar situation in England and Wales—it will be very different. I am afraid that the idea of patient choice will vanish in England. It is nice to think it is there and that it will exist in future, but it simply will not be there.
I have heard of many instances of patients who had a certain degree of choice and were able to go to a slightly different hospital than the one first suggested when they made the case and asked for that change. Frankly, I think this amendment has provided the opportunity for an attack on the Welsh health service.
Nia Griffith
Absolutely—not necessarily from the hon. Gentleman, but from other hon. Members there has been a blatant and clear attack. I would be the first to make a fuss—indeed, I do—if somebody cannot get a specific treatment, and we all know that in every area, whether in England or Wales, certain specialties may be difficult to cover in certain periods. We all know that we need to fight for certain things for certain constituents. As was mentioned, however, there is no clear winner or loser; there is no clear leader or laggard in the four UK nations in terms of health provision, as shown in a longitudinal study by the Nuffield Trust over a long period.
Susan Elan Jones
It is all very well various Conservative Members saying, “We are not making an attack on the NHS”, but the leader of their party went to their Welsh conference and—I have just checked this because it is almost beyond belief that he used this phrase—described Offa’s Dyke as
“the line between life and death”.
I am sorry, but that is offensive. Conservative Members continually play the game, but they are Cameron’s little dogs, nothing else, and they are not prepared to speak up for Wales.
Nia Griffith
I fully agree with my hon. Friend. Indeed, many of my constituents, who would be the first to criticise if something were wrong with the national health service, were shocked by those comments and deeply outraged at the insult to the many hard-working staff. I am glad that Conservative Members in the Committee have recognised the hard work done by many of our doctors and nurses in Wales, but there has clearly been an unmitigated and quite unnecessary attack. As has been pointed out, if he looked at some of the statistics, the hon. Member for Monmouth would find that waiting times for certain cancer treatments are shorter in his patch than over the border in the Wye valley. It is absurd to state that everybody is hopping across to England. Likewise, the hon. Member for Forest of Dean has tabled one of the amendments, but Gloucestershire Hospitals NHS Trust treats only 82% of its cancer patients within the 62-day limit, whereas in Wales the figure is 91%. Every Welsh trust is outperforming the Gloucestershire Hospitals NHS Trust.
When considering these figures it is easy to pick one number or specialty and to forget that for the vast majority of people in Wales treatment has improved rapidly over the past few years. It is certainly very different to how it was in the 1980s and ’90s, when people waited an extremely long time. The key point to remember is that England too has had a dreadful year for A and E.
Nia Griffith
I am saying that in England it has been the worst year for decades for A and E, with almost 1 million people waiting more than four hours. It has been much harder to get to see a GP in England since the Government scrapped Labour’s 48-hour appointment guarantee. [Interruption.] I am stating the fact that some things have not gone well in the NHS in England, and I am pointing out the criticisms, including shortages of nurses. In Wales we have 60 nurses per 10,000 people; England has only 50, and shortages in certain departments have been causing particular problems. In Wales, delayed transfers of care and discharges are at an all-time low, whereas in England the number of hospital bed days lost to delayed discharges is at an all-time high. One might ask whether that has something to do with the cuts to local government expenditure that have been experienced in England under this Government.
All in all, the amendment on transferring block funding so that people can shift from England to Wales is, first, not very practical. Secondly, there are already opportunities for people to go across the border where that is the most appropriate treatment. Thirdly, the reform of the system in England will make it extremely difficult for GPs to provide even basic treatment for many of their patients, given the budgets they will be dealing with.
There have already been a number of exchanges on fair funding between the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) and me, and my right hon. Friend the Leader of the Labour party made it clear this week that we recognise that although the Barnett formula has served the UK well, there is a specific set of issues relating to Wales. As a result, an incoming UK Labour Government would address the issue for Wales without it impacting on Scotland. The right hon. Gentleman refers to not having a piecemeal approach, but I suggest that his amendment is just that and that a more comprehensive look at the issue would be more appropriate.
Mr Harper
I will try to be relatively brief although I will say one or two things that I had not intended to say because I have been provoked by the previous contribution. First, the double standards are breathtaking. My hon. Friend the Member for Monmouth (David T. C. Davies) gave a perfectly reasonable speech and made it very clear that he was not attacking doctors and nurses but speaking about senior NHS professionals, yet he was accused of attacking doctors and nurses. The hon. Member for Llanelli (Nia Griffith) then proceeded to criticise standards of health care in England, yet somehow that is okay because she is just pointing out facts. Absolute nonsense. If we see things wrong in our constituencies it is our duty as elected Members to point them out. My hon. Friend was simply pointing out to the Committee problems in his constituency that had been raised by constituents. [Interruption.] I am not surprised that Labour Members do not want to hear this. The NHS is not performing well in Wales, and I will set out why my constituents in England are concerned about that.
I am happy with the confirmation from the hon. Member for Llanelli that if her party is elected to government it will sort out the Barnett formula for Wales and give it more money without that affecting funding for Scotland. As an English Member, it is quite clear to me which way the bill will be coming, so I will be pleased to tell my English constituents that another reason for not voting for the Labour party is that they will be facing a large bill to give more of their taxes to be spent by the Welsh Assembly Government, as well as the money they give to Scotland. I am grateful to the hon. Lady for that campaigning opportunity.
Amendments 12, 13 and 14 have been tabled by my hon. Friend the Member for Monmouth—my constituency neighbour—and my hon. Friend the Member for Aberconwy (Guto Bebb). I listened carefully to their arguments and I am happy to support the amendments as I think the principles they outline are sensible. My hon. Friend the Member for Aberconwy spoke about the Welsh Assembly Government’s policy of voice not choice. That would be fine if, when patients said something with their voice, somebody actually listened to them. The problem is that nobody listens, which is a real issue for my constituents.
Paul Flynn
Why does the hon. Gentleman think the Public Administration Committee, which has a Conservative Chair and majority, gave the health service ombudsman in Wales as the model and exemplar to follow? It said that that was the best service of the four countries, and it also recalled that Wales still has community health councils, which act splendidly as a source of receiving complaints and dealing with them.
Mr Harper
The hon. Gentleman makes a very good point. Of course, the ombudsman service deals with the things that go wrong, and the points made by my hon. Friends were about the things that go wrong in the health service. It may or may not be true that the ombudsman service is a better system for clearing those things up, but we are trying to avoid them going wrong in the first place. I agree with the hon. Gentleman about community health councils. We used to have them in England and they were abolished by the Labour Government, which was a very bad idea. I suspect that he voted for getting rid of them, and I wish that he had not done so.
On the performance of the NHS in Wales, I shall limit myself to what I said when we debated the issue on Second Reading—[Interruption.] The shadow Secretary of State cannot help himself. All I want to do is point out that I referred to mortality statistics in that debate, and I made the point that they were worse in hospitals in Wales. The Hansard reporters then note an interruption, which was the barracking from Opposition Members claiming that I was smearing Wales—[Interruption.] The hon. Member for Newport West (Paul Flynn) says it again. Actually, if he read the Hansard report for that debate, he would know that all I was doing was quoting the right hon. Member for Cynon Valley (Ann Clwyd), who said:
“The second warning sign, said Francis, is the level of mortality statistics. In fact, they appear to be dangerously high in many hospitals in Wales.”—[Official Report, 5 March 2014; Vol. 576, c. 930.]
All I was doing was putting on the record a fact—the hon. Member for Llanelli said that we are allowed to do that—that was cited by a senior Labour Member, and I am accused of smearing the health service. If that is the level of debate we are going to have, we will not get very far.
Owen Smith
Has the hon. Gentleman reflected, in the period since he made those remarks, on the 10-year longitudinal study carried out by the Nuffield Trust? It looked at all the indicators applicable across all four health areas of the UK and concluded that no one country is steaming ahead and no one country is lagging behind.
Mr Harper
No, I have not, because all I did was quote a Labour Member. They were not my words, but I was accused of smearing the NHS in Wales, which I did not do.
I was surprised to note that the hon. Member for Llanelli, after we had had our lengthy debate on day one of consideration of the Bill in Committee, tweeted that I was spending a lot of time on the Wales Bill and she wondered what my constituents would make of it. Well, the thousands of my constituents who are forced to be treated by the NHS in Wales against their wishes—that is not my view or assessment of the NHS in Wales—will, I suspect, be grateful that I am raising these concerns in the House on their behalf with Ministers, so that they can get better health care and a choice of where they are treated.
Amendments 17 and 18 are about improving the transparency of the agreements that govern cross-border services—the cross-border principles that were agreed by Ministers in the Department of Health and in the Welsh Assembly Government, together with the accompanying protocol that was sorted out by officials in NHS England and NHS Wales, supposedly based on those principles. The budgetary protocols will improve the transparency of the system.
New clause 3, also in my name, is an exact copy—with the appropriate changes—of the language that is in the Health and Social Care Act 2012. It puts a legal duty on commissioners in England, when making commissioning decisions, to consider the impact of their decisions on the provision of services to people who reside in Wales—and we have heard several examples from Members of constituents who live in Wales and receive services in England. There is no such reciprocal duty, and new clause 3 would provide that Welsh commissioners had to have regard to the likely impact of their commissioning decisions. If my constituents were receiving services in Wales and Welsh commissioners were making decisions that would have an impact on those services, they would have a legal duty to consider how my constituents would be affected. All I am asking for is parity between commissioners.
Owen Smith
Does the hon. Gentleman accept that one reason that provision was included in the Act was to mitigate the risk that commissioning groups in England would choose to decommission traditional services being provided by other parts of the NHS in England, such as tertiary care, and choose BUPA, Spire or some other private provider that might not be bound by the same protocols and memorandum of understanding to provide those services to Wales—a significant concern to those of us who looked at the Health and Social Care Bill? It remains a significant concern in a privatised NHS in England.
Mr Harper
I do not share that concern. The hon. Gentleman has all these scare stories about privatising the NHS, which are complete and utter nonsense. Since the provision exists, and commissioners in England have to have regard—rightly—to the impact of their decisions on Welsh residents, all I am asking for is a reciprocal duty on commissioners in Wales if they provide services to residents in England. That is nothing more than common fairness.
Hon. Members may be wondering why my constituents would care about the NHS in Wales. I shall set out briefly why it matters. I have some 6,000 constituents who reside in England in my constituency. The only GP surgeries that are conveniently located for them are branch surgeries whose main practices are located in Wales and registered with the NHS in Wales, so even though my constituents go to a GP surgery in England, they are being treated by GPs who are registered in Wales. Following decisions made by the Welsh Government and commissioners in Wales, my constituents find that their choices about where to have secondary care are increasingly limited. That is becoming a real problem. We have made some progress by liaising with the Aneurin Bevan health board, for example, but I am conscious that it could revert at any time to the previous situation. I want the issue to be sorted out permanently.
The cross-border principles that were agreed by Ministers of both Governments provide that cross-border commissioning should reflect the legal rights of patients in their country of residence. That is all I am asking for. What seems to have happened is that the protocol, the detailed arrangements agreed by NHS England and NHS Wales, did not quite reflect what Ministers in both Governments—to be fair—had agreed. My constituents are asking for nothing more than their legal rights under the NHS constitution and according to the Health and Social Care Act 2012. They want to be able to exercise the choice that my hon. Friends the Members for Aberconwy and for Monmouth set out.
My constituents have the option of being treated in Wales and, given what the shadow Secretary of State has said about the quality of services, they may want to be treated in Wales. But what they do not want is to be forced to be treated in Wales if they wish, for whatever reason—better treatment or any other preference—to be treated in England. They are English residents and they should have that right. That is all my amendments would achieve, and I hope that the Minister will address that.
Owen Smith
Much as we are enjoying the extended audition by the hon. Gentleman for the post of Secretary of State for Wales, can he point us to the evidence showing that thousands of his constituents are so concerned about treatment in Wales, or is this just an anecdote?
Mr Harper
I do not know where to start with that rather childish intervention. There is no vacancy, because my right hon. Friend is doing an outstandingly good job as Secretary of State for Wales, and I hope he continues in his post for a long time. He is doing an awful lot better than the shadow Secretary of State would do if, God forbid, he were ever to get the job.
I am concerned because my constituents are affected by the not very well thought-through devolution settlement—[Interruption.] The evidence is constituency correspondence, a very well attended public meeting with hundreds of local residents, and a very active local campaigning group. This is a real issue in my constituency and thousands of constituents are affected by it. I am doing my job as their Member of Parliament by setting out their views. I have been very reasonable in my argument and I look forward to the Secretary of State’s response. He is a Secretary of State who listens to and deals with issues brought to him by Members of Parliament—unlike the shadow Secretary of State—and I look forward to his response to the debate.
Paul Flynn
What is entirely novel in the debate on health, which I have never experienced in my 28 years in this House, is for Wales and the Welsh health service to be used as a political football to kick around to save the skins of Tory MPs and fulfil the ambitions of Lynton Crosby. He is the one who is using the issue not to make legitimate complaints—it is right that hon. Members raise legitimate complaints, as they always have—but for something entirely fresh. At every Prime Minister’s questions, when the attention of the whole nation is on this place, questions are distributed to Welsh Tory MPs, and to non-Welsh MPs who do not know the places they are talking about, that criticise the Welsh health service and create the impression that it is a poor, second-class service. This is a malicious deception: it is not true.
There is a lot wrong with the health service in every part of these islands. There are weaknesses and everyone can provide examples of particular cases, but what is the effect when the impression is given, week after week, example after example, that the Welsh health service is rubbish? What does that do to someone waiting for an operation or treatment to be told, again and again, that the service they are getting is second class? A big part of the healing process is confidence. If confidence is destroyed, that damages the health of the nation on a very deep level. What happens to the people working in the health service who do marvellous but thankless jobs—the jobs we turn up our noses at—when they come home and watch the television at night? There is a hallelujah chorus of Tory MPs saying that the service is bad, not good.
Paul Flynn
I will not give way. I will speak for only a very short time.
At the Conservative party conference in Wales, the Secretary of State for Wales, Assembly Members, the Secretary of State for Health and the Prime Minister lined up to talk about one subject: undermining the Welsh health service. It is, rightly, called the war on Wales. The damage that that does is enormous, and it is done to the whole reputation of Wales. That is not just happening in Wales; it is happening throughout the United Kingdom. This is how the Tories believe they are going to claw their way back to power, but I have news for them. There are now two Tory parties in Wales: the Joneses and the Farageists. The people will have a choice of which bit of bigotry they want to vote for next time. That will cut the reactionary vote in Wales in half and very few Welsh Tory MPs will be back here. When the Prime Minister says, from his lofty position, that there is a line between life and death at Offa’s Dyke, it will not be forgotten and it will never be forgiven.
Mr David Jones
It is a pleasure to serve under your chairmanship, Mr Crausby. It has been an interesting and lively debate. I will speak in the first instance to clauses 21 and 22.
Clause 21 confers on the Assembly the legislative competence to decide its own budgetary procedures. The effect of the clause is that the Assembly will be able to legislate to put in place budgetary procedures that take account of the Assembly’s and Welsh Ministers’ new powers under part 2 of the Bill. Clause 22 sets a requirement on the Secretary of State and Welsh Ministers to publish separate reports on the implementation and operation of the new tax and borrowing powers. Reports must first be published within a year of the Act passing and thereafter before each anniversary of the Act being passed. They must continue until a year after the new finance powers have been transferred fully to the Assembly and to the Welsh Ministers.
Mr Jones
That, of course, is entirely a matter for the Welsh Government, but, in practice, that is what they are calling it at the moment.
I thank my hon. Friends the Members for Monmouth (David T. C. Davies) and for Aberconwy (Guto Bebb) for their amendments 12, 13 and 14, and my hon. Friend the Member for Forest of Dean (Mr Harper) for his amendments 17 and 18 and new clause 3. They raise important issues about the provision of cross-border health services in Wales and England, issues which are, of course, vitally important to anyone who lives close to the border—or even not so close, as was pointed out by my hon. Friend the Member for Ceredigion (Mr Williams). Indeed, they are important to anyone who wants world-class health services to be delivered throughout the United Kingdom.
Health is one of the most important services—arguably, the most important service—to be delivered by any Government. We all know that people value the delivery of good health care more than almost every other public service. This is, after all, a service on which we are all likely to call at some stage in our lives. It is therefore essential for any Government to deliver health services which are effective and efficient, and which provide good value for money. In England, the Government will have increased spending on health by about £12.7 billion in cash terms over the lifetime of the current Parliament, delivering an NHS that continues to improve and the health care that people want and deserve. However, none of that would be possible without our front-line NHS teams: the doctors, nurses, and other health care professionals.
As we have heard from Members this evening, the sad fact is that the Labour Government in Cardiff are presiding over a health service in Wales which is declining. My hon. Friend the Member for Monmouth gave some illustrations of that decline. In Wales, Labour has cut the health budget by 8%, despite having been given an extra £1.6 billion in the block grant. The result has been a decline in health services in Wales which is evident for all to see, with unacceptably long waiting times.
Hywel Williams
Whether or not one agrees with the policies of the Labour Government in Cardiff, surely devolution means that it is a matter for them and not for the Secretary of State.
Mr Jones
Actually, it is for every elected representative to express concern when a service as important as health is affected. When the devolved Administration are not delivering an adequate standard of health care, it is entirely appropriate for every elected representative to draw attention to that.
Owen Smith
Does the Secretary of State agree with the Prime Minister that Offa’s Dyke is
“the line between life and death”?
Mr Jones
I agree entirely with my right hon. Friend the Prime Minister that in England there is a cancer drugs fund, and in Wales there is not. I can tell the hon. Gentleman—[Interruption.] The hon. Gentleman should listen to this. Constituents of mine have died because they have not had access to cancer drugs, because they live in Wales. If the hon. Gentleman considers that an acceptable state of affairs, shame on him.
There is a significant lack of resources in Wales compared with England. For example, Wales has no cancer drugs fund. As the hon. Gentleman will know, a recent study conducted by Bristol university showed that Welsh patients were seven times less likely to have access to cancer drugs than those in England. There is a litany of failure in relation to Welsh health services. Almost everybody who lives in Wales can give examples of such failures. Only today, the Western Mail reported that complaints to health boards in Wales had increased by more than 40% between 2009-10 and 2012-13.
However, the Labour party is simply not listening. The First Minister and his Cabinet are presiding over what looks increasingly like a shambles. Health care in Wales is moving backwards. That is, quite simply, unacceptable—
Mr Jones
No, I will not. The hon. Gentleman can listen.
Crucially, it is also both alarming and worrying for people in Wales who need to use those services.
The Welsh Labour Government in Cardiff are not only failing thousands of patients in Wales, but failing hard-working professionals who are every bit as competent and dedicated as those in any other part of the country. It is in that context that we are debating the amendments tabled by my hon. Friends the Member for Monmouth and for Aberconwy.
David T. C. Davies
I entirely support what my right hon. Friend has just said. I have just received a long e-mail. I shall forward it to my right hon. Friend, but one sentence says it all:
“I run a local veterinary hospital and I am ashamed to admit that the animals under my care are treated more promptly and effectively than the people in Monmouthshire.”
The lady who sent that e-mail made it quite clear that she was criticising not the doctors or nurses, but the system created by Labour Members.
Mr Jones
I am grateful to my hon. Friend for that intervention.
Amendments 12, 13 and 14 seek to shine a light on the organisation and funding of cross-border health services—services provided in England to patients living in Wales and vice versa. I shall not dwell on the intended legislative effects of these amendments, but rather on the intentions behind them. I know this is an issue of real importance to many Members who have spoken this evening, and I would like to reassure the Committee that I share the concerns about the operation of the current system.
My hon. Friend the Member for Forest of Dean has also spoken to his amendments 17 and 18, which would require both the Secretary of State and the Welsh Ministers to include in their annual reports on the implementation of the Bill’s financial provisions details on the costs and effectiveness of cross-border services. His proposed new clause 3, which reflects concerns he has expressed over many months to me and my right hon. Friend the Secretary of State for Health, would require the Welsh Ministers to consider the impact of their decisions on the provision of health services to people who live in England but who are registered with Welsh GPs.
Current funding arrangements are set out in the protocol for cross-border health care. I entirely agree that there is concern about the practicality and deliverability of these arrangements as they operate on the ground. Everyone should receive the best possible health care regardless of where they live or where their GP is registered. As we have heard, health services in Wales are falling short in many respects of the standards we expect. That is a matter for the Assembly, and in particular the Welsh Government, urgently to address.
The Welsh Government’s policy of referring patients registered with Welsh GPs for treatment in Wales only created more difficulties for English patients, such as the constituents of my hon. Friend, who are registered with Welsh GPs. I am pleased, however, that following discussions between the Wales Office and the Welsh Government some local health boards in Wales have reviewed this policy and have exempted English residents. I know this falls short of patient choice, but it is at least a step in the right direction.
Improving the cross-border protocol is the responsibility of both the Welsh and the United Kingdom Governments and I can assure the House that this Government are determined to tackle the protocol shortcomings and ensure better cross-border health services. It is only right that we ensure that the health care of people living close to the border does not suffer merely because of where they happen to live. It is in this mechanism that the greatest potential for real change lies, and that is why we are reviewing it to ensure it really does meet the needs of people on both sides of the border. Work is under way, led by the—
Owen Smith
On a point of order, Mr Crausby. Is it in order for the Secretary of State—who we have not heard from for, I think, fully 245 minutes—to dwell for almost the entirety of his speech today on continuing the war on Wales and the Welsh NHS, none of which is addressed in this Bill, which is meant to be about the financial circumstances post-the Silk commission as they relate to Wales, not the NHS in Wales?
The Temporary Chair (Mr David Crausby)
The Minister is addressing the clauses. It is up to him what he says in his speech.
David T. C. Davies
Further to that point of order, Mr Crausby. Given that Labour Members of the National Assembly for Wales’s health Committee are refusing to hear this evidence and are refusing to hear from important witnesses, is it not absolutely right that my right hon. Friend the Secretary of State should continue to raise the issue of the scandalous standards of care in the NHS in Wales?
The Temporary Chair
As long as—[Interruption.] Order. As long as the Minister is talking to the amendments, he can say what he likes.
Mr David Jones
Thank you, Mr Crausby. It is clear that the hon. Member for Pontypridd (Owen Smith) does not want to hear what we are doing to remedy the problems in the Welsh health service.
Work is under way, led by the Department of Health and the Wales Office, to find practical and durable solutions to the problems which patients living on both sides of the border face on a daily basis. In March, the Secretary of State for Health made a commitment to this House that, by the end of this year at the latest, we would find a solution to the problems faced by English patients who must currently use NHS services in Wales but who would prefer to receive their treatment in England. My right hon. Friend has also asked the chief executive of NHS England to investigate the possibility of the English NHS providing treatment to Welsh patients in areas where the Welsh NHS proves unable to provide the care they need.
Mr Llwyd
The right hon. Gentleman is describing the process for the Barnett floor, which has been well known for several months. He says that some urgent work is being undertaken by government on this issue. Therefore, it would not be an imposition to expect a review to be forthcoming within six months of this Act coming into force.
Mr Jones
Well, I can only reiterate the point which I thought the right hon. Gentleman had accepted: that our priority is to address the deficit we inherited from the Labour party at the last election. Nevertheless, the next review is expected to take place in advance of a spending review in 2015 and it is likely to be around the time when this new clause suggests the report should be published. These arrangements ensure that we have a shared understanding of funding levels in Wales, and a process is in place to consider options should further convergence be forecast to resume. It therefore provides a firm basis for proceeding with the new financial powers in the Wales Bill, and I hope that the Plaid Cymru Members will therefore not press new clause 1 to a vote. I also ask hon. Members to support clauses 21 and 22 standing part of the Bill and to support amendment 29.
David T. C. Davies
Given what I have heard today, I am perfectly happy for now to withdraw the amendment. I look forward to working with the Secretary of State for Wales and the relevant Welsh Assembly Minister in drawing further attention to this issue in Wales and to returning to it on Report. I therefore beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 29, in clause 21, page 23, line 32, at end insert—
‘() in sub-paragraph (2), after paragraph (a) insert—
“(aa) section 119 in so far as it relates to estimated payments for a financial year into the Welsh Consolidated Fund or to the Welsh Ministers, the First Minister or the Counsel General;”;’.—(Mr David Jones.)
This amendment ensures that the Assembly is not prevented from modifying section 119 of GOWA 2006 (statement of estimated payments) provided such modification relates to the estimated payments described in the amendment and not to the Secretary of State’s duty in subsection (3) of that section.
Clause 21, as amended, ordered to stand part of the Bill.
Clause 22 ordered to stand part of the Bill.
New Clause 1
Review of options for Barnett formula reform
‘(1) The Secretary of State shall make arrangements for a review of options for reforming the Barnett formula in order to meet the objective of calculating the block grant funding for Wales on the basis of need.
(2) The Secretary of State shall lay a copy of the report of the review mentioned in subsection (1) before each House of Parliament within six months of this Act receiving Royal Assent.’.—(Mr Llwyd.)
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The Temporary Chairman (Mr David Crausby)
With this it will be convenient to discuss the following:
New clause 8—Crown Estate in Wales: Revenue—
‘Revenue raised by the Crown Estate in Wales shall be paid into the Welsh Consolidated Fund.’.
New clause 9—Crown Estate Commissioner with special responsibility for Wales—
‘(1) In Schedule 1 to the Crown Estate Act 1961 (Constitution etc of Crown Estate Commissioners), paragraph 1 is amended as follows.
(2) After sub-paragraph (3) insert—
“(3A) One of the Commissioners shall be appointed as the Crown Estate Commissioner with special responsibility for Wales, who must be a person who knows about conditions in Wales as they relate to the functions of the Commissioners.”.
(3) After sub-paragraph (4) insert—
“(4A) The Crown Estate Commissioner with special responsibility for Wales shall be appointed on the recommendation of the Chancellor of the Exchequer, who shall consult the Welsh Ministers before making that recommendation.”.’.
Mr Llwyd
Everyone will be pleased to hear that I shall be fairly brief. [Interruption.] I sense the disappointment. I am sorry to let the Chamber down at this late hour.
New clause 7 is about the transfer of ownership and control of the Crown estates in Wales, new clause 8 is about the consequent transfer of revenue and new clause 9 is about appointing a Crown Estate commissioner with special responsibility for Wales. As has been said in various debates by various colleagues, we have set about preserving the integrity of the Silk recommendations, so in speaking to these new clauses, which stand in my name and those of my two honourable colleagues, my hon. Friends the Members for Arfon (Hywel Williams) and for Carmarthen East and Dinefwr (Jonathan Edwards), I shall first deal with new clause 9.
New clause 9 is the recommendation of the cross-party commission on devolution, which was chaired by Paul Silk. The recommendation is less than we wanted, but it recognises what was agreed as part of a compromise. That is why it is disappointing to see it left out of the Bill by the Government. The new clause deals with the appointment of a Crown Estate commissioner with special responsibility for Wales.
The Crown Estate has a diverse range of holdings throughout Wales. As well as agricultural land and mineral rights, these include the sea bed out to the 12-mile nautical limit, within which it is responsible for issuing, for example, permits and leases for wind energy creation. However, the Crown Estate is not accountable to the people of Wales, and all profits from its holdings, both onshore and offshore, are passed to the UK Government. These are likely to grow substantially in the future, mainly due to the demand for renewable energy. We in Plaid Cymru believe that ownership and control over the Crown Estate in Wales should be transferred to the Welsh Government. That is the issue we are probing through new clauses 7 and 8.
The Crown Estate in Wales is likely to be increasingly important, especially in the context of its role, as I said, in developing renewable energy. Devolving the Crown Estate is essential in order for Wales to have a say in how energy projects are planned and to see financial gain from the natural riches that are harvested by them, whether that is renewable or other forms of energy.
We welcomed the announcement roughly a year and a half ago by the United Kingdom Government establishing the coastal communities fund, which will increase investment in Wales based on a share of Crown Estate revenues above the existing Barnett formula allocation, but we need to make progress and build on this.
The Silk commission recommendation of a Crown Estate commissioner with special responsibility for Wales was reached as a compromise. We believe that the recommendation should be adopted as soon as possible and the Bill seems to us to be the vehicle for so doing. The London Treasury is the Crown Estate’s sponsor Department, with the Economic Secretary as its sponsoring Minister. The Crown Estate is led and directed by its board of eight commissioners. The board includes a member who represents Scotland, but no other part of the United Kingdom is specifically represented. The Scottish Government are consulted on the appointment of the member representing Scotland.
Although Wales accounts for a relatively small percentage of the value of the Crown Estate’s portfolio, amounting to roughly £8.6 million, we believe that that will increase substantially in the future and that it should be within the control of the Government and the Assembly of Wales. Dr Richard Cowell of Cardiff university suggested in his evidence to the Silk commission that
“bringing ownership of the Crown Estate in Wales to the Welsh Government might enable a better quality of debate about the kind of off-shore renewable energy development pathway that is appropriate for Wales, and open up discussion on how the royalties from resource exploitation should be best invested.”
We believe the Wales Bill, given its financial and taxation remit, should include the same provision as is made for Scotland in the Scotland Act 2012, which provides for a Crown commissioner with special responsibility. Not only should Wales be equal with Scotland in this regard, but all the main parties have agreed to it as part of the recommendation of the Silk commission. Recommendation 17 of the second Silk report states that
“there should be a Welsh Crown Estate Commissioner”
and that
“a Crown Estate office should be established in Wales”.
Jonathan Evans
The right hon. Gentleman is putting forward an interesting proposition. May I test the point that he made that the revenue would increase significantly? I hear what he says and I understand the point about the development of renewable energy, but can he share with us any study or analysis that has been done, or is that just an observation?
Mr Llwyd
To be frank, it is probably an observation, but one can look at what would have been the Severn barrage; what is going on in Swansea at the moment; various other projects off Ynys Môn, such as wave power; and the way in which the Crown Estate is seeking vastly to increase its mooring fees, for example at Abersoch in my constituency, doubling, trebling and quadrupling the annual fee for mooring a boat, of which there are several hundred in that bay. Fees for mineral exploitation are also being increased and there are common land rights from which it is entitled to receive revenues, which are increasing. Taking all that in the round, and if there is to be further exploitation of natural resources offshore, and indeed onshore—whether that will happen, I know not, but it probably will—I can only conclude that there will be a substantial increase in revenue in the years to come. I cannot give the hon. Gentleman hard figures, but I surmise and I believe that the case is made that there will be a substantial increase in the future.
The new clauses are probing amendments, but I will be very interested to listen carefully to the Minister’s response.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
It is a pleasure to serve under your chairmanship for the final part of day two of the Bill Committee on the Floor of the House this evening, Mr Crausby, and I thank the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) for the way in which he presented the new clauses and the spirit in which he spoke to them. He is always constructive and informed on these matters.
In tabling the new clauses, the right hon. and hon. Members from Plaid Cymru seek to establish a mechanism by which the Crown Estate in Wales can be devolved. New clause 7 sets out a mechanism to devolve the Crown Estate in Wales to the Assembly; new clause 8 requires revenue from the Crown Estate in Wales to be paid into the Welsh Consolidated Fund; and new clause 9 specifies that one of the Crown Estate commissioners shall have “special responsibility for Wales” and
“shall be appointed on the recommendation of the Chancellor of the Exchequer”,
who must consult Welsh Ministers before making a recommendation.
As hon. Members will be aware, the Silk commission made several recommendations in its part II report relating to the Crown Estate in Wales. It recommended that a Welsh Crown Estate commissioner be appointed in consultation with the Welsh Government, that a Crown Estate office be established in Wales, that the existing memorandum between the Crown Estate and the Welsh Government should be published and regularly updated, and that more emphasis should be given by the Crown Estate to the Welsh supply chain.
The Silk commission did not recommend transferring ownership of the Crown Estate to the Welsh Government. Typically, Plaid Cymru seek to go further than the commission recommended, and in doing so are pre-empting proper consideration of the commission’s recommendations. My right hon. Friend the Secretary of State and I have repeatedly made it clear that the Government do not regard the Bill as an appropriate vehicle for implementing Silk II recommendations. It will come as no surprise to Opposition Members that we also do not regard it as a vehicle for going further than Silk recommended.
Silk recommendations that require primary legislation should be matters for political parties to consider in preparing their election manifestos. Those that do not are being actively considered by the Government. I therefore urge the right hon. Gentleman not to press new clause 7, 8 and 9.
Business without Debate
delegated Legislation
Petitions
Keith Vaz (Leicester East) (Lab)
I would like to present a petition, signed by 1,059 residents of Evington in Leicester, opposing Santander’s intention to close the local branch in Downing drive. Evington is one of the very last urban villages in the city of Leicester, and the bank’s decision to close the branch will have serious consequences for local people. They will need to go into the city centre to withdraw or bank their money. I will shortly be arranging a meeting with the chief executive of Santander. The petitioners, led by Hakim Khalifa, Irene Johnstone, Anna Wills, Malcolm Taylor, Anup Patny, Richard Harrison, Ken Richardson, Peter Brooks and Donald Nolan, and supported by the two councillors Dipak Bajaj and Baljit Singh have this to say:
The Petition of residents of Leicester East,
Declares that the proposed closure of the Santander Branch on Downing Drive in Evington will have an extremely negative impact on elderly residents in the area who use the branch.
The Petitioners therefore request that the House of Commons urges the Department for Business, Innovation and Skills to meet with representatives of Santander to examine the impact of branch closures on local residents.
And the Petitioners remain, etc.
[P001347]
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I am pleased to be able to present this petition asking the House of Commons to urge the Government to examine the feasibility of extending the Tyne and Wear Metro to Washington and bringing the Leamside railway line back into use. The petitioners and I believe that doing so would boost jobs and growth in Washington, and indeed in the wider region. The petition is accompanied by one along the same lines collected by Adam Robson from Washington, which as of today has been signed by 1,585 people on the change.org website.
The petition states:
The Petition of residents of the United Kingdom,
Declares that the Petitioners believe that the extension of the Tyne and Wear Metro to Washington is a vital, yet missing, part of the region’s transport system, and further that such an extension would make a significant contribution to the economic development of the town.
The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to seriously explore the feasibility of extending the Tyne and Wear Metro to the town of Washington, utilising the old Leamside railway line.
And the Petitioners remain, etc.
[P001346]
Southeastern Train Services
(10 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Heidi Alexander (Lewisham East) (Lab)
I am aware that the Minister is not in his place. I am told that he is in a car on his way here. I just hope that he is not on a Southeastern train.
Southeastern runs virtually all the rail services that serve my constituency, providing links to a range of central London stations as well as out to Kent. There are seven stations in my constituency: Hither Green, Blackheath, Lee, Grove Park, Catford Bridge, Catford and Beckenham Hill. There are four railway lines, three of which converge at Lewisham station.
Although Lewisham station, which sits on the border of my constituency and that of my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock), has the docklands light railway, my patch of London remains untouched by the tube map. Extending the Bakerloo line to Lewisham might be the long-term aspiration of many of us, but for the time being the trains operated by Southeastern are one of the key ways in which my constituents get about.
I am conscious that a list of seven stations and four train lines may lead people to think that my constituency is well served by rail links. On the face of it, it is well served, but the reality for many of the 37,000 people in Lewisham who use the trains to get to and from work every day is grim: hot, horrendously overcrowded, late and slow trains, with a hefty price tag to boot. I am not prone to exaggeration, but I honestly believe that in this country we transport cattle better than some of my constituents.
Just last month, I was contacted by a constituent who told me that he had seen
“2 people collapse in the last 10 days due to overcrowded and overheated trains”.
This problem is very serious, and if the Minister had been present, I would have invited him to join me one morning to experience the problem for himself. Trains arriving at stations such as Hither Green and Blackheath at any time between 6.30 and 9.30 in the morning are already full. My constituents squeeze themselves on if they are lucky; if they cannot, they wait for the next train. I apologise, Madam Deputy Speaker, for being graphic, but people literally start their working day stuck in one another's armpits.
The journey to London Bridge should take between 10 and 12 minutes, but routinely takes between 20 and 30 minutes. There is often a constant stream of tweets from Southeastern, usefully providing the information that a train that was supposed to have eight cars will instead have six or four cars.
To add insult to injury, year on year we are paying more and more for the pleasure. An annual season ticket on Southeastern for zones 1 to 3, a point-to-point ticket that allows travel only from one station to another, now costs £976. It has gone up by £216 since 2010—a 28% increase in four years. Travelcards, which allow onward use of the tube and bus network, cost considerably more. The rising cost of those tickets has massively outstripped the negligible changes that people have seen in their pay packets and it makes a very significant dent in household budgets.
I have lived in the Lewisham and Hither Green area for the past 12 years. In that time, platforms have become noticeably busier, and that is borne out by statistics compiled by the Office of Rail Regulation. In 2002-03, Lewisham was the 55th busiest station in the country, and there were 3.6 million entries to or exits from the station that year. In 2012-13, the last year for which data are available, that number more than doubled to 8.2 million, with a further 1.7 million interchanges, making it now the 38th busiest station nationwide. That is significant growth.
That pattern is repeated at all other local stations and is consistent with the regional breakdown of growth in rail usage, which shows that growth in London is markedly greater than anywhere else in the country. To put that in a national context, Lewisham is a busier station than Newcastle, Nottingham or Southampton; it is comparable to a station like Sheffield. When we talk about increasing capacity on our rail network, we must not forget places such as Lewisham which are neither part of the affluent commuter belt nor on London’s tube map.
Gareth Johnson (Dartford) (Con)
I congratulate the hon. Lady on securing this debate on an issue that she has spoken out about in the past. Does she agree that although poor reliability may be Southeastern’s main failing, it is compounded by the poor communication with the commuters who are her constituents and mine?
Heidi Alexander
I do agree. In part, the problem is reliability, but one of the main issues that I want to focus on is the degree of overcrowding that we experience on our train services.
The case for tackling overcrowding on my part of the rail network is irrefutable. The problem is getting worse and is likely to deteriorate further if urgent action is not taken. Thousands of new homes are planned in places like Lewisham and Catford over the next few years, and it goes without saying that future residents will need to be able to get around. They will need to be able to get to work and to get back from other parts of London at weekends. Basically, they need a decent railway service to live their lives.
The population of Lewisham continues to grow. Despite asking various parliamentary questions on this subject, I am at a loss to understand when commuters in my constituency are going to see longer trains. All I know is that, according to an answer I received on 8 April, the Under-Secretary of State, the hon. Member for Wimbledon (Stephen Hammond), who is the railways Minister, does not think there is demand for longer trains on all services. Beyond that, I am afraid that I cannot get much sense out of the Department or Southeastern.
Currently, no 12-car trains serve stations in my constituency during the rush hour, but there should be such trains. Platforms have been extended. I suspect that millions of pounds has been spent on doing that job, although again, despite my asking parliamentary questions, the Department cannot tell me how much has been spent and refers me to Network Rail. When I have asked Network Rail, it has not got back to me. We have spent money on lengthening platforms but we do not have longer trains to stop at them. It is almost as good as the one about the aircraft carriers with no aircraft to use them. Surely in difficult economic times we should not be wasting expenditure in this way—we should be reaping benefit from it.
In the written answer I received from the Minister at the beginning of April, I was told that a study would be done in 2016 and that some capacity enhancements may be forthcoming from 2019. That is at least five years away. It is simply not good enough. The Minister is currently in the process of negotiating a new “direct award” contract with Southeastern. Following the mess that the Government have made of letting franchises elsewhere in the country, they have put on hold the letting of the new Southeastern franchise, deciding instead to award a series of shorter, directly awarded contracts. Is there no way in which they could negotiate longer trains on some services calling at stations in my constituency sooner than 2019? Could some trains not start closer into London?
I would be really grateful if the Minister could explain the issue. Is it the availability of rolling stock? Is it an unwillingness on the part of Government to fund longer trains? Is it that when he looks at overcrowding statistics for services into London he thinks that there is not a problem on services run by Southeastern? If it is the latter, I would urge him to speak carefully to his civil servants about how the standard definitions of overcrowding —passengers in excess of capacity, otherwise known as PIXCs—are calculated. My understanding is that the calculations include an allowance relating to what is deemed to be an acceptable number of people standing in addition to those sitting. The excess passengers figure comes on top of that and, given that my constituents experience the most crowded 20 minutes of the journey, I am not sure that those PIXC scores will paint a realistic picture of the levels of overcrowding experienced by commuters who live in my constituency.
I also understand that Southeastern amalgamates its performance data for all of its services, including its High Speed 1 services from the channel tunnel, which may also skew overall performance scores. Does the Minister look at disaggregated data for each of the different types of Southeastern routes?
Tracey Crouch (Chatham and Aylesford) (Con)
The hon. Lady is doing a very good job of standing up for her constituents who use the Southeastern service, which is also used by my constituents. Will she join other Kent and south London MPs in calling for the disaggregation of data as part of the new franchise agreement?
Heidi Alexander
I would be happy to join hon. and right hon. colleagues in calling for that. It needs to happen before the new franchise is let. Could we see it in the direct award contracts that the Department will be letting, I think, this summer?
I think you will have probably sensed my frustration, Madam Deputy Speaker, but I am not the only one who feels strongly about the issue. I speak on behalf of a very significant number of my constituents. Sadly, it comes as little surprise to me that the national passenger survey and surveys by organisations such as Which? put Southeastern at the bottom of the train operating company league table. I suspect that much of my constituents’ dissatisfaction is driven by experiences of overcrowding and a general sense that the service offered is woeful value for money. It also relates, as the hon. Member for Dartford (Gareth Johnson) has said, to a lack of clear, reliable, real-time information when there are cancellations and delays.
I know that Southeastern has requested an official review by the rail regulator of Network Rail’s performance, as not all problems relate to things in Southeastern’s control. I understand that, but there needs to be better communication with the travelling public and a sense that Southeastern is not just constantly trying to shift the blame to someone else. It would be useful if the Minister provided an update on the official Office of Rail Regulation review.
It would also be useful if the Minister provided his latest thinking on what should happen come 2018. Given poor performance and the fact that Southeastern’s parent company, Govia, received £82 million in Government subsidy last year, is he satisfied that the current franchising system is delivering the best deal for the taxpayer?
We know that the Government are reluctant to do a root-and-branch review of the structure of railways in the UK, presumably because they are concerned that it may throw up pragmatic solutions that go against the grain of their ideology. The public, however, want to know that if they are paying exorbitant sums for their travel, they are getting the best possible bang for their buck.
Could Transport for London, for example, become the franchising authority for Southeastern in future? Experience in south London with the London Overground has been positive, and TfL will soon become the franchising authority for some Greater Anglia services. Why do not the Government want to do the same for Southeastern?
I am conscious of the fact that this debate started earlier than usual and I would like to take a few more minutes to pick up on two issues relating to Southeastern services and connectivity: the Catford loop line and access arrangements at Lewisham station.
Many local people share an aspiration for four trains an hour to stop on the Catford loop. I am told that such a service could be introduced without detriment to other existing services. I have asked Ministers about this before and have been told that the detailed specification for services in a new Southeastern franchise has yet to be decided. However, given this interim period of four years before any new franchise, is there any possibility of upping the number of stopping trains on the Catford loop?
May I ask the Minister to revisit my correspondence with his predecessor, who is now the Secretary of State for Northern Ireland, about Southeastern’s determination to keep the platform 4 gate at Lewisham station permanently closed? If we want people to use the railway instead of their cars, stations need to be as easily accessible as possible. Although I understand Southeastern’s desire to tackle fare dodging by having a fully gated station, that makes no sense when the next station stops are not gated. With a significant regeneration scheme now under way next to Lewisham station and access arrangements reduced as a result, the platform 4 gate issue has taken on new importance. Even if it cannot be reopened permanently, might a temporary relaxation be allowed for the duration of the construction works on the adjacent development project?
I realise that I have been down in the detail of rail provision in my constituency, but these are important matters for many of those I represent.
London is a fantastic city to live and work in, but it is let down by its failing rail network. I am afraid to say that I am not sure that Ministers seem willing or able to intervene, let alone to learn lessons and correct the system. The result is that existing train operating companies are limping on, with passengers feeling voiceless and out of pocket. Put simply, when we ask people to pay sky-high fares for their travel, they should at least get a half-decent service.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
I apologise for my slightly late arrival at the Dispatch Box, Madam Deputy Speaker. Perhaps that was rather apt, given the subject we are discussing.
I congratulate the hon. Member for Lewisham East (Heidi Alexander) on securing this debate on Southeastern services. At the very outset, I want to make the point that the rail franchising system and the way in which the Government engage with private sector operators is all about improving rail services for people, not some ideological opposition to state provision. In practice, the system has been shown to deliver in many parts of the country. As we have seen during the period since privatisation, rail usership has doubled from 750 million to 1.5 billion. Of course, that is part of the problem: as more and more people use rail services in this country, the overcrowding on trains and the problems of squeezing more and more trains on to what is by and large a Victorian network is a real challenge that I know frustrates commuters daily.
As the hon. Lady has contributed so fully to previous discussions in the House—for example, the debate in February secured by my hon. Friend the Member for Dartford (Gareth Johnson), who I note has joined us in the Chamber—some of my points will sound familiar. I hope that she will forgive that repetition, but I will cover some of her questions from the last debate, particularly on overcrowding and passenger compensation.
I thank the hon. Lady for her invitation to join her on the train to Lewisham. I suggest that I can do better than that, as I have a member of staff who lives on that very line, and I get a daily update about the problems of getting a seat on the train. Indeed, when she moved slightly further away from the centre of London, she said, “Although it’s a longer journey, at least I can get a seat.” It is something of an indictment of that particular service that people see living further away as a good idea, because they can get a seat before the train sets off. I am made aware of some of the daily trials and tribulations; indeed, I also sometimes get excuses about why she sometimes arrives at work late.
Let me first state that this Government are committed to continuing the strong growth in rail travel experienced over recent years. We have invested billions of pounds in railway infrastructure, and we have set out our plans to continue to do so. The Thameslink programme is one of those key investments, and we are committed to funding and delivering it in its entirety. On completion in 2018, it will virtually double the number of north-south trains running through central London at peak times. It will deliver 1,140 carriages of high-capacity next generation rolling stock, in addition to about 600 new carriages that will be provided as part of the Crossrail project. That represents a significant enhancement to the capacity of the entire UK rail network. That might be no consolation to people in Lewisham, but it shows that we recognise the problem and are investing not only in new infrastructure, but in new rolling stock.
Heidi Alexander
I was aware of discussions about the new Thameslink franchise that could have meant that some services would call at stations such as Lewisham. I wonder whether the Minister can update me on whether there is any chance of some Thameslink services being routed through Lewisham, instead of along the more traditional routes, and on whether that could add capacity to our part of the network.
Mr Goodwill
I am afraid that I cannot give the hon. Lady any news on that subject. However, as it has been raised on the Floor of the House, I know that officials will be keen to revisit it to see what potential there is. In her contribution, she spoke about the potential for improving services on the Catford loop. However, the system is by and large operating at capacity, particularly at peak times in the morning and evening. In fact, it is operating at more than capacity given that many people cannot get a seat on their train.
The key headline indicator for rail performance is the public performance measure, which measures the percentage of services that arrive within five minutes of their timetabled time. From April 2013 to March 2014, the Southeastern network achieved a disappointing PPM score of 89%. That is 3.8 percentage points below the target agreed between Southeastern and Network Rail. I note the point that the hon. Lady made about aggregation, which means that those figures may hide worse performing parts of the network. She mentioned that High Speed 1 has a good punctuality record. That is a good reason why we should be building brand new rail infrastructure in this country. It does not have the same problems, such as those related to bad weather, that we see on parts of the creaking Victorian network.
PPM is the responsibility of Network Rail and the train operating companies, and a failure by one or both will cause the PPM to fall. To assess where the blame for the declining PPM lies, it is necessary to consider performance against the delay minute targets agreed between Network Rail and Southeastern. In general terms, Network Rail is responsible for approximately two thirds of the delay minutes across the UK rail network, with the train operating companies accountable for the remainder.
The performance of Southeastern over the past 12 months was 6% adrift of its cumulative delay minute target. That 6% represents an additional 16,000 delay minutes over its target of 271,000. Network Rail, on the other hand, finished the year more than 50% adrift of its targets, which represents 200,000 delay minutes above its target of 400,000. The results of both Network Rail and Southeastern are clearly influencing the downward PPM trend, with Network Rail’s performance having by far the greatest impact.
What is being done to improve Network Rail’s performance? First, it is important to acknowledge that safety must remain the highest priority. Network Rail’s performance in that regard has ensured that the UK has one of the safest, if not the safest, railways in Europe. That said, Network Rail’s rapidly increasing share of delay minutes shows that its performance has simply not been good enough and must improve.
It would be remiss of us to ignore the impact that severe and unprecedented weather has had on its operational performance, and the inevitable delays that that has caused. Since October last year, the severe weather has led to landslips, flooding and vegetation issues—I presume that that means the wrong kind of leaves—all of which have impacted heavily on the service that Southeastern has been able to deliver. To take one example, passengers using the Hastings line endured closures and disruption between December 2013 and March 2014 owing to multiple landslips. Although it is fair to put Network Rail’s performance into perspective, extreme weather should not be allowed to mask underlying issues and risk factors that could have been controlled or at least mitigated. In other words, the weather is not an excuse for everything.
Southeastern recently referred Network Rail to the Office of Rail Regulation to highlight its poor performance with regard to trees on the track, landslips and engineering possession overruns. The ORR held a formal review of Network Rail’s performance in March in the presence of Southeastern and Network Rail’s senior management teams. At the review and in subsequent communications, Network Rail accepted that performance on the Southeastern network had fallen below acceptable levels of late, and it has provided assurances that performance will be improved—
Mr Goodwill
Encouragingly, Network Rail has already reviewed its management of engineering possessions and taken action to implement new processes designed to overcome identified weaknesses in planning and delivery.
Although Network Rail’s recent performance on Southeastern’s network has been unsatisfactory, investment through Network Rail has not been neglected by the Government. In control period 5—2014 to 2019—Network Rail will deliver a £38 billion programme to help transform the busiest parts of Britain’s rail network. That programme takes forward the plan set out by the Government in their rail investment strategy published in 2012.
Southeastern is currently performing within its contractual benchmarks for “cancellations”, “train capacity” and “delay minutes”, and has done so for the duration of its franchise. The Department monitors those benchmarks regularly and, in the event of a breach, swift and appropriate action will be taken. The hon. Lady raised Southeastern’s compensation scheme and overcrowding at the last debate in February. I shall now deal with those points in turn.
On passenger compensation, Southeastern’s official compensation scheme is called Delay Repay. Under Delay Repay, all passengers are entitled to claim compensation for each delay of more than 30 minutes, whatever the cause. There are no exclusions for delays outside the control of the train operator, such as those caused by Network Rail, or even outside the rail industry, such as those caused by vandalism or cable theft. Delay Repay is more generous than the previous compensation regime, and allows compensation to be claimed as follows: 50% of the single fare for delays of 30 to 59 minutes; 100% of the single fare for delays of more than 60 minutes; 100% of the return fare for delays of more than two hours.
Southeastern has paid out millions in Delay Repay compensation over the past 12 months, dwarfing payments made the previous year and showing increasing passenger awareness. It is certainly a way of concentrating the operator’s attention on shortcomings in that area. In addition, given the ongoing disruption on the Hastings line, and in recognition of the loss of service to season ticketholders, Southeastern decided to compensate those passengers with £50 Marks and Spencer vouchers. When the line opening was again delayed owing to a further landslip, Southeastern chose to further compensate season ticketholders with cheques ranging from £100 to £250. Those were commendable actions by Southeastern that it was not contractually required to make.
Overcrowding is a persistent issue on that and other lines, and from the passenger counts it collects, Southeastern is aware of services that are over-capacity and require strengthening. The Department encourages train operating companies to increase train length on overcrowded trains where it can reasonably do so without causing greater problems elsewhere on the network. Until additional rolling stock is introduced, increasing capacity will depend on Southeastern’s ability to deploy effectively its rolling stock to meet demand.
I am aware that Southeastern is looking into the possibility of running 12-car trains in the London metro area, but that is subject to the successful completion of power supply upgrades, as well as ongoing work to ensure the safe deployment of driver-only operation at stations. I understand that Southeastern is working with Network Rail to resolve those issues as a matter of priority. On additional rolling stock, we are in discussions with Southeastern to determine whether an affordable solution exists to augment its fleet by the end of 2017. Those discussions are ongoing, as part of the direct award negotiation.
The hon. Lady will know that the Department is currently negotiating a four-year direct award contract with Southeastern from October 2014, in accordance with the re-franchising programme. Those points will be familiar following her debate in February, but I consider the enhancements to be of considerable benefit to passengers and worthy of repetition. The new Southeastern franchise has been purposefully designed with customer satisfaction at its core. For that reason, an innovative performance regime has been included, which contractually requires operator-funded investments where National Rail passenger survey targets are not met. In addition, a financial incentive regime will be linked to the standard operator benchmarks of “delay minutes”, “cancellations” and “train capacity”. Attaching financial reward to customer satisfaction and operational performance is an essential element of the new franchise. This is designed to drive passenger benefits and, ultimately, continued strong growth in rail travel.
Heidi Alexander
By which date will 12-car trains on the Southeastern network call at any station in my constituency in the morning rush hour?
Mr Goodwill
As I said, discussions are ongoing, so I cannot give the hon. Lady a precise date. I hope that she will be reassured that it is an issue of great importance to the operator. Given the incentives, and the penalties that non-performing companies will incur, it is in the company’s interests to improve services and meet those key performance indicators.
Making performance more transparent is a further key aim of the new franchise. While Southeastern currently reports an average public performance measure by monthly period, in the new franchise it will be required to publish PPM data by route, in addition to its overall PPM average, which answers the point the hon. Lady made about individual performances being masked by the best performing services such as HS1. We will also be discussing with Southeastern what other information can be published about customers’ experience of using its services. I hope that she will engage with that process and let Southeastern know which indicators she wants it to focus on. I suspect that overcrowding is probably the issue that most affects customers after delays. There is compensation for delays, but that does not help customers in overcrowded trains, especially in bad weather.
My expectation is that increased transparency will help passengers make better informed travel decisions, as well as allowing the operator and Network Rail to target improvement strategies on the worst performing routes. Greater transparency will also enable the Department to challenge more effectively the operator’s delivery.
The hon. Lady mentioned the platform 4 gate at Lewisham station. I have to admit that I was not aware of that problem, which is due to engineering works, but I will certainly look into it and see that it is addressed. She also touched on the extension of the contract through direct award. As with all direct awards, this is a necessary step to achieving a manageable and deliverable franchise schedule for both the market and the Government. We continue to monitor the performance of Southeastern very closely.
Southeastern’s operational performance has been relatively good in the last 12 months, although it remains 6% off its delay minute targets. For the first period in the new rail year, it is ahead of its targets. Southeastern continues to work with industry partners Network Rail to improve performance for passengers, and has recently called and attended a formal review of Network Rail’s performance.
The massive investment being made by the Government in the Thameslink programme will improve services for the whole of the south-east of England, with 40% more capacity on services between Sevenoaks and the Thameslink core, via the Catford loop. However, in the short term, the Thameslink programme will cause significant disruption at London Bridge station. We believe that certainty of ownership and a stable partner will help better to manage the services for passengers during this period.
In summary, operational performance has declined sharply on the Southeastern network since October last year, and I agree that this is not acceptable. I expect to see improvements now that the Office of Rail Regulation has conducted its formal review, and Network Rail has provided commitments to Southeastern. There is also room for improvement in Southeastern’s performance, given that it was 6% off its delay minute targets by year end in March 2014. It has, however, made a strong start to the new rail year, with delay minute performance for the latest period in April ahead of target.
I hope that, by outlining some of the Department’s plans for the four-year direct award period, I have shown that the Department is committed to driving real improvements in transparency, performance and customer satisfaction. I am grateful to the hon. Lady for her continued interest in the Southeastern franchise, and for bringing this debate to the attention of the House.
Question put and agreed to.
Westminster Hall
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Votes at 16
(10 years, 4 months ago)
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Sarah Champion (Rotherham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone, and it is a privilege to raise this subject again in Parliament. There are 1.5 million 16 to 17-year-olds in the UK and they are missing out on the vote. I am hugely grateful to all the young people who, in the lead up to the debate, made themselves aware of it, alerted others, provided briefings, tweeted about how the issue affects them, and even turned up today to watch. That commitment is a clear indication of the political will of young people, which currently goes unserved.
There are so many things a person can do when they become 16. They can leave school to enter work, give full consent to medical treatment, consent to sexual relationships and even get married, if they choose to.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I am sure that the hon. Lady recognises that in England and Wales people cannot get married at 16 or 17 without parental consent; there is not the ability to do that of one’s free will.
Sarah Champion
I thank the hon. Lady, and I recognise that point. Sixteen-year-olds may also join the armed forces, change their name by deed poll, obtain tax credits and welfare benefits in their own right, become a member of a trade union or co-operative society, and even become the director of a company. On top of all that, 16-year-olds in work are required to pay income tax and national insurance contributions, yet those 16-year-olds paying taxes are not allowed a say in how they are spent.
Mr Mark Harper (Forest of Dean) (Con)
Everyone, if their income is high enough, has to pay tax and national insurance. A child who has a sufficient level of income—who is, for example, gifted money by relatives—is eligible to pay income tax, but still has no say. To what level is the hon. Lady suggesting that we reduce the voting age?
Sarah Champion
I am not suggesting reducing the voting age below 16. I am suggesting 16 for the reasons I have already stated—that people may consent to sex, for example, and so are recognised as adults in other areas. Surely 16-year-olds having no say if they pay tax is not right. It reminds me of “no taxation without representation”, an expression, coined 250 years ago, that eventually led to the American revolution. I do not intend to start a full-scale revolution, but I hope that we trigger radical reform.
Moving away from the status quo is difficult, as history recognises. In 1918, votes for women was not a popular cause, but the minority who knew it was right paved the way for millions of British women, who have gone on not only cast to their vote, but regard doing so as the norm. Tracing history further back, much the same could be said of the Chartist movement, which fought for the vote for the working classes. Once again, at the time, that idea was regarded with animosity and was resisted, but society quickly came to see the opening up of the vote as fair and just. The time is right to open the democratic system even further, and to include 16 and 17-year-olds among the group of people who are able to vote. It would be a bold and pioneering move that would really show how far we have come as a country.
Since the debate was announced, I have heard from many 16 and 17-year-olds throughout the country on why securing the vote is so important to them, and particularly from the young people of the Rotherham youth cabinet, who went out of their way to come to my office last week to share their thoughts on voting at 16. At the meeting, Oliver Blake, who was previously our Member of Youth Parliament, said:
“I feel that the major issue preventing people from supporting the Votes at 16 campaign is that people say you’re not mature enough. I don’t feel that argument is valid. You have people at all ages who don’t use their vote wisely; you can see this by the number of people voting for extremist parties or joke candidates, but you don’t exclude them from using their vote. I want to be able to vote because I want a say in my future, and I know I’ll use that vote responsibly.”
Rotherham’s current Member of Youth Parliament, Ashley Gregory, expressed his desire to help choose his future by voting now. He believes that issues of direct relevance to young people, such as university tuition fees and education, demonstrate his case. At our meeting, he said:
“I find it difficult to hear MPs having conversations about what the level of tuition fees will be, how higher education is funded or even what curriculum we study in school without being…a legitimate part of that conversation. These are decisions that affect me, but I’m not allowed a voice on them.”
The arguments in favour of voting at 16 are varied, but each in its own right is strong, from the argument that allowing 16 and 17-year-olds to vote empowers them to engage with the political system, to the argument that young people voting would lead to a fairer and more inclusive youth policy. Furthermore, there is the argument that young people should not be expected to contribute to society through taxation as members of the armed forces, or by parenting children, without having a say in how that society is governed. Another persuasive argument is that the low turnout of younger people at elections might be dealt with by engaging them earlier in the political process. Taken individually, each of those arguments is forceful, but collectively they make a robust case for reform.
Alex Cunningham (Stockton North) (Lab)
Does my hon. Friend agree that schools still have a tremendous role to play in educating young people about using their vote? It troubles me that young people do not generally vote—the 18 to 25-year-olds. There could be much more education in schools to encourage young people to see how important voting is.
Sarah Champion
I absolutely support my hon. Friend on that point, which I will come to.
I recognise that introducing voting at 16 is a bold and radical proposal, but it is an opportunity to invigorate a new generation of politically active and engaged citizens, and that would create a more open and fair political system. Due to new technologies, young people are more informed than ever before, and more able to seek out information and to campaign on issues that affect them. Recently, my office received a letter from a young woman who wanted to volunteer with me. She wrote about her deep passion for women’s issues and feminism, and her views were profound and well informed. We should not expect any less from our young people.
In the information age, when anyone is able to find out about an issue at the touch of a button, it is not surprising that more young people than ever are expressing a desire to engage with the political system. There is, however, a flipside to that. While we must celebrate the fact that many young people are choosing to engage actively with politics, we must also be cautious, because there are problems in the system that need fixing. Those problems will not be fixed overnight, but voting at 16 might help to address them.
Opening up democracy to young people is an important way of confronting the democratic deficit faced in the UK. Electoral turnout in the UK has been on a downward trend since 1950, when 84% of the population turned out to vote; turnout was only 65% in the most recent general election. Membership of our political parties has fallen; the Conservative party, Mr Bone, has gone from being 3 million strong in 1950 to having only 100,000 members today. At the most recent elections, only 44% of those aged between 18 and 24 voted. Rather than turn our backs on the problem, we must confront it.
By offering votes to 16 and 17-year-olds at school and in colleges, and improving citizenship education, we can embrace the important civic duty of voting in our education system. Using citizenship education as a tool to support young people in developing their political understanding is key, as my hon. Friend the Member for Stockton North (Alex Cunningham) indicated. When I asked young people in my constituency about citizenship education and what they had learned about politics as part of that, some of them in their final year of school replied that they had only three or four sessions in which they had talked about politics in the entirety of their secondary education. Is it any wonder that we are seeing a decline in voting, and that political apathy has become the norm?
People are too quick to use the system as an excuse for not moving ahead with democratic reform. I hear arguments such as, “Young people aren’t educated well enough about politics to be able to use their vote wisely.” Surely that is a call to give them a well balanced and politically neutral education, in a way that is similar to how we teach religious studies, rather than an argument for suppressing young people’s opportunities for involvement in democracy. To blame the system rather than change the system is a regressive and unhelpful stance.
As Members of Parliament, we should be leading the way by empowering young people, rather than turning them away from the door of democracy. We should recognise the importance of increasing the participation of young people in politics. Allowing 16 and 17-year-olds such empowerment in Scotland, where they are being afforded a vote in the independence referendum, has reignited the issue on a national level, and that is one of the reasons why today’s debate is so timely.
Wayne David (Caerphilly) (Lab)
Does my hon. Friend accept that it is difficult to construct the intellectual case for why young people in Scotland may vote on whether Scotland should remain part of the United Kingdom, but not on anything else?
Sarah Champion
Absolutely; there is flawed logic there. We see in Scotland the impact that allowing 16 and 17-year-olds to vote in the referendum is having on their political engagement. Young people are often featured on the news or in discussion programmes, debating their opinions on Scottish independence. It inspires me to see those young people discussing the issues and taking a stance. The validity of their position is not for me or anyone else to judge, but their engagement with the debate is brilliant to see, and it can teach us lessons about how an inclusive politics is an attractive and fair politics.
This argument applies more broadly. At the heart of the issue is the notion of civil liberties. The debate is not about whom a 16 or 17-year-old votes for, but about recognising their maturity and providing them with a vote, and about a society building them up to use that vote to the best of their ability. Ultimately, this should not be for anyone except 16 and 17-year-olds themselves to decide on. If they feel that they are mature enough to have a vote, we as politicians and as a society should trust our young people enough to allow them to exercise it. I have read that public opinion is against the votes at 16 campaign, but it is not public opinion that matters so much as the opinion of 16 and 17-year-olds. It is their opinion, rather than those of others, that we should listen to and act on. Young people are rightly calling for the right to vote.
Dr Coffey
I am sure that the hon. Lady is a great supporter of the Youth Parliament, which has been embraced more and more by this House. However, does she not find the very low turnout surprising? The person who won the nomination to become the Member of Youth Parliament for my constituency secured fewer than 200 votes, which shows that an opportunity for young people across Suffolk Coastal—indeed, the country—to vote for their own Members of Youth Parliament gathered little interest. Why would it be any different for the national Parliament?
Sarah Champion
I thank the hon. Lady for her intervention. Her point is interesting. I will come on to the Youth Parliament; nearly 500,000 people voted in the elections to it. I am sure that, like me, she will work with her Youth Parliament Members to broaden the campaign, so that more young people vote.
Alex Cunningham
My hon. Friend might be interested to know that in Stockton-on-Tees, hundreds of young people participated, because schools got involved and encouraged young people to use their vote to elect their youth parliamentarians, and it was a great success. The situation can vary across the country, just as it does for national elections.
Sarah Champion
I completely agree with that. I want to come on to some of the organisations that are helping with the campaign. The votes at 16 coalition, led by the British Youth Council, has been campaigning for votes at 16 for 10 years, backed by 16 and 17-year-olds across the country. As recently as November 2013, the UK Youth Parliament voted to make the issue of votes at 16 its national campaign, after balloting some 478,000 young people nationally. The campaign was then chosen in the Youth Parliament’s annual debate in the House of Commons. Members of the Youth Parliament are democratically elected by young people in their constituency, so the fact that votes at 16 was voted to be their priority campaign shows just how important the issue is for young people nationally.
As an example of the strength of feeling on the issue, I would like to read an extract from Hansard of the debate, from the speech of Shakeel Hajat, who represents the east midlands. He said:
“Votes at 16: what a topic! Through the conversations that take place during annual sittings and conventions, it crops up constantly in the debates of the UKYP, and rightly so. It is the most relevant topic to young people: 49,945 of them voted for ‘Votes at 16’ to be the national campaign for the UK, making it the most popular topic on the agenda today. For too long this issue has lingered in our hearts and minds, and now it is finally time for it to be given long-awaited attention.
Members of the Youth Parliament, I stand before you today as a 17-year-old: a 17-year-old with responsibilities, but without the right that should go with them. For example, at 17 I have the right to have a wife and children. Obviously I have neither. However, the Government say that at 17 I can take the responsibility of having a partner and children, but I cannot influence the society that I would want for my kids because I do not have the right to vote. I am denied that right not for reasons connected with my knowledge or political awareness, but because I am…younger than the required age. That one year has cost me my representation, my political participation and, most important, my voice. Members of the Youth Parliament, we are being robbed.
A common argument against votes at 16 is that many 16 and 17-year-olds do not know enough to vote. Another is that there would be too low a turnout at polling stations. However, those are not sufficient reasons to deny 16 and 17-year-olds the vote. Every age range contains people who may not have enough political knowledge to vote, yet we do not stop certain people voting on the basis of their political awareness, and even if turnout is low, we will have empowered young people. We will finally be represented on councils, in the European Parliament and at general elections, and the Government will have to listen.
You may be interested to know that the same arguments were used against the vote for 18-year-olds and the women’s suffrage movement...In the past the UK has led the world in voting reforms, but now I fear that we are trailing. Giving women the vote was a huge step towards a fair and equal democracy. It was the breaking down of a civil rights barrier, and I assure you, Members of the Youth Parliament, that votes at 16 will be the next step.”
The strength of feeling is clear, and it is represented not only by other young people across the country but by young people’s organisations. London Youth, the National Union of Students, the Scottish Youth Parliament and the British Youth Council are only a small sample of the young people’s organisations that are actively speaking out in support of the campaign. I am grateful to all of them for the support that they have given me for this debate.
Similar debates are happening in schools and colleges. Last year, Newham college held a discussion group on voting at 16, to which students of all ages and backgrounds contributed. That debate found, once again, that the majority of students were in favour of reducing the voting age to 16. I am told that much of the discussion focused on the right level of maturity required to vote. While some students argued that 16 was too young, many argued that people matured at different rates, so having the option to vote younger was important.
It appears that, if you ask 16 and 17-year-olds whether they should be allowed to vote, the majority will consistently reply that they should. Opponents of voting at 16 express concerns about undue influence over a 16-year-old’s vote, especially from parents and peers. That should not be a reason to turn down the opportunity for 16 and 17-year-olds to vote, but an argument for improving the information and support available to young people in the lead-up to their first vote. If young people overwhelmingly argue that they want to vote, turning it down due to the impact of their parents seems unfair, unreasonable and, to be quite honest, patronising.
I am pleased to see that many Members of Parliament have already pledged their support to the campaign. In particular, I am proud to belong to a party that recognises the voices of 16 and 17-year-olds. My right hon. Friend the Member for Doncaster North (Edward Miliband) has already argued, and I completely agree with him, at our party conference that to change our politics, we have to hear the voices of young people, not only on matters that affect them immediately, such as education, but on matters that interest them or will have an impact on their future. We need to hear from the young people demanding a job, campaigning on mental health, or volunteering to help elderly people in care homes. For the votes of young people to matter, we must recognise that, while it is important for young people to hold the Government to account over youth policy, it is equally important for political parties to wake up and realise the contribution that young people can, and do, make to our society.
We in the Labour party have worked hard to move towards a fair and representative democracy, and I know that changes are starting to happen outside the party as well, but too often that has focused exclusively on the voices of women or of ethnic minorities. It is time that we realised that young people, too, have little representation in our political system, and that giving 16-year-olds the vote is one way to rectify that imbalance. There is potential for politicians to gain much deeper relevance to young people by implementing a reduced voting age. Pushing that change through would win considerable respect from a potentially lost and disenchanted generation.
Voting at 16 will also open up policy making to become fairer and more accountable. By being accountable to 16 and 17-year-olds, the system will become skewed such that politicians, policy makers and the Government naturally gravitate towards a greater consideration of youth issues in policy formation. That is especially important in a system where young people feel so disengaged.
Alex Cunningham
Perhaps one of the policies that would be influenced is university fees. Governments might have approached the idea quite differently if they had to account to 16 and 17-year-olds.
Sarah Champion
I completely agree; it echoes what I have been saying. If young people were able to have a much stronger voice, we would listen to them and make our policies fairer.
We are at a point in history when the statistics tell the story of declining trust in party politics and its ability to effect change, not specifically among young people but across the board. There is a feeling of being disfranchised in all our communities and among all age groups, and a real and urgent need to reverse that feeling before it continues into future generations. Engaging young people will help to build up a politically interested society and will bring change not just now but for future generations.
Toni Paxford, a member of Rotherham’s youth cabinet, told me that, for her, the issue was not necessarily the signal that getting the vote would send, but the signal sent by not being given it. She told me of a friend who spends most of her spare time volunteering for charity, as well as of her own experiences raising £3,000 independently for local charities. She argued that by not giving 16-year-olds the vote, society fails to recognise the important contributions that young people can make, and that the failure to recognise those contributions would bring about a culture of apathy among young people.
That point brings me to the contributions made to our society by 16 and 17-year-olds. Toni’s example is one of an incredible volunteering commitment, but such contributions to society come via other routes as well. Sixteen-year-olds can legally become parents, but they raise their children in a society in which they cannot have a say. They can legally go to work and contribute to our economy but are not allowed a say in what our economic policy should be. Perhaps most starkly of all, we let 16-year-olds join our armed forces and thus represent our country, but do not respect them enough to give them a say in our defence policy.
It is not fair or right to allow that set of conflicting messages to continue. We cannot expect 16 and 17-year-olds to contribute to our society through various means—economically, physically, intellectually or socially—in a capacity where we recognise them as an adult, but then give them the democratic rights of a child. That conflict is already being recognised in a number of countries, such as Austria, Bosnia and Herzegovina, and Argentina. We must not allow ourselves to fall behind: we have been pioneers of voting reform in the UK in the past, and I hope that we are open-minded enough now to continue that trend. It is high time that we recognised the clash within our expectations of 16-year-olds. We trust our young people to contribute to society in many ways, so we should start to give them their democratic rights.
If people counter the campaign for votes at 16 with arguments that 16 and 17-year-olds are not mature or responsible enough to vote, I will argue that they should look to the many mature and responsible ways in which 16 and 17-year-olds are already legally entitled and expected to contribute to our society. Allowing voting at 16 would send so many positive signals to our young people. It would say, “We value your voice. We value your contribution. We believe you are responsible.”
Guy Opperman (Hexham) (Con)
I congratulate the hon. Lady on securing this debate, and apologise that, owing to problems with my train, I was not here at the beginning. I may have missed her saying this at the start of her speech, but does she agree that if her argument is taken forward, at the very least the idea should be piloted in a small, designated area rather than rolled out nationwide?
Sarah Champion
I would argue that it is already being piloted in Scotland and Wales, where the responses are positive. However, if the only way the Government will take the idea forward is by piloting, let us pilot.
Positive messages are crucial to creating a new generation of politically engaged and inspired people who will go on to teach their future families such values, and are exactly why voting at 16 is important. The onus is on us to show young people that they count too.
The votes at 16 campaign is not a new one—it goes back approximately 10 years—but public interest in it is gathering towards critical mass, particularly given the 2012 vote in the Welsh Assembly in favour of lowering the voting age to 16 and the fact that 16-year-olds will be voting in the Scottish referendum. There is a clear and strong appetite for the reform. I accept that it faces strong opposition, but radical change always does. Change is not always comfortable or easy, but when it is right and just, sidestepping the need for it simply shows cowardice.
It is time that 16 and 17-year-olds were recognised for the things that they can and do contribute to society. The country might not be quite ready for it, but in my view, that means our task is to make the country ready. We must take up the challenge and make the political reforms required to give young people a stronger citizenship education, a greater degree of political knowledge and a broad range of political opportunities. Only by doing so will we give the vote to 16-year-olds in an effective way. By raising our young people rather than pushing them down, we will open up democracy and create a generation of more inspired and confident citizens, who have real faith that politics can make changes for them, their families and their communities.
For too long, the idea has been denied and the issue has been sidestepped. As far back as 1998, the British Youth Council surveyed 1,000 young people and asked their opinions on votes at 16; the response reinforced the desire for 16-year-olds to become a part of the democratic system. In 1999, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) proposed an amendment on the issue to the Representation of the People Bill then going through the House; it was defeated by 434 votes to 36, showing that at that time the opinion of Members of Parliament was significantly against votes at 16. That year, however, the Trades Union Congress passed a motion calling for votes at 16.
Through the early years of the 21st century the campaign gathered strength, galvanising support from the Children’s Rights Alliance for England and the Young People’s Rights Network, and even featuring in the electoral manifesto of the Liberal Democrats. An Electoral Commission review of the idea was launched, and private Member’s Bills on voting at 16 were brought forward in 2004, 2005 and 2008. Some progress has been made in recent years but Parliament seems consistently to refuse to give the issue the attention it deserves. On the 24 January last year, Stephen Williams MP led an historic debate in the House of Commons on extending the vote to 16—
Mr Peter Bone (in the Chair)
Order. It is normal to refer to Members by the constituency that they represent, not by name.
Sarah Champion
I apologise for that slip, Mr Bone.
The motion for that debate stated:
“That this House believes that the age of eligibility for voting in all elections and referenda in the United Kingdom should be reduced to 16.”
Incredibly, it won the Commons vote, with 119 Members voting in favour and 46 against, yet the Government have still done nothing to send a signal to young people that their voice and their vote are valued.
A persistent refusal by this Government to permit voting at 16 sends a message to 16 and 17-year-olds that their views on society are not valid. That is not and should not be the case. Our 16 and 17-year-olds will form the next generation of creative thinkers, business leaders, scientists and engineers. We will and do expect them to contribute to our society, both now and in future. Our message to them should be that we expect them to contribute to a society that appreciates them, that welcomes their opinions and that is willing to act to represent their views. If we cannot act to bring that about, it should be no surprise if our young people become alienated from the democratic system.
Already, the political system serves to alienate young people. The average age of an MP is 50, and less than a quarter of MPs are women. We cannot expect young people to engage in politics if it is seen as unfamiliar to and unrepresentative of them. I do not believe that granting votes at 16 is the final or only step needed to engage young people politically, but I believe that it would be a really positive start to the process. We must show young people that we value both their contributions to society and their opinions about how things should be done.
In government, Labour introduced citizenship to the national curriculum. Rather than paring that back, we should be bolstering the teaching of citizenship and politics in schools. Research has shown that if someone votes in the first election after they reach the age of majority, they are more likely to carry on voting; conversely, someone who does not vote in that first election is unlikely ever to vote. As Members of Parliament, we have an important role in structuring a society that teaches young people that using their vote is worthwhile and that their voice is valued as part of society’s decision making.
We know that people are encouraged to vote when it is easiest and most convenient for them—that is the experience from postal voting—so some campaigners have argued that we should consider having polling booths in schools. That would mean that the first time sixth-form and college students voted, they would do so in a supportive and welcoming environment. Surely that can only be a good thing. Such modifications are crucial in opening up our democratic system. If we want to understand why young people do not engage as much as we would hope, we must start by addressing the environment in which they engage. If we cannot get that right, young people’s entire experience of political engagement will start off on the wrong foot.
Some might argue that that role should fall to the young person’s parents, but leaving it to parents alone allows for a much more variable rate of participation by young people, potentially based on the parents’ own view of whether it is important to vote. We should not be looking to establish a system in which young people decide based on their parents’ intentions, but one in which young people are well informed and have enough support to decide for themselves.
After today’s debate, I hope that every MP—not just the ones here in the Chamber—goes to schools and colleges to discuss this issue with young people in their constituency. I hope that young people take the initiative to write to their MP and tell them why it is so important. I was aware of the issue and believed in it, but I did not actively campaign on it until I heard the young people of Rotherham telling me why it was so important to them. As elected Members, we are here to represent our constituents, and it is particularly important that we represent those who do not have a voice of their own. Hearing the passion of so many young people who believe so vehemently is enough to make one realise that allowing voting at 16 is the right thing to do. It is the right thing to do because it is inclusive. It is the right thing to do because it recognises the contributions that 16-year-olds make to society.
Mark Field (Cities of London and Westminster) (Con)
Will the hon. Lady give way?
Mark Field
Apologies; I have just come in, but some of us have other constituency duties. Those who can rely on the Welsh Parliament obviously have far less to do as Members of this House. May I ask the hon. Lady whether inclusiveness applies—[Interruption.]
Mr Peter Bone (in the Chair)
Order. It is normal when there is an intervention that it is addressed to the Member who is speaking. Hon. Members sitting next to her should be quiet.
Mark Field
The hon. Lady refers to inclusiveness. Does that apply to 14-year-olds, or perhaps to 12-year-olds as well?
Mr Peter Bone (in the Chair)
Order. Let me make this point clear. You do not have to be here at the beginning of the debate to intervene. That is a fact.
Wayne David
On a point of order, Mr Bone. It would help the consistency of the debate if someone was here to hear the arguments. Logically, they might not ask about points that have already been made.
Mark Field
I had been here for the previous few minutes, which is why I asked whether that particular point about inclusiveness should apply to 14-year-olds and 12-year-olds. Does the hon. Lady not think that as well as having a right to vote, there is also a responsibility that any young adult should have in matters of politics or current affairs, and that therefore we have probably got the balance right and 18 is roughly the right age? Of course, there will be 16-year-olds and 15-year-olds who are very engaged, but equally there are older people who are not.
Mr Peter Bone (in the Chair)
Order. First of all, interventions are short. Secondly, it is entirely up to the hon. Member who is speaking whether they take an intervention. The hon. Lady has kindly taken the intervention, but we do not want half an hour on it. I think we have had enough.
Sarah Champion
I appreciate the hon. Gentleman turning up to the debate. Had he heard my speech, all his questions would have been answered. I refer him to Hansard. I absolutely agree that children should be made aware of the political process from a very young age, but I do not agree that those younger than 16 should be given the vote, because in other areas of their life they are still treated as children, whereas in some areas of their lives 16-year-olds are treated as adults. That is where I believe the discrepancy lies. Most importantly, giving votes to 16 and 17-year-olds is the right thing to do, because it sends a message about the values that we as society place on them. It shows them that we believe that they are important.
Mr Mark Harper (Forest of Dean) (Con)
It is a great pleasure to serve under your chairmanship, Mr Bone. I start by congratulating the hon. Member for Rotherham (Sarah Champion) on securing the debate. It is a debate we have had a number of times in the House, and I have had the pleasure of speaking on most of those occasions. The hon. Lady will probably find it disappointing that I will not support her campaign for extending the voting age to children—those of 16 years of age—and I would like to set out for the House why.
It is a great pleasure to see the Parliamentary Secretary, Office of the Leader of the House of Commons, my right hon. Friend the Member for Carshalton and Wallington (Tom Brake) in his place. I have occupied the same seat as him in debates on the issue in the past. The Government do not have a settled view on the matter, because the two coalition parties do not agree. I will save him any embarrassment by explaining my party’s view. The Conservative party’s view is that we should not extend the voting age below 18. The Liberal Democrats believe that we should, and I expect that the Minister will set out the Government’s view and expand a little on his party’s view.
Wayne David
If the Conservative party’s position is as the hon. Gentleman says, why, in January last year, did the Conservative party not vote against votes at 16?
Mr Harper
I am a humble Back Bencher, and I do not speak for the Conservative party’s voting position. There have been several votes on the matter in the House. For example, in 2005, during the previous Parliament, the hon. Member for Bristol West (Stephen Williams) proposed a ten-minute rule Bill, which I spoke against and opposed, and the House voted clearly against it. A private Member’s Bill, which I think the hon. Lady mentioned, was introduced in 2008 by Julie Morgan, the then Member for Cardiff North who is now a Member of the Welsh Assembly. That private Member’s Bill did not get support in the House; it was opposed by Members on both sides of the House, for very sensible reasons.
My arguments for opposing the extension of the voting age to children—those below the age of majority—have nothing to do with the hon. Lady’s straw-man arguments about people’s competence, intelligence or ability to reach a rational decision. My point is simple. We have to have a voting age, and some people will be on one side of that cut-off point and some people will be on the other. I think there is general agreement about that. The real question is where we set the age. My view is that the right age is the age at which we decide that someone moves from being a child to being an adult. That is the right cut-off point at which someone should be able to vote and make a serious decision about who governs their country.
One argument put forward by the hon. Lady and others who favour votes at 16 is to allege that in a range of policy areas 16-year-olds have certain rights. Some of the things that the hon. Lady set out were accurate, but several were not. People tend to set out half the story but forget to fill in the missing pieces, and my hon. Friend the Member for Suffolk Coastal (Dr Coffey) pointed out one of them. In England and Wales it is perfectly true to say that 16-year-olds can get married, but there is a significant qualification, namely that they have to have permission from their parents. We do not accept, therefore, that 16-year-olds are capable of making that important, life-changing decision; we say that they must have parental consent.
Alex Cunningham
As a Scotsman, albeit one who lives in England and represents an English constituency, it always interests me that 16-year-olds in England can make the choice to cross the border to Gretna and get married there. Do they not, therefore, have the choice after all?
Mr Harper
I was careful to say that that was the position in England and Wales, and not in Scotland. I am familiar with the law in Scotland, which is a matter for Scots. People in England and Wales are perfectly capable of going to any jurisdiction in the world to do various things that they are entitled to do there.
When it comes to joining the armed forces, the hon. Lady left out two important qualifications. First, although 16-year-olds can join Her Majesty’s armed forces, they cannot do so without the consent of their parents. We do not accept that 16-year-olds should be able to join the armed forces purely on their own say-so; we insist that their parents consent to that decision. Secondly, we do not deploy 16-year-olds in theatres of armed conflict. We make a clear decision, following on from the UN convention about child soldiers, that we do not deploy young people in conflict zones until they attain the age of 18. Those are two important qualifications.
Sarah Champion
I hope that I made it very clear in my speech that I was not saying that we were deploying 16-year-olds. I was merely saying that they were able to represent our country at an international level.
Mr Harper
Yes, but the important point that I have made was that they are not allowed to join the armed forces without their parents’ permission, so we do not accept that they are able to make such decisions. I accept that there are some things that people can do at the age of 16. The age of sexual consent is 16, although there are two scenarios in which we do not accept that someone under 18 is able to make a sensible decision. In a case under the Sexual Offences Act 2003 of abuse of a position of trust, we make a distinction between those aged 16 or 17, and those aged 18 or over. We make a similar distinction about whether someone is able to consent to be in pornography. We say that they are unable to do so until they are 18, for sensible reasons of child protection that I very much support.
Mark Field
My hon. Friend is making an important argument. It is also the case—perhaps he will come on to this—in relation to the purchase and consumption of tobacco products. The trend has been in an upwards direction, with the threshold age now 18. Likewise, in relation to driving, there is now a strong lobby that suggests, perhaps for good reasons, that people should not be behind the wheel of a car on their own under the age of 18. My hon. Friend is making a positive case that there is no consistent move towards the age of 16. If anything, we are militating in the opposite direction, with many of the threshold ages moving towards 18 and the age of majority.
Mr Harper
My hon. Friend makes a good point; I was coming to that. I have been involved in this argument since I was elected to Parliament in 2005, and have heard many of the arguments used in favour of various ages of consent for various activities. He is quite right. It is interesting that in many cases the age has been going upwards, often for sensible reasons: we are saying that we want to protect children from certain activities and that we do not think that they can make sensible judgments on some issues. However, I find it interesting that those who are keenest on votes for 16-year-olds—those who think that 16-year-olds should be able to decide who governs our country—are often the same people who are keenest to say in many other areas that 16-year-olds are not able to make decisions, and to increase the age limit. My hon. Friend makes a sensible point, to which I will come in a moment.
The hon. Member for Rotherham discussed the school leaving age and people’s ability to go out to work. Again, the trend on that issue is in the opposite direction to the one that she proposes. We are now mandating education or training until age 18, although I recognise that that applies in England and not in Scotland, Wales or Northern Ireland. The driving age is one age limit that I, coming from a rural constituency, would rather keep at 17, because it enables children to be more mobile, especially those who have left school to go to work or those going into higher or further education. However, there are proposals to increase that minimum age as well.
We do not think that 16-year-olds should be able to purchase alcohol, but the age limit that has changed since I have been in Parliament, of course, is the one for purchasing tobacco, for sensible reasons. Personally, I have no problem with adults smoking. I do not think it is a pleasant habit, but I think that adults should be free to make the decision to smoke, although I would not do so myself. However, we think that we should protect children from tobacco, and we do not allow them to purchase it until they are 18. It would be a bit odd to say to children, “We don’t think you’re able to make a decision about smoking tobacco until you’re an adult, but”—to follow the hon. Lady’s argument—“we do think you’re able to vote for representatives who will make decisions about legislation.”
We do not let people gamble until they are 18, with the exception of playing the national lottery and buying certain scratchcards. Many film classifications still have an 18 certificate. We accept that there are many items of subject matter in films, videos and DVDs that we should not allow children to watch. Since I have been in Parliament, there has been an interesting debate—again, one of its proponents was someone who thinks that we should lower the voting age—after which the Houses of Parliament passed the Sunbeds (Regulation) Act 2010, in which we decided that those under 18 years of age were not capable of exercising a decision whether to have a tan or not. That may or may not be a sensible decision—I did not feel particularly strongly one way or the other—but I find it slightly odd that the same people who pass legislation saying that someone must be an adult to make such decisions think that we should lower the voting age. That is not very intellectually consistent.
Guy Opperman
I held a debate involving four high schools—Haydon Bridge, Ponteland, Prudhoe and Hexham—on that particular issue last month. It was won by Ponteland high school, whose students proposed the motion for 16-year-old voting, and who also swayed quite an elderly audience—with respect to them. I accept that my hon. Friend is my former boss, and normally I would obey everything he says, but on this issue, does he not accept that to a degree, whether or not the argument is won today, the tide is beginning to turn a little?
Mr Harper
No, I do not accept that. In a moment, I will counter what the hon. Member for Rotherham (Sarah Champion) said by explaining why I do not think that the voting age is particularly significant to how Members of Parliament conduct themselves, or ought to conduct themselves, with regard to young people. I might touch then on my hon. Friend’s point. I will not labour any more of the arguments, but it is worth saying that the trend is against allowing younger people to make such decisions.
Tom Brake
On the subject of trends, my hon. Friend will know that in some cases relating to electoral matters, the trend is going in the other direction. The Electoral Administration Act 2006 lowered the minimum age for standing for election to the House of Commons and local authorities from 21 to 18, in line with the minimum voting age.
Mark Field
My hon. Friend has set out the case well. To touch on what my hon. Friend the Member for Hexham (Guy Opperman) just said, does he share my concern that there is a lot of cynicism involved in the argument? The perception of the Labour party and the Liberal Democrats is that they will reap some electoral dividend by being modern and allowing 16-year-olds to vote, yet there is little good evidence to suggest that the voting age should be reduced, other than the idea that those political parties will benefit from the votes of that young age group and that those of us who take the hopefully more balanced view that it is not necessarily in the interests of the electorate to be extended in that way will suffer from being seen as old and fuddy-duddy.
Mr Harper
I do not share that concern, for two reasons. My hon. Friend mentioned people’s motivations for change. I am perfectly happy to accept that the hon. Member for Rotherham is setting out a case that I have heard before from those in favour of the argument, and that it is reasonable. It is, of course, the case that certain people are in favour of allowing 16-year-olds to vote for one reason only; I am thinking of one particular First Minister of Scotland whose only reason for wanting young people to vote in the Scottish referendum was that he looked at opinion polling evidence from some time ago and thought that they would be more likely to vote in favour of Scottish independence. That is the only reason why he supported allowing them into the debate. Subsequently, of course, polling evidence showed that young people have changed their minds and are now opposed to independence.
That is why I am relaxed about the issue. First, I think that we should treat younger people with respect and argue our view, even if it does not necessarily accord with theirs. I think that we will actually get some credit for being prepared to say things to people with which they might not agree, but which we think are right. Secondly, to go back to votes for women, there were people on the left who thought that enfranchising women would mean that women voted for them. The lesson for our party—less true recently, but certainly true for the bulk of the 20th century—is that the enfranchisement of women meant that the Conservative party was in power when we otherwise would not have been if only men had had the right to vote.
Guy Opperman
On the Scottish referendum, I was in Aberdeenshire last September and was delighted to see that the youngsters proposing to vote were canvassed. Of pupils in the entirety of the Aberdeen schools, 75% were in favour of the Union. Surely, from a politician’s point of view, the lesson is to be careful what you wish for.
Mr Harper
My hon. Friend is right. I will mention opinion polling, but it suggests that we should set out what we think is right and have some confidence that it will stand us in good stead, rather than make a cynical calculation of what we think people in some age group might or might not decide to vote for and take a view for that reason, which has a great likelihood of backfiring.
The reason why I have laboured the point about age categories is that if we do not set the voting age at 18 —the age at which we suggest that children become adults—I am slightly concerned about where we will set it. I know that the hon. Member for Rotherham is advocating that we set it at 16, but I am concerned that once we move it to 16, based on her arguments, there are no good reasons why we should not make it 14 or 10, for example. We say that 10 is the age of criminal responsibility, at which people may be held accountable for their actions, so why not 10, 12 or 14? I have met plenty of 14-year-olds in my constituency who are perfectly capable of listening to facts and arguments, making very good arguments themselves and making up their own minds. By the hon. Lady’s argument, there is no logical reason why I should not give them the vote. If we move away from 18, there is no obvious place to stop, which I think is a good reason for sticking where we are today.
Sarah Champion
Obviously I have not made my argument very clearly. In numerous fields, 16-year-olds are recognised as adults in law. The hon. Gentleman has shown some of the present anomalies. I would like to clear up those anomalies. It is precisely for that reason that I am arguing for votes in law. He looks confused, so let me give an example. People can have sex at 16 but are not allowed to watch it until they are 18—there are all sorts of anomalies like that, and we need to clear them up.
Mr Harper
Although I used to be a great fan of tidying things up, one of the things that I have learned in my time in politics is that life is quite complicated and that some of those anomalies exist for very good reasons. For example, although the hon. Lady said earlier that people can get married and have children at 16, and it is perfectly right that they can legally do so, I do not think there are very many people who would advocate doing so or say that, as a general rule, it is a good idea for 16-year-olds to get married and start a family. I think that most people would consider that 16 is rather too young for someone to do that.
Also, regarding the hon. Lady’s point about children having sex and watching sex, I hope that she is not suggesting that the age at which children can participate in pornography should be reduced. As I said, I am very happy that the age for that is set at 18, which is not the same as the age at which people may have sex, for very good child protection reasons. Again, the trend has been against any reduction in the age at which children can participate in pornography.
All of the rules on age may not be logical and tidy, but a lot of them exist for very sensible reasons. The hon. Lady says that she would like to tidy some of the rules up. Some of the arguments about increasing the age at which people can buy tobacco and do a whole bunch of other things—use sun beds, for example—were championed by her party. I am perfectly happy to accept that there are people who think that we should change the legal age for doing lots of things to a lower level, and if they want to reduce the voting age as well, that seems logical and consistent. However, I find it very odd that people who support raising the age at which we let people legally do things such as using sun beds and purchasing tobacco—it is perfectly sensible to hold that view—simultaneously hold the view that people should be able to vote at a younger age. It is not logically sensible to hold both those views; to do so seems to make no sense at all. If someone votes, they are making decisions about who governs the country, about tax rates, about where we deploy armed forces and about all sorts of important issues. If people think that young people are capable of making those sorts of decisions, I do not see how they can also say that young people cannot purchase a packet of cigarettes. That does not seem to make any sense at all.
Let me just pick up on the point that the Electoral Commission made, which has been mentioned. In 2004, the commission published the results of a review that it had carried out on the age of electoral majority; the review took 12 months and was pretty extensive, and it was set up under the previous Government. Having carried out that research, the commission concluded that the minimum voting age should stay at 18. That conclusion was based on international comparisons; on the minimum age limits and maturity, although as I have already said the maturity issue is not one that I am particularly focusing on; and on research that the commission had carried out among the public, which suggested there was strong support for keeping the minimum voting age at 18 and which also showed that young people themselves were divided on the question. I will come back to that last point in a moment, because I have a relevant story about it of my own; it is similar to that told by my hon. Friend the Member for Hexham (Guy Opperman), but has a different conclusion.
The commission also referred to voter turnout, although I have to say that the argument about voter turnout is not my strongest argument; just because people between the age of 18 and 25 turn out to vote at very low levels, that is not in itself an argument against reducing the voting age. Having said that, it is an odd argument that lowering the voting age will engage more people, because there is no evidence that suggests that 16 to 18-year-olds would turn out to vote in higher numbers than those aged between 18 and 25.
The commission recommended that the candidacy age should be brought into line with the voting age and thus be reduced from 21 to 18. That is a very sensible proposal. It seems to me that if someone is able to vote and make a decision about who their representatives are, they ought to be able to stand to be one of those representatives themselves. The House has debated the issue previously and I know that a number of younger people have been elected to local authorities, although no one under the age of 21 has been elected to the House of Commons. As I say, the suggestion seems perfectly sensible, but it prompts a question. If someone believes in reducing the voting age to 16, do they also believe that 16 to 18-year-olds ought to be able to be candidates at elections? I genuinely do not know the views of the hon. Lady and the Parliamentary Secretary on that issue; the hon. Gentleman might like to fill us in on what the Liberal Democrat view is.
Let me deal briefly with a number of the arguments that the hon. Lady made. The one that I thought was not very sensible was about the various previous campaigns about voting—for example, the campaigns to enfranchise women, first the campaign to enfranchise women generally, and then, of course, the campaign to reduce the voting age for women after they were enfranchised at a higher age level than many people wanted. That question arose when we were debating the private Member’s Bill on voting age. There is an obvious difference between enfranchising women and reducing the voting age. Unless something horrible happens, a 16-year-old will become an 18-year-old in due course and will then be able to vote. Women, who were unable to vote were never going to be anything other than women and therefore were never going to be able to vote. So giving the vote to women is qualitatively different from giving the vote to children, because a 16-year-old may not be able to vote today but will of course be able to vote in two years’ time.
That point relates to the issue that my hon. Friend the Member for Hexham, who is no longer in his place, raised earlier. As an MP, like all hon. Members, I am sure, I visit youth projects and schools. I visit schools right down to primary schools, where I talk to very young children, and right up to secondary schools, including sixth forms, where there are students who are old enough to vote today. I treat all the young people I meet with great respect. First, I respect them in themselves; we debate and have arguments. Secondly, I am of course very well aware as an elected Member that if I am talking to a 13-year-old today, in five years’ time that person will indeed be casting a vote. When I was first elected to the House in 2005 and I went round schools, I was very clear that in 2010, when I would be seeking re-election, any 13-year-olds to whom I spoke would indeed have a vote and would be able to make a decision on my future.
Consequently, I just do not follow the argument that just because someone is not entitled to vote today that we pay no attention to their views, because we only pay attention to people who can vote. I pay attention to the views of all my constituents. Some of my constituents—for example, Jehovah’s Witnesses—do not vote because they choose not to, but I still listen to their views and take their arguments seriously. About 30% of my constituents chose not to vote at the last general election, but when people come to me to state their views on something, I never engage in a conversation with them about whether they are likely to vote for me. I treat everyone’s views with great respect and I am sure that that is true of all Members, so the idea that we do not listen to young people and we do not pay attention to what they think—that we do not think about tuition fees, education or similar things just because young people under the age of 18 are not able to vote—does not hold water.
We have to set the line somewhere, and I think that the right place to set it is the age of majority—the age of 18—when we basically decide that children become adults. That is where I think the line is best left. I do not think that that means that we do not engage with children in debates and arguments in schools and colleges; I and all other Members do engage with children in that way perfectly well. Also, those who campaign on this issue because they think that it will in some way pay an electoral dividend for them—I am not putting the hon. Member for Rotherham in that category—should, as my hon. Friend the Member for Cities of London and Westminster said, be careful what they wish for. If we treat young people with respect and engage them in the argument, they will have more respect for us than if we just agree with something that some of them think because we consider that it will make us more popular. As I say, I do not put the hon. Lady in that category. The voting age should stay where it is—at 18—and I am against what the hon. Lady is proposing.
Mr Peter Bone (in the Chair)
Order. It might help right hon. and hon. Members to know that I would like to start the wind-ups at 10.40 am.
Wayne David (Caerphilly) (Lab)
Thank you, Mr Bone, for the opportunity to speak. I rise to support the arguments put forward by my hon. Friend the Member for Rotherham (Sarah Champion). She made an excellent speech. It is a crucial fact that in many areas of their lives 16 and 17-year-olds are treated as adults. That is not the case in all areas, and we are not arguing for many other areas to be addressed. However, there should be an extension of their responsibility to include the ability to cast a vote. I say that because in my experience young people are far more mature, engaged and proactive than perhaps they were 10, 20, 30 or 40 years ago.
It is very important to recognise that if we want a society that is based on the principle of involvement and participation, there is no more important a group to be involved and to participate than young people. I see empowering them, by giving them the vote at 16 and 17, as a crucial way of doing that.
It slightly worries me that some—though not all—the arguments against extending the franchise to 16 and 17-year-olds are very similar to the arguments that were used in the past against extending the vote to other people in society. I think of the arguments about the Reform Act 1832, and the Reform Acts that followed. The establishment in this country is always reluctant to empower people by extending the ability to vote. It is sad that some of the same arguments are being used against extending the vote to 16 and 17-year-olds.
My background has convinced me of the desirability of lowering the voting age. I worked for the Workers Educational Association and conducted a number of classes for young people. The involvement and depth of maturity displayed in the discussions we had in those adult education classes was quite remarkable. We discussed every issue under the sun, so it seemed illogical to then say, “Your views are very interesting, but nevertheless you have no ability whatever to influence outcomes on such issues in our society.”
Similarly, before being elected to this House I worked as the policy officer for the Wales Youth Agency, and was particularly involved with the voluntary youth sector. Today, I am the president of the Council for Wales of Voluntary Youth Services, known as CWVYS. The issue of how to empower young people was absolutely central to the work I was engaged in at the Wales Youth Agency. I am pleased to say that we established a youth forum in Wales, initially known as Young Voice, but now going by a more trendy name, Funky Dragon, which was thought up by young people themselves. That body has an impressive track record on engaging with a range of issues, particularly relating to the Welsh Assembly, and expressing its collective views clearly and powerfully.
As in many other constituencies, we have a very effective youth forum in Caerphilly that meets regularly. The maturity expressed by young people on a range of issues is remarkable. I am pleased to say that the local authority in Caerphilly, like others elsewhere, takes on board such effectively and coherently expressed views.
I would like to make a couple of points, the first being on the situation in Scotland. There will be a vital referendum in September in which 16 and 17-year-olds are being given the vote for the first time. I think that that has been welcomed in Scottish civic society, whichever way those young people vote. It will be difficult to put back into the box something that has been released—and something that I think has proven successful, in terms of having an effective debate in Scotland. What is good enough for the debate on the Scottish referendum is good enough for debates and votes on a raft of other issues in all parts of the United Kingdom.
My hon. Friend the Member for Rotherham referred to the situation in Wales. Although it does not have the power to extend the voting age, the Welsh Assembly has expressed its opinion that the vote should be conferred on 16 and 17-year-olds. That is the way that things are going.
Finally, if we are honest with ourselves, when Members engage with young people, we all come away with the feeling that it is not the case that young people are not interested in politics; that is a myth. Young people are interested in a raft of issues that affect them, whether it be the environment, education, or employment. They are turned off by establishment politics; frankly, they are turned off by middle-aged men in grey suits—not blue ones—discussing issues as though they knew best. We must move away from that culture, and the most effective way to do that is to extend the vote to 16 and 17-year-olds to ensure that their voice has a material impact on the development of our society.
It has already been mentioned that last year there was a good debate on the Floor of the House on lowering the voting age. I had the pleasure of summing up for Her Majesty’s Opposition. The vote at the end was in favour of extending the franchise to 16 and 17-year-olds by 119 votes to 46. Given that clear view expressed by the House, I would like to think that the Government will respond positively with what they intend to do to make progress on this issue. I have learned this morning that, despite the fact that it abstained on that vote in January last year, the Conservative party is opposed to extending democracy by lowering the voting age. I hope that that is not the view of the Government as a whole, and look forward to the Minister’s response.
Mr Andy Slaughter (Hammersmith) (Lab)
It is a pleasure to serve under your chairmanship this morning, Mr Bone, in a debate on what you rightly said was an important matter of constitutional significance. I congratulate my hon. Friend the Member for Rotherham (Sarah Champion) on securing the debate and on her passionate speech. She is devoted to the issue and has often raised it in the House, and she had time this morning to set out her thoughts in full. I look forward to the Minister’s response, particularly now that it has been previewed by the hon. Member for Forest of Dean (Mr Harper) as reflecting both the Government view and the diametrically opposite Liberal Democrat view. We are all used to Liberal Democrat politicians expressing two opposing views at the same time, but it will still be interesting to hear how the Minister responds.
Mr Harper
I will not allow my views to be traduced. I was trying to be helpful to the Minister. He will set out the Government’s position, which is that they have not taken a view on either side of the argument because the coalition parties have different views on the subject. He will no doubt take the opportunity to set out the view of the Liberal Democrats as well. The two positions are not opposite, and I was trying to be helpful, as I always am.
Mr Slaughter
We will find out. I will resist provoking the hon. Gentleman because we have already heard quite a lot from him so far in this debate. We also heard from my hon. Friend the Member for Caerphilly (Wayne David); both Members are experienced on this subject, as they are, respectively, the former Minister and former shadow Minister with responsibility for constitutional reform. I therefore feel that my knowledge of the matter is somewhat limited, particularly as I am carrying the flag on behalf of my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg), who unfortunately cannot be present because he had a long-standing commitment to chairing a conference on electoral reform. He is particularly keen on that issue, but also on lowering the voting age, and I know that he has been travelling up and down the country meeting young people to discuss the issue. He, the shadow Secretary of State for Justice—my right hon. Friend the Member for Tooting (Sadiq Khan)—and the Leader of the Opposition, my right hon. Friend the Member for Doncaster North (Edward Miliband), have led on this agenda and are together putting the issue at the heart of the Opposition’s constitutional reform programme.
We are facing a deficit in politics that goes beyond the issue of young people voting. It would be easy to retreat from the problem, especially in the midst of a significant economic crisis, but it is not enough to do nothing and hope that the tide changes. It is essential that we seek to explore new ways of achieving democratic renewal and political reform. General election turnout in the UK has been on a downward trend since the 1950s, when 84% of the population turned out to vote. At the last election, the proportion was just 65%. As we have heard, membership of political parties has fallen off a cliff, spectacularly so in the case of the Conservative party, which is now at one thirtieth of its peak membership, but all political parties have been affected.
We deplore the fact that a majority of young people do not vote at elections yet decide to do nothing about it. I thought that some Members who intervened earlier and oppose voting at 16 were using that fact as a reason to justify doing nothing, rather than as a reason to take the matter more seriously. Youth is not automatically linked to apathy, and the reasons behind low turnout are complicated. My experience is that young people today are often highly political but wary of formal party politics. Many do not feel that politicians listen to their concerns or discuss their aspirations.
Bite the Ballot is a very good organisation that promotes young people voting, and one of its representatives commented:
“I would say the majority of young people don’t trust politicians.”
It is probably true that a majority of all people do not trust politicians, but that feeling might be particularly significant among the young, who are perhaps not so world-weary, slightly more idealistic, and therefore more shocked by the way in which politicians sometimes behave. People will have heard the exculpatory comments of Chris Huhne during his media exercise yesterday; I think we must all say that sometimes we politicians do not do ourselves any favours at all.
Sitting back, doing nothing and hoping that our young people vote is not enough. Opening up our democratic system to younger people is important and is a way to solve this problem. Rather than turning our backs, we must seek to improve the current democratic malaise by empowering young people.
Only 44% of those aged 18 to 24 voted in the general election. A recent survey found that only a third of 16 to 24-year-olds say they have an interest in politics. Compare those figures with the 76% of those of pension age who voted. The gap has almost doubled since 1970, when there was an 18 percentage point gap between young people and those of pension age, to around 30 percentage points.
There was a good article in the Daily Mirror this morning—there are always lots of good articles in the Daily Mirror—about this issue, although I do not know whether the Minister read it. It stated:
“Almost 60% of young people say they will not vote in the 2015 General Election”
and that the percentage of those intending to vote in the European elections is only 30%, although perhaps the latter is not so surprising. Those are poor figures and they appear to be getting worse. The response to that should not be to write off young people’s voting, but to take the approach that my party has taken. At the Labour conference, the Leader of the Opposition set out how we will seek to change the situation.
It is right to say that introducing votes at 16 is a radical proposal that has the potential to energise a new generation of politically active and engaged citizens. However, votes at 16 need to go hand in hand with wider youth engagement and a renewed commitment to citizenship education. The education participation age is rising to 18. By offering the vote to 16 and 17-year-olds at school, at college and in workplaces, we can intertwine civic duty with our education system. Conferring a democratic responsibility and opportunity on people still in compulsory education offers practical benefits. For example, on polling days, schools and colleges could have polling stations for students, making it more likely that this group would take advantage of the opportunity. That would be intertwined with Labour’s policy to empower schools to work with electoral registration officers to ensure that students are registered to vote.
The next Labour Government will create schools that nourish real civic duty and democratic understanding, as well as ensuring, of course, that teachers are qualified and all schools are properly inspected, and taking up other unconventional ideas that the Government do not appear to support.
It is important to note that only about half of young people aged 18 to 24 are registered to vote. If people vote once, they are more likely to vote again. The Social Market Foundation published research that found that the closer to an election an individual’s 18th birthday is, the more likely they are to vote. That demonstrated that people who turn 18 in the year leading up to a general election are significantly more likely to vote than those who turn 18 in the year after the previous general election and have to wait five years. Those who vote when young continue to vote. Over time, voting could become a rite of passage in our education system, like taking exams, but this will require a strengthening of citizenship education.
Almost 50% of the population of my constituency was born outside the UK. This is anecdotal rather than statistical evidence, but in communities in my constituency, there is often much greater political awareness and willingness to vote, and that is passed down from parents to children, whether because they value the vote more or because they are taking more of an interest in a country that they have come to relatively recently. If the same interest was shown more widely, that would help; it is achievable. Often, marginal decisions affect whether people vote. For example, we all know that making it easier to vote by post or by other means massively increases turnout.
The Labour Government made great strides with their introduction of citizenship as a subject in secondary school. Citizenship education should sit at the core of our curriculum, giving young people an understanding and deeper knowledge of, and interest in, civic issues. Votes at 16 would place renewed emphasis on this area for our schools.
Wayne David
The Government are introducing individual electoral registration. Does my hon. Friend agree that one of the main emphases of the Government’s programme encouraging young people to vote should be schools’ participation in encouraging young people to register, so that they can vote at 18? It would be a small step forward to encourage registration for votes at 16.
Mr Slaughter
I worry about individual electoral registration, as a number of wards in my constituency have below 50% initial tie-up. In many ways, that will be a barrier to voting. That makes it all the more important that we ensure that the educational aspect and the simple ability to explain to people how the new system works go hand in hand. These problems are not limited to young people.
Votes at 16 can inspire young people to get involved in our democracy. Many young people are already involved in roles of democratic responsibility. Some 85% of secondary schools have school councils, around 20,000 young people are active in youth councils and there are 600 elected Members of Youth Parliament, each serving for 12 months and voted in by their peers. Most hon. Members will have witnessed Youth Parliament debates and met their local representatives, who are supported by groups like Bite the Ballot, the British Youth Council and the Patchwork Foundation, which do great work getting young people involved in politics.
I agree with Government Members that this is not a partisan political issue, although I worry about why so many Conservative Members are against the idea. So much damage has been done to young people under the current Government. They have abolished the education maintenance allowance and university fees are soaring—we must give a hat-tip to the Liberal Democrats for that, although perhaps we will find out that Constance Briscoe was responsible for that as well, in the long term. The Government scrapped the future jobs fund, too. It is hardly a surprise that the coalition parties are nervous about the idea, but over time that will not be an issue.
Finally, let me deal with the main subject of the speech made by the hon. Member for Forest of Dean. With all due respect to him, he was trying to infantilise young people. It is not as simple as saying, “Yes, there is a single age at which young people are able to do everything.” That is not what my hon. Friend the Member for Rotherham was saying. The fact is that we do move age limits up and down, and they differ from those in other countries. For example, we decreased the age of criminal responsibility by four years, just as we equalised the age of consent at 16 for all young people. The point is that one has to make a judgment on the merits of the case. Yes, it has been right in some cases to protect young people by imposing an age limit—for purchasing tobacco products, say, because they are addictive, and because if people start smoking young, they tend to continue. However, we do not need to protect people from voting. If anything, we should encourage that engagement, and the later stages of school is exactly the time to do that.
At 16, people can go out to work, become a director of a company, join a trade union and participate fully in society. Many young people are adults at 16, and it is wrong to restrict them in respect of voting. That is why the next Labour Government will give 16 and 17-year-olds the vote. However, that is not enough; they must be given a reason to vote, and the support to engage in the democratic process. Voting is a gateway to participation in society, not an end in itself. If we do not give 16 and 17-year-olds the vote, we are excluding them from some of the rights and responsibilities that we otherwise increasingly load on them. Giving them the vote is the fair and right thing to do.
The Daily Mirror article that I mentioned ends with a rather depressing quote from a young person:
“Young people’s voices don’t get heard, so why should they vote? I don’t think politicians take enough time to listen to us, and it’s a shame because we are the future.”
That downward spiral should be reversed. If we give young people the vote and encourage them to use it, they will feel that we are taking their interests more seriously, and then I hope we will see a rise in participation and in the percentage turning out to vote.
The Parliamentary Secretary, Office of the Leader of the House of Commons (Tom Brake)
It is a pleasure to serve under your chairmanship, Mr Bone. I congratulate the hon. Member for Rotherham (Sarah Champion) on securing this debate on an important, interesting and topical issue and for highlighting some of the excellent achievements of the young people she has met in her constituency, with whom she has debated this matter. I also thank other hon. Members who have contributed.
The hon. Lady described votes at 16 as a radical change. Personally, I consider it to be an incremental change, not a radical change, but that is a Liberal Democrat view rather than a Government view.
I am afraid that I have been needled into responding to a couple of points that the hon. Member for Hammersmith (Mr Slaughter) made. He likes to target the Liberal Democrats. He was, I am afraid, posing as a slow learner who did not understand the practicalities of coalition, although I am sure that he understands them very well: there is an agreement between two parties, they form a Government and deliver a programme, but those two parties remain independent and have differing points of view, as set out earlier. It was made clear in this debate that Opposition Members have a clear view.
The hon. Lady, who opened the debate, the hon. Members for Stockton North (Alex Cunningham) and for Caerphilly (Wayne David), and the shadow Minister spoke in support of votes at 16. I am not sure whether the hon. Member for Hexham (Guy Opperman), who is no longer in his place, supports votes at 16 or thinks it is a logical conclusion and somewhere we will get to eventually. Other contributions from the Government Benches, whether it was the interventions of the hon. Member for Suffolk Coastal (Dr Coffey), the detailed speech of the hon. Member for Forest of Dean (Mr Harper)or the lengthy interventions of the hon. Member for Cities of London and Westminster (Mark Field), who is no longer in his place, made it clear that there is no consensus within the Government on the issue. There are, therefore, no plans to lower the voting age in this Parliament.
Alex Cunningham
Will votes at 16 be in the Liberal Democrat manifesto at the next election?
Tom Brake
I am pleased to say that votes at 16 is very much party policy, and has been for a number of years. A point was made on whether political parties advocate the policy for their political advantage. We will have to see whether it is to the Liberal Democrats’ political advantage to give votes to 16 and 17-year-olds, but we have held a position of principle for many years that we want to see the policy adopted.
We have heard a variety of facts and figures, both for and against the proposal to lower the voting age, which demonstrates that the evidence is not clear cut. Most studies and polls seem to show that a majority of 16 and 17-year-olds favour lowering the voting age, although the situation is not always clear. A YouGov survey of 14 to 25-year-olds conducted for the Citizenship Foundation in November 2009 found a majority—54%—opposed to votes for 16-year-olds, with just 31% in favour. I regularly take straw polls when visiting schools in my constituency, and I can confirm that there is not unanimous support, even among 16 and 17-year-olds, for lowering the voting age.
The Youth Citizenship Commission, which the previous Government set up in 2009, looked at ways of developing young people’s understanding of citizenship and increasing their participation in politics and, as part of that, whether the voting age should be lowered to 16. In its summer 2009 report, it did not find significant evidence on which to base a recommendation and did not believe that evidence that would lead to a clear conclusion was available or would become available in the foreseeable future. In light of that, it concluded that the question of whether the voting age should be lowered should be decided by political processes. That is clearly what today’s debate is about. While certainly not a silver-bullet solution, I believe that lowering the voting age would help engage young people at an early age in our democracy and political processes and give them a greater say over the many decisions that affect their lives and the world in which they will grow up.
Members have referred to the worrying levels of engagement among young people, and I echo their concerns. Registration among young people is lower than for other population groups. Turnout among 18 to 24-year-olds, who of course can vote, has also been falling. At successive elections from 1974 to 1992, around a quarter of 18 to 24-year-olds did not vote. In 1997, that rose to nearly 40%, then to around 45% in 2001 and 55% in 2005. We can all take individual action, and many Members have set out the contacts they have. They referred to the activities they undertake with schools to promote registration and political activity. There are things that we have to do as politicians, unpopular as we are. People may have their views about the Independent Parliamentary Standards Authority, but handing over responsibility for our expenses to an independent body was one of the collective actions we needed to take to restore credibility, which is lacking. The most recent Hansard Society annual audit found that only 24% of 18 to 24-year-olds said that they were certain to vote at the next election, and that is an alarming statistic.
A number of Members referred to citizenship education, which has been a compulsory part of the national curriculum in secondary schools for pupils aged 11 to 16 since 2002. It will not only be retained in the new national curriculum for teaching from September 2014 but will be strengthened. It will not be pared back, as the hon. Member for Rotherham said. We are all in agreement with her that citizenship education is key to this debate.
The Government are fully committed to doing what we can to increase voter registration levels. That point was made by the hon. Member for Caerphilly, who touched on independent electoral registration. He asked whether the Government were trying to increase voter registration, particularly among young people, and that is exactly what we are doing. We have announced that five national organisations and all 363 local authorities and valuation joint boards in Great Britain are sharing just over £4 million of funding to promote voter registration among under-registered groups, which include young people. In particular, UK Youth and the Scottish Youth Parliament are working exclusively on engaging young people, as are other organisations, such as Bite the Ballot. I am sure that many Members will have had opportunities to participate in events in their constituencies that Bite the Ballot has organised. I had the pleasure of doing that at Carshalton Boys Sports college a couple of weeks ago.
Reference has been made to the Scottish independence referendum. The hon. Gentleman said that this was the first time that 16 and 17-year-olds in Scotland had had the chance to vote. In fact, there have been health board and crofting commission elections in which they could participate. However, Members cannot read anything into the Scottish Parliament’s decision to allow 16 and 17-year-olds to vote in the referendum and any effect that that might have on the voting age for parliamentary and local government elections in the United Kingdom. The Scottish Parliament has powers to determine aspects of the referendum, and that is exactly what it has done.
One of the main focuses of the debate has been on the rights and responsibilities of 16-year-olds. We have heard lists of what young people can and cannot do at certain ages. Advocates on both sides of the argument have exchanged blows on those lists, and it is correct that the age limits change from time to time. In truth, however, those lists add relatively little to the debate. There is no standard age of majority in the UK at which one moves from being a child to being an adult. The lists are not pertinent to a debate on the specific issue of whether young people should be able to vote at 16 and 17.
After carrying out an extensive consultation and review, the Youth Citizenship Commission did not find significant evidence on which to base a recommendation, and that is why we are having a political debate on whether young people should be able to vote. There is no plan in this Parliament for a change to the voting age, but the Government welcome and encourage the involvement of young people in policy and decision making. Indeed, we are seeking to increase democratic engagement among the youth of this country through the Government-funded youth voice programme—Members will be well aware of many of its aspects—and the Youth Parliament, which I had the pleasure of welcoming to the Chamber last November. The Youth Select Committee is an important innovation that mirrors parliamentary inquiries. It is now in its third year and I look forward to giving evidence to it. I am sure that we all commend the young people on it for their hard work on their inquiries.
To conclude, the debate has again shown the divergent views in this House on whether 16 and 17-year-olds should be eligible to vote, and that reflects differing opinions on the issue in society at large. There is also no consensus within the Government on the issue. It was not included in the coalition agreement and there are no plans for a change in this Parliament. We are, however, taking a range of measures to encourage young people to register and to ensure that their voices are heard. I am sure that debate on whether to lower the voting age will continue and, for my part, I support the proposal and welcome the ongoing debate.
Cyberstalking
(10 years, 4 months ago)
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Nadine Dorries (Mid Bedfordshire) (Con)
It is an absolute pleasure to see you in the Chair today, Mr Bone, not least because I was asked last week to chair this debate myself. Although I am capable of multi-tasking, I was not sure how I would manage that, so it is a pleasure to serve under you.
I should also say at the outset that I have received text messages from several hon. Members who are travelling down from various parts of the country. If they arrive in Westminster in time, I hope that they may be able to participate late in the debate, so if people start coming in and not going through the normal process, I am aware of that.
I should be clear that I want to discuss the rise in recent years of cyberstalking rather than cyber-bullying or cyber-harassment or, indeed, malicious communications, which are terms that are occasionally misused by the press and other commentators. Cyber-bullying, however, is also a serious, modern-day offence that profoundly affects people, in particular teenagers, and can result in serious outcomes such as suicide. I am also a vice-patron of the Cybersmile Foundation, a cyber-bullying campaign organisation.
I have consulted leaders in the field of cyberstalking, including Professor Carsten Maple from the university of Bedfordshire, who is also a director of the national centre for cyberstalking research. By his definition, cyberstalking occurs when an individual or individuals become obsessively fixated with another person and pursue them utilising electronic means that cause life-altering degrees of distress or fear in the victim. Before mass use of the internet, such people would often operate alone, as one-offs, but through various social media sites such as Twitter and Facebook and other platforms, individuals can now join together and operate almost as a pack and over a sustained period.
Stalking is not a new phenomenon; it has existed for many years, and Members will recall various cases in which stalking ultimately led to serious consequences. It is only relatively recently, however, that the first legislation was introduced in the United Kingdom to tackle stalking and harassment, so this Government—and the previous Government—are fairly new to the issue. We need to get on top of the problem, because cyberstalking and access to the means utilised for cyberstalking are on the rise.
Legislation was first introduced in the Protection from Harassment Act 1997, which came some seven years after the world’s first stalking legislation was passed in California. As we have moved into an age of electronic information and communication, stalkers have found more effective and efficient means to perpetrate their malicious acts. Physical stalkers have become cyberstalkers, and cyberstalking has become an epidemic that stretches across the globe. In many cases, physical stalkers were previously cyberstalkers.
In the press today is the tragic case of Helen Pearson, who was stabbed eight times with a pair of 12-inch long scissors by Joe Willis. The case is now in court. We know that she was stalked via electronic means before being physically stalked. Such cases occur often, and I will go on to discuss how stalking, attempted manslaughter or grievous bodily harm are often the offences considered in court, but the case began with cyberstalking.
Like all stalkers, cyberstalkers seek to gain power, control or influence over a victim. However, perpetrators usually have a high level of computer proficiency and will often combine cyber and physical stalking. Stalking may be increasing, but it has been documented that victims report stalking to the police only after 100 incidents. Helen Pearson reported her stalker 125 times to Devon and Cornwall police before any action was taken, for example. On 25 November 2012, as a result of the Protection of Freedom Act 2012, amendments were made to the Protection from Harassment Act 1997 formally to recognise and define stalking as a crime, which may have given rise to increased awareness, resulting in the increase in charges under the 1997 Act. In 2012-13, the number of charges laid under the 1997 Act increased by more than 1,000, but a problem with the statistics on reports of stalking or prosecutions made under stalking laws such as the 1997 Act is that the report or charge is often made for an offence other than stalking, as I just highlighted using the Helen Pearson case.
Members may remember a recent case in Teesside Crown court. Anthony Graham from Middlesbrough admitted raping a woman and separately attacking her landlord with a claw hammer, leaving him with irreversible brain damage. Graham had become obsessed with the female victim and attacked her after she rejected his advances. On the day of the rape, Teesside Crown court heard, Graham was waiting at her house with a bunch of flowers. She rejected him, so that evening he went to her home and dragged her by her hair to a nearby house. The court heard that Graham tied the victim up using the belt from her dressing gown, and made repeated threats to kill her. The next evening, he went after her landlord, whom Graham thought was her lover, and attacked him with a claw hammer, causing irreparable brain damage. There will be no record of the cyberstalking that preceded the attacks, but it was a crime that moved from cyberstalking to a physical attack.
In the United States, 76% of women murdered by their current or former intimate partners were stalked by their attacker in the previous 12 months. Similarly, 85% of women who were victims of attempted murder by current or former intimate partners were stalked within the 12 months before the attempted murder. In the past two years in Afghanistan, 99 brave soldiers have been killed while protecting our freedom. In the same period in the UK, 266 women were killed by violence perpetrated by men against women—the most recent case being the distressing murder of a schoolteacher in Leeds last week.
Research into the specific nature of cyberstalking is unfortunately in its infancy, but the UK is a leader in the academic world through the work of Lorraine Sheridan, Paul Bocij, Carsten Maple and Emma Short—to name just a few. As a result, the university of Bedfordshire is at the forefront of cyberstalking research. The studies we do have show that cyberstalking is a much under-reported crime. We do not yet know how many victims of murder or attempted murder by former partners were actually subjected to cyberstalking by their attackers, but we can say that cyberstalking occurs frequently in cases of physical stalking. A report last year of victims who had contacted the national stalking helpline found that some form of technology was used by the stalker in more than 70% of cases. Such technology may be a tracker fixed to the underneath of a victim’s car, which is not an offence in law, but more often it is in the form of computers and social media, whose darker elements I will discuss later.
I just outlined a case in which stalking led to a serious physical attack, but I do not want the House to think that victims are harmed only physically. A non-physical attack may have psychological effects that can lead to physical manifestations in the victim. In 1996, Gaetano Constanza appealed against a conviction for assault occasioning actual bodily harm contrary to section 47 of the Offences Against the Person Act 1861. Constanza had followed Louise Wilson, made silent telephone calls, written on her front door and written more than 800 letters to her in the space of four months. There was medical evidence that she was suffering from clinical depression and anxiety. The Court of Appeal rejected the appeal and affirmed that assault could be committed without the victim even seeing the potential perpetrator of the violence. That scenario arises when victims are cyberstalked using social media sites: the attacker may be physically unknown to them; alternatively their identity may be known but, because of sustained and prolonged cyber-attacks, the victim can manifest symptoms as bad as, or worse than, those from an actual physical attack.
Cyberstalking can lead to a number of anxieties for victims. A study published this year found that cyberstalking had no less impact than physical stalking. ECHO, the electronic communications harassment observation project conducted by the national centre for cyberstalking research at the university of Bedfordshire, found that half of all victims who had been subjected to online and offline stalking had exhibited clinically recognised symptoms of post-traumatic stress disorder. One victim said:
“I am bombarded with…verbal abuse daily, my name and address has been traced and my private life interfered with.”
Cyberstalkers attack victims by a number of means. The proliferation of the use of the internet and its ubiquity has meant that victims can be stalked at any time, day or night, from any location. It is likely that internet communication removes disincentives: a stalker who might be deterred from confronting, or is unable to confront, a victim in person or on the telephone might not experience the same hesitation about sending harassing or threatening electronic communications to or about a victim. Furthermore, physical stature is not relevant in cyberstalking, as it sometimes can be in physical stalking. Indeed, there is a different ratio of male to female victims in cyberstalking compared with offline stalking. In the ECHO study, the ratio of two female victims to one male is much lower than that in a number of other studies of traditional forms of stalking.
One study of cyberstalking found that one in four victims had false information about them posted online. The harm caused by such “cyber-smearing” is often far more serious than that caused by equivalent offline acts such as writing poison-pen letters, because information posted on the internet is available to a huge audience and can remain easily accessible for a long time. Deleting malicious messages from the internet is incredibly difficult, as I am sure hon. Members are aware. When those messages are reposted and harvested—when one site automatically reposts information from another site—or when individuals repost, it is even more difficult. In addition, messages are often specifically sent to the social media sites of family, friends, work colleagues and neighbours, and the impact can be massive.
The anonymity of the internet, which is so important for freedom of speech, is used to make the lives of victims as difficult as possible. There is no checking of the validity of messages posted online. Those who see them do not know whether the messages are accurate and often do not know who sent them. Cyberstalkers will often attempt to be anonymous—or at least pseudonymous, as they try to dissociate an online identity from their true identity. Some cyberstalkers have an online identity and behind the scenes have several anonymous identities, which they use to reinforce their known identity. Such a person will go on to a social media site and use the false accounts to reinforce what they say.
Unfortunately, there are many tools that can assist cyberstalkers in hiding their true identity. Of course, anyone can create a new e-mail address using a pseudonym. However, a number of cyberstalkers use remailer services. A user sends an e-mail to the remailer, which strips off the information that could identify the sender and remails the message to its intended recipient. Some Members of the House may be aware of the growing use of the so-called dark web, an area of the internet that is not visible to regular search engines and often not to regular browsers. Instead, some areas can be accessed only by using special browsers that provide users with high levels of anonymity. Unfortunately, some cyberstalkers are using those or other so-called proxy servers in an attempt to hide their identity and location. Proxy servers are servers to which a user can connect to make it appear that they are at the same location as that server. Anonymity services can present problems for legislators and law enforcement, as well as causing huge additional anxiety for the victim.
Perceived anonymity is one factor that can lead to toxic disinhibition, through the removal of a capable guardian and of accountability and shame. A number of studies confirm that when people are online, social inhibitions that would be present in normal face-to-face interaction can be loosened or abandoned. Threats made under the shroud of anonymity can lead to increased fear in a cyberstalking case. One victim received threats stating that her cyberstalker was going to push her under a tube train as she commuted to work. She had no idea of the identity of the stalker—not even whether they were male or female. I ask hon. Members to imagine the fear and distress that she felt waiting for that train every morning. Any of the many seemingly innocuous commuters and tourists around her could have been the stalker, who had told her which tube she took, from which stop and at which time. It is entirely possible that the cyberstalker was never there and had never seen her get on the tube, but had gained that information in other ways; but would that make the victim’s fear any less? That fear was profound. The case is not an isolated one. One study found that in 42% of cases the cyberstalking victim did not know the identity of their stalker. That contrasts with offline stalking, where research has shown that a much higher proportion of victims know who their stalker is.
The ability to be pseudonymous has enabled cyberstalkers to impersonate their victims or their friends and family. By pretending to be the victim or someone close to them the stalker can gain access to information or spread falsehoods and incite relationship breakdown. A study showed that one in 11 victims had been impersonated in messages to friends, family or colleagues. Cyberstalkers often enlist the aid of other people to pursue a victim. Stalking by proxy is a common behaviour associated with cyberstalking and can be seen on Twitter every day. Tweets will almost be harvested between a group of people, and retweeted. There are examples of people looking for people to join them in cyberstalking. Studies have shown that one in four victims suffered when their cyberstalker encouraged others to harass the victim. That is a common problem.
Cyberstalkers have an arsenal of technology and services to assist them in their malicious campaigns. Some of the more obvious are messaging systems such as SMS and instant messaging, message boards, social networks, discussion forums and chat rooms, but others might use video games, for example. In fact, any system that allows people to send or display messages to an individual, a group or the public can be used. However, beyond messaging systems, cyberstalkers also use systems such as GPS technology, listening devices, hidden cameras and, as I have mentioned, car tracking devices to target their victims or learn more about their activities and personal life. In an age where we put so much information about ourselves online, that is particularly troubling. How hard would it be to locate someone’s whereabouts and the details of their personal life through information posted online not only by them but by the people who know them?
Even more worryingly, one study showed that more than 40% of victims surveyed had been sent malicious software by the perpetrator. Those programs can corrupt files, allow the perpetrator to control the victim’s computer, or be used to harvest information about the victim. They can be attached to a harmless e-mail, perhaps even from a trusted person whose computer has previously been compromised, or sent by someone impersonating a trusted source. There have, for example, been numerous cases where a trojan—software hidden in a seemingly innocuous message, akin to the ancient Trojan horse—allows the perpetrator to control the victim’s machine. That would give access to files, personal information and any peripherals, such as a webcam, so someone’s stalker can watch them while cyberstalking them.
Given the clearly massive impact that cyberstalking can have and the increasing number of ways that cyberstalkers can use technology and gain support for their campaigns, it is vital that an effective support system is in place. I am pleased to say that there is now a national stalking advocacy service, Paladin, and three leading charities—Protection Against Stalking, the Suzy Lamplugh Trust and the Network for Surviving Stalking—to raise awareness and offer support to victims. There is also an outstanding national stalking helpline that offers support to victims. It is funded by the Home Office, although I understand that funding may not be guaranteed for the future. I truly hope that issue is resolved—perhaps the Minister can provide confirmation of that. There is also a national lead for stalking, Assistant Chief Constable Garry Shewan of Greater Manchester Police, who chairs the stalking and harassment working group and is working with various agencies to change attitudes and promote awareness. Those agencies include social media sites such as Twitter and Facebook, and Amazon, where we are at last beginning to see those organisations recognise the role that their product plays in the perpetration of cyberstalking.
However, I think we need more understanding, research and awareness of the specific nature of cyberstalking. The work of Professor Carsten Maple and Dr Emma Short at the national centre for cyberstalking research has made an outstanding contribution, and further support is needed for them and others to continue their work. Furthermore, we need to ensure that there are sufficient education and training programmes on cyberstalking. We need to ensure that people at all levels and in all areas of the justice system are aware of just how skilful cyberstalkers can be, how significant and far-reaching their impact can be, and how prolific they are. We need people to be aware of the danger posed to victims from psychological and physical attack.
We need employers to understand that this kind of stalking can happen in the workplace. To cite further research that I discovered this morning, a survey undertaken by the national centre for cyberstalking research found that in one in four cases of people being cyberstalked, the stalker made contact with them either via the workplace or using work contact details. However, clearly victims are not happy to discuss with their employers that they are victims of cyberstalking through the workplace: less than half disclosed their stalking experience to their manager or HR representative. That may be explained by the fact that 61% of respondents said that their workplace either did not have a policy for stalking or that they were not aware of one; however, 80.4% of those believed that their workplace should have such a policy. Finally, when asked whether their employer would treat cyberstalking the same or less seriously than traditional stalking, 46% of respondents stated that their employers would take it less seriously. Therein lies the problem: people do not understand the effects of cyberstalking and online stalking, and the effect that it can have on the individual. That is why we need employers to understand the issue.
We also need to educate the public on how they and others use the internet. They need to understand the risk at which they may be putting themselves and how their actions could have very serious consequences for others. That is not a simple undertaking, but it is very important.
I shall finish on the training of police in dealing with complaints about cyberstalking and the way in which they handle complaints. There has been a need for police forces and individual officers to complete the training that has been made available by the National Centre for Applied Learning Technologies. Bedfordshire police are obviously more aware of cyberstalking and its impact than most police forces, and I was told that 370 officers have completed the online training so far, with the number of officers likely to increase significantly if a decision is made to make the training mandatory. Given the impact of cyberstalking, I believe that it is now time for police officers to undergo mandatory training.
As we know, Helen Pearson reported her stalker to the police 125 times and he almost stabbed her to death in a graveyard. It took a member of the public to intervene and pull him off her. If that member of the public had not happened to be in the right place at the right time, I have no doubt that Helen Pearson would not be here today to be in that court case. Her situation is not unusual. As I have said, research has shown that it takes almost 100 complaints to the police before they take a complaint about cyberstalking, stalking or a combination of the two seriously.
Does the Minister agree that it is time to make the training mandatory? If he believes that mandatory training may be too big a measure to put in place, does he think that the Home Office should give an instruction to police forces to encourage them to ensure that all their members have applied to complete that online training, and that police forces should monitor the number of police officers who complete the training and make that information available to the Home Office? That needs to happen and there need to be specific training courses for police officers—I know that the university of Bedfordshire and Professor Carsten Marple are working on training police officers. It is not only about completing the online training, but about one-to-one training for officers on the front line to understand the issue. When officers understand the link between cyberstalking and physical stalking, the impact that it has on individuals today, and how very often we see the step from one to the other, they will begin to take complaints made by individuals more seriously.
I suppose that is where I will wind up, Mr Bone. I hope that the Minister can provide some reassurance. I know that the Government take cyberstalking and all forms of stalking very seriously, as we saw with the measures that were put in place in December 2012. However, there is more work to be done, and it is tragic that we have the case that I mentioned in the newspapers today. It is happening all the time. We have to take action to ensure that cyberstalking stops and that we do not see situations like that again.
Mr David Hanson (Delyn) (Lab)
It is a pleasure to serve under your chairmanship today, Mr Bone. I thank the hon. Member for Mid Bedfordshire (Nadine Dorries) for bringing this important topic to the Chamber. The debate is valuable in showing that there is cross-party agreement on the issue, including on the part of the Minister. The debate not only raises awareness of cyberstalking, but ensures that there is a real Government focus on measures taken to help reduce the number of incidents, and to help support organisations that can deal with the issue in a much more co-ordinated way.
[Mrs Linda Riordan in the Chair]
I welcome you to the chair, Mrs Riordan. You have missed an interesting and complex presentation from the hon. Member for Mid Bedfordshire. She made a compelling case for the impact of cybserstalking, not only on women, but across the board. As she said, cyberstalking occurs when someone becomes obsessively fixated on an individual and pursues them through electronic means, causing the victim distress or fear.
Stalking often happened before the advent of the internet and wide-ranging social media, and previous Governments recognised that by making stalking and harassment an offence. However, we are in an electronic age, and as the hon. Lady said, with the growth of a range of social media such as Twitter and Facebook, and of the internet, e-mail and texting, the ability to take stalking from physical to cyber is increasing all the time. We do not know what inventions will come downstream and widen the use of social media. There is clearly a problem that the Government and the authorities need to address.
In research by The Guardian in February 2014, 41% of women reported that a partner or ex-partner had used online activities to track or check up on them, and 37% of women have felt threatened by such behaviour. Facebook and e-mail were named as the most common means of abuse. In January 2014, The Daily Telegraph Magazine reported that prosecutions under section 127 of the Communications Act 2003, which particularly addresses menacing or offensive behaviour conducted via social media, e-mail, telephone or the internet, had dropped by 30% from 3,108 cases in 2012 to 2,221 cases in 2013. The hon. Lady mentioned that the Protection of Freedoms Act 2012 has been passed since the first figure came out, and she mentioned that there have been approximately 1,000 inquiries following the introduction of that legislation. It would be helpful if the Minister could give an overall assessment of the number of potential cases being brought under either the new legislation or previous legislation, so that we get a sense of where we are on the problem.
The National Society for the Prevention of Cruelty to Children has reported that 38% of children have been victims of cyber-bullying, which the hon. Lady has made clear is a different issue, but it shows that there is potential for not just women and men but children to be affected. In September 2013, Women’s Aid helpfully surveyed online more than 300 women who have survived domestic violence. The survey found—these are important figures in relation to the points raised by the hon. Lady—that: 45% of women who have survived domestic violence have experienced some form of abuse online during their relationship, including through social network sites or e-mail; 48% reported experiencing harassment or abuse online from their ex-partner once they had left the relationship; 38% reported online stalking once they had left the relationship completely; and 75% reported that the police did not know how best to respond to their concerns and allegations. That includes 12% who had reported abuse to the police and, rightly or wrongly, believed that they were not helped.
There is a real issue, and we need to address the points that the hon. Lady has helpfully raised. What are the agencies doing in response? We have a clear legislative framework that was put in place following pressure from outside the House and with cross-party support in the House, but we need particularly to look at the clear link between domestic violence and online abuse, harassment and stalking. We also need to consider how we can influence and change what are, as she clearly stated, online tools for people who wish to stalk, intimidate, control and coerce women in particular, but also men and children.
The impact on children can be great and long-lasting. A similar Women’s Aid survey showed that witnessing the impact of a parent being cyberstalked was particularly damaging to children’s development and growth, making them anxious or depressed, giving them problems at school and difficulties sleeping, and making them feel isolated and insecure. Cyberstalking is not simply a problem for the person being stalked; the problem extends to the wider family, particularly children.
Nadine Dorries
One of the reasons for that is that cyberstalking often introduces life-changing behaviour in the person being stalked. The children of parents who normally go about their business will observe that their parents, or the person being stalked, dramatically alter what they do in their day-to-day life. They might no longer go outdoors because they are too frightened, or they might change how they travel to work. They might even move house. All that has a very disturbing effect on children. As I stated, causing such behaviour constitutes a crime; a precedent has been set in court. What most victims of cyberstalking do not know is that if their life is being affected in that way, they are able to take legal action against the person who has perpetrated the crime of cyberstalking against them.
Mr Hanson
I am grateful to the hon. Lady for highlighting again the impact of cyberstalking, not only on the individual being stalked, by whatever means, but on wider family relationships, particularly with children. As she has made clear, cyberstalking can have an impact across the board, including on a child’s ability to relate at school and with friends. It can also affect a child’s use and development of important social media skills, because e-mail, Twitter and Facebook are important social media that have a positive effect, as well as having the potential to be used in a negative way.
That is important, and it brings me to my first point for the Minister, which backs up what the hon. Lady has said. How are we assessing the scale of the challenge? Is it simply about the number of cases reported to the police? Is it simply about the number of telephone calls made to the national stalking helpline? Is it about referrals to organisations such as Paladin or the Suzy Lamplugh Trust? What is the Government’s estimate of the nature of the problem, and how are they assessing it? What is the Government’s estimate of, and how are they assessing, the response to the legislation that was in place on stalking and harassment generally, and to the legislation passed in 2012 on cyberstalking and the use of social media in particular? It would be helpful if the Minister, as a starting point, gave both his and the Government’s assessment of whether the problem is static or increasing, whether reporting of the problem is increasing or falling, or whether the problem is increasing while reporting is falling. I would like a general indication from the Minister of how he and the Government are assessing the nature of the problem.
I support what the hon. Lady said about the agencies dealing with cyberstalking. The police rightly take cybercrime and e-crime very seriously. They are looking at a range of issues, and we hear continually about how they are addressing cybercrime and e-crime. Given the wide-ranging potential for cybercrime and e-crime generally, internationally and nationally, I would like the Minister’s assessment of where cyberstalking falls within the police’s priorities, because the police central e-crime unit is looking at those issues. What priority does it give to extending good practice to police forces across the United Kingdom? What co-operation is it undertaking with police forces across Europe and the world? How is it relating to good practice and policy? What steps is it taking to ensure that the same recognition is given to online violence and stalking as is given to stalking and potential violence in the community?
Nadine Dorries
This might be a good point at which to drop a piece of information into the debate. The e-crime unit—many forces across the country are not aware of this—now has a direct interface with social media sites. In fact, I think there are two police officers—the number is due to increase—who interface with sites such as Twitter and Facebook. They were not there before, but they are now. The e-crime unit hopes to increase that interface, but the problem is that police forces across the country do not know how to access those officers; they do not have the contacts or know how to get in touch with them. The police officers are there; they have been provided for by the e-crime unit. I hope that the Minister will take that away and consider how to inform police forces. The work is being done; police forces just need to be able to access it.
Mr Hanson
Not quite always. We were born within a month of each other in the same city, so there is obviously some telepathy, and we agree with each other on this point.
Legislation has been passed, and the police force has an e-crime unit. A range of demands on that unit are of extreme significance in the growing drive against crime. I want to endorse and emphasise points made by the hon. Lady. What steps are the Government taking, through the national e-crime unit and through Assistant Chief Constable Garry Shewan to ensure that all local forces are aware of the unit? What priority is given to cyberstalking in that unit? What are the elements of good practice in the response to complaints made? How many cases are being brought forward? What is the relationship between the police force and individuals when cases are brought forward, and what is the level of understanding? Those are all important issues.
When I was the Minister responsible for policing, I found that it was good to have a national policy, but sometimes the national policy is reflected by the first person a crime is reported to locally, whether in North Wales, Bedfordshire, or our home city of Liverpool. That is where the impact of the national policy is translated at local level. I would welcome the Minister’s assessment of those issues.
My second point relates to the criminal justice system generally. It is more than a year since the offences of stalking were introduced. Has the Minister assessed how the criminal justice system understands the new offences and how it responds to victims of online abuse, harassment and stalking? I am not being confrontational, but what is his assessment of how the criminal justice system understands the legislation? What changes has it made since the legislation was introduced? What assessment has it made of its mechanism for prosecuting? How many prosecutions have there been and how many have been successful? What training is offered to the staff in our constituencies who work as prosecutors, judges, and defence barristers? Those issues are important.
The third point concerns something that the hon. Lady touched on. We are talking about predominantly social media, which is not just a UK but a worldwide phenomenon. Facebook, Google and Twitter, all of which I use, and other social media that I do not, are all international. What discussions is the Minister having with our colleagues in Europe, the providers of the services and other nations to ensure we get the right balance between freedom of expression and the regulation of abuse? It is possible for an individual to cyberstalk him, me or the hon. Lady from a beach in California. The focus on the provider, on good practice on their part, and on them having a strong, effective co-ordinated complaints procedure is important, as is legislation in the United Kingdom.
The hon. Lady touched on how someone on social media can be anonymous or have several identities. Again, I do not wish to be confrontational, but there is an opportunity for the Minister to look at how we can get standardised good practice on these issues across a range of Administrations. I would welcome his assessment of whether providers such as Google, Twitter, Facebook and others understand the impact that their social media can have when they are used for cyberstalking or harassment.
Finally, I want to focus on an issue that the hon. Lady mentioned: the assessment of victims’ needs. I do so for two reasons. First, there is the initial assessment when somebody feels they are being stalked through social media—e-mail, Twitter, Facebook or whatever. What help and support is available at the start of their concerns about cyberstalking? This boils down to broad understanding. This is a new issue; when I was first elected to this House 23 years ago, we would not have talked about this issue at all. We would not have talked about Twitter or Facebook; I did not have an e-mail address or a mobile phone, and I did not get texts. All that has happened in 20 years, during my time in this House. What help and support is available to aid our understanding of the issues? Often, the first port of call might be the local Victim Support services at Mold Crown court in my constituency, which might or might not have knowledge of the impact of cyberstalking on an individual. What is the Minister doing to ensure wider awareness of the issue, and to ensure that it is seen to be important for the reasons that the hon. Lady outlined?
The debate has been helpful. I do not have any answers, and I am not trying to be confrontational in terms of the Government’s performance on these issues, but I want to see what their forward strategy is, so that we can look at the assessment of the problem, the capability of the police to respond to complaints, the capability of the criminal justice system to respond and understand the issues, the support available to people who have faced the issue, and the action that providers of social media are taking to address and understand the issue. Those are five key areas, and I am willing to engage on them with the Minister, and hopefully with my colleagues in a future Government.
This issue is important. Cyberstalking can impact on and destroy people’s lives, and it can be done from the anonymity of a Twitter feed, a Facebook page, or an e-mail address established for the purpose, in the United Kingdom, Europe or anywhere in the world. We need to address this, and I am grateful to the hon. Lady for securing the debate.
The Minister for Crime Prevention (Norman Baker)
I congratulate my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) on securing this important debate and on communicating her thoughts effectively and convincingly. I welcome the constructive approach of the shadow police Minister. We have three parties in this debate, and all three speakers are in the same position: we want to deal with this serious matter carefully, sensibly and effectively. We all share the abhorrence that my hon. Friend expressed for the consequences of cyberstalking. The Government has an open mind as to how we take the matter forward. We are committed to tackling cyberstalking. If there are good ideas, from wherever they come in the House, we want to look at those ideas. We have an open door as well as an open mind on these matters. I hope that the shadow police Minister will take that in the constructive spirit in which it is meant.
Stalking, whether it occurs online or offline, is a serious crime that can have devastating and debilitating effects on those targeted, as my hon. Friend eloquently set out. It is a crime that the coalition Government takes very seriously. According to the independent crime survey for England and Wales for 2012-13, after the age of 16, stalking affects 4% of women and 2% of men a year. It can affect many people in many different circumstances—incidents of stalking can take place within the context of a violent relationship or after a brief relationship, and it can involve a casual acquaintance or a complete stranger.
Victims of stalking may be affected in many different ways. They may lose their home, their family, their friends and their job in a bid to escape a persistent, fixated stalker. The most extreme outcome may be homicide or suicide. Everyone has the right to feel safe and secure and to live their life without feeling threatened or intimidated, and without being spied on. Victims of stalking have those fundamental freedoms taken away from them.
Both my colleagues referred to legislation and to enactment, and it is right to deal with both aspects. I will deal with legislation first. The Government is absolutely clear that what is illegal offline is illegal online. Cyberstalking is simply a term that describes a way to stalk a victim—using the internet—and it is therefore covered by the legislation. If people behave online in ways that would be unacceptable in any other context, there must be consequences. In 2012, we introduced two new stalking offences, which by definition include cyberstalking. We are determined that those who engage in such reprehensible behaviour are brought to justice.
My hon. Friend made a powerful case that stalking online is, in some ways, more debilitating for the victim and more damaging than it might be offline. She drew the helpful and pertinent comparison between poison pen letters, which could be called the offline method of stalking, and online stalking, with its potential impact and the ability of the internet to makes things available to far more people. Online stalking can therefore be more damaging than offline stalking—she made that point powerfully, which law enforcement agencies and the Government need to take on board.
Cyber-smearing, as my hon. Friend called the practice, is indeed more serious than poison pen letters. She was also right to say that anonymity is more possible online than it is offline. That can be more threatening and give perpetrators the appearance of having more power than they have offline, where they may be identified. People may therefore behave more outrageously and unacceptably online than they would do otherwise. The Government treats online and offline crime equally as crime, but I personally accept her point that online stalking can be more serious. We have to reflect that fact in how we approach the matter. I am grateful to her for making the case.
In answer to one of the questions asked by the shadow policing Minister, data from the Crown Prosecution Service’s report on violence against women and girls, published in July 2013, indicate that up to June of that year 91 prosecutions had been commenced under the new stalking offences. The legislation is still of course relatively new, and we will continue to monitor its use closely and carefully to ensure that it is effective and appropriate. He also asked about the number of potential cases yet to be brought forward. Police-recorded crime figures from April 2014 will give a clearer picture of stalking, because it is now separated from harassment.
Norman Baker
I mentioned that 91 prosecutions had been commenced, but I do not have the figure for whether the outcomes were successful. If I can rustle up that figure during the debate, I will give it to the Chamber. Otherwise, I am happy to write to the shadow Minister and my hon. Friend with that information.
Both the Members who have spoken in the debate rightly raised the issue of training. Legislation is not enough; it is only useful if it is effective and used, and if those who have the duty to act under it understand how it works and are sympathetic to it. The police, the criminal justice system, the front-line practitioners and industry all have a role to play in tackling the appalling crime of stalking, and we are working with them to increase awareness. For example, the Home Office has developed a one-day training course to improve understanding of stalking among those who come into contact with victims. The package was developed in partnership with Women’s Aid and the Paladin National Stalking Advocacy Service.
In addition, the College of Policing has developed a training package on stalking and harassment, which last year won the silver award for “excellence in the production of learning content” at the national 2013 e-learning awards. The training package is available to all police officers and staff. Furthermore, all newly qualified police officers—uniformed officers, investigators and public protection officers—are expected to complete it. It has been completed 48,000 times by the police since October 2012.
Nadine Dorries
Will the Minister confirm whether that is the same as the online package with the rather complicated name? I am afraid my notes have been taken away, but I have found a reference. Is his training package the same as that of the National Centre for Applied Learning Technologies, which 370 Bedfordshire officers have completed? Or is it a different package? If it is a different one, we need to have some harmony between the packages that are out there and what forces can access; otherwise, the picture presented is complicated. Does the Minister know whether those packages are the same?
Norman Baker
The terminology used by my hon. Friend was not what I used, but I will also check that point and come back to her with an answer. I was referring to a College of Policing package.
We have also developed a cyber-flag to enable forces to highlight crimes that have taken place online. The flag is running on a voluntary basis during 2014-15, and forces have been encouraged to start returning data to the Home Office. The flag will become mandatory in 2015-16. As time progresses, we will have a much clearer picture of what is happening than we did immediately after the enactment of the new offences.
I am pleased that in June 2013 the CPS made mandatory its e-learning package on prosecuting cyberstalking, non-cyberstalking and harassment. More than 1,300 lawyers have now completed that training, which is another aspect of the necessary involvement of the law enforcement agencies. For prosecutors to have appropriate guidance in place is also critical—a point made by the shadow Minister—and in June last year the CPS published guidelines for prosecutors on the approach that they should take in cases involving communications via social media. The guidance is absolutely clear that such communications are capable of amounting to criminal offences. We will continue to work with the police and other criminal justice agencies to ensure that all stalking cases are handled effectively and with due sensitivity.
I will now respond to one or two of the other points made. Garry Shewan and Alison Saunders, the Director of Public Prosecutions, wrote jointly to all chief constables and chief Crown prosecutors to identify common issues, such as charging correctly, and how they could be more effective. So they have taken action as well. As I mentioned, the CPS published robust guidelines in July last year, and they set out how to tackle cases involving social media. It is also worth mentioning at this point that the Home Office is committed to ensuring that local police and crime commissioners are fully aware of such offences and of the victims. A series of focus groups is planned that will include giving victims of stalking an opportunity to share their experiences with police and crime commissioners. We are trying to cover all bases.
Nadine Dorries
To be helpful to the Minister, I remind him that one of the issues that I raised was the funding for the National Stalking Helpline. Will that be continued?
Norman Baker
Funding for the Suzy Lamplugh Trust has been ring-fenced until March 2015; decisions beyond that point, for reasons of the electoral cycle, have yet to be finalised. The helpline is also funded by the Home Office. I am keen to get certainty on funding not only for that but for all useful Home Office strands. Clearly, we have to consider what we can do sensibly, given the election period, so that we do not end up with varied and vital sources of funding drying up and leaving people out there who perform much good work, especially in voluntary organisations, high and dry. I fully understand the point made by my hon. Friend about certainty of funding—it is guaranteed until March 2015 for the Suzy Lamplugh Trust, but I am keen to see what we can do to give more certainty before the summer recess, if at all possible.
There is also a vital role for social media companies to ensure that they respond quickly and appropriately to incidents of abusive behaviour on their networks. We expect such companies to ensure that they have easy-to-use reporting tools and robust processes in place to respond promptly when abuse is reported and, if necessary, that individuals who do not comply with their acceptable use polices have their accounts suspended or terminated.
Online abuse and harassment affect young people, which my hon. Friend referred to. On 13 February, the Minister for Culture, Communications and Creative Industries, my hon. Friend the Member for Wantage (Mr Vaizey), chaired a meeting with social media companies, including Facebook, Twitter, and Google, charities and Members of Parliament to discuss what more might be done to protect young people online.
The purpose of the meeting was to hear from social media companies about the measures they have in place to protect children from abuse, threatening behaviour, or seeing something that may be harmful. MPs had the opportunity to challenge, ask questions and raise any concerns. We affirmed the position that social media companies should respond quickly to incidents of abusive behaviour on their networks and ensure that they have measures in place to protect users.
As my hon. Friend the Member for Mid Bedfordshire said, some of the people who engage in such reprehensible behaviour use anonymity to cover up who they are and to avoid being brought to justice. Of course, sometimes it is complicated to identify who is responsible, but it can be done. She will no doubt be aware of one or two cases in which individuals have been successfully prosecuted. For example, the Caroline Criado-Perez case involving the bank notes issue resulted in two convictions. It is absolutely right that such matters are taken forward.
It is also true—the shadow Minister referred to this—that such crimes are relatively new. They did not exist when he arrived in Parliament, or indeed when I arrived in Parliament in 1997. Therefore, MPs and successive Governments, and those to whom we look to enforce legislation, whether the police, the CPS or others, have been on a learning curve to ensure that the legislation is correct. We are committed, and we are trying to ensure that our practitioners out there are committed, to putting in place procedures and methods to ensure that such crimes can be dealt with effectively and that those who are responsible are brought to justice. It is important to do that.
We are on a learning curve, because the legislation and the crime are relatively new. However, some of the measures I have spoken about indicate that we are taking the issue seriously and that we are making useful contacts and connections with those whom we expect to enforce the legislation out there.
Part of the matter relates to education and ensuring that young people in particular understand the need to be safe online. I am particularly concerned that—this is slightly beyond the point made by my hon. Friend —when people add something innocuous to Facebook or their website, it could come back to haunt them in 20, 30 or 40 years, which simply was not possible when we were their age. Therefore, young people need to be fully educated to understand the consequences and implications of the internet in a way that was not necessary for us when we were growing up.
All schools, including independent and free schools, must have a behaviour policy. E-safety teaching also applies in all schools. Education about online safety is important. The Government-funded Child Exploitation and Online Protection Centre, which is now integrated with the National Crime Agency, has issued advice on sexting and has produced material for teachers.
From September, children in primary schools will be taught how to use technology safely and respectfully, how to keep personal information private and where they can go for help and support. That is a useful development. Secondary school pupils will be taught a range of ways to use technology safely, responsibly and securely.
In addition, the Government has sent a clear message to schools that bullying, including cyber-bullying, is absolutely unacceptable. As I mentioned, every school is by law required to have a behaviour policy that includes measures aimed at preventing all forms of bullying among pupils. We have updated the advice to schools on bullying and cyber-bullying, setting out their legal duties, and the powers and the steps they can take to tackle it effectively. The Department for Education has given almost £3 million to organisations such as Beatbullying, the Diana Award, Kidscape and the National Children’s Bureau to provide state-of-the-art materials on cyber-bullying.
Regarding cybercrime more generally, we need to keep pace with the way in which crime is changing, and we are committed to improving our ability to tackle emerging issues. We are investing £860 million through the national cyber-security programme to improve our ability to detect attacks, develop world-class cyber capabilities and promote economic prosperity. That includes the creation of the national cybercrime unit, which is part of the National Crime Agency and will bring together law enforcement experts into a single unit to take the fight to the most serious offenders. As far as I am concerned, people who harass and destroy lives are serious offenders.
We have made progress, but there is more to do. In March, we updated the cross-Government action plan on violence against women and girls. It contains specific commitments to tackle stalking, including further action to raise awareness of that crime and continued funding for the national stalking helpline, which is a free national helpline that provides information and advice to victims of stalking.
More broadly, we will support effective local approaches to tackling violence against women and girls by providing local areas—through police and crime commissioners, local authorities and health care commissioners—with the information they need to deal effectively with crimes such as stalking.
Critically, we are committed to driving a culture change, both across society and in the response by front-line agencies. That is why, since 1 April, stalking and harassment offences are being reported separately in the police-recorded crime returns to the Home Office, allowing better assessment of how the offences are being investigated.
I will pick up on other points that I have not covered so far. My hon. Friend mentioned one particular incident, but she will of course understand that I cannot refer to ongoing cases.
I hope that I have misunderstood one of my hon. Friend’s points; it is not the case that an individual has to make 100 complaints to the police in every case before the police take action. As I understand it, the situation is that, often, 100 incidents occur before victims report matters to the police; I just want to be quite clear on that point. However, it is absolutely key that the police take matters seriously. To be honest, it has been a bit patchy in the past, and we have a challenge to drive up performance to the level of the best.
My hon. Friend is right to make the point that stalking, as well as being a reprehensible crime in itself, can be the precursor for something even more serious, such as physical attacks. Therefore, it is sensible, not just morally right, for the police to get ahead of cases early to identify those who may want to do something even more serious when they are banned from stalking.
I am confident that the important issue of malicious software being sent to gain control of a computer and access to a webcam will feature in the new information given to school children funded by the DFE. The capacity to use the internet maliciously is not well or widely understood, and it needs to be.
I think I have answered my hon. Friend’s point about funding. If there are any other issues about funding that she needs to follow through with me, I will be happy to do so subsequently.
To re-emphasise my point about online safety, guidance to digital safety is available online, and digital safety is included in the Home Office training package on stalking. Four sessions have been delivered to practitioners since February, and materials are available more widely.
I hope that I have gone some way to reassuring hon. Members that the coalition Government is absolutely clear that stalking, bullying, harassment and threatening behaviour are completely unacceptable. Regardless of whether such behaviour occurs online or offline, we are committed to putting an end to it. Online is a particular challenge, which we have grasped. All of us are on a learning curve, but we are determined to ensure that those responsible for such reprehensible behaviour are brought to justice.
If there are any outstanding points that hon. Members have raised but which I have not been able to deal with, I shall happily write to them with the information requested.
Loan Protection Gap
(10 years, 4 months ago)
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Mr Andrew Love (Edmonton) (Lab/Co-op)
I belatedly welcome the hon. Member for South Northamptonshire (Andrea Leadsom) to her new position as Economic Secretary to the Treasury. She served with some distinction for four years on the Treasury Committee. As a continuing member of the Committee, I congratulate her on her appointment and welcome her to what I think is her first Adjournment debate.
More than 80% of borrowers have no form of protection to safeguard their loans, and the number of those in that position is on the increase. The disparity between the number of vulnerable consumers who need loan protection and those with an insurance policy is referred to as the loan protection gap. In this debate, I intend to raise five key issues involving loan protection insurance policies. First, I will draw attention to the significant minority of vulnerable consumers who continue to experience the damaging effects of excessive debt on their work, health and family life. Given that the squeeze on real incomes continues at a time of increasing consumer expenditure, the problem is likely to intensify, especially for those on the bottom half of the income scale.
There are any number of surveys confirming the squeeze on living standards. I will refer to just three. The first, a 2013 study carried out by the university of Birmingham on financial inclusion, showed that the real value of wages in 2012 had fallen back to 2003 levels. In this year’s “Green Budget”, the Institute for Fiscal Studies confirmed that living standards have declined over the past five years, and the Office for Budget Responsibility, the Government’s own independent forecaster, confirmed in its recent budget report that living standards will not recover to 2008 levels until 2018. Incidentally, in relation to loan protection, the OBR also forecast that the level of household debt will increase each year over the forecast period to 2018.
Secondly, I will show that the payment protection insurance mis-selling scandal has led to a collapse in trust and confidence in protection products and that, as a result, such policies have been withdrawn from the market by all but the very small, bespoke, specialist providers. PPI mis-selling is the biggest financial services scandal ever. It has affected every major bank, £13 billion has been paid in compensation and the bill is still rising. I asked the House of Commons Library to survey the market for protection policies. I would never call it a scientific study, but it gives a representative idea of what has happened in the marketplace. Unsurprisingly, the findings are somewhat depressing. PPI is seen as toxic, with little or no prospect of the main players re-entering the market. As a result, provision has declined significantly. Some policies are still provided, but mostly by small specialist providers.
John McDonnell (Hayes and Harlington) (Lab)
One of those specialist providers is CUNA Mutual. CUNA is working with the largest credit union in my area, Plane Saver, which brings together British Airways staff and has been running for a number of years, and has developed what seems to be a way forward that provides at least an element of protection: the debt waiver system, at least for credit union services. Has my hon. Friend come across that? I would welcome discussions with the Minister, maybe involving a visit to my constituency to meet the Plane Saver group to examine this potential way forward.
Mr Love
I have indeed heard of the Plane Saver credit union, and I have been in touch with CUNA Mutual as well. I will talk later about the debt waiver system that they have introduced; it is one of a selection of protection products that should be available more widely in the market but are not. I will discuss some of the reasons why.
Payment protection insurance is currently provided only by small, specialist providers. As a consequence of that and of the lack of competition in the market, it has increased in cost. At a time when incomes are being squeezed, expensive income protection policies are an unwelcome additional cost for consumers.
Thirdly, surveys confirm that financial insecurity is on the rise. At the same time, protection products are totally absent from the market. The result has been the creation of a protection gap. Is the Minister aware of those developments? What steps are being taken to address this clear market failure?
In 2013, CUNA Mutual carried out a survey of financial insecurity in more than 2,000 households. Its findings were stark: two out of three were concerned about losing their job; six out of 10 were anxious about their financial affairs; 20% would find themselves in financial difficulties within a month of losing their job, rising to 30% in some regions of the country; 44% claimed that they were cutting back on heating and 59% on food, simply to make ends meet. Other surveys confirm that the number of borrowers safeguarding new loans or income has collapsed to less than 1%. Taking all those changes into account—I hope that the Minister will be sympathetic to my view—the Treasury, as a matter of urgency, should conduct a review of the state of consumer protection in credit markets to determine a plan of action to close the protection gap.
Fourthly, with traditional income protection policy tarnished, what new models of loan protection can fill the gap? Guidance was provided some time ago by the Financial Services Authority on a suite of transparent, fair and affordable lending policies, but it has had little impact on the market. The Government must show leadership by promoting the introduction of policies that will provide solutions to the protection gap. CUNA Mutual suggests that 95% of mortgages are currently sold to customers without any insurance.
This issue is not just about consumer protection. In a recent survey, 70% of respondents said that they do not trust the banking and financial services sector. Loan protection can act as a form of stimulus to get lending going again. The credit union mentioned by my hon. Friend the Member for Hayes and Harlington (John McDonnell) has experienced a boost in the number of mortgages due to the protection policy that it provides.
On the positive side, there have been some modest developments. In 2011, CUNA Mutual asked the FSA to test the debt waiver before CUNA took it up. It tested successfully and, as I will discuss, it has been introduced in a number of mutual organisations. In its 2013 report on loan protection, ResPublica, the well-known think tank, recommended that the Government should encourage the Royal Bank of Scotland and Lloyds, the two banks with major public involvement, to adopt the debt waiver. I concur with that recommendation, but little has been done to follow up on it.
Fifthly, the mutual sector is leading the way in tackling the protection gap through the use of the debt waiver in its lending. This shifts the emphasis on to the lender to indemnify the loan, rather than placing the emphasis on the customer to insure their ability to pay. What steps are being taken to encourage the financial services industry to follow the guidance of the FSA regarding the debt waiver and other similar products, so as to help to tackle the protection gap?
The debt waiver is relatively new to the UK, where it has been introduced in a number of organisations, but it has a long and successful track record since the 1930s in north America. Incidentally, it was introduced at the height of the great depression, to help try to restore confidence among the public in lending. In its 2013 report, ResPublica recommended that the regulator fast-track the debt waiver and other similar products, but nothing much seems to have happened. Three mutuals, including the one referred to by my hon. Friend, have introduced the debt waiver very successfully, in one case providing coverage for accident and sickness for up to one year, through the debt waiver, at no cost to the borrower. In my view, that is a very good deal for the consumer.
However, all these things are, of course, just the tip of the iceberg when set against the 95% of people who simply do not have any coverage at the moment. That is the argument; that is the need; and that is what I hope to get a response on from the Minister.
In conclusion, the challenge for the Government, the financial services industry and indeed all stakeholders is to recognise the dramatic impact that mis-selling PPI has had on the market for protection policies; to quantify the resulting loan protection gap; and, most importantly, to challenge the industry—all those lenders out there—to take the necessary action to tackle the gap. I hope that the Minister will concur and will take steps to address this problem.
The Economic Secretary to the Treasury (Andrea Leadsom)
Thank you for calling me to speak, Mrs Riordan. It is an honour to serve under your chairmanship, particularly as this is my first outing as a Minister in Westminster Hall.
I am very grateful to the hon. Member for Edmonton (Mr Love), a highly esteemed former colleague of mine on the Treasury Committee, for securing this debate on an incredibly important subject, which, as he well knows, the Treasury Committee has looked at. The Committee has been very concerned not only about the appalling scandal that has been PPI mis-selling, but about the implications for people who can no longer obtain PPI. This is very important not only for the hon. Gentleman’s constituents but for all our constituents right across the United Kingdom. I am very pleased to have the opportunity to set out the Government’s position.
The hon. Gentleman will recall that when we were together on the Treasury Committee one of my absolute pet projects was to try to increase competition in the UK banking system. One of my favourite lines was that people are more likely to divorce not once but twice than to change their bank account. There has been a fundamental lack of competition in the banking system, which has meant that we are in a position now where people are lucky if they are able to get access to certain products and services. He is therefore absolutely right to raise this issue today.
It is very important to me as a Treasury Minister to use my time in the role to ensure that consumers become more empowered and more capable of taking responsibility for their own financial future. I hope that the hon. Gentleman will also be reassured to hear that I wholeheartedly share his central concern that consumers need to build their own financial resilience—if you like, a financial fall-back—into their own financial affairs.
Of course, the hon. Gentleman is absolutely right that one such financial fall-back might be a loan protection product or another kind of income protection product, but it could also be savings, and some people will rely on responsible borrowing to help them to bridge the peaks and troughs in their finances. The key point is that consumers are vulnerable if they do not have any kind of financial fall-back. Financial difficulties can mount up and quickly turn into problem debts, as we have seen all too often. That situation is what the Government are taking comprehensive steps both to prevent and address.
I would like to use my comments this morning to set out, first, what the Government and the regulator are doing to support the development of appropriate protection products; secondly, how the Government are using flexibility and tax relief to promote savings and reward savers; thirdly, how we are reforming the regulation of consumer credit, to ensure that lenders both lend responsibly and treat those consumers who are in financial difficulties fairly and with understanding; and finally, a bit about how we are taking action on debt advice, to ensure that those who have problem debts get the help that they need.
To start with, I shall discuss the protection market. As the hon. Gentleman rightly said, consumer trust in protection products has been severely damaged by the PPI mis-selling scandal, and the market has contracted severely as a result of this lack of consumer trust. With a scandal on such a scale, robust regulatory action is key to restoring faith in the products and in the firms that provide them. I agree that that does not mean that consumers’ need for protection products, as one form of financial fall-back, has gone away. As long as the products are sold appropriately and responsibly, and as long as consumers can trust them, they continue to serve a real purpose. We need to promote them, and on that point the hon. Gentleman and I completely agree.
The Financial Conduct Authority also believes that there is a place in the market for income protection products. It has issued guidance that is designed to encourage a new generation of products that are fit for purpose. Although PPI is no longer allowed to be sold at the point that a loan or credit is given, a number of alternative protection products are available to consumers, some of which the hon. Gentleman has mentioned, such as income protection insurance, and innovations such as debt waivers, as the market adjusts to consumer demands.
The Government have been driving the industry, and will continue to drive it, to design and bring to market simple and transparent income protection products that are fit for purpose and that consumers can more easily understand and trust. In fact, that was one of our aims in commissioning Carol Sergeant to conduct a review of simple financial products. As the hon. Gentleman may know, her report recommended the development of a number of simple products, including savings products and a simple income protection product. The industry is making good progress against her recommendations. It has committed to getting a simple products accreditation model up and running by the end of the year. In parallel, the Association of British Insurers is leading on the development of a simple group income protection product, which can be sold throughout the workplace. We are confident that simplifying products in this way will make it easier for consumers to see the benefits of protection products, and will redevelop the income protection market in a way that works better for consumers.
Mr Love
I hear what the Minister is saying about all the developments and the work that both consultants and the regulator are doing in relation to protection policies, but unfortunately there has been very little impact on the market so far. That may be understandable in the context of the disaster that PPI has been in terms of providing income protection policies. However, the debt waiver is something different and something that everyone can have confidence in: it is truly tried and tested in other countries. Will she give the House a reassurance that firmer, more robust steps will be taken by the Government to influence the regulator to do more to get the industry to take these protection policies seriously?
Andrea Leadsom
Yes, I think I can give the hon. Gentleman some reassurance that the Government are committed to the proper development of alternative income protection products, which would certainly include the debt waiver. Obviously, as he has pointed out, there has been a real crisis in consumer trust in these products, but the Government are certainly committed to ensuring that that lack of provision is addressed, and his raising the issue today will certainly reinforce our endeavours to achieve faster progress.
There are other ways in which the Government are trying to ensure that consumers and customers have proper financial protection. Of course, one of those measures has been to promote saving. Having a savings “buffer” is many people’s financial fall-back, and as the Chancellor made clear in March, this year’s Budget was a Budget for savers. We announced a reduction in taxes for the lowest-income savers, so that from next April the starting rate of savings income tax will be lowered from 10% to zero, and the band to which it applies will be extended to £5,000. That should help the worse off—the smaller savers—and encourage them to save in order to create a financial fall-back for themselves.
We also announced increased flexibility in saving and investment choices through the ISA system and an increase in the overall ISA limit to £15,000. We have introduced new National Savings and Investment products in order to help retired savers to get a better return. The Government have taken action on the promotion of savings products and increased saving as a means to create a financial fall-back, and we are determined to do more to help people to provide for their own financial fall-back needs.
There have been some important changes on the regulation of consumer credit that I am sure the hon. Gentleman would welcome. Regulation of consumer credit is vital to this debate in two ways: first, it is vital that lenders lend responsibly and only to those who can afford to pay it back; and secondly, lenders should treat people in financial difficulty fairly and with the appropriate understanding. The Government are committed to curbing irresponsible lending and strengthening consumer protections, and we have a clear vision for the consumer credit market. We want to see firms meeting the standards expected of them, lending responsibly, and offering competitively designed and priced loans and credit products that will meet consumers’ needs.
The hon. Gentleman will be aware that responsibility for consumer credit regulation has now transferred from the Office of Fair Trading to the new Financial Conduct Authority, which has far stronger powers. In particular, the FCA has turned the OFT’s non-binding guidance into binding rules. We are confident that the FCA is better resourced to take a proactive approach to identifying risk and that it has a broader and more robust suite of enforcement powers to punish breaches of its rules. As such, we are confident that in future lenders will both lend more responsibly and treat customers more fairly.
Mr Love
This is a slight aside to the thrust of the Minister’s comments, but with regard to the mortgage market review, which sets the terms of the discussion between the customer and the lending institution, I am not aware that within the comprehensive discussion that is now required any room is given to insurance products to protect the loan. I would have thought that that was one way in which the regulator could ensure that at least it is brought to the customer’s attention that they should get a protection policy, so that if things go wrong, they can rest assured that their loan will be insured.
Andrea Leadsom
The hon. Gentleman make a very good point. Since I am extremely new in the job, I hope that he will forgive me because that is a point that I cannot answer. Nevertheless, it is an excellent idea and perhaps I can write to him on it. I would certainly take such a good suggestion forward.
John McDonnell
The Minister may well gain inspiration on that while I am talking. I requested earlier that she come to meet the Plane Saver credit union in my constituency. That group meets the objectives she mentioned not just by providing protection; we have found that it is also encouraging more savers to join the credit union. It seems to tackle both issues at the same time, so perhaps that is a model she would like to explore in more detail.
Andrea Leadsom
I am grateful to the hon. Gentleman for his invitation. I am keen to become more closely involved in such an important issue and so will discuss with my team whether I can come to meet his constituents. I thank him again for the invitation.
Finally, I want to mention the provision of debt advice. Where people get into financial difficulty, the Government are committed to ensuring that they can access free help and advice on managing debts. That is why the Government have put funding for debt advice on to a sustainable footing.
In conclusion, I thank the hon. Member for Edmonton again for instigating this debate on such an incredibly important issue. We know that times have been extraordinarily tough and continue to be so for many people in the United Kingdom, and we are determined to do more to ensure that consumers get the advice and support, the responsible lending, and the suite of products that they need to enable them to manage their own financial affairs more effectively.
Mr Love
I thank the Minister for being so liberal in taking interventions. One conclusion that I have reached on this issue is that the relationship between the Treasury and the regulators is extremely important. Will the Minister discuss with the regulator what further action it can take to get the industry to live up to its responsibilities to give customers not just a responsibly delivered loan, but protection for that loan should things go wrong?
Andrea Leadsom
I can assure the hon. Gentleman that I will take up that issue with the FCA when I see it next.
I hope that the hon. Gentleman is reassured that the Government fully agree with his concerns and are already taking action to address them, and that I have undertaken to try to take further his specific recommendation that we look more closely at debt waivers. We are determined that financial services serve consumers in the way that they should, and that consumers understand the benefits of all the products, including income protection, that are on offer. I am very glad to have had my first Westminster Hall debate as a Minister with such a sensible and measured colleague, and I shall look forward very much to his holding me to account in the coming years.
Birth of Shakespeare (Commemoration)
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Nadhim Zahawi (Stratford-on-Avon) (Con)
We are here today to commemorate the birth of a self-taught, self-made, self-created man. A man of many parts: player, poet, grammar school boy made good, entrepreneur, and of course cultural icon. A man who gave Britain a voice before there was a Britain. And a man who gave the world its best and truest account of what it means to be human.
The great 18th century man of letters. Dr Johnson, observed:
“Other poets display cabinets of precious rarities, minutely finished, wrought into shape, and polished unto brightness. Shakespeare opens a mine which contains gold and diamonds in inexhaustible plenty”.
Johnson was right about the extraordinary richness of Shakespeare’s works. Each of us will have a favourite line from the canon, whether
“All the world’s a stage”;
“To be or not to be”;
or
“This story shall the good man teach his son”.
I would be fascinated to hear which of Shakespeare’s speeches sends a shiver down the Minister’s spine.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
Does my hon. Friend agree that that is the question?
Nadhim Zahawi
Wonderful. I am confident that we shall have an extraordinary, cultured debate.
Shakespeare’s influence on English is not confined to the stage or the heavily annotated academic textbook: his words live and breathe in the language of everyday speech. If people wear their heart upon their sleeve, become a laughing stock, have people in stitches, then, in one fell swoop, simply vanish into thin air, they are quoting Shakespeare. They could also be describing the political career of Godfrey Bloom, but that is another story.
I hope the Minister will agree with me that the bard’s legacy is not only artistic, for as well as Shakespeare the poet, we also have Shakespeare the brand. When the Chinese premier, Wen Jiabao, visited Britain for two days in 2011, one day was reserved for high-level strategic talks in Whitehall, but the other day, at his own request, was spent in Stratford with the Shakespeare Birthplace Trust, the independent charity created by Act of Parliament to care for the sites associated with Shakespeare’s life. The thought of one of the world’s most powerful men wearing special white gloves so that he could reverently handle a Shakespeare first edition is a striking reminder of just how far Britain’s cultural reach extends.
Indeed, the British Council recently asked young adults in China, India, Germany, Brazil and the United States of America to name a person associated with contemporary British culture; Shakespeare came out top and was most popular in China. This is an important finding, because the recreational industries are one part of the Chinese economy where Britain has a real competitive edge, accounting for 35% of all Chinese imports. Recreation is a relatively small part of the Chinese economy now, but as China rebalances away from Government investment towards domestic consumption, we need to make sure that Britain maintains that dominant position.
Does the Minister recognise that Shakespeare is an incredibly important part of Britain’s image abroad? Does he agree, too, that the Shakespeare brand can be used to promote trade and dialogue with our target markets? I know that some will take issue with the idea of Shakespeare as a brand and at the use of a marketing term to describe such a towering, literary genius, but the bard would have seen no contradiction between art and enterprise. For him, they were one and the same.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
j I thank the hon. Gentleman for giving way. In fact, I nearly called him my hon. Friend, because we get on rather well.
Mr Sheerman
I have no objection to having a Shakespeare brand, although I am a little bit reserved about. It is worrying that, in my work to get children out of the classroom to learn, not enough children from a more economically challenged background are getting into Shakespeare, visiting his birthplace in the hon. Gentleman’s constituency or even learning about Shakespeare at school. Does he agree that that is important and should be mentioned as a concern?
Nadhim Zahawi
I thank my hon. Friend for his question. He is right. I will deal with some of those issues later.
Uniquely among Elizabethan playwrights, Shakespeare owned a stake in the theatre company for which he wrote. Like all good business owners, he invested in the company, in 1608 helping to finance a second theatre in Blackfriars, just across the river from the more famous Globe, and he is still winning business today. Heritage tourism is worth a staggering £26.4 billion to the UK economy, and theatre is worth at least £2.8 billion. Shakespeare is a major part of that story; he is worth £355 million to Stratford alone, bringing in 4.9 million visitors a year to a town of just 26,000. Some 15,000 jobs —that is one job in every eight—in the Stratford and Warwick areas are associated with tourism. In London, Shakespeare’s Globe accounts for 11% of all London theatre-going. I am sure that the Minister will join me in paying tribute to the work of the Royal Shakespeare Company, the Shakespeare Birthplace Trust, the Globe and Shakespeare’s England, for their contribution to Britain’s world-class tourism industry.
Shakespeare is far more than just an economic asset. For so many young people, he is their way into the greatness of English literature. His work is studied by half the world’s schoolchildren and here in the United Kingdom is an indispensible part of the national curriculum. Does the Minister agree that the best way to cultivate a lifelong love of Shakespeare is to make him accessible at an early age, as the hon. Member for Huddersfield (Mr Sheerman) suggested? Will he join me in congratulating the RSC and the Shakespeare Birthplace Trust on doing just that? Thanks to Government support, both have brilliant educational outreach programmes.
In March, the Shakespeare Birthplace Trust launched Shakespeare week, a national campaign, funded by the Arts Council, to bring Shakespeare to life for 500,000 primary school children. Does the Minister agree that Shakespeare week was a huge success and would he encourage other schools and arts organisations to join the 3,600 already registered for Shakespeare week next year?
Last week, we were privileged to see some of that outreach work on display here in Parliament. William Shakespeare and parliamentary democracy are two of Britain’s greatest gifts to the world, so I was delighted to bring them together for one night. At my invitation, Mr Speaker kindly hosted a special performance of extracts from “Henry IV”, featuring an ensemble cast drawn from seven secondary schools and one college in my constituency, under the direction of the RSC. The young actors were joined by schoolchildren from Bridgetown primary school, ably assisting the Shakespeare Birthplace Trust to exhibit some of the most precious artefacts in its collection. Does the Minister agree that this was a truly memorable evening and was he, like me, amazed, moved and humbled by the performance?
Mr Sheerman
I wonder whether the hon. Gentleman will agree with me. This is an important anniversary. Is it getting enough attention from the BBC? The BBC this week is pounding the airwaves, or our ears, with Dylan Thomas on his centenary, whereas John Clare—it is his 150th anniversary this year—has almost no attention at all. I am a great Shakespeare fan and I love Dylan Thomas, but why does the BBC let us all down in this way, so that a great English poet, such as John Clare, is relatively neglected?
Nadhim Zahawi
The hon. Gentleman has been a champion of John Clare and regularly mentions him in the main Chamber. I would not in any way take away from the work that the BBC is doing on Dylan Thomas, not only because of his importance to our cultural life and its enrichment, but in fear of offending some colleagues in Parliament. I would like to think that what we have been able to do for Shakespeare’s 450th birthday is worthy of praise from the Minister. I hope his speech will recognise the wonderful evening that we had in Mr Speaker’s apartments.
Stratford’s most famous son has given this country so much, and I feel it is time we gave something back. In “Henry IV, Part 1”, Prince Hal, referring to his future transformation from dissolute youth to national hero, says:
“If all the year were playing holidays,
To sport would be as tedious as to work;
But when they seldom come, they wish’d-for come.”
There are few occasions when the British people can come together and celebrate what it is that makes them proud to be British: when they seldom come, they wished-for come. What better symbol of Britishness than an English poet who worked for Welsh Tudors and Scottish Stuarts, a man who conquered the globe with a quill pen? My final question to the Minister is: will he support my call to have Shakespeare’s birthday— 23 April, which is St George’s day—officially recognised in the calendar? I have long argued that 23 April should become a bank holiday, but official recognition would be an excellent start. He is our star of poets, the swan of Avon, a man
“not for an age, but for all time”.
I hope Members will join me in wishing William Shakespeare a very happy birthday. He may have died in 1616, but:
“So long as men can breathe, or eyes can see,
So long lives this, and this gives life to thee.”
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I will speak briefly. I am grateful to the hon. Member for Stratford-on-Avon (Nadhim Zahawi) for smiling on my contribution. When I chaired the Children, Schools and Families Committee, I worked very closely with the Shakespeare schools festival, which is a fine institution. I have always celebrated the excellent work it has done, and the fact that it takes Shakespeare into unusual settings. A lot of people get put off Shakespeare because they think it is posh or for the elite. Tickets for the Royal Shakespeare Company in the hon. Gentleman’s constituency, or to plays in London, can be expensive or difficult to get. We should make Shakespeare accessible to more people in our country. It would be a great shame if Shakespeare was seen as something for an exclusive part of the population. He is the dramatist of the people, and he should have that currency.
Does the hon. Gentleman agree that right across our cultural life, we want greater involvement of people in schools, colleges and lifelong learning? I was pulling his leg about John Clare, but I seriously want him celebrated. A little boy—a farm worker’s son who was a farm worker himself—left school at 12 able to read and write and could not stop reading and writing. He wrote more than 1,000 poems, many of them lately discovered lost works that he wrote when he was in the asylum. This is his 150th year, and we should celebrate that, as we should celebrate Dylan Thomas, too.
We have some problems—this is the only demurring I will do in this debate—in the cultural sector. It is relying a little too much on brands and commercial sponsorship. I look sadly at the diminished Arts Council and its work in the regions. Looked at constituency by constituency, so much of arts funding is flowing to only a few constituencies, and so little is flowing to many others.
I thank the hon. Gentleman and you, Mrs Riordan, for allowing that briefing contribution.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
It is a delight to respond to my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), who secured this debate to celebrate the birth of Britain’s, and possibly the world’s, greatest poet and playwright. The question of whether the study of Shakespeare is an elite activity has been debated; given the paucity of representation at today’s debate, I wonder whether debates about Shakespeare are an elite activity—we have four of the leading parliamentarians of our generation in this room—or simply a minority activity. It might, however, be because the debate coincides with lunch. As Shakespeare tells us,
“Unquiet meals make ill digestions”.
I can perhaps understand why those of our colleagues who wish to eat a good lunch have not made today’s debate.
There are so many quotations about Shakespeare that one could use, but I will start with this rather florid one, from the great French novelist Victor Hugo:
“In Shakespeare the birds sing, the bushes are clothed with green, hearts love, souls suffer, the cloud wanders, it is hot, it is cold, night falls, time passes, forests and multitudes speak, the vast eternal dream hovers over all. Sap and blood, all forms of the multiple reality, actions and ideas, man and humanity, the living and the life, solitudes, cities, religions, diamonds and pearls, dung-hills and charnelhouses…all are on Shakespeare and in Shakespeare.”
That is a typically French, florid quotation, but it again shows how Shakespeare speaks to all. I prefer a more pithy English poet, who summed it up:
“The remarkable thing about Shakespeare is that he is really very good—in spite of all the people who say he is very good.”
That quote, of course, came from our great poet, Robert Graves.
It is 450 years since Shakespeare’s birth—almost half a millennium—and it is remarkable that he is as popular today as he has always been, if not more so. His works touch on timeless themes, allowing us to explore complex issues of politics, conflict, discrimination and oppression, and give us insight into the human emotions of love, friendship, rivalry, ambition and greed. Through Shakespeare’s plays, we can forge a greater understanding of one another, and they allow people to explore issues that can be difficult to discuss openly. We have Shakespeare to thank for more than 3,000 words in the English language that are commonplace today, as my hon. Friend the Member for Stratford-on-Avon said, including hot-blooded, new-fangled, and—the word that sums up my hon. Friend—majestic.
Mr Sheerman
I am getting worried as the Minister proceeds with his speech. He is so eloquent and reads Shakespeare so wonderfully. I have heard my constituent Sir Patrick Stewart—he was born in Huddersfield and shares his birthday of 13 July with John Clare—read Shakespeare, but he is nothing compared with the Minister.
Mr Vaizey
I join my hon. Friend in thanking the hon. Member for Huddersfield (Mr Sheerman), who has become an hon. Friend, following that wise intervention. Both my hon. Friends have talked about Shakespeare in schools. I am conscious of the warning from “Richard III”:
“So wise so young, they say, do never live long”,
but thankfully Shakespeare is still widely taught in our schools. The study of his masterpieces allows our children to establish a link with our culture, history, heritage and language. That is why the wise Secretary of State for Education—he reminds me of the quote that “some are born great”—has personally ensured that the importance of Shakespeare’s work continues to be recognised in the new national curriculum starting in September 2014. My speech is becoming slightly more prosaic.
In celebration of Shakespeare’s 450th birthday, the Education Secretary, working with the Royal Shakespeare Company, which already works with more than 400,000 children annually, has distributed the RSC’s Shakespeare toolkits—I am not sure if Shakespeare invented that word—to more than 16,000 state-maintained primary schools. That will bring Shakespeare’s plays to life for countless school children through playful, practical experiences, helping them to understand the language, characters and stories. The Department for Education has provided £500,000 of grant funding over the past two years for the Shakespeare schools festival, which I celebrated with my hon. Friend the Member for Stratford-on-Avon in the Speaker’s house. It is the UK’s largest youth drama festival, offering students from all backgrounds the opportunity to perform Shakespeare on the stage.
Mr Sheerman
Does the Minister agree that Shakespeare is at its best when someone trained to read and act it goes into a school and performs it for the children? Any of us who have been to schools can see that, whether the children are tiny or older. There are so many underemployed actors and so many talented young actors in this country that we ought to have a new programme that actually pays them a reasonable fee to go into schools to bring Shakespeare to life this year.
Mr Vaizey
That is an excellent idea. On the back of Teach First, we could have “Recite First”. I will come to discuss my plans for cultural education in the widest sense, because it is important that such programmes marry central Government and grass-roots initiatives. We should try to work with people with a passion for a subject, such as those involved in the Shakespeare schools festival, to deliver the sort of cultural experiences that we all want for as many of our young people as possible.
Having discussed the Royal Shakespeare Company, I want briefly to talk about the Globe theatre, which was set up as a result of the passion of Sam Wanamaker—entirely, funnily enough, with private money, although I believe that its education programme is funded in part by Arts Council England. It welcomes 100,000 students every year—from pre-school children to postgraduate students—to take part in tailored projects and workshops. It is supported by PricewaterhouseCoopers and Deutsche Bank, which echoes the point that my hon. Friend the Member for Stratford-on-Avon made about the marriage of arts and enterprise, and demonstrates Shakespeare’s global appeal. The 450th anniversary also saw the launch of the first Shakespeare week, a national annual celebration to inspire primary school children and their families. It aims to give every primary school child in Britain the chance to be inspired by Shakespeare.
My hon. Friend spoke eloquently of Shakespeare’s global appeal. He is the most widely read and studied author in the English language, and his complete works have been translated into more than 90 languages, from Arabic to Zulu. On a recent visit to China—my hon. Friend mentioned the Chinese President’s visit here—I was struck by how revered and celebrated Shakespeare is in that country. Indeed, the Chinese Vice-Minister of Culture, to whom I gave a complete set of the DVDs of Shakespeare’s plays, told me clearly that Shakespeare was not a British playwright, and that he belonged to the world. He was of course making the point that Shakespeare’s legacy is global. It is the case, however, that the wider reach and appreciation of Shakespeare’s work enhances this country’s global reputation and influence, helps us to connect with other countries, and encourages people to study and do business. Shakespeare’s global appeal, again picking up on what my hon. Friend said, has a massive impact on our tourist industry. Eight million visitors head to Shakespeare country every year, helping to support the local Stratford economy and providing many thousands of jobs.
2012-13 was an exceptional year for the Royal Shakespeare Company, which is based in my hon. Friend’s constituency, with 1.5 million people from around the world experiencing its work, more than 335,000 of whom were first-time attendees. The company recently broadcast its performance of “Richard II” with David Tennant in cinemas and schools, reaching over 100,000 people, which I gather is the largest ever audience for a single, live performance of a Shakespeare play. In 2013, the Globe theatre welcomed over 600,000 people to its productions, either at Bankside or on tour.
My hon. Friend mentioned the RSC’s huge impact on the local economy, and the hon. Member for Huddersfield spoke about the arts outside London. I inform Members that the Select Committee on Culture, Media and Sport is holding an important inquiry on the subject. Arts Council support to organisations outside London is strong, with some 70% of lottery funding going outside London. I will be able to put these points in more detail to the Select Committee when I give evidence, but this debate, while celebrating Shakespeare’s birth, reminds us that one of our top five national performing arts organisations is firmly based outside of London, and continues to thrive by being so based.
Mr Sheerman
Before the Minister concludes, may I propose a challenge? I am part of a group of MPs who are challenging a minimum of 150 MPs to get 150 of their constituents to read 150 poems this year. I hope that the Minister will get involved. The Secretary of State for Education has already agreed to take part, and I hope that other Members will do the same, because it would help to bring the arts and culture to life. Some of those poems will be by Shakespeare, some by Dylan Thomas and, if we are very lucky, some of them might even be by John Clare.
Mr Vaizey
I will certainly pick up on that challenge and will contact as many of my constituents as I can to encourage them to undertake it. I could work with Oxfordshire’s superb library service, which continues to thrive under the stewardship of Oxfordshire county council, to communicate the challenge. I hope that the hon. Gentleman is working with library services up and down the country, because they offer similar schemes, such as the summer reading challenge for children, in which 99% of library authorities participate.
I note that the right hon. Member for Birkenhead (Mr Field) has entered the room. As he is one of my oldest friends, I am conscious that, having impressed the hon. Member for Huddersfield, I must impress him, too. He has missed the best bits of my speech, but I will come to my conclusion, sensing the mood of the House.
The bard’s birthday celebrations began in earnest during the week of his birthday with fireworks on the roof of the Royal Shakespeare theatre, and a big birthday bash at the Globe on Bankside, which was attended by nearly 6,000 people, who played pin the ruff on the bard. I happened to be in China at the time, but I marked the occasion at the start of the Shakespeare 450 season at China’s national centre for the performing arts.
Celebrations of this prestigious event are not being limited to his actual birth date. While we have ambitious plans to celebrate the 450th anniversary of his birth, we also want to commemorate in 2016 the 400th anniversary of his death. The two key dates are linked, and the RSC is celebrating with Young Shakespeare Nation. Kicking off with “Richard II”, the RSC will perform every one of Shakespeare’s plays over the next six years, sharing them with audiences up and down the country and internationally, through filmed performances in cinemas and streamed free to classrooms across the UK. Shakespeare’s Globe has begun the world’s most extensive tour of his work: a two-year tour of “Hamlet” will visit every single country on earth—205 at the current count—from 2014 to 2016. The tour will travel across seven continents, taking one of Shakespeare’s best-known plays to many who have never had the chance to experience his great works.
The BBC—the hon. Member for Huddersfield said that it had perhaps let us down, but I do not agree—and the Royal Shakespeare Company will also collaborate on “Dream 16” as they take “A Midsummer Night’s Dream” on an epic tour to partner theatres across the UK, with Bottom and his friends played by local amateur companies and Titania’s fairy train by primary school children.
The British Library has reopened its refurbished permanent gallery with a display of some of the greatest treasures from its William Shakespeare collections, including a rare first folio. In recognition of his global appeal, the British Library is also developing a major exhibition in partnership with institutions in the United States, with events, learning programmes, outreach projects and performances on site and across the country. These unprecedented celebrations will bring Shakespeare to life for all to enjoy, whether they are veterans of his works or newcomers discovering the delights of his writing for the first time.
Mr Sheerman
Does the Minister agree that it would be a terrible shame, on this day when we are celebrating Shakespeare and his great heritage in this country—and the brand—if we did not use the full 30 minutes of this little, half-hour debate? Will the Minister perhaps give us a little more of Shakespeare’s poetry in the remaining 90 seconds of this precious debate?
Mr Vaizey
I had thought that we were doing pretty well, as we have only 60 seconds left. I was going to conclude by recognising the arguments of my hon. Friend the Member for Stratford-on-Avon for a Shakespeare bank holiday. A great many issues have to be taken into account when considering bank holidays, not least the wider cost to the economy and the fact that they are the responsibility of the Secretary of State for Business, Innovation and Skills, but there is no doubt that we should ensure that more attention is paid to the celebrations of the bard’s birthday.
As I reach my peroration and conclusion, I want to say that this year’s celebration of Shakespeare’s life and works is one of the biggest opportunities for us to showcase the strength of Britain’s culture to the world since the Olympic and Paralympic games in 2012. It is a fitting commemoration to the bard’s outstanding contribution to the cultural life of this country and around the world. I must say, Mrs Riordan, that I have been under such pressure that I would
“give all my fame for a pot of ale”.
Universal Jobmatch Programme (Fraud)
(10 years, 4 months ago)
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Mr Frank Field (Birkenhead) (Lab)
It is the first time that I have had the privilege of speaking under your chairmanship, Mrs Riordan, and I welcome it. You will realise from your own constituency work that the debate is immensely serious. It originated with a constituent who was ripped off, to put it in delicate language, through using the Universal Jobmatch that the Government, rightly, provide. I want to say at the outset, to avoid any doubt, that while I have been a Member of the House I have always been in favour of conditionality. The Government’s latest move on conditionality—
Mrs Linda Riordan (in the Chair)
Order. Will hon. Members who attended the previous debate leave quietly? I should be grateful.
Mr Field
I should have hoped for more order at Jobcentre Plus than some hon. Members have been displaying, Mrs Riordan.
It must be at least 25 years ago that I suggested that help should be given to those who had difficulty finding a job. There may be fraud, and we should ask people from that group to come in at different times each day to sign on. I am pleased that after about 25 years a Government have got round to that idea. I approach the debate not in an attempt to wreck what Jobcentre Plus does, but in an attempt to improve it. As a start, Andrew Forsey of my office, who has done all the work on this, checked the Jobmatch scheme for Birkenhead today, as I am sure the Minister did. I know that many of her constituents use the same facilities. In the Birkenhead constituency there are 2,647 people claiming jobseekers’ allowance and, an hour or so ago, 24 jobs were advertised as available within 20 miles of Birkenhead. Fifteen of those were duplicate agency jobs, and two were stand-alone agency jobs. Despite the fact that the search was for jobs within 20 miles, one of those advertised was in Milton Keynes, two were in London, and one was for an overseas worker. There was a grand total of three actual vacancies. The Monster jobsite, run separately from the work that Monster does with the Department for Work and Pensions, had one job listed today, which was a teaching job.
To focus the debate, I thought it would be worth while considering the letter that the Minister wrote to the Chairman of the Select Committee, and the annex to that. The Clerk to the Select Committee kindly sent me a copy of both, and I have 12 questions for the Minister. Five are about the letter, and the others are about the annex. First, the Minister says in her letter:
“We have well established procedures to minimise the risks of this”—
bogus jobs—
“occurring within Universal Jobmatch.”
What are those checks and what are the results of using them? Secondly, she says:
“We have closed the fraudulent account and will compensate all jobseekers that have been affected in this case.”
I refer to constituents who were taken for a ride by a fraudster advertising on the Department for Work and Pensions site. The Minister says that they will be compensated. They lost at least £65 each—the money that they were asked to provide for a Home Office check—and have been offered £25. What does the Minister mean by compensation in those circumstances?
Thirdly, the Minister’s letter states:
“If the employer is in breach of our Terms and Conditions we will remove their right to advertise on Universal Jobmatch.”
What trawling of the site does she carry out, and how many removals occur? My constituent received a letter from the Department, which said:
“Currently there are 179 accounts advertising 352,569 jobs which potentially breach the Terms and Conditions”
that the Department has laid down. If the Department is telling one of my constituents that well over 350,000 jobs advertised may be in breach of the terms it lays down, how are the removals carried out? Fourthly, the letter states that that Department has
“removed…400 non-compliant accounts since…November 2012.”
May we have some idea of the reasons for the removals? How were the accounts breaking the contracts? Will the Minister explain more about the cleansing undertaken to get to that total?
My fifth and last question about the Minister’s letter arises from her saying that
“we have now concluded our investigations into 183 distributor accounts, resulting in the removal of the accounts and the associated vacancies.”
What are those distributor accounts? What sorts of vacancies were removed, and how many jobs were involved? Answers to those questions arising from the letter will enable us to understand more fully the action that the Department takes to ensure that people who use Universal Jobmatch will not be ripped off.
The first question arising from the annex is about its slightly boastful statement that DWP and Monster
“have already made major improvements”.
May I ask what those are? Secondly, it says:
“Sadly, the existence of ‘rogue’ employers is nothing new”.
If they are nothing new, what does the Department learn from finding out about those bogus employers and acting against them? After all, the Department offered facilities to someone who was known, certainly in some circles, as a fraudulent individual. People skilled in fraud do not normally turn up using their correct names, and nor did the person in question, but he was ushered into DWP to conduct his fraud. What action does the Department take in that respect? Thirdly, the annex mentions “well-established procedures to minimise” fraud. What are those procedures?
The fourth question arising from the annex to the letter is about the assertion that
“like all internet job sites, we manage the issue of duplicate or inappropriate vacancies.”
I remind the House that there are 15 duplicate jobs in the 54 advertised today on the DWP site. How well is that managing the issue? Fifthly, it is claimed that
“whenever we have a doubt”
action is taken. Who registers those doubts, and what is the doubt test that could lead to action? Sixthly—there are only two more questions—the annex states:
“If an employer breaches our terms and conditions we remove their right to advertise.”
Yet, as I said, the letter to my constituent said that there might be more than 350,000 jobs in breach of the terms and conditions. What action is the Department taking?
Lastly, the annex says that
“there has been inaccurate speculation about the relationship of the DWP and Monster.”
Will the Minister tell us something about that relationship, so we can be clear what it is? It is totally proper for them to have a relationship and for the DWP to ask Monster to carry out its functions; but it is not proper to expose constituents to fraud. That is the main point of the debate.
Today, even if we took the Department’s website at face value, only 24 jobs are advertised within 20 miles of Birkenhead, with more than 2,500 people claiming JSA. Large numbers of people are dead serious about trying to get a job, quite rightly, using that service, and they are being let down badly. What actions will the Government take to improve the service? Again, if people do not use the Jobmatch website actively, might they face sanctions, given the numbers of sanctions being employed at present? It is totally proper that the Department should have a website on which to advertise jobs, and totally proper that Beveridge’s idea of labour exchanges should be brought into the IT age, where people can easily advertise and where—we hope—claimants can as easily find jobs. However, the Department has totally failed not only to ensure that there are serious jobs on the site but, even more important, to take action to combat fraud.
I welcome the opportunity for the debate and to face my neighbour in Wirral West. Some of our constituents use the same jobcentre and the same site. I look forward to her replies, although I quite understand that she may need to write to me afterwards with some of them. I am grateful for the debate, Mrs Riordan.
The Minister of State, Department for Work and Pensions (Esther McVey)
It is a pleasure to serve under your chairmanship, Mrs Riordan. I thank the right hon. Member for Birkenhead (Mr Field) for securing this debate, so we can have clarity over Universal Jobmatch and about the many positive things that it is doing at the moment. If we look at the latest statistics and numbers of people getting into work, we see that this year annual employment has gone up to the highest level in 25 years, and this month we have had the biggest annual fall in long-term unemployment since 1998. The number of vacancies at any one time in the market has also gone up significantly, with 600,000 job vacancies at any one time.
I will try to answer as many of the right hon. Gentleman’s questions as I can here today. If I do not get to all of them, I will write to him with further answers, as he suggested. I thoroughly understand why he secured the debate. Although fraud in Universal Jobmatch is less than 0.1%, the one instance took place in his constituency.
I can confirm that the fraudulent account was closed and all the people affected were compensated. The right hon. Gentleman asked about the amount that was given; it was significant. Of course, there was the repayment of money for the Criminal Records Bureau check—£65—and yes, he mentioned £25 on top of that. Significantly, some of those people got up to £1,200, because it is about actual money lost as well as compensation—he will be pleased to hear that. I have the full list of people, what they have got and how we have recompensed them.
Mr Field
I welcome that information. As the Minister knows, in this case, Jobcentre Plus invited the fraudster in to have an office in the DWP, so one of my questions was what steps the Department takes to ensure that when it offers people office space in the Department, they are bona fide, as one would have thought they would be. What actions does the Department take to weed out fraudsters, who clearly do operate in the system?
Esther McVey
I will come to that. We have more than half a million businesses and 6.1 million claimants on the site, and nearly 5 million job searches a day. We know that there will be instances—it is less than 0.1%, as I said—where something goes wrong. What matters is how we deal with it, sort it out and compensate those people, as we did in this instance.
Things have changed considerably over the past 16 years. The right hon. Gentleman was a Minister in the Department, so he will know that. Every Jobcentre Plus, everybody who works there, and every adviser wants the best for their claimant. We have seen how things have changed significantly, from being paper-based to having job points—a quite clunky solution introduced by the previous Labour Government. Job points frequently did not work, were offline, and things could go wrong. I looked for the statistics for fraud during the Labour Government’s tenure, but it seems that they did not wish to keep those figures. Although we have anecdotal evidence that fraudulent and bad behaviour was common, and we know that that was regional, it seems that it may have been brushed under the carpet. I am not sure what was going on then, whereas we have full transparency of what goes on now, significantly so and obviously, because it is online, which is key.
If we think of the changes and transformations over the past 16 years, of course we have to be online. Google did not even exist 13 years ago. The technological advances are significant and not having people online would be wrong, given that 25% of all jobs are online only. We have to get the best service we can. However, by opening up those opportunities—by having more than 227% more vacancies online and 1,316 more employers online—we open up the possibility of fraud, and we have to clamp down on that significantly.
The timeline of what went on may help to explain some of the procedures and things that happened. The vacancy posted by Options 4 Families for a trainee child counsellor went up online on 9 December 2013. On 18 December, the DWP was notified by Monster, which asked whether it was right that we were asking for CRB checks. It was not a constituent coming in to say, “I have a problem here,” as they do through letters, e-mails, and by coming into surgeries. It was our own checks that came across the problem. Ten thousand manual checks are going on per month, and Monster does checks too, so things were looked at then. It was decided that that was fine and the vacancy went back up online, but it was brought back down again and closed on 20 December. It was probably online for about nine days. Only a month or so after that, it seems, the right hon. Gentleman came to us to discuss the matter. We had, however, already seen it, and we were dealing with it and getting in touch with those constituents. That goes to show the checks that are going on constantly, the support that is available and how we deal with things.
That is what is key. Why did Universal Jobmatch come into being? What did we have to do in 2012 to give us the best opportunities to help people into work in this day and age? How were we going to have an online system that actually helped people to look for work, matchmaking them 24/7 and not only during opening hours of 8 to 6, Monday to Friday? How could we have a system enabling people to upload a CV, to find more jobs and to know what is going on? Universal Jobmatch is the best possible solution: it is the largest website in the UK, with 5 million job searches every day on average, bringing employers and employees together and with a significant increase in the number of employers using it. That is key, too. We have to reach out to claimants, and we have to reach out to businesses and employers to ensure that they want to engage and play a part. We also have to help Jobcentre Plus staff, who want to know that they have the best possible equipment.
As we have seen, it is important that we close down any fraudulent behaviour. It is also important that we deal with other inappropriate vacancies. It is worth noting that there frequently seems to be confusion between fraudulent vacancies, which are entirely unacceptable, and the duplicate vacancies that we sometimes see and can arise for a variety of reasons. Often, if a vacancy appears more than once on the site, it is a result of an employer using multiple agencies or posting the opportunity by themselves in addition to using other avenues. That is an unavoidable feature of the open-access model that the service provides, and it must be seen in that context. There are significant opportunities but, equally, if such duplication should not have occurred—if people are posting a vacancy where they have no direct relationship with the employer, for example—the vacancy will be taken down.
We have to consider what Universal Jobmatch has brought to the arena. There is Monster and various other services, but Universal Jobmatch allows job advisers to help people find a job and to check that they are looking for work, which is also key. Equally, we can work with claimants through their claimant commitment and help them to use the service. We can also advise claimants. We take things such as data security very seriously and we give advice to our jobseekers on how to stay safe online when conducting a job search. That advice is published on the UJ website, and it is given to people in jobcentres in a leaflet, “Safety and Security when looking for work.” Claimants are also advised not to pay any fees up front for help with job searches, and they are advised not to reveal personal details such as their bank account number, national insurance number or date of birth. Such information should also not be included on their CV. We are giving such advice on a daily basis.
People can access extra support through the “contact us” button. They are asked whether the site is working adequately, and there is a most frequently asked questions page. There is also additional support. Jobcentre staff are able to help people as much as they can. All of that is key, but it is always evolving and changing. We have to ensure that we have the best service, and wherever anything goes wrong we have to clamp down and ensure that it does not happen again. Equally, when a local Member of Parliament brings the activities of a company to this House, it highlights exactly what we do to close down companies and see what has happened. It also shows how we have supported claimants to recoup their money, which is right. The system is constantly monitored, and we constantly survey what is and is not acceptable.
We have made considerable improvements to Universal Jobmatch. When it was first introduced, we ensured that it was easy to use, that people were getting used to it and that employers had confidence in it. Confidence is key, too: we have to ensure that people have confidence in the system. Of course, all those businesses have confidence and think that Universal Jobmatch is a great way to reach out and find employees. It is significant that 90% of businesses that use Universal Jobmatch are small and medium-sized enterprises. For them, it is a cheaper and more reliable way of finding somebody close to their business. People underestimate the service. More than ever before, the Government are reaching out to business and asking, “How can we support you? How can we get somebody employed? What training do they need? Do they need work experience? Do they need any extra support?” That is what we are doing, and Universal Jobmatch is part of that greater relationship. All I can say is that, with the significant increases in getting people into work, all of these things are working.
We have the ability to disable and delete non-essential cookies, and we have taken the ability to close down accounts. We are enabling jobseekers to re-access their Universal Jobmatch account securely when locked out. We have revised access groups to control the web admin for DWP. We are also listening to what claimants would like. They are saying that they would like to search by a keyword or skill; they would like to find work within a specific distance, postcode or ward; they would like to choose how many hours they have to travel; and they want to filter out vacancies already reviewed within the list of results. We are doing all of those things—constant monitoring, constant upkeep and constant development.
The system has revolutionised the way people look for work. It is enabling people to get into work, and it is allowing advisers to work more closely with claimants, but where things go wrong, it is right that that is brought to this House. In this case, the matter was sorted back in December before the right hon. Gentleman brought it to the House, but it is right that the matter is discussed openly so that we get the best possible result for claimants.
Mr Frank Field
If one was a Prime Minister looking for a totally trustworthy Minister to be in charge of our security service and to ensure that nothing of any comprehension could be learned about the service, today’s debate shows that we have a candidate to fill that role. I am as confused as I was when I came in about what actually goes on.
In the few minutes remaining, I have three very simple questions for the Minister. First, she said that 10,000 checks are undertaken. Why 10,000? What is the time span, and what are the results? Secondly, she said that the Government will hunt duplicates and take them down. Of the 24 jobs advertised as relevant for Birkenhead, 15 were duplicates. Who is responsible for taking down those jobs?
Thirdly, the Minister talked in general terms about having to clamp down. Who clamps down, and who is responsible for that? How many people? How often do they do it, given the number of people who put up jobs and depend on the results? I would be grateful for answers to those three questions.
Esther McVey
By way of example, I was showing how, before the right hon. Gentleman even knew about the incident in his constituency, we had found it, dealt with it and closed down the site, which shows that we have our own team working on it within the DWP. Monster’s team is working on it, and it was streets ahead of his good self, even though it is correct that he brought the matter to the House. Of course we have said that anyone who was put to any inconvenience, who paid out or who suffered any loss was paid, and the compensation on top of their loss was significant. For example, where a loss in actual terms was £750, there was £500 of compensation on top. I have the full list of all those who received payments, but trust me that we have worked closely with them. We did not want to be in that situation, and as I said less than 0.1% of people are in that position, but we have dealt with it. Equally, there are 1,002 full-time vacancies within a 20-mile radius of Birkenhead posted on Universal Jobmatch today.
As I said, where things go wrong, we correct them and sort them out, but I hope everyone can see that we have done that in this instance. When we look at the number of people, 11 came forward and wanted compensation, which we have resolved. When we see that 5 million people a day are doing a job search on the site, we can see how, for the overwhelming majority of people, it is a very good addition to the other things that they might be doing to search for work both by themselves and with their adviser.
Question put and agreed to.
Written Statements
EU Foreign Affairs Council
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
My noble Friend the Minister of State for Trade and Investment, Lord Livingston, has today made the following statement:
The EU Foreign Affairs Council (Trade) will take place in Brussels on 8 May 2014. Lord Livingston will represent the UK on all the issues on the agenda.
The substantive items on 8 May will be:
Negotiations on an EU-Canada comprehensive economic and trade agreement (CETA)—the European Commission will update Trade Ministers following political agreement on this FTA last year.
Negotiations on an EU-Japan economic partnership agreement—the European Commission will report on the fifth round of negotiations; report on the EU-Japan summit of 7 May; and present their review of progress after one year of negotiations.
Doha development agenda (DDA) including the green goods initiative—the European Commission will circulate a non-paper on the post-Bali DDA work programme, and Council conclusions and negotiating directives for the green goods initiative will be put to Trade Ministers for their consideration.
Economic partnership agreements (EPAs)—the European Commission will report on progress on negotiations with western, eastern and southern Africa.
Transatlantic trade and investment partnership (TTIP)—the European Commission will report on the fourth round of the TTIP negotiations and Trade Ministers will discuss the upcoming fifth round.
ECOFIN
(10 years, 4 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
A meeting of the Economic and Financial Affairs Council will be held in Brussels on 6 May 2014. The following items are on the agenda to be discussed.
Current Legislative Proposals
The presidency will provide an update to Council on the ongoing work on financial services dossiers.
Parent Subsidiary Directive
Council is expected to be asked to reach political agreement on an amending directive to the parent subsidiary directive. The Government support the proposed amendment, which will effectively close a loophole whereby companies operating across Europe could exploit differences between member states in the tax classification of certain financial instruments in order to reduce their overall tax liability.
Financial Transactions Tax
Council will hold a state of play discussion on the proposal for a Council directive implementing enhanced co-operation in the area of financial transactions tax. Following a number of working level meetings, this is the first opportunity for Finance Ministers to discuss the proposal since the Council decision authorising enhanced co-operation was adopted early last year.
Macro-economic Imbalances Procedure—In-depth reviews
Council will discuss the in-depth reviews published on 5 March and adopt a set of related Council conclusions. The Government take note of the Commission’s assessment that the UK is not experiencing excessive imbalances, and can support the proposed conclusions.
Follow-up to the meetings of G20 Finance Ministers and Governors (10-11 April) and IMF/World Bank (11-13 April) in Washington DC
Council will be informed of the main outcomes of the G20 Finance Ministers and Central Bank Governors and IMF/World Bank meetings held in Washington DC from 10 to 13 April. The Government remain supportive of the Australian G20 agenda, particularly on the development of comprehensive growth strategies.
Informal ECOFIN (April)
(10 years, 4 months ago)
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The Chancellor of the Exchequer (Mr George Osborne)
An informal meeting of the Economic and Financial Affairs Council was held in Athens on 1-2 April. Ministers discussed the following:
Working lunch for ECOFIN members
Ministers received a debrief on the earlier Eurogroup meeting, where the focus was the announcement of the financial assistance package for Greece. There was also a presentation by the think-tank Bruegel of a paper on “Europe’s social problem and its implications for economic growth”, followed by an exchange of views.
ECOFIN working session I
Ministers discussed recent developments in the EU economy, with the Commission pointing to the gradual improvement of the economy and growth in the UK, Latvia and Lithuania.
The Commission and the high-level expert group on SME and infrastructure financing updated Ministers on the findings of the group, and possible ways forward on this initiative. The presidency confirmed it was important to monitor developments leading on from the recommendations of the group.
Ministers also endorsed the G20 EU terms of reference and the IMFC statement.
ECOFIN working session II
The Commission presented its proposal on banking structure reform, followed by a presentation from the chair of the high-level expert group, Erkki Liikanen. Ministers held an exchange of views, where the UK outlined how the Government are taking forward structural separation of banks in the UK.
Ministers were also updated on the state of play of the single resolution mechanism, focusing on implementation following the political agreement reached by the Greek presidency; and of the single supervisory mechanism.
Local Government Pension Scheme
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
The Government have laid before Parliament the Local Government Pension Scheme (Offender Management) Regulations 2014. These amending regulations will protect the pensions of both existing and former probation staff as they move to the new probation structures on 1 June 2014, provide certainty and security for transferring members, and prudently manage the accrued rights of members involved in the provision of probation services with the legal and orderly transfer of the assets and liabilities in respect of those members.
The regulations secure continued pension provision in the local government pension scheme for staff transferring from 35 probation trusts when they cease to operate on 31 May 2014, to either the national probation service, which will be a part of the Ministry of Justice, or one of the 21 community rehabilitation companies selected, after an open public exercise, to provide certain offender rehabilitation services.
Amendments to the scheme are needed because those staff transferring to the national probation service would, usually, be offered membership of the civil service pension scheme. The community rehabilitation companies can be admitted to the scheme through existing admitted body status provisions. Allowing transferring staff to remain in their current pension arrangement will assist the smooth transition to the new arrangements and give transferring staff reassurance because their pension arrangement does not change when their employment changes.
The regulations also provide for the Greater Manchester pension fund to be responsible for all pension administration for the new arrangements for probation provision. When probation trusts cease to operate, the scheme assets and liabilities in respect of current and former probation staff will move to the Greater Manchester pension fund. A framework for the transfers has been provided to facilitate the smooth movement of assets and this framework is set out in actuarial guidance issued by the Secretary of State, who has consulted and received actuarial advice from the Government Actuary’s Department.
Taxpayers get value for money as there are no lump sum exit payments to meet any cash shortfalls when the probation trusts cease to participate in the scheme. This is because the asset transfers are managed in an orderly and transparent way for all affected administering authorities, and liabilities will be prudently managed through the national probation service or community rehabilitation company. Local taxpayers are also protected from the possible risk of contractor failure by way of a Ministry of Justice guarantee to protect the Greater Manchester pension fund.
Armed Forces Pay Review Body
(10 years, 4 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
The supplement to the 2014 report of the Armed Forces Pay Review Body (AFPRB) making recommendations on the pay of service medical and dental officers has been published today. I wish to express my thanks to the chairman and members of the review body for their report.
In line with the Government’s 2011 autumn statement, which announced that public sector pay awards will average 1% per annum for the two years following the public sector pay freeze, the AFPRB has recommended an increase of 1% to base military salaries for all ranks within the medical and dental cadre for 2014-15. In addition, the AFPRB has recommended a 1% increase in general medical practitioner and general dental practitioner trainer pay and associate trainer pay. These recommendations are accepted in full by the Government with implementation effective from 1 April 2014.
The Government have also accepted the AFPRB recommendations for the retention of the golden hello scheme, but with amendments to the eligible cadres, with effect from 1 October 2014 and the removal of increment levels 20 to 29 from the non-accredited pay spine with effect from 1 August 2014.
Copies of the AFPRB report are available in the Vote Office and the Library of the House.
Less Lethal Weapons (Triennial Review)
(10 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
On 13 September 2013 I announced to Parliament through a written ministerial statement—Official Report, column 69WS—the commencement of the triennial review of the Scientific Advisory Committee on the medical implications of less lethal weapons (SACMILL). I am now pleased to announce the completion of the review.
SACMILL plays an important role providing independent, specialist advice across Government on the medical implications of the use of less lethal weapons; those whose design and intention is to control and then neutralise a threat without substantial risk of serious or permanent injury or death. Such devices include water cannon and the taser.
The review concludes that the functions performed by SACMILL are still required. The review also looked at the governance arrangements for the body in line with guidance on good corporate governance set out by the Cabinet Office. The report makes some recommendations in this respect, mainly around its own governance structure and its relationships with its customers. The Ministry of Defence will be looking at how best to take forward these recommendations.
The full report of the review of SACMILL can be found on the gov.uk website and copies have been placed in the Library of the House.
House of Lords
Armed Forces Front-line Combat Roles: Women
(10 years, 4 months ago)
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Lord Selkirk of Douglas
To ask Her Majesty’s Government what steps the Ministry of Defence is taking to evaluate whether women should be allowed to serve in frontline combat roles in the infantry, prior to making a decision in 2018 in accordance with the European Union rules on reviewing that policy.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, first I am sure that 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, who were killed while on operations in Afghanistan on 26 April. 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.
Defence is required by EU law to conduct a review into the exclusion of females from ground close combat roles no later than 2018. This would include posts in the Naval Service, the RAF and the Army. While the nature, scope and timing of the review have not yet been determined, we are considering whether to bring it forward, recognising the need both to improve the diversity of the workforce across defence and to maintain operational effectiveness.
Lord Selkirk of Douglas (Con)
My Lords, will the Minister accept that the whole House will wish to be associated with his message of condolence to the families of those who have very sadly lost their lives?
I shall mention a past interest in this subject: 70 years ago my aunt was a pioneering woman who used to fly military aircraft to front-line aerodromes in the Second World War. If women have the inclination, aptitude, ability and strength required, is it not time for the Government to consider following the examples of such countries as Canada, Australia, France, Germany, Norway, Denmark, the Netherlands and, not least, the United States of America, all of which either have allowed women to take their place in combat roles on the front line or are in the process of doing so?
Lord Astor of Hever
My noble friend is right, which is why we keep this subject very much under review. Women already serve on the front line with great distinction, and we will take into account the factors that my noble friend has mentioned, as well as other aspects, particularly the effect on unit cohesion. My noble friend mentioned other countries. That will be very relevant, although we need to be sure that the answer is right for our Armed Forces and the way they operate.
Lord Rosser (Lab)
On this side, we also wish to express our sincere condolences to the families and friends of the five members of our Armed Forces who have recently lost their lives on operations. We are reducing the numerical strength of our Armed Forces in Afghanistan, but the dangers remain, and the enormity of the sacrifices which young service personnel continue to make on our behalf has been brought home to us all once again.
Women currently serve in theatre as engineers, intelligence officers, medics and fighter pilots. The ban on women serving on submarines has been lifted, and increasing numbers of women have been appointed to senior military posts in recent years, but more needs to be done to make sure that our Armed Forces reflect the communities they serve, in line with a key objective of Army 2020. Serious consideration needs to be given to the further roles that women can play, including serving in front-line combat, since we need to maximise the talent and expertise available. The Minister said that the Government are looking at bringing forward the review, which is due by 2018. I wonder whether he can be a bit more specific on that. Is it currently the intention to wait until 2018, or is there an earlier target date for a decision? What are the considerations that will be taken into account by the Government in looking at the issue of women serving in front-line combat roles?
Lord Astor of Hever
My Lords, as I said in my Answer, we are looking very clearly into the possibility of bringing the review to an earlier date than 2018. As soon as I have any information, I will come back and report it to the House.
Baroness Garden of Frognal (LD)
My Lords, I associate these Benches with the condolences to those who were killed in the helicopter accident. Given the news, mentioned by the noble Lord, of the first women to serve in submarines and the appointment of the first two-star officer in the Royal Air Force, will my noble friend say what opportunities the Army is giving to extend career opportunities to women, whether in combat roles or elsewhere?
Lord Astor of Hever
My Lords, I am very grateful for my noble friend’s kind words, very much in memory of her late husband, who was a very distinguished helicopter pilot. She asked what front-line roles women already serve in. They already serve in a variety of front-line roles, including as medics, fire support team commanders, military intelligence operators and dog handlers, with at least two having won the Military Cross. Looking round the House, I know that a number of noble Lords have been to Afghanistan, and I am sure they have met many of the women who play a very distinguished part in supporting our troops out there, particularly the medics, who do an incredible job.
Baroness Dean of Thornton-le-Fylde (Lab)
When the Minister is able to inform us when the review will take place, will he also inform us of the factors that will be taken into account? A number of us have heard “force cohesiveness” over the years, but it is a bit like Heinz 57 varieties; it can mean a lot to different people. If we are not clear what factors are to be taken into account, the outcome may in fact be a different decision than many of us would want to see.
Lord Astor of Hever
My Lords, in 2002 there was a review that took approximately two years. There was another review in 2010. The conclusions of both were mixed. As a result, Ministers concluded that a precautionary approach was still necessary and the exclusion of women was retained. It might be helpful to the House if I were to write to the noble Baroness and other noble Lords who are interested, giving a link to the Written Statements made in November 2010 and setting out the full report of the review and the information and research that was carried out.
Lord Lester of Herne Hill (LD)
My Lords, great progress has been made in the Armed Forces in dealing, for example, with homosexuality or pregnancy discrimination and other matters of that kind. Will the Government, in considering whether to bring forward the review, bear in mind a case in which I appear, Johnston v Chief Constable of the Royal Ulster Constabulary, in which it became clear that women already are performing vital undercover works of a combative nature, facing real danger, and are at least as important in the work that they are doing as their male colleagues?
Lord Astor of Hever
My Lords, my noble friend makes an important point. As I say, we are reviewing seriously a date earlier than November 2018. I can say to my noble friend that the Ministry of Defence remains fully committed to treating everyone fairly and properly, whatever their gender, ethnicity or other characteristic. We will continue working to eliminate any form of discrimination.
Health: Liver Disease
(10 years, 4 months ago)
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Lord Brooke of Alverthorpe
To ask Her Majesty’s Government whether they will produce a strategy to reduce liver disease.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, improving outcomes for people with liver disease is a priority. Public Health England has a wide-ranging programme aimed at tackling its three major causes—viral hepatitis, alcohol abuse and obesity—through strengthening local action, promoting healthy choices and giving appropriate information to support healthier lives.
Lord Brooke of Alverthorpe (Lab)
My Lords, I gather from that that the Government are not prepared to consider introducing a strategy, which is a great pity given that liver disease is now the fifth biggest killer and we have some of the worst figures in the whole of Europe. How does the Minister see a more general approach, rather than a specific target in a strategy, producing a change in the terrible figures which we now see in the number of deaths, given that the deprived areas of the country where most of them occur, such as Manchester, had a reduction in the funding to commissioners and GPs for this purpose last month?
Earl Howe
My Lords, as the noble Lord is aware, NHS England is responsible for the overall national approach to improving clinical outcomes for people with liver disease. At the moment, it has no plans to produce a strategy specifically for liver disease, but it is adopting a broad strategy to reduce premature mortality, including mortality from liver disease. There is a major emphasis in the work being done by NHS England and Public Health England on prevention. They are supporting clinical commissioning groups and local authorities with a suite of tools to help them maximise the best possible outcomes for their local communities, such as local authority profiles. That can help local authorities and CCGs indentify the significance of liver disease in their area compared to the rest of the country, and the actions they could take to tackle it.
Baroness Gardner of Parkes (Con)
Can the Minister identify more clearly for me his definition of liver disease? He cited various things. Do his liver disease figures include the metastases from cancers, which are often a terminal condition? Are they treated separately or classified as part of the existing numbers?
Earl Howe
My Lords, there are over 100 types of liver disease, which together affect at least 2 million people in the UK. The main ones are derived from alcohol misuse, viral infection, being overweight and obesity, and there are conditions that are inherited as well as those which attack the immune system. As regards metastases, I would need to be advised but I would imagine that that falls under the general heading of “liver cancer”, which is certainly included in my remarks to the noble Lord opposite.
Baroness Billingham (Lab)
My Lords, given the sad news that we have had in the past 48 hours of the death of Elena Baltacha, one of our best young tennis players—I have no idea about the history of her illness, but I know it has gone on for many years—what is the availability of liver transplants? That is a question that will cross many people’s minds. It would seem to me that if it was available and she was a suitable candidate, that could have been looked at. Can the Minister give us any assistance on that?
Earl Howe
My Lords, I, too, learnt with great sadness of the death of Elena Baltacha, and was also unaware of the history of her medical condition. It is not appropriate for me to comment at the Dispatch Box on whether she should have received a liver transplant. However, I can say that transplant services are very active in this country. More and more liver transplants take place compared with a few years ago, and there are better techniques to ensure their tolerability in patients. If I can find out some more information, I will be happy to write to the noble Baroness.
Baroness Finlay of Llandaff (CB)
Do the Government recognise that a strategy needs to be far wider-reaching than health, given that alcohol abuse results in two-fifths of crimes being alcohol-fuelled and in a cost to society of £55 billion a year? That sum would be recouped in part if the unit price of alcohol was raised by 10%, which would help to decrease the binge drinking which results in young people ending up in liver units with fulminant end-stage liver disease.
Earl Howe
I agree with the noble Baroness that if we are to tackle liver disease we need to look as broadly as we can at the causes of alcohol misuse. We remain concerned about the wide availability of cheap, discounted alcohol and will soon take action to ban sales of alcohol below cost, where the price is equivalent to duty plus VAT. As regards minimum unit pricing, that remains a policy under consideration, but it will not be taken forward at the moment while we gather further empirical evidence. We do not want to launch a policy that may have unintended consequences.
Baroness Manzoor (LD)
My Lords, the incidence of liver cancer and liver disease is increasing significantly in young people, and it is the only cancer that continues to increase. Can my noble friend state whether there is a high-profile health education strategy that will help to tackle alcohol abuse and raise awareness among young people, who now talk about getting “preloaded” before they go out to drink alcohol, and which will highlight the issue of obesity? We need a high-profile health education campaign in that area.
Earl Howe
My Lords, as my noble friend knows, there is of course scope to include alcohol awareness in relevant lessons in secondary schools. However, I take my noble friend’s point. I am encouraged by recent figures which show a drop in binge drinking, but that is no cause for complacency. It still takes place, and too many young people end up in specialist care and sometimes lose their lives. That is very much on Public Health England’s radar.
Lord McConnell of Glenscorrodale (Lab)
My Lords, Elena Baltacha had a remarkable career—
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)
My Lords, we are against the clock. It is the Labour Benches.
Baroness Wheeler
My Lords, I, too, pay tribute to Elena Baltacha, who was a truly remarkable and very brave woman. One in five people in the UK is at serious risk of liver damage, but a recent government response shows that the Secretary of State has not met any external organisations to discuss liver disease since May 2010, and current Ministers have not met representatives of people living with liver disease since September 2012. Can the Minister commit urgently to remedying this situation, particularly as it is in such stark contrast to the 130-plus meetings the Government have had with the drinks industry?
Earl Howe
My Lords, liver disease is very much in the sights of my honourable friend the Minister for Public Health, as is evidenced by the document we published last week, Living Well for Longer, in which there is a whole section on alcohol and liver disease, and by what NHS England and Public Health England are doing to tackle them.
Transforming Rehabilitation: Mental Health
(10 years, 4 months ago)
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Baroness Linklater of Butterstone
To ask Her Majesty’s Government what plans they have to include mental health treatment and support in contracts for the probation services as part of the new Transforming Rehabilitation programme.
The Minister of State, Ministry of Justice (Lord Faulks) (Con)
My Lords, our reforms will bring in the best of the private and voluntary sectors to work with offenders and reduce reoffending. Community rehabilitation companies will be contracted to work with low and medium-risk offenders in the community, and the National Probation Service will supervise high-risk offenders. Both will be required to deliver services for specific groups such as females and BME offenders, as well as those with mental health issues, to ensure that an offender’s treatment requirements are complied with, including in situations where a court order exists.
Baroness Linklater of Butterstone (LD)
I thank my noble friend for that reply. I am sure that he will be aware that currently four out of every 10 people who are being supported by the probation service are actively mentally ill: that is, 39%. This underlines the range of skills and knowledge that is required today from experienced members of the probation service in managing and properly meeting the needs of these clients. Therefore, will the Minister clarify whether the new organisations now bidding for probation service contracts are specifically expected by the Ministry of Justice to include and implement mental health provision across the board—because there are not specialisms to this extent within the probation service, as far as I know—and whether this requirement will be included in the proposals? How will the quality of the proposals of the new probation service contractors and the performance of the new providers be assessed?
Lord Faulks
My noble friend, and the House, may recall that the Government lodged with both Houses of Parliament a detailed draft services agreement, which included provisions that would apply to mentally ill offenders. Clause 3 of the agreement provides that the contractor shall monitor that the treatment provider prepares a full treatment plan with details of the specific mental health needs of each allocated person, with the timescale indicated to the court at the time of the sentence. Therefore, companies will be contractually obliged to do this. They will have an obligation under the Human Rights Act and under the Equality Act. My noble friend is of course right that the skills should be preserved in relation to mental health.
Baroness Howarth of Breckland (CB)
Will the Minister clarify the relationship between NHS England’s responsibility for mental health and that of the Ministry of Justice, and how contracts are laid between the two, not only in the private sector but in the voluntary sector, where a number of organisations have lost contracts through this confusion? I declare an interest as a trustee of the Lucy Faithfull Foundation.
Lord Faulks
There is an obligation to treat offenders and non-offenders the same. The circumstances in which they come to be treated may be different. Those who are in prison may suffer from a number of different mental illnesses. Their treatment is the responsibility of NHS England. Of course, there are complications with the delivery of treatment in the community as well, but there is no absolute difference in the treatment that is appropriate to you when you are an offender in prison or out of prison or are an ordinary member of the public. Clearly there are matters of co-ordination that the noble Baroness would say are not sufficiently attended to.
Lord Beecham (Lab)
Between 2010 and September 2012, 86% of the prison and probation-related work contracted out to the private sector by NOMS went to G4S, Serco and Sodexo. If the Minister is so confident of the performance of these contractors in this important and sensitive area, why has the Ministry of Justice refused to disclose the figures for the succeeding year, even after an FoI request from the Centre for Crime and Justice Studies? Is he aware that just three third-sector organisations accounted for two-thirds of the third-sector expenditure in the same field?
Lord Faulks
I cannot comment on the details of the noble Lord’s question, but I assure him that neither of those two organisations are part of the CRC delivery, as he may well be aware. The CRC contracts are being drawn up and will be in operation by 2015. This matter was fully debated before both Houses of Parliament and we believe that any difficulties should be capable of being found in the stress-testing that is currently being undergone.
Lord Ramsbotham (CB)
My Lords, to follow on from my noble friend’s question about NHS England, can the Minister comment on a recent freedom of information question and answer that showed that only 5% of clinical commissioning groups were actually funding specific healthcare for probation and that 25% of the CCGs questioned did not even realise that it was their responsibility to fund medical health provision in probation?
Lord Faulks
I cannot comment on the specific freedom of information request to which the noble Lord refers but I can perhaps reassure him that the Government are particularly aware of the danger of individuals escaping the net who are suffering from mental illness—offenders who come to the attention of courts and police services. Much work is done by the liaison and diversion services, which have invested a considerable sum of money to make sure that those who are often reluctant to acknowledge that they have mental illness, when they come into contact with a court or police station, are identified by appropriate health professionals. The information about them is then passed on to the appropriate figure so that, when they go to prison or are in the hands of a CRC, that information is available. A considerable investment has been made and for altogether 22% of the population it is hoped to roll out the arrangement throughout the country so that there is much better liaison in future.
Yarl’s Wood Immigration Removal Centre
(10 years, 4 months ago)
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Lord Ramsbotham
To ask Her Majesty’s Government why the United Nations special rapporteur on violence against women was refused access to Yarl’s Wood immigration detention centre while on an official visit to the United Kingdom.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, a visit to Yarl’s Wood immigration removal centre was never agreed as part of this fact-finding mission. However, as part of her visit, the special rapporteur, Ms Rashida Manjoo, met the Home Secretary, the Minister for Crime Prevention and the Chief Inspector of Prisons.
Lord Ramsbotham (CB)
My Lords, I am very grateful to the Minister for that reply. As he will appreciate, it can do our national reputation no good at all if it should ever be felt that the United Kingdom is refusing access to a UN special rapporteur who is here in connection with the signature that we have given to the optional protocol on the UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment. Therefore, I hope very much that, in future, that position will be clarified, as the publicity can have done no good at all. I would be very grateful if the Minister could inform the House of what action will be taken to ensure that future visits can be properly handled.
Lord Taylor of Holbeach
I disagree with the premise of the noble Lord’s question, because Ministers met the special rapporteur and were keen to support a programme for her visit that was more directly relevant to addressing violence against women and girls. That is why we offered the visit to a refuge, facilitated by Women’s Aid, and supported a number of other visits for the special rapporteur, including a visit to a number of government departments, devolved Administrations and front-line agencies relevant to the reasons for her visit.
Baroness Lister of Burtersett (Lab)
My Lords, the recent report by Women for Refugee Women found that many of the women in Yarl’s Wood had experienced sexual violence, which surely makes it a relevant visit for the special rapporteur. What is the Government’s response to that report, which showed the traumatic impact on those women of detention?
Lord Taylor of Holbeach
No one can be unaware of the fact that detention is a necessary evil. It is part of the requirements that we have in enforcing an immigration policy. However, the inspection by the Chief Inspector of Prisons found very little evidence of victimisation of women at the centre. It was felt that there was insufficient recognition of particular vulnerabilities of detained women; those points were taken and are being addressed by Yarl’s Wood.
Lord Avebury (LD)
My Lords, apart from the chief inspector’s findings on the lack of recognition of the vulnerabilities of women detained in Yarl’s Wood, there was also a finding that the quality of rule 35 reports was poor. Was not the refusal to admit Ms Manjoo not only a kick in the teeth for the UN, violating the terms of its mandate, but an unfortunate indication that those concerns had not been addressed, as the special rapporteur seems to have suspected?
Lord Taylor of Holbeach
No, my Lords, that is not the case. Yarl’s Wood was inspected by Her Majesty’s Chief Inspector of Prisons last year and, overall, the report was positive. I mentioned those aspects of which I felt it was important for the House to be aware. Detention is an essential part of effective immigration control and we take the welfare of those in our care very seriously. Her Majesty’s Chief Inspector of Prisons has responsibility for ensuring that those standards are maintained.
Baroness Scotland of Asthal (Lab)
My Lords, does the noble Lord not appreciate that Yarl’s Wood has caused a lot of concern not only in this country but internationally, and that a failure to allow the UN special rapporteur to enter causes even more alarm, although I accept absolutely what he says about detention being necessary in some cases?
Lord Taylor of Holbeach
I have explained to noble Lords and, I hope, to the noble Lord, Lord Ramsbotham, in responding to his Question, the reasons why we felt that it was more appropriate to give the rapporteur the opportunity to see the effective measures that the Government are taking to address violence against women and girls.
Baroness Symons of Vernham Dean (Lab)
My Lords, the noble Lord has been very good in explaining the meetings that the special rapporteur had and sought to say that he thought those meetings were sufficient. However, he has absolutely failed to explain to the House why the special rapporteur was denied access to Yarl’s Wood. It is a very simple question, not about the meetings that she had but why, specifically, she could not go to Yarl’s Wood.
Lord Taylor of Holbeach
Access to Yarl’s Wood is in the gift of the Home Office, which determines whether it is suitable for people to visit it. Her Majesty’s Chief Inspector of Prisons has a statutory role to address that issue. It was not a question of denying this person the opportunity to do her job. She was given every chance to take up our offers to visit refuges, but she did not choose to do so.
Lord Roberts of Llandudno (LD)
My Lords, what statement did the Chief Inspector of Prisons make following the refusal to allow the rapporteur to enter Yarl’s Wood?
Lord Taylor of Holbeach
I am afraid that I cannot comment on that as I do not have the details of that question.
House of Lords Reform (No. 2) Bill
Lord Steel of Aikwood
Lord Steel of Aikwood (LD)
My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
Immigration Bill
(10 years, 4 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Taylor of Holbeach
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, I said on Report that I would table further amendments regarding the power to make regulations about the removal of family members.
In its 24th report the Delegated Powers and Regulatory Reform Committee remained concerned that the scope of the delegated power was still too broad and, as it currently stands, should be subject to the affirmative procedure. In seeking to address this concern, the amendment removes reference to making further provision for the removal of family members under any provision of the immigration Acts and limits the scope of the regulations so that they can not extend beyond the two provisions described, namely the time period for removal and the service of the notice to family members.
I hope that this reassures noble Lords that this limits the regulations strictly to procedural matters that should be subject to the negative resolution procedure. I therefore beg to move.
The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
My Lords, Amendment 2 is to Clause 15(5), which provides that the tribunal may not hear a new matter unless the Secretary of State consents to its doing so. There was a debate on that provision on Report, and I am grateful to those noble Lords and noble and learned Lords who have had an opportunity since then to follow that up and to have a better understanding of the concerns which prompted the tabling of that amendment. Since the Government tabled this amendment a number of points have been raised by my noble friend Lady Hamwee and the noble and learned Lord, Lord Hope of Craighead. I hope that I can address those points in speaking to this amendment.
Our discussions were helpful and not least identified that the definition of a “new matter” is wider than necessary because it includes reasons for wishing to remain in the United Kingdom which, if refused, would not give rise to a right of appeal. This potentially extends the scope of the power to give consent beyond appealable matters. As the significance of “new matter” is restricted to circumstances in which an appeal would arise as a consequence of the decision, the definition should be similarly restricted—hence this amendment.
My noble friend Lady Hamwee has asked why the amendment does not address the substance of the arguments made on Report. The Government remain committed to the important principle that the Secretary of State should be the primary decision-maker. An amendment that provided for the tribunal to have discretion as to whether it should hear a new matter would undermine that principle. It could also create a substantial risk of satellite litigation about the circumstances in which that discretion should be exercised.
We have heard examples, particularly on Report, where it was suggested that it would not be right for the tribunal to be prohibited from hearing a new matter. It is our intention that the Home Office will publish detailed guidance on when consent should be given. I can assure your Lordships that the examples given—such as when the illness of the appellant makes determination of the appeal urgent, or where inadequate legal representation has meant that the new matter could not have been raised earlier—are the types of circumstance in which that guidance will direct presenting officers to give substantial weight when considering the issue of consent.
In certain circumstances, however, the Secretary of State’s consideration of a new matter is fundamental to that matter being correctly decided, including by the tribunal. For example, where the new matter is an asylum claim it is only the Secretary of State who, having taken fingerprints from the individual, can verify that the claim has not been made previously in the United Kingdom or another EU member state. It is in those cases that consent for the tribunal to hear the new matter may be refused. However, even in such cases, whether to grant consent will also be informed by the individual’s circumstances.
The noble and learned Lord, Lord Hope of Craighead, asked whether guidance would be provided for the situation where the presenting officer is unable to take instructions on whether to grant consent. I assure the noble and learned Lord that the guidance will provide for this situation. I can also elaborate on the details, which I hope will provide further reassurance.
Lord Hope of Craighead (CB)
My Lords, I express my gratitude to the Minister both for his amendment and for the clarifications that he has given on the guidance that will be given to tribunals. I am sure that the amendment helps to remove an element of doubt about the scope of the words “new matter”. It became clear as we discussed the matter following the debate on Report that some change was needed, and I am extremely grateful to the Minister for his willingness to listen to us and to deal with that point.
As for the guidance, I gave rather short notice of the point that the Minister has dealt with but he has dealt with it to my satisfaction. Again, I am very grateful to him for his willingness to meet us to discuss these rather tricky matters.
Baroness Berridge (Con)
My Lords, first, my apologies for missing the first two sentences of the debate on this amendment. I left 1 Millbank over the road as soon as debate on the Bill started but I am not as nimble as I thought and I make my apologies to the House.
I, too, am grateful to the Minister for his reflection on this matter since Report and for the amendment that the Government have laid. I join the noble and learned Lord, Lord Hope, in thanking him for the meeting that was arranged at short notice prior to the Recess. I, too, am grateful that the amendment narrows the definition of what the tribunal should consider to be a new matter and that what is or is not a new matter will be for the tribunal to determine according to the legislation. The narrowing of the definition is most welcome as, once the matter is determined to be a new matter, the tribunal cannot hear it without the consent of the Home Secretary.
I am also grateful for the specific guidance outlining the circumstances in which the Home Secretary will consent to such a new matter being in front of a tribunal. I am grateful for my noble friend’s explanation of what will happen if very junior counsel are in front of a tribunal when a new matter is raised and unfortunately they cannot get instructions or the file containing the necessary information.
Everything in the Government’s amendment is welcome as far as it goes but I do not think that it will come as any surprise to the Minister that I remain disappointed that the Government have not laid an amendment giving the tribunal an exceptional discretion to hear a new matter if the demands of justice require it. Justice is of course the overriding purpose of our courts and tribunals, and ordinarily the Secretary of State should be the primary decision-maker on a new matter but not if justice demands otherwise.
On Report, the constitution arguments were ably outlined by the noble and learned Lords, Lord Hope, Lord Woolf and Lord Brown. This is the first time that a party to any proceedings will have this kind of control over jurisdiction and I shall be interested to know—as I am sure all noble Lords will be—how it works out in practice. I would be grateful if the Minister could indicate whether, if this new power results in judicial review cases, there will be a way of keeping a record of the judicial review decisions in relation to the guidance and to consent being refused. Will those figures be available some time after the Bill is passed for the purposes of post-legislative scrutiny?
Lord Avebury (LD)
My Lords, the Immigration Law Practitioners’ Association has pointed out that this is a meaningless amendment because a tribunal would not be able to consider a matter that was not within its jurisdiction in any case. It is disappointing that the Government have not noticeably reflected, as my noble and learned friend assured me they would, on the alternative suggestions made by my noble friend Lady Berridge, on this clause, and supported by several noble and learned Lords, to give effect to the recommendations of the Joint Committee on Human Rights in its eighth report. Your Lordships were almost unanimous in condemning a proposal to allow one of the parties to an appeal to instruct the tribunal on what matters it can or cannot consider.
My noble and learned friend the Minister did not challenge the assertion that the tribunal had not allowed abuse of its own process in the past or had treated the Secretary of State unfairly, or that the existing process was inefficient. There was no suggestion on Report that the Government had raised any concern in the past over this alleged problem, but if we concede that there might have been cases in which a new matter—which is only to be defined in guidance, as we heard—was raised, that still does not mean that your Lordships should agree to grant this sweeping power to allow the respondent to veto the consideration of the new matter, even when the reason for its last minute appearance was the difficulty in getting hold of the presenting officer, as in one of the cogent examples given by my noble friend in introducing her amendments. In such cases the presenting officer who may have been unable to get instructions from senior counsel overnight can ask for an adjournment. My noble and learned friend did not say that he knew of any instance when such a request had been refused.
My noble friend said that she thought satellite judicial review went against what the Government were seeking to achieve, but that would still be the only way of challenging a decision by the Secretary of State to prohibit the use of a proposed new matter, after the amendment that is now before us. I asked my noble and learned friend whether the Government had made any estimate of the number of judicial review cases likely to be heard as a result of this provision and what would be the estimated reduction in the savings expected from it. I received no answer. I certainly agree with the suggestion made by my noble friend just now that a record should be kept of such cases.
The main reason why the Government insist that the Secretary of State should have this power seems to be, as we have heard, that she is the primary decision-maker of right on these applications rather than the late arrival of new matters, some of which is due to the inaccessibility of the Home Office. Nobody argues with that in principle, although my noble friend Lady Berridge pointed out that the Secretary of State had, in effect, voluntarily abdicated that role by allowing officials to make such a large number of wrongful decisions at first instance.
Even if that problem is solved, there remains a serious objection to what the Government propose. The fundamental principle of the rule of law is the right to a fair trial. In his wonderful book, The Rule of Law, the late noble and learned Lord Bingham emphasised that the right applies to,
“adjudicative procedures of a hybrid kind … proceedings in which one or more parties may suffer serious consequences if an adverse decision is made”.
He goes on to mention a recent case in the Supreme Court in Canada, where the Chief Justice, delivering the unanimous judgment of the court, said that,
“a fair hearing requires that the affected person be informed of the case against him … and be permitted to respond to that case. This right is well established in immigration law”.
Thus, if the applicant is denied the right to present what may be a crucial piece of evidence, he is denied the right to a fair trial. That right trumps the Secretary of State’s right to be the primary decider. This amendment, leaving Clause 15 effectively untouched, does not cover the mischief dealt with so effectively by my noble friend Lady Berridge.
Baroness Hamwee (LD)
My Lords, my noble and learned friend responded extremely speedily to my bank holiday inquiry, and I am grateful to him for that. The points about whether consent should be required for the tribunal to consider a new matter have been covered quite thoroughly, but I would like to mention the question of guidance. I was curious that this is guidance, because it must be guidance by the Home Office, and therefore the Home Secretary, to the Home Secretary. I would have understood had it been called a code of practice. The title does not really matter: it is the content. I wonder whether there is any distinction between the two.
Having seen the letter to the noble Baroness of 29 April, it seems to me that the way the guidance is described comes quite close to the exercise of discretion. I am aware that I have not put a question mark at the end of any of that, but I felt that I wanted to make those points.
Lord Woolf (CB)
My Lords, may I be forgiven if, despite my discourtesy in not being here earlier, I say a few words on this matter? It is very important, not only for the principles that noble Lords have clearly expressed already, but purely from a practical point. I urge the Government to think again about this, based on the experience of dealing with immigration cases for the majority of my career in the legal profession. The repeated use of the justice system to obtain delay was always a problem. I understand the motivation of the Government all too well, but that does not justify the departure from principle about which we have heard.
However, this is the point that I am most anxious to make. In reality, if the first tribunal before whom this matter is happening does not have the power to say what the procedure will be, that will create a lacuna which will be exploited more and more frequently by those who realise that they just need to make a new point and the Government’s representative will have to ask for adjournments so that he or she can take instructions on what action to take. Not only is this wrong in principle, it will create an undesirable position. Although it is not intended, it will undermine the status of those who adjudicate on these matters. More and more immigration matters are now being dealt with outside the High Court, so we should not be undermining that status but supporting it.
I urge the Government to take this away again. I do not think that they have met either the problems of principle that were raised on the last occasion that this was discussed or, more importantly perhaps, the practicalities of sitting on a tribunal and having to deal with applications. As an adjudicator, if you are in doubt about the right course to take, of course you can always adjourn. Most legal systems are plagued by unnecessary adjournments. In my view, what the Government are creating here is unnecessary scope for adjournments. Even if there is just the ability to make applications—you can never stop them—they will result in adjournments, which I would have thought is the last thing the Home Office wants.
Lord Wallace of Tankerness
My Lords, I thank all noble Lords who have contributed to this debate. I do not think I tried to oversell what the amendment will do because it is in many respects technical and addresses a problem that was identified as the result of an amendment moved on Report by my noble friend Lady Berridge. Even those noble Lords who have raised questions acknowledge the principle that the Home Secretary is the primary decision-maker; it is something that Parliament has agreed. What this subsection seeks to do is to accept that there will be circumstances where the consent of the Secretary of State is given for the tribunal to hear a new matter, albeit that the Secretary of State is the primary decision-maker. I am also sure that the guidance will reflect what the noble and learned Lord, Lord Woolf, has said. It will be based on the great experience garnered over the years on how these tribunals work, and the intention is to facilitate rather than to frustrate.
I would say to my noble friend Lord Avebury that, as I indicated in responding to the point raised by the noble and learned Lord, Lord Hope, if a presenting officer, having considered the guidance, takes the view that consent should be granted for the tribunal to hear the new matter, he or she does not need to take instructions in order for that decision to be made. It is only where the presenting officer, having considered the guidance, takes the view that the consent should not be granted that instructions would need to be taken. I discussed the position with officials before coming to your Lordships’ Chamber today, not least because the noble and learned Lord, Lord Hope, had raised it, and I have been assured that it is very unlikely indeed that a presenting officer would be unable to take instructions. I shy away from using the word “impossible” because you can bet your life that, if I say that, something will happen in the first week. However, I am told that it is highly unlikely because an established process is in place by which the senior caseworkers in each presenting officer’s unit work on a rota system to provide these kinds of instructions to presenting officers. It is anticipated that there would be a very brief adjournment to allow the instruction to be taken.
My noble friend Lady Berridge asked about judicial review, a point that was echoed by my noble friend Lord Avebury. The Home Office keeps a record of the judicial reviews that are brought, and certainly it will continue to monitor closely the effectiveness of this new power. It is important to note that judicial review can be brought for a number of reasons, not just the ones that have been identified in this debate. The question I was asked was whether a record is kept, and the answer is yes. A record is kept which will help to inform a review of the effectiveness of this provision.
My noble friend Lady Hamwee is right inasmuch as this guidance is technically for the Home Secretary, but it is intended for the presenting officers who act on behalf of the Home Secretary. However, as I say, it will be published and so people will know what it contains. I also indicated to my noble friend when moving the amendment that, if the guidance is not followed and there is no sound basis for departing from it, I rather think that a judicial review may follow hot on the heels of any such decision. How the judicial review is determined is of course a matter for the courts, but the fact that it will be published should, I hope, provide some degree of certainty and consistency in how the Home Secretary exercises the consent provision set out in this subsection. I therefore commend the amendment to your Lordships.
Lord Avebury
“Persons unable to acquire citizenship: natural father not married to mother
After section 4D of the British Nationality Act 1981 insert—“4E The general conditions
For the purposes of sections 4F to 4I, a person (“P”) meets the general conditions if—(a) P was born before 1 July 2006;(b) at the time of P’s birth, P’s mother—(i) was not married, or(ii) was married to a person other than P’s natural father;(c) no person is treated as the father of P under section 28 of the Human Fertilisation and Embryology Act 1990; and(d) P has never been a British citizen.4F Person unable to be registered under other provisions of this Act
(1) A person (“P”) is entitled to be registered as a British citizen on an application made under this section if—
(a) P meets the general conditions; and(b) P would be entitled to be registered as a British citizen under—had P’s mother been married to P’s natural father at the time of P’s birth.(i) section 1(3), (ii) section 3(2),(iii) section 3(5),(iv) paragraph 4 of Schedule 2, or(v) paragraph 5 of Schedule 2,had P’s mother been married to P’s natural father at the time of P’s birth.(2) In the following provisions of this section “relevant registration provision” means the provision under which P would be entitled to be registered as a British citizen (as mentioned in subsection (1)(b)).
(3) If the relevant registration provision is section 3(2), a person who is registered as a British citizen under this section is a British citizen by descent.
(4) If the relevant registration provision is section 3(5), the Secretary of State may, in the special circumstances of the particular case, waive the need for any or all of the parental consents to be given.
(5) For that purpose, the “parental consents” are—
(a) the consent of P’s natural father, and(b) the consent of P’s mother,insofar as they would be required by section 3(5)(c) (as read with section 3(6)(b)), had P’s mother been married to P’s natural father at the time of P’s birth.4G Person unable to become citizen automatically after commencement
(1) A person (“P”) is entitled to be registered as a British citizen on an application made under this section if—
(a) P meets the general conditions; and(b) at any time in the period after commencement, P would have automatically become a British citizen at birth by the operation of any provision of this Act or the British Nationality (Falkland Islands) Act 1983, had P’s mother been married to P’s natural father at the time of P’s birth.(2) A person who is registered as a British citizen under this section is a British citizen by descent if the British citizenship which the person would have acquired at birth (as mentioned in subsection (1)(b)) would (by virtue of section 14) have been British citizenship by descent.
(3) If P is under the age of 18, no application may be made unless the consent of P’s natural father and mother to the registration has been signified in the prescribed manner.
(4) But if P’s natural father or mother has died on or before the date of the application, the reference in subsection (3) to P’s natural father and mother is to be read as a reference to either of them.
(5) The Secretary of State may, in the special circumstances of a particular case, waive the need for any or all of the consents required by subsection (3) (as read with subsection (4)) to be given.
(6) The reference in this section to the period after commencement does not include the time of commencement (and, accordingly, this section does not apply to any case in which a person was unable to become a British citizen at commencement).
4H Citizen of UK and colonies unable to become citizen at commencement
(1) A person (“P”) is entitled to be registered as a British citizen on an application made under this section if—
(a) P meets the general conditions;(b) P was a citizen of the United Kingdom and Colonies immediately before commencement; and(c) P would have automatically become a British citizen at commencement, by the operation of any provision of this Act, had P’s mother been married to P’s natural father at the time of P’s birth.(2) A person who is registered as a British citizen under this section is a British citizen by descent if the British citizenship which the person would have acquired at commencement (as mentioned in subsection (1)(c)) would (by virtue of section 14) have been British citizenship by descent.
4I Other person unable to become citizen at commencement
(1) A person (“P”) is entitled to be registered as a British citizen on an application made under this section if—
(a) P meets the general conditions;(b) P is either—(i) an eligible former British national, or(ii) an eligible non-British national; and(c) had P’s mother been married to P’s natural father at the time of P’s birth, P—(i) would have been a citizen of the United Kingdom and Colonies immediately before commencement, and(ii) would have automatically become a British citizen at commencement by the operation of any provision of this Act.(2) P is an “eligible former British national” if P was not a citizen of the United Kingdom and Colonies immediately before commencement and either—
(a) P ceased to be a British subject or a citizen of the United Kingdom and Colonies by virtue of the commencement of any independence legislation, but would not have done so had P’s mother been married to P’s natural father at the time of P’s birth, or(b) P was a British subject who did not automatically become a citizen of the United Kingdom and Colonies at commencement of the British Nationality Act 1948 by the operation of any provision of it, but would have done so had P’s mother been married to P’s natural father at the time of P’s birth.(3) P is an “eligible non-British national” if—
(a) P was never a British subject or citizen of the United Kingdom and Colonies; and(b) had P’s mother been married to P’s natural father at the time of P’s birth, P would have automatically become a British subject or citizen of the United Kingdom and Colonies—(i) at birth, or(ii) by virtue of paragraph 3 of Schedule 3 to the British Nationality Act 1948 (child of male British subject to become citizen of the United Kingdom and Colonies if the father becomes such a citizen).(4) A person who is registered as a British citizen under this section is a British citizen by descent if the British citizenship which the person would have acquired at commencement (as mentioned in subsection (1)(c)(ii)) would (by virtue of section 14) have been British citizenship by descent.
(5) In determining for the purposes of subsection 1(c)(i) whether P would have been a citizen of the United Kingdom and Colonies immediately before commencement, it must be assumed that P would not have—
(a) renounced or been deprived of any notional British nationality, or(b) lost any notional British nationality by virtue of P acquiring the nationality of a country or territory outside the United Kingdom.(6) A “notional British nationality” is—
(a) in a case where P is an eligible former British national, any status as a British subject or a citizen of the United Kingdom and Colonies which P would have held at any time after P’s nationality loss (had that loss not occurred and had P’s mother been married to P’s natural father at the time of P’s birth);(b) in a case where P is an eligible non-British national— (i) P’s status as a British subject or citizen of the United Kingdom and Colonies mentioned in subsection (3)(b), and (ii) any other status as a British subject or citizen of the United Kingdom and Colonies which P would have held at any time afterwards (had P’s mother been married to P’s natural father at the time of P’s birth).(7) In this section—
“British subject” has any meaning which it had for the purposes of the British Nationality and Status of Aliens Act 1914;
“independence legislation” means an Act of Parliament or any subordinate legislation (within the meaning of the Interpretation Act 1978) forming part of the law in the United Kingdom (whenever passed or made, and whether or not still in force)—
(a) providing for a country or territory to become independent from the United Kingdom, or(b) dealing with nationality, or any other ancillary matters, in connection with a country or territory becoming independent from the United Kingdom;“P’s nationality loss” means P’s—
(a) ceasing to be a British subject or citizen of the United Kingdom and Colonies (as mentioned in subsection (2)(a)), or(b) not becoming a citizen of the United Kingdom and Colonies (as mentioned in subsection (2)(b)).4J Sections 4E to 4I: supplementary provision
(1) In sections 4E to 4I and this section, a person’s “natural father” is a person who satisfies the requirements as to proof of paternity that are prescribed in regulations under section 50(9B).
(2) The power under section 50(9B) to make different provision for different circumstances includes power to make provision for the purposes of any provision of sections 4E to 4I which is different from other provision made under section 50(9B).
(3) The following provisions apply for the purposes of sections 4E to 4I.
(4) A reference to a person automatically becoming a British citizen, or a citizen of the United Kingdom and Colonies, is a reference to the person becoming such a citizen without the need for—
(a) the person to be registered as such a citizen by the Secretary of State or any other minister of the Crown;(b) the birth of the person to be registered by a diplomatic or consular representative of the United Kingdom; or(c) the person to be naturalised as such a citizen.(5) If the mother of a person could not actually have been married to the person’s natural father at the time of the person’s birth (for whatever reason), that fact does not prevent an assumption being made that the couple were married at the time of the birth.””
Lord Avebury
My Lords, the rationale behind this amendment, to put it as simply as possible, is to enable a child born before 1 July 2006 to a mother who is not married to the natural father to become a British citizen automatically, or to have an entitlement to be registered as a British citizen in circumstances where the child would have had either of those rights if the parents had been married.
I am grateful to the Minister for accepting in principle the amendment that I moved for this purpose in Committee and for deploying the formidable resources of the Bill team to turning the inadequate wording of my original attempt into the text now before your Lordships in Amendments 3 and 5, as well as for the useful exchanges that I had with the Minister and the Bill team during that process.
The reason for the cut-off date is that, after that, a child born to parents who were not married is already covered by the definition of “father” in Section 50(9A) of the British Nationality Act 1981—the BNA. These amendments will now cover the child born before 1 July 2006 whose mother never married the father or who was married to someone else at the time of the child’s birth. This reflects the way the Home Secretary has previously exercised discretion under the Act and will continue to do so for children born post-2006 where the mother’s husband is not the child’s natural father.
Proposed new Section 4F deals with persons who would currently have had an entitlement to register as British citizens under the specified sections of the BNA if their parents had been married. Currently, these persons can be registered at the discretion of the Home Secretary under Section 3(1) of the BNA, but Section 4F gives them an entitlement. If a person would be entitled to registration under Section 3(2) only, had their parents been married, registration under Section 4F gives them citizenship “by descent”—the status they would have acquired if their parents had been married. Section 14 of the BNA needs to be amended to secure this outcome, and this is accomplished by Amendment 5.
If a person would be entitled to registration under Section 3(5), had their parents been married, there is an additional discretion to waive parental consent. For the other specified subsections of the BNA in Section 4F, consent is required from both the mother and the “natural father”—the person who satisfies the proof of paternity regulations made under Section 50(9B) of the BNA.
Proposed new Section 4G covers those born after 1 January 1983 and before 1 July 2006 who would have become British citizens automatically if their parents had been married. The main beneficiaries of this section will be persons born in the UK to a British or settled parent who would have become British citizens under Section 1(1) or 1(1A) if their parents had been married and persons born abroad to a British parent who would have become British citizens under Section 2(1) if their parents had been married.
Proposed new Section 4H covers persons who were citizens of the UK and colonies immediately before 2 January 1983 but did not become British citizens because their parents were not married. This will benefit those who acquired citizenship through birth in a British colony and still had that status on 31 December 1982—for example, a person with a UK-born natural father who was born in a current overseas territory or was born in a former colony and did not acquire citizenship of that country when it became independent. Here again it is necessary to place these persons in the category “by descent” or “otherwise than by descent” to correspond with the status they would have had if their parents had been married. The distinction between these two categories occupies 26 pages of Fransman’s magisterial tome on British nationality law, so I hope your Lordships will be content with that reference.
Proposed new Section 4I benefits people who would have acquired British citizenship in three situations: first, if they were British subjects or citizens of the UK and colonies by birth in a former colony and would not have lost that status when that country became independent if their parents had been married; secondly, if they were British subjects before 1 January 1949 and would have become a CUKC on that date if their parents had been married; and thirdly, if they did not acquire the status of British subject or citizen of the UK and colonies but would have done so if their parents had been married. This will also benefit those who would have acquired citizenship under Section 5(1)(a), (c) or (d) of the British Nationality Act 1948. I am sorry to say that that will not apply to those whose parents had the right to register their births at a British consulate under Section 5(1)(d) while they were minors but omitted to do so. That reflects existing law for persons whose parents were married, and the rights of both groups will have to wait for a future opportunity.
Proposed new Section 4J defines a person’s “natural father”. It is interesting to recall that when the BNA was originally going through another place in 1981, the Minister—now the noble Lord, Lord Luce—said that citizenship could not be extended to illegitimate children because,
“the problem of identifying the father in such cases remains insurmountable”.—[Official Report, Commons, Standing Committee F, 17/3/81; col. 623.]
Watson and Crick had received the Nobel Prize for determining the structure of DNA 19 years earlier but the practical applications of their discovery were still a long way in the future. The power in proposed new Section 4J(2) is a broad one but this reflects the power to make different provisions for different circumstances that already exists in Section 50(9B) of the BNA. The provision is intended to benefit potential applicants and ensures that regulations for establishing the proof of paternity can be adapted if circumstances change; for example, following scientific advances.
It has not been possible to deal with the British Overseas Territories in these amendments because of course they would have to be consulted about any proposed amendments to the Act dealing with the forms of citizenship connected with those territories, as we have acknowledged. I would be grateful if my noble friend the Minister could assure me that the Government will launch such a consultation, preferably in the next Session of Parliament, so that, having done so, next time we have an immigration Bill we can deal with the limited number of stateless persons left with only BOTC status. At the same time this will enable us to annul some of the reservations we have put to our accession to the convention on the elimination of discrimination against women.
At Third Reading of the then Nationality, Immigration and Asylum Bill, the then Minister, the noble Lord, Lord Filkin, said:
“One can only go so far back in seeking to right the wrongs of history and of previous generations”.—[Official Report, 31/10/02; col. 298.]
My noble friend the Minister echoed this on the last day of Report. In the thickets and undergrowth of immigration law, there are still plenty of wrongs of history waiting to be rectified, but at least if your Lordships agree to these amendments they will remove most of the discrimination against people whose parents were not married that has infected our immigration law in the past. I beg to move.
Baroness Smith of Basildon
My Lords, I am grateful to the noble Lord, Lord Avebury, for his explanation of his amendment. Immigration law is far more complicated than most people realise and he did a great service to the House in explaining his amendment, which of course we welcome and support.
Turning to Amendment 6 concerning the Long Title of the Bill, which the Government have amended, I share with your Lordships my confusion and hope that the Minister can give some clarification. I am grateful to the Minister for meeting me last week to discuss this and other issues. He gave me a letter explaining the amendments before us today, which was very helpful. But he also said about what was then Amendment 4 and is now Amendment 6 that,
“an amendment to the Long Title is necessary to ensure that it covers nationality matters”.
He then referred to the amendment moved by the noble Lord, Lord Avebury,
“with a view to appropriate amendments on the issue at Third Reading to create a new registration provision for persons born before 1 July 2006”.
However, he did not say that that was not the only amendment being made to the Long Title, because the amendment as printed—although not referred to in his letter—says that it also makes,
“provision about the removal of citizenship from persons whose conduct is seriously prejudicial to the United Kingdom’s vital interests”.
Yet when we debated that issue here in your Lordships’ House at both Committee and Report stages—they were very good and lengthy debates, unlike those which took place in the other place, which were rather cursory—it was decided, despite the length of the debate and the complexity of the issue, that an amendment to the Bill would be made removing the Government’s clause and inserting a new clause saying in effect that this was a complex matter which should go to a committee of both Houses. That amendment, in the name of the noble Lord, Lord Pannick, was passed by a majority of 62. Although that issue is not in the Bill, it is now in the Long Title.
Lord Taylor of Holbeach
My Lords, perhaps I may begin by taking this opportunity to thank my noble friend for tabling these amendments, which he will know we welcome. The House will recognise that nationality law is a complex and difficult area. Anomalies do arise, and have indeed done so, particularly as the way in which people view the family has changed since the British Nationality Act was introduced in 1981.
In 2006, amendments to that Act enabled illegitimate children to inherit nationality from a British father in the same way as a legitimate child. However, those amendments were not made retrospective. To have done so could have caused problems for individuals who were now adults and had made a life for themselves in a different nationality.
The amendments proposed by my noble friend today will enable illegitimate children born to British fathers before 2006 to register as British if they choose to do so. The measures apply to those who would have become British citizens automatically if they had been born legitimately. I realise that my noble friend is concerned also about the situation of those who could have become British if their unmarried parents had been able to register them as British, or in some circumstances if they had been able to register the birth with the consular service. However, the Government’s position—indeed, my noble friend restated it in his introduction—remains that we can go only so far to right the wrongs of history. There can be many reasons why parents may not choose to exercise these options and we cannot, therefore, now make assumptions about whether unmarried parents would have chosen to exercise them if they had had the opportunity to do so.
I know that my noble friend is also concerned about British Overseas Territories citizens. Changes to those provisions require consultation with the territories concerned and this has not been possible in the time available. However, I assure my noble friend that the Government will look for suitable opportunities to discuss this issue with the overseas territories once the provisions are implemented.
Baroness Smith of Basildon
I am sure that, as a former Member of the other place, I was not suggesting for one second that it does not have the right to look at our amendments and come to its own decisions. This is about the contrast between the two issues. While I am happy to accept the explanation that deprivation will be considered further by a Joint Committee of both Houses once the Bill leaves your Lordships’ House, that contrasts with the issues of the trafficking of children and guardians for trafficked children. That provision was passed by your Lordships’ House and does not now appear in the Long Title, even though it has been amended to deal with something that is not in the Bill in the same way. It is just that contradiction between the two and I would hope that the Minister can reassure me that, since this House has committed to the guardians for trafficked children, the Government will also remain so and are not taking for granted the support from the other place on the issue of deprivation of citizenship and making people stateless.
Lord Taylor of Holbeach
It would not be in my nature to take anything for granted where Parliament is involved. However, I think I made the position of the Government quite clear on guardians for trafficking when the amendment was considered, and the noble Baroness herself has been well aware of that. I hope she will accept what I am saying. It will be a matter of our listening to the House of Commons, as we must now call the other place, and giving it an opportunity to present to us what it considers of our amendments. That is a reasonable position to take. Meanwhile, this change to the Long Title facilitates the adoption of my noble friend’s amendments, which I hope the House will support because they will be welcomed by many and assist individuals hitherto precluded from British citizenship by historical anomaly. They will therefore be able to register as British citizens if they wish to do so. I am extremely happy to be able to offer my support to my noble friend in this matter.
Lord Avebury
I am extraordinarily grateful to the Minister for his kind remarks and for his undertaking to take an opportunity, I hope in the near future, to raise the question of overseas territories and how their position can be brought into line with what we are now about to agree, as far as our own citizenship is concerned.
We have whittled away at the wrongs of history in 2002 and 2006, and now again in 2014. It is not beyond the bounds of possibility that on a future occasion we will be able to rectify some of the remaining difficulties that affect our nationality law, particularly the wrong that I think we did to people whose parents did not register them when they were minors. It would have been right, not just in the case of the illegitimate but also for those who were born to married parents, to allow those individuals when they became adults to exercise the rights that their parents had not exercised on their behalf.
However, that is only a very minor niggle compared with my pleasure at being able to move an amendment that grants citizenship to people who are illegitimate in circumstances where, if their parents have been married, they would have had it long ago.
Lord Taylor of Holbeach
“( ) an order under section 43, or under a section amended by such an order;”
Lord Taylor of Holbeach
My Lords, Amendment 4 is a technical amendment concerned with bank account measures. It is intended to ensure that, should any of Clauses 40, 41 or 42 be amended by the Treasury using the power provided in Clause 43 in such a way that further matters may be specified by order under any of those provisions, then any orders so made will be subject to the affirmative resolution procedure.
Clause 43 currently gives the Treasury the power to amend any of Clauses 40, 41 and 42 to allow it to ensure that the restriction on opening accounts remains effectively targeted. This power allows the Treasury to amend those provisions in such a way that a particular matter could be specified in a further order, should that be considered appropriate. To give an example, Clause 42 could be amended so that the reference to “bank” means a reference to an institution of a type to be specified in a further order made by the Treasury.
In that example, though, any subsequent order that specified the types of institution would then properly be made under the amended Clause 42, rather than by Clause 43. Any order made under Clause 43 that amends any of Clauses 40, 41 or 42 is already subject to the affirmative resolution procedure. However, orders subsequently made under Clauses 40, 41 or 42 are not referred to in Clause 74(2) of the Bill, which means that without this amendment they would be subject to the negative rather than the affirmative procedure. Given the importance of the matters involved, the Government’s intention is that any such order should be subject to the affirmative resolution procedure, and the amendment confirms that the affirmative procedure should therefore apply. I beg to move.
Lord Avebury
“Part 8AProvision relating to persons unable to acquire nationality because natural father not married to mother British Nationality Act 19811 (1) The British Nationality Act 1981 is amended as follows.
(2) In section 14 (meaning of “British citizen “by descent””), in subsection (1), after paragraph (d) insert—
“(da) the person is a British citizen by descent by virtue of section 4F(3), 4G(2), 4H(2) or 4I(4); or”.(3) In section 41A (registration: requirement to be of good character), in subsection (1), after “5,” insert “4F, 4G, 4H, 4I”.
British Nationality (General) Regulations 20032 (1) In regulation 14 of the British Nationality (General) Regulations 2003—
(a) after “4D(3)” insert “or 4G(3)”;(b) after “section 4D” insert “or 4G”.(2) The provision inserted into regulation 14 by this paragraph may be amended or revoked by the exercise of the powers conferred by section 41 of the British Nationality Act 1981 as if that provision had been inserted by those powers.”
Lord Taylor of Holbeach
Lord Taylor of Holbeach
My Lords, I will be moving this amendment formally at the conclusion of what I believe is now the practice of the House to thank the House and Members of the Bill team at this stage of the proceedings. I should like to do so because this has been an extremely interesting Bill. I have enjoyed myself in taking it through and have enjoyed the House’s engagement with the issues that have been presented. Even this afternoon, although we have been dealing with clearing-up matters, we have had the opportunity to listen to the power of argument of noble and learned Lords, my noble friends and the noble Baroness, Lady Smith of Basildon.
A lot of people have been involved. I thank in particular my noble and learned friend Lord Wallace of Tankerness and my Whips, my noble friends Lord Attlee and Lord Ahmad. They have been great stalwarts during the period in which we have been taking this Bill through. I thank the noble Baroness, Lady Smith of Basildon, and the noble Lord, Lord Rosser, who have been extremely courteous to me throughout the proceedings. We have had the opportunity of a number of meetings that have helped the passage of the Bill through the House and have improved it. I particularly thank my noble friend Lady Hamwee, as a coalition partner, the noble Lord, Lord Avebury, and a number of other noble Lords from the Lib Dem Benches who have provided penetrating observations on the Bill, from which we have all been able to benefit.
A lot of other government departments have been involved in the Bill. I hope noble Lords will realise that it is not just the Home Office but the Government who have brought forward the Bill. I am sure that noble Lords will recognise the way in which my noble friend Lord Howe has worked to establish the health provisions in the Bill in the context of health reforms generally. It was a great advantage to us all to have the opportunity of a joint meeting with him.
Although they are not in their places, I thank the noble Lords, Lord Hannay and Lord Best, for making it possible to find ways of dealing with the issues concerning students and landlords, which were causing a great deal of anxiety when the Bill appeared before the House at Second Reading.
There are too many noble Lords to mention by name. I shall just say to all those who have been involved in this Bill that I hope they will look back on it with pleasure and know that they have been party to a Bill dealing with an important matter in a proper way.
We are all grateful to our friends in the Box and the many elsewhere who have been briefing us. We have been very demanding. The House has been extraordinarily demanding of their time. That is quite proper, and they would not wish it to be any other way. They have responded as we have asked. It reflects great credit on the skills and abilities of those who lie behind Ministers at the Dispatch Box that they have been able to satisfy the House in the way that they have. With those words, I beg to move.
Baroness Smith of Basildon
I concur with the comments made by the Minister and respect those about this being a much improved Bill. That is accurate. We are pleased that the Bill has seen significant improvements, with amendments and concessions from the Government addressing issues raised by noble Lords. I was also pleased that he thanked the noble Earl, Lord Attlee, for his help and advice during the passage of the Bill.
I also thank the Minister. Where he has been unable to address issues from the Dispatch Box, he has been prepared to meet and discuss them, and to clarify those issues in writing. All noble Lords who have taken part in these debates have contributed to the improvement of the Bill, and we hope that some of those improvements will remain as debates continue. There are others that we would have liked to have seen and have not been able to achieve, but we still agree with the noble Lord that this is an improved Bill from that which presented itself to your Lordships’ House.
I add my thanks to colleagues, not only on the Labour Benches but across all Benches, who have put a lot of work into and contributed much to the Bill. I also thank the Bill team for its efforts and for being prepared to meet, and the Labour research team that helps us on our side of the House. It is no surprise that Sophie Davis, who has been advising the Labour Front Bench on this, was the Labour researcher of the year, which we all thought was very well deserved. We look forward to another Bill and another debate in the next Session.
Baroness Hamwee
My Lords, with the leave of the House—I know that it is unusual to speak at this stage—I promised my noble friends that I would say something at the appropriate point. It will have been an open secret to your Lordships that a number of us on the Liberal Democrat Benches have found these issues particularly difficult. The negotiations within our little group were sometimes quite difficult, because these are difficult issues.
I am sure that in the next Session we will tax my noble friend the Minister with matters that are mostly outside the scope of the Bill but which some of my noble friends showed considerable ingenuity in raising. I thank the Minister personally for his generosity, including extraordinary generosity with his time and his patience.
Pfizer and AstraZeneca
Lord Popat (Con)
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Secretary of State for Business, Innovation and Skills to an Urgent Question in another place on the Pfizer bid for AstraZeneca. The Statement is as follows.
“The life sciences industry is of paramount importance to the UK as part of the Government’s industrial strategy, which is securing a long-term plan for key sectors where we are global leaders. We are committed to ensuring that we continue to be at the forefront of life sciences research and development, with high-quality jobs, manufacturing and decision-making in the UK.
There has been a lot of comment and debate in the press recently on this important issue, although I should stress that there has not been a formal bid from Pfizer to take over AstraZeneca. The Government must and are approaching it from the position of even-handed neutrality and recognise that this is ultimately a matter for the shareholders of both companies. But I can assure the House that my colleagues across the Government and I engaged early with both companies to ensure the outcome is positive for the long-term future of this sector in the UK, precisely to avoid previous Governments’ failure in this type of situation.
The Opposition call for changes to the law, but we are operating within the framework that they introduced in 2002. They removed Ministers from making decisions about mergers apart from in a few specified public interest areas. I notice that they chose not to reform the regime in response to the Cadbury/Kraft merger.
One of our options as the Government would be to consider using our public interest test powers. This would be a serious step and not one that should be taken lightly. We are open-minded about it, but we should stress that we are operating within serious European legal constraints. I can, however, assure the House that we are very alive to the national interest considerations here. We see the future of the UK as a knowledge economy, not as a tax haven. Our focus is on what is best for the UK: securing great British science, research and manufacturing jobs and decision-making in the life sciences sector”.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the Minister for repeating the Statement made by his right honourable friend the Secretary of State in the other place.
The bid from Pfizer for AstraZeneca, like others before it in recent years, raises questions. We are a party of business. We believe in free trade and open markets. We also celebrate the extraordinary success of the UK over decades in attracting FDI and R&D. There is no doubt that the largest global companies see the UK both as a centre of excellence and as a gateway to European markets. However, we have to work hard to retain that position.
We have heard a lot from the Government over the past few years about the need to rebalance the economy. The recently published BIS industrial strategy suggests that pharmaceuticals, and life sciences more generally, is one of the sectors that could make the greatest contribution,
“to future growth and employment in the UK”.
Given that, and the need to ensure that we have sustainable clusters of industrial activity across the whole UK, we need to consider the proposed takeover very carefully. This company contributes more than 3% of our exports and provides more than 7,000 jobs directly around the country. Any takeover could have a big impact on employment in Cheshire, Macclesfield, Luton and Bristol, as well as in London. Many more small and medium-sized firms are part of their supply chain, and they, too, are at risk.
The issue is whether this transaction will be good for jobs and growth in the UK, whether it will protect Britain’s knowledge, research and skills base, and whether it represents a long-term investment in the UK. However, it is also a question of whether such key decisions can be left to shareholders and boards. With that in mind, perhaps I may ask the Minister the following questions. First, Pfizer has said it is committed to making a long-term investment in the UK through this purchase, but this is the same company that shut down its R&D facility at Sandwich in 2011. Why do the Government believe that the same fate will not befall AstraZeneca? Have they not learnt the lessons of the Kraft takeover of Cadbury Schweppes? What assurances will they obtain from Pfizer? Secondly, do the Government support the case for an immediate independent assessment of this deal and the impact it may have on our science base, as called for by the Leader of the Opposition? If not, why not?
Lord Popat
My Lords, the good news is that this country is very attractive for inward investment from across the world. Long-term economic plans play a key role in making Britain the best place in the world for global companies to invest and create jobs. Therefore this approach by Pfizer, which will be one of the biggest investments in Britain in our history, is a vote of confidence in our economy. However, as it is a vital part of the scientific research base and supports thousands of high-quality jobs, we will scrutinise any proposal extremely closely to ensure that it is in the UK’s best interest.
On the history of Pfizer in Kent, this is like any other large corporate company. We live in the age of the global economy, when large companies quite often take over our companies, and our companies do the same abroad. They tend to consolidate and try to remove duplication. What happened in Kent was regrettable. We lost 2,500 jobs. I am glad that the site has been regenerated. However, we are keeping a very close eye on the situation. A large number of Cabinet Ministers are involved in this proposal. There has not as yet been a formal approach for a takeover—it is just being discussed—but Cabinet members are involved, as are some civil servants, and the department is keeping a very close eye on this bid by Pfizer.
Lord Fowler (Con)
My Lords, it would be unwise for the Opposition to make a party issue of this. I will put a point to the Minister which I have not heard made before. It is said that the only people who have an interest in the outcome are the shareholders, but surely there is a wider public interest here. Does not the taxpayer, through the National Health Service, spend more than £12 billion a year on branded drugs? Is it, therefore, in the interests of the British taxpayer that there should be fewer but ever more powerful companies in this market?
Lord Popat
My Lords, AstraZeneca is a global company with activities around the world. It has a strong Anglo-Swedish heritage. It is not 100% British-owned, having a large number of shareholders right across the world. It is a business that brings expertise from both the UK and the US. It has a French CEO and a Swedish chairman. Yes, it supplies drugs to the NHS and makes a very good contribution in that respect, but I am sure that if the deal goes through we will watch very closely to make sure that we protect ourselves. It will go through the Competition Commission. The deal will also go through the European Commission to make sure that this takeover is in the best interests of this country, taxpayers and the public.
Lord Patel (CB)
My Lords, the history of acquisitions in the pharma industry is that R&D facilities are shut down. AstraZeneca has developed a very strong collaborative culture with scientists, working particularly in the life sciences, in drug development. What effect will the merger have on our science base and the excellent facilities that AstraZeneca has for drug development?
Lord Popat
I agree with the noble Lord that AstraZeneca does some of the best research in this country. This is why it is in our interests to make sure that if the merger does take place, we will scrutinise everything that is being put forward by Pfizer to our Government. As I said earlier, the NHS makes very good use of this company when it comes to research and development.
Lord Mitchell (Lab)
My Lords, we cannot get away from the fact that Pfizer has form. It closed its successful R&D facility in Kent, as was mentioned; it bought and gutted three American competitor companies; and now it plans to set up a tax-inversion wheeze to buy a British gem. Does the Minister agree that this deal is not in the British interest, that it is not even in the American interest and that it is certainly not in the interests of one of our great science-based companies?
Lord Popat
My Lords, as a Government we have a role to play—but a very limited one—when it comes to takeovers and mergers. All takeovers and mergers depend on boards of directors and shareholders. Like all global pharmaceutical companies, Pfizer has faced challenges from many of its drugs going off-patent and having to replace them with new, innovative medicines. Both Pfizer and AstraZeneca have had to restructure major research projects around the world. That is a reality for some of these research and development companies.
Lord Stoneham of Droxford (LD)
My Lords, it seems that without a formal bid it is important that the Government maintain their neutrality on the merits of any bid but that they still have a major interest in jobs and research. Have the Government researched whether the advantages of the so-called tax-inversion scheme could be obtained without Pfizer establishing their international corporate headquarters in the UK?
Lord Popat
I agree with the noble Lord; the Government are very neutral on this thing and there is no formal bid at this stage. If the merger or acquisition process continues, we will keep a close eye on the subject to make sure that Pfizer cannot come and invest in this country simply as a tax haven.
Lord Haskel (Lab)
My Lords, the World Health Organisation advises that priority number 1 in public health is to develop new antibiotics, because germs are becoming resistant to old ones. The Government’s major responsibility is public health. In what way will this merger help public health in this country?
Lord Popat
My Lords, as I said earlier, as yet there is no formal bid for this merger. The relevant government department is looking into a number of things, including public health and the supply of medicines to the NHS by AstraZeneca. We will have to wait and see what developments take place over the next few weeks on this merger.
Baroness Neville-Rolfe (Con)
My Lords, I was glad to hear the Minister say that the Government would do whatever was best in the UK public interest in this case. I was disappointed that the Cadbury merger was not fully scrutinised or blocked, and concerned about a succession of takeovers by utility companies, which ensured that they are now owned from Germany or France and that the UK interest is not always preserved. What powers do the Government or the EU have to ensure adequate scrutiny of this important merger, and how will they ensure the observance of any promises on jobs or R&D?
Lord Popat
The noble Baroness makes a very important point. The law already backs boards that feel that a takeover would be against the long-term interests of their company. Directors must have regard to the likely long-term consequences of their decisions. With regard to foreign takeovers, the code was amended to make it explicit that directors are not required to consider the offer price as a determining factor when deciding whether to recommend a bid. They can take full account of the bidders’ plan which, since 2011, has also had to be set out in more detail.
Quite often takeovers or mergers are looked at on a case-by-case basis. Cadbury Schweppes was a classic example of a large takeover. Although there is a limitation on what the Government can do under present legislation, the party opposite, when it was in government, had the opportunity to make the necessary changes. It did not happen, and the Cadbury Schweppes takeover went very smoothly. We are very concerned to make sure that the interests of British research and development and British exports are taken into account if any such merger or takeover takes place.
National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) (Amendment) (No. 2) Regulations 2014
(10 years, 4 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Hunt of Kings Heath
That this House regrets that the National Health Service Commissioning Board and Clinical Commissioning Groups (Responsibilities and Standing Rules) (Amendment) (No. 2) Regulations 2014 create arrangements for the management of services for very rare conditions that are much more fragmented than those in place prior to the Health and Social Care Act 2012; and further regrets that the process by which services for rare and very rare conditions are considered by the Prescribed Specialised Services Advisory Groups and NHS England for commissioning nationally are unclear and lacking in openness and transparency. (SI 2014/452)
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to have the opportunity to debate services for very rare conditions. The House has long had an interest in those rare conditions and, indeed, in specialised services more generally. During our debates on the Health and Social Care Bill in 2012, we had extensive discussions about how to protect specialised services. Of course, the funding of those services is at the moment the subject of much debate because of the overspending under the auspices of NHS England. That clearly emphasises some of the problems arising because of the changes brought about by the Health and Social Care Act 2012.
Rare diseases are more of a feature of healthcare in the United Kingdom than many people think. Indeed, I understand that there are reckoned to be about 6,000 such diseases, and it is calculated that 6% of the population have such a rare disease, but each separate disease can affect fewer than 500 people. Those diseases can often involve some of the most vulnerable patients; given the small patient numbers and clinical complexity involved, it can be difficult to plan and manage. I understand that work has shown that four in 10 patients with a rare disease report difficulty in getting a correct diagnosis and then face similar challenges with obtaining suitable treatment.
Prior to the 2012 Act, these services were commissioned by a single national specialised commissioning team, subject to approval by Ministers on advice from the Advisory Group for National Specialised Services. That single commissioning team could draw on advice from the advisory group’s broad multidisciplinary membership to ensure high-quality service developing. The advisory group itself benefited from the bespoke ethical decision-making framework appropriate to considerations of products and services for such small patient populations.
Under the new system, responsibility for highly specialised services has been fragmented in a number of ways. Services are planned by an advisory group within NHS England called the rare diseases advisory group, while new highly specialist technologies are due to be developed and evaluated by NICE under a new methodology currently under development. Separately, the prescribed specialised services advisory group advises Ministers which services to instruct NHS England to commission, including new highly specialised services, such as in the statutory instrument that we debate this afternoon.
Apart from the complexity of these new arrangements, a number of problems have been identified by the Specialised Healthcare Alliance. First, the separation of these complex and interrelated functions between different national agencies risks the loss of efficiency and expertise in planning highly specialised services. As an example, links between NICE and NHS England would need to be extraordinarily close given that many highly specialised services are heavily dependent on high-cost, low-volume drugs.
Further, changes to the commissioning of these services present additional causes of concern. Rather than retaining a single national commissioning team to manage relationships with providers of highly specialised care across the country, delivery is now delegated, I understand, through NHS England’s four regional offices, with contracts held by the 10 area teams with responsibility for specialised commissioning which have providers on their patch. The alliance has expressed concern that cohesive oversight of these services is likely to be undermined in the process and may even introduce a greater degree of clinical risk. The efficiency of the arrangements, moving from one national to 15 different teams with a greater or lesser involvement, also seems highly debateable. As an example, where access to a service across the country is dependent on only three or four providers, problems at one will have an immediate consequence on the others as well as on patient referrals.
The prescribed specialised services advisory group advises Ministers on changes to the scope of specialised services to be prescribed in regulations for direct commissioning by NHS England. Under the terms of the 2012 Act, Ministers prescribe services for NHS England to commission directly, including specialised services, while all the other non-prescribed activity falls to clinical commissioning groups to commission for their local populations. In prescribing a service as specialised, four factors in the Health and Social Care Act 2012 are taken into account: the number of individuals who require provision of the service; the cost of providing the service or facility; the number of persons able to provide the service or facility; and the financial implications for clinical commissioning groups if they were required to commission the services or facility themselves. Ministers receive advice from the advisory group hosted within the Department of Health to inform such changes. However, this has not been at all transparent. Indeed, in its first year of operation, the advisory group was hidden from public view. It was not until 2 May 2014 that the first details of its membership, decision-making processes and recommendations were published. A few members of the alliance have campaigned to secure inclusion of their services as specialised services but were taken by surprise by the publication of this statutory instrument as they did not know that the advisory group had issued a recommendation to Ministers.
The noble Earl may have good news for us about the publication of a report on this matter either today or in the past few days. As it reached me by e-mail this morning, I have not had time to read it, and it is certainly not available in the Printed Paper Office. That is a pretty poor do if we were meant to have it in time for this debate. It is very important that this work is transparent. I hope the noble Earl can give us more assurance on that this afternoon.
Will the noble Earl respond to the evidence given by the NHS England chief executive to the Commons Select Committee on 29 April, in which Mr Simon Stevens suggested that the scope for specialised services had been overextended and needed to be reviewed? The noble Earl will know that the overspend by NHS England is causing great concern in the health service not only because it suggests that NHS England has lost control over the commissioning of specialised services but because the resources have had to be taken from other parts of the health service. Clearly, this position is not sustainable. I would be grateful if the noble Earl would respond to that question.
Baroness Brinton (LD)
My Lords, the regulations, which address an important Cinderella service in the NHS that not many know about, are extremely important. I thank the Specialised Healthcare Alliance for its briefings, which have provided an extremely helpful background. I know that the noble Lord, Lord Hunt, has provided a couple of figures, but it might be worth pointing out that there is a clear distinction between “rare” and “very rare” diseases. It sounds silly to say, but those with very rare diseases would welcome having, for the one in 17 or fewer of the population who will be affected by a “rare” disease—that is the ratio—a reasonable coverage throughout the country, although it may be in specialised areas. However, “very rare” diseases may affect fewer than 500 patients in the UK and, in the case of one or two diseases, may affect perhaps only one or two patients.
With the implementation of the new clinical commissioning groups it has obviously been important to reassess how treatments for rare diseases are commissioned. I do not have to declare an interest because I do not have a rare disease but, as someone who has to access rare biological medicines, I know that my local CCG and many others are struggling with the whole issue of prescribing expensive drugs. However, they cost pocket money when compared with the cost of medicines and treatments that we are looking for as regards rare and very rare diseases. The key is that one-size commissioning will absolutely not fit all, even within the definition of one rare disease, because it would be very unusual to find one clear clinical route. These days, the personalisation of drugs based on genes identification—80% of rare diseases have a genetic component—and the range of co-morbidities with most of these diseases mean that we absolutely must have clear and individualised treatment routes, with a much higher level of understanding of the diseases.
That is why I welcome the prescribed specialised services advisory group, which, for brevity, I shall refer to from now on as the PSSAG—I do not know what the Department of Health is calling it but we may as well add something else into the alphabet soup. It is important that the Secretary of State consults the PSSAG. The regret Motion was laid prior to the publication last week of the recommendation from that special advisory group. Inevitably, the timing is unfortunate, but life is like that. However, I believe that the publication of this report significantly reduces the concerns in the regret Motion about fragmentation and transparency. For example, the sections on membership and process on pages 7 and 8 of the report, some of which the noble Lord, Lord Hunt, referred to, make it very clear that both lay members and representatives from the royal colleges, as well as members with financial and technical expertise who can offer assistance, will come together to look at things. The noble Lord referred to what has to be reviewed but the other elements are equally important. The PSSAG must also consider how activity can be identified to enable separate contracting, monitoring and payment, which I think addresses the noble Lord’s point about what happens when things are devolved to a regional level. It also has to address the running costs associated with separate and direct commissioning, as well as consider defining elements of service to be commissioned. Therefore, I think that I am more reassured than the noble Lord, Lord Hunt.
It will be very important to monitor implementation, partly because, certainly in the early days, it will be difficult to budget for it, in part because of what I said about the personalisation of treatment routes and medication but also because, as we and the commissioners become much more familiar with the changes taking place in the treatments, particularly the gene therapy treatments, we may find that the costs of associated treatments are significantly reduced quite early on if the biologics and other superdrugs, as well as stem cell drugs, begin to work. Therefore, I would be grateful if the Minister could reassure the House about monitoring the situation once the PSSAG gets fully into its stride and commissioning starts to take place.
I have one area of concern, which is perhaps where more than one of the specialist groups that are going to be looking at treatment routes are involved in commissioning a patient’s treatment. Often two, three or possibly even four specialist groups are likely to be involved. In cystic fibrosis there would obviously be a principal neurological one but blood and kidney specialist groups might be involved as well. My fear is that we may end up, as we have done in the NHS in the past, with the position where a patient in a hospital sees lots of different consultants but does not know who has overall responsibility for holding the ring. Is there an equivalent in this sector to make sure that one group has a specific responsibility, partly so that clinicians and therefore their patients are not passed from pillar to post among these different specialist advisory groups?
Lord Walton of Detchant (CB)
My Lords, I am grateful to the noble Lord, Lord Hunt, for raising this crucial matter. This issue of rare diseases is of increasing importance with the developments in knowledge and in new forms of treatment that are beginning to emerge. For many years in the NHS, doctors and scientists recognised that there were a good many rare diseases, but those received comparatively little attention save for supportive treatment because no effective drugs were available that were curative or that would at least alleviate significantly the effects of such diseases.
Of course, one has to recognise that many rare diseases still exist in medicine but every single disease, even if it is incurable, can have its effects modified to some extent by pharmacological, psychological and physical means. However, that was not particularly brought to public attention until the past few years, when developments in molecular biology—not least in genetics—highlighted by the rare diseases consortium and by the Genetic Alliance UK meant that in a very large number of rare diseases the causal gene was identified, isolated and localised in the genome. In addition, drugs have begun to emerge which will alleviate or overcome the effects of the genetic defect. For those patients who have a rare disease, affecting up to several thousand individuals, these are known as orphan drugs; for those affecting a few hundred or a few dozen patients, these are known as ultra-orphan drugs, which are very expensive. The number of patients likely to benefit is relatively small so the commercial viability of these remedies is at least a matter of grave concern.
While there are important things to take on board here—we were talking about R&D and AstraZeneca a little while ago—we must recognise the fact that Britain has an outstanding record in medical research and development. As I have often said, today’s discovery in basic medical science and in applied science brings tomorrow’s practical development in patient care. People with rare diseases can be helped by these remedies that are now coming on stream much more rapidly than has been the case in the past. The important thing is this: as the noble Lord, Lord Hunt, said, before the Health and Social Care Act was passed, we had the Advisory Group for National Specialised Services which commissioned services for some people with rare diseases. When the Act was passed, we—those who debated it extensively in this House—were reassured by the knowledge that there was an agreement that highly specialised services would be commissioned by NHS England. In recent debates with the noble Earl, he has been able to reassure us that that organisation has a rare disease advisory group, advising it on the management of these conditions. He was also able to reassure us about the early availability in this field, and in others, of unlicensed drugs in specific circumstances that may be effective in the management of many conditions in medicine—not just for cancer but for rare diseases, too. That is crucial.
However, as the noble Lord, Lord Hunt, said, we are concerned that the services are somewhat fractured in the sense that I have been unable to find out with any great clarity the terms of reference of the prescribed specialised services advisory group. It is not at all transparent at the moment. As the noble Lord said, nothing has been clearly published about its membership, its modus operandi and how it will function, or to what extent it has a relationship, if any, with NICE on the new procedures that NICE is introducing for the examination of orphan and ultra-orphan drugs. We need reassurance and more information on how this group works and, in the interests of public scrutiny, how it makes an effective contribution to health service decision-making. These are matters of great importance because rare diseases, though rare, are a major blight on people in the community. However, we cannot assess human suffering in purely numerical terms. The suffering resulting from many of these rare diseases is in many ways serious and exceptional and deserves very special attention.
For that reason I was very concerned, and I hope that I have misinterpreted the remarks of the director of NHS England, Mr Simon Stevens, in his report to the Commons Health Select Committee. He said that he thought there was a need for the scope of specialised services to be reviewed because he thought that they had been overextended. This is a phase in medicine in the UK when that would cause great concern to patients and their families and to many doctors who are concerned about the treatment of these diseases.
Baroness Thomas of Winchester (LD)
My Lords, I am grateful to the noble Lord, Lord Hunt, for initiating this debate and giving us the opportunity to talk about the new health service arrangements as they affect rare and very rare conditions. As other noble Lords have done, I shall range wider than the regulations—only briefly—because it is not often that this subject comes up for debate. The opportunity should not be missed to say something about those of us with a rare disease, in my case muscular dystrophy, and how it is faring as the new NHS arrangements are being put in place. I declare that interest.
All muscular dystrophies are rare diseases and some are very rare and there has been a great deal of uncertainty about how existing services for patients would fit into the way that services are commissioned, planned and delivered in the new NHS landscape. However, the situation was far from perfect before the changes. Some patients might not see a consultant for several years and many found it very difficult to access the right respiratory and heart checks, physiotherapy—especially hydrotherapy—and emotional and practical support. It was very much a postcode lottery. I had to discover for myself, 20 years ago, how helpful an exercise regime was, and this is now advised by healthcare professionals.
The new NHS set-up has provided not just a challenge but an opportunity to get things right from the beginning. The Muscular Dystrophy Campaign has worked closely with NHS commissioners on both a national and regional level and has achieved significant and encouraging progress in developing a dedicated neuromuscular standard through a specific annexe in the specialised neurosciences service specification. This has ensured that there are now more than 40 neuromuscular care advisers and specialist nurses funded by and embedded in the NHS, who provide invaluable support and advice to those with muscle-wasting conditions and their families. More are still needed, particularly to help guide patients and families through the transition from childhood to adulthood.
Another valuable initiative is Bridging the Gap, a Department of Health-funded project run by the MDC which began last July to help shape the future of neuromuscular services in England. This project brings together NHS commissioners, clinicians and health professionals through regional patient-led neuromuscular forums. Already it is bearing fruit, such as the development of GP online modules and emergency care plans, which it is hoped will improve the quality of care and support of people with neuromuscular conditions.
Clinical reference groups have been a positive step overall towards the effective commissioning of specialised services, although there are still problems. First, there is a disparity of CRG arrangements for rare diseases. Cystic fibrosis, for example, has its own CRG for children and adults and works well, but neuromuscular diseases are spread across three CRGs. I am taken with my noble friend Lady Brinton’s suggestion of there being a designated clinical lead so that everyone knows who to turn to. I believe that a one-off meeting has been arranged by NHS England to bring together these CRGs, but a long-term plan is also needed to work out how they will work together in the future.
Secondly, the main neuromuscular service specification prepared over the past three years, which covers children, transition and adults, mainly sits in the adult neurosciences CRG, which has adult-only expertise. It is a very welcome and recent step in the right direction that the paediatric neurosciences CRG has agreed to adopt the neuromuscular annexe of the service specification, but further work is needed here. I look forward to my noble friend’s reply.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, I am well aware that the noble Lord, Lord Hunt of Kings Heath, retains a keen interest in this topic, and I thank him for bringing it to the Floor of the House. I was naturally disappointed to hear that he feels that the new commissioning arrangements for specialised services which were put in place through the Health and Social Care Act 2012 are fragmented, and that the process for determining which services are considered to be specialised is unclear and lacking in openness and transparency.
Let me begin by emphasising that the Government continue to uphold the principle that no one is left behind, no matter how rare their condition, and that people with rare conditions should receive the same access to high-quality care as people with more common conditions. The Health and Social Care Act 2012 established the NHS Commissioning Board, now known as NHS England, and gave it responsibility for commissioning, among other things, specialised services. These services are prescribed in the regulations that the noble Lord has referred to. The arrangements for managing the commissioning of these services replace a system whereby 10 specialised commissioning groups and one national commissioner were responsible for commissioning both specialised and highly specialised services. Under that previous system, it became clear that there was variation in the range of services which some specialised commissioning groups were commissioning and the policies that were being applied to these services. This led to an inequity in access to services. Furthermore, the lack of standard contracts across the 10 specialised commissioning groups meant that the quality of services across the country was inconsistent.
All that has been replaced with a new system whereby one national commissioner is responsible for commissioning all specialised services for people with rare and very rare conditions. NHS England has developed standard service specifications and policies for commissioning these services, and these are underpinned by detailed identification rules that allow the commissioner of the activity, either NHS England or CCGs, to be determined. NHS England has implemented a robust process for developing and consulting on commissioning specifications and policies that includes public consultation. NHS England works with the 10 area teams responsible for the delivery of this work to ensure that highly specialised services continue to be commissioned in an effective way at the national level. I understand that all those involved in commissioning these services meet on a monthly basis to discuss any issues arising and how they might be resolved.
The noble Lord, Lord Hunt, raised the issue of the separation of functions carried out previously by AGNSS. I note his concerns that the system will be worse off without AGNSS. As a consequence of the 2012 Act, AGNSS ceased to have a role and its key functions have been picked up by other groups. From April last year, Ministers retained the power to decide which services should be commissioned, but NHS England became responsible for determining the number of centres and levels of funding in commissioning all specialised services. The prescribed specialised services advisory group has been established to provide Ministers with advice on whether services are specialised and should be directly commissioned by NHS England. NHS England worked with the former chair of AGNSS to consider how best it might receive high-quality clinical advice on highly specialised services. The Rare Diseases Advisory Group was set up by NHS England to provide it with this advice. The assessment of very high-cost drugs for patients with rare conditions was the final strand of AGNSS’s work which needed to be properly secured for the future. Ministers decided that NICE was best placed to offer this advice. I hope that that gives clarity to the arrangements that are now in place and the reasons why we considered this to be a compelling set of arrangements.
As I am sure noble Lords will acknowledge, the changes that were made through the Health and Social Care Act were extensive. With change being made on such a broad scale as this, one might expect that the processes for setting up the reformed commissioning arrangements will take a little time to settle in.
There are a variety of reasons for the trend in spending on specialised commissioning, which the noble Lord, Lord Hunt, mentioned, including increased demand for specialised services and increasing demand for high-cost drugs. NHS England is taking steps to address budget management and reviewing the opportunities to reduce costs while maintaining the quality of services, which I know it attaches great importance to doing.
I remain confident that these new arrangements will lead to high standards for all patients needing to access specialised services, wherever they live and no matter how rare their condition is. I listened with care to my noble friend Lady Brinton. The intention and ultimate effect will be to ensure that patients in need of specialised services receive consistent access to high-quality care, wherever they live, and that services are organised and delivered as efficiently as possible.
Our agenda is very much one of continuing improvement. Although I am aware of the concerns expressed by the Specialised Healthcare Alliance, neither I nor NHS England accepts the premise that the changes we have made are leading to greater fragmentation. However, I am grateful to noble Lords for drawing these issues to my attention. I assure noble Lords, not least my noble friend, that I share their wish to see joined-up, consistent services across the country. I can give an assurance, too, that I will monitor the provision of specialised services over the coming months.
The noble Lord, Lord Hunt, said that the process by which services for rare and very rare conditions are considered by PSSAG for commissioning nationally are unclear and lack openness and transparency. That concern was echoed by the noble Lord, Lord Walton. It may be helpful if I talk a little about the group and its role. The National Health Service Act 2006, as amended by the 2012 Act, requires that before making regulations setting out which specialised services are to be prescribed, and thus made the commissioning responsibility of NHS England, the Secretary of State must obtain advice appropriate for that purpose and consult NHS England.
PSSAG was established in 2013 as a Department of Health expert committee to provide this advice. Its role is to provide advice to Ministers on whether services are specialised and should be directly commissioned by NHS England rather than by clinical commissioning groups. The appointment of this group helps to ensure that the Secretary of State has appropriate advice when exercising functions under Section 3B of the NHS Act 2006. The group met for the first time in September 2013.
The noble Lord, Lord Walton, asked about the group’s terms of reference. It has working terms of reference, which are currently being further developed and will be signed off at a future meeting. As part of the exercise in advising Ministers, the group will also consider proposals for NHS England on the formulation of its service descriptions, which are used to explain what NHS England is providing under the different headings for the specialised services provided for in the regulations. The group will provide advice to Ministers on whether the service descriptions and any proposed changes are appropriate in respect of the prescribed service.
Evidence, supporting information and activity in respect of those services currently prescribed in legislation for direct commissioning by NHS England, along with any new services identified as potentially specialised and warranting commissioning by NHS England, are all made available to PSSAG from a range of sources. These sources may include clinical reference groups—CRGs—patient groups, clinicians, commissioners and members of the public. The proposals that the group considers are in large part generated by NHS England through its CRGs, which cover different areas of clinical practice. As PSSAG is still relatively new, the processes for enabling services to be referred to the group for consideration, and the annual cycle for considering whether services are specialised or not, are still being refined.
Lord Hunt of Kings Heath
My Lords, first, I thank the noble Earl for his response, and the noble Baronesses, Lady Brinton and Lady Thomas, and the noble Lord, Lord Walton, for taking part in the debate. I say to the noble Baroness, Lady Brinton, that of course the Motion was drafted well before the publication of the report. In fact, I received notification of the report only this morning. She seems to have got hold of it before me. Obviously it is helpful to have the report, which I have no doubt we will study, but I hope that this will be the start of an engagement between the advisory group and Parliament, and I hope that the advisory group will offer an open meeting for parliamentarians in the near future where we could discuss these matters with it.
The noble Lord, Lord Walton, was absolutely right to remind us of the increasing importance of ensuring that we have appropriate mechanisms for providing services and funding for these very rare diseases, particularly as technology advances and given the likelihood of orphan drugs being required more in the future.
I had hoped that I might identify a way to fund some of these services, but the Minister has told me that the money has perhaps been discounted and is already in the system. I say to him, however, that the low uptake by the NHS of innovative new medicines is a major problem. Alongside the issue of AstraZeneca, we have to persuade and cajole the NHS that it has to change its approach to new medicines. My own experience is that increases in staffing, in units and in medical equipment are all regarded as a good thing but that an increase in the drugs budget is seen per se as a bad thing. This, frankly, is nonsensical given what many drugs can bring to the public. The fact is that we have a hugely innovative R&D and pharmaceutical industry in this country which we should be very proud of, but the NHS has a lamentable record in investing in the output of that R&D industry. This is a very serious issue from the point of view both of patients and of our continued success—one hopes—as a country in attracting that R&D investment in the future. My understanding is that, in research and clinical trials in the future, unless we are able to compare innovative new drugs with what would in many countries be the normal drug usage, we will find it even more difficult to have clinical drugs started in this country. This is a very serious issue and we have collectively to tackle it.
I note what was said by the noble Baroness, Lady Thomas, who made some very powerful points. The noble Earl, Lord Howe, believes that the current system is not fragmented in the way that I described. Obviously, we will have to see whether this proves to be the case in the future, but there is a risk, with four regional and 10 area teams, of pretty widespread inconsistency within those teams and areas. We need to keep that under very close review.
I am very grateful to the alliance for its briefing and the work that it does. I wonder whether Ministers would be prepared to meet the alliance to discuss our debate and the advisory group’s report. I have already asked whether the advisory group would be prepared to meet parliamentarians. I am grateful to the Minister for expanding on the comments made by Simon Stevens to the Health Select Committee about the overspend on specialised commissioning. NHS England is not very visible in the Palace of Westminster and it should become more so. Before it makes pretty fundamental decisions on specialised commissioning, it would be very good if it was again to agree to meet parliamentarians to discuss it. This has been an excellent debate. I beg leave to withdraw my Motion.
Businesses: Small and Medium-Sized Enterprises
(10 years, 4 months ago)
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Lord Cope of Berkeley
That this House takes note of the actions which have been taken following the publication in 2013 of the Report of the Select Committee on Small and Medium Sized Enterprises (HL Paper 131).
Lord Cope of Berkeley (Con)
My Lords, I welcome particularly the former members of the Select Committee which produced the report which is the subject of this debate—the members of the old comrades association, if I may say so, of the Select Committee. Our committee report had a good reception from the Government and others last year. We were particularly glad that the Government agreed to report again on developments a year later, which my noble friend the Minister did on 27 March, and to facilitate this further debate.
The theme of our work was government help for SMEs—small and medium-sized enterprises—to export. Exporting is obviously good for SMEs and essential for the prosperity of our country. Government help for this purpose is not controversial between the parties or, for that matter, within the coalition but it is also supported and assisted by many outside bodies. The Government’s support is of course shown by the appointment and excellent work of the Ministers concerned, particularly, until not long ago, by my noble friend Lord Green of Hurstpierpoint and now by my noble friend Lord Livingston of Parkhead.
Our report was very strong about the need to improve awareness of UK Trade & Investment and UK Export Finance—UKEF—among businesses. It is after all no use for UKTI to make excellent services available, as it does, if not enough SMEs know about them. The Federation of Small Businesses, among others, emphasises that increasing awareness of the services available is the most pressing need. It is of course not always easy to get through to SMEs. They are very busy and self-reliant, almost by definition. They are used to working out problems for themselves. They have a lot to think about and their dealings with government and their many agencies are usually about taxing and regulating them. So the message “We are here from the Government to help you” does not immediately switch on the “Welcome” sign. I hope that my noble friend the Minister can tell us a little more about the progress and effects of the effort, mentioned in a recent paper, to contact all the 8,900 medium-sized businesses by this summer. The Bank Holiday weather has encouraged me to believe that summer—that most flexible of dates—is about to arrive. How, too, are they getting on with the “Exporting is GREAT” campaign?
A real shock to us on the Select Committee was the tiny number of firms, or at any rate of SMEs, being supported by UKEF. We were told of UKEF’s new marketing campaign, which of course I welcome; that three new schemes had been introduced in 2011, particularly to help SMEs; and that UKEF was recruiting additional staff. In the recent Budget, some further proposed improvements to UKEF’s terms were announced, whose purpose included trying to ensure that smaller companies could benefit. Can my noble friend the Minister tell us what is now expected to be the level of UKEF support to SMEs in the coming period?
On SME finance generally, we were, like many others, critical of the banks. Recent figures suggest that the borrowing environment for smaller businesses has improved. Certainly, when one goes into branches of the large clearing banks one sees trays of leaflets encouraging SMEs to approach them and start-ups to come and see them. However, I have also seen recent evidence that decisions are still made well above the branch level and take a long time to gain approval, longer sometimes than the timetable that export sales require. Captain Mainwaring of Walmington-on-Sea is dead—replaced, one feels, by distant computer watchers.
One of our points was that businesses can borrow from a much wider range of sources than just the clearing banks. This has been widely discussed since, with much talk of challenger banks and so on. SMEs can and should look around. There are many ways to access finance and the clearing banks have lots of competition in this field nowadays. Some of it was formally considered novel but is now thought normal, such as internet banks, crowd funding or peer-to-peer lending—a term that can be misunderstood in your Lordships’ House. SMEs have a vitality that needs to be matched by flexible financial backing, and that is available.
We did not deal separately in our report with the effects of technology on SMEs, although the amazing changes that it continually makes ran like a thread through much of what we did. My noble friend Lord Livingston has great expertise in this area, not least from his period as chief executive of Dixons plc and PC World. As technology connects the world at an ever faster rate, it changes markets radically. You can find and reach customers much more widely across continents. The English language is helpful in this. After all, it is so often the language that computers use to speak to humans. But retail customers in particular need to be spoken to in their own language and with regard for local customs. Finding customers by technology is one thing, but selling also depends on how easy it is to deliver to your customers in distant places. More and more can be delivered electronically—books are the obvious example—and other products of the creative industries, which are so important in this country.
We have always been an innovative and outward-looking country, and IT gives us so many extra chances both to innovate and to reach out to the world. SMEs, with their flexibility, are in the forefront of all this. However, IT also makes the world more complicated. It is partly responsible for the increase in regulations and forms of every kind in all countries. That is one reason why the Government need to help SMEs to export through UKTI, the FCO and other bodies such as the chambers of commerce.
I particularly want to mention two more detailed matters that we referred to in our report. The first is intellectual property. As we learn with morbid fascination of the latest developments in that great lawyers’ feast, the titanic intellectual property struggle between Samsung and Apple, which I think is now in its third year, we should remember that for SMEs such things can be an existential challenge. How can you protect your idea or special product in foreign markets in many countries? I am not going to go into all the aspects, but I ask the Minister how the new IP attachés in our overseas embassies are doing in China and elsewhere. Is there any recent progress to report on international negotiations on IP? China at least is said to be realising that it has intellectual property to lose these days as well as to gain from.
I also want to mention bribery law. The definitions of what precisely constitutes a crime remain only partially understood by SME exporters despite 40 pages of careful legal guidance from the Ministry of Justice. We on the committee worried that the Government were waiting for case law to remedy this deficiency—in other words, that some businesses may suddenly find themselves the specimens being pinned down for examination in the courts while lawyers and judges work out in their confrontational way, in ever higher courts, what this Parliament intended the legislation to mean in practice.
The International Chamber of Commerce wrote after our report saying what was needed was not more parliamentary scrutiny or change in the law or guidance, but more efforts to promote awareness of the present guidelines, particularly by our embassies in relevant countries. We agree about awareness, but we thought that further consideration in a Lords committee might help both awareness and clarity.
All are agreed that the Government should, through their agencies, help SMEs to export in whatever ways are effective. I welcome the appointment of Dominic Jermey as chief executive of UKTI. He has unusually wide experience, including in both UKTI and the FCO, recently as ambassador to UAE.
I pay tribute to my noble friend Lord Green of Hurstpierpoint for his unceasing efforts while he was in the Government. He invigorated the whole process, and UKTI in particular. He proved once again the case for people of energy and expertise to be appointed to the House of Lords specifically to be Ministers. I am delighted that he is here today to speak. His successor, my noble friend Lord Livingston of Parkhead, has brought his own successful high-level commercial and financial experience, as well as his vigour, to the job over the past few months. It is essential work for our national prosperity. We wish him well and look forward to his speech today. I beg to move.
Baroness Cohen of Pimlico (Lab)
I thank the noble Lord, Lord Cope, for securing and introducing this debate on a subject so vital to our economy. Indeed, our report goes on giving. This is effectively the second debate that we have managed to have on it, and I very much welcome it. I also thank the noble Lord, Lord Livingston, for feeding as many of us as could be assembled in a hurry to discuss the report when he was appointed.
Britain Open for Business sets out an impressive range of services and improved delivery of those services, but it still does not seem to me to be directed towards the smaller end of the market—the smaller medium-sized companies, if I may so describe them, the really small companies and, above all, the problem of start-up. At one level, that is fair enough. In the short term, the big wins in increased exports must come from concentrating on larger and medium-sized companies. However, we need to look beyond them. In any case, they are reasonably well placed to access the information they need, once you prod them into action. We heard many views that smaller companies may not be able to spare a hand from the day-to-day business to put in the effort to export, and it is there that we need to concentrate.
Since our report was completed, and after reading the Government’s formal response, Britain Open for Business, I have been thinking about how the national goal of increasing exports can be achieved. Let us be clear that at the moment it is not a success story. Our balance of payments on manufactured goods is worsening. We must improve. I believe that means putting in the hard, long-term slog to get smaller companies into exporting.
In this context, when we think about concentrating on larger companies, the example of the proposed takeover by Pfizer of AstraZeneca stands as a kind of living, breathing horror about what can happen to your larger companies. As an ex-director of the London Stock Exchange and a director of many companies in my time, I say that fine words about carefully considering takeovers by foreign companies do not really come to much when you find yourself faced with a bid of 30% more than the existing stock market price. That tends to overrule any amount of careful consideration, partly because not to take account of such a stock market price increase would be damaging to the interests of shareholders. The Government—and we, when we are once more the Government—will have to think about how we protect jobs and vital national infrastructure in a reasonable and measured way.
For the moment, however, I am thinking about developing some more vital national infrastructure. I come to the report’s particular concerns and targets. The whole committee was started at the request of the noble Lord, Lord Popat, then a Back-Bencher in your Lordships’ House. He won the right to set up the committee that we are still discussing.
Small and very small companies need lots of encouragement and advice and access to finance at reasonable prices if they are to export and grow. We indentified a critical role in the advice and support for the LEPs and chambers of commerce. There is almost nothing about LEPs in Britain Open for Business, but I will not have a go at that one because my noble friend Lord Haskins will be speaking later in the debate. He chairs a large LEP and will be able to tell us.
We are not yet offering enough help, both advisory and financial, and we lack the culture to provide it. The noble Lord, Lord Heseltine, in another report, identified this gap and noted that is was filled in other European countries by the chambers of commerce. There is work to be done here. We were told on our travels that some chambers were inactive or unwelcoming. There is nothing in Britain Open for Business about how they might be revitalised. They could indeed be given funding to improve. Like everyone else, they need competent central organisers, which many cannot afford. I recommend this and wonder whether the Minister will comment on this in his reply.
We could also think more carefully about how small companies get started. This has been a lifelong interest for me. Although two of the companies that I have helped are restaurants and have never exported a thing, I could have done better if I had thought about it. That is also particularly true of whether we can find a way to help our immigrant business men and women, who can see a market in their countries of origin for goods made here. We met a couple of such businesses in our travels, one exporting curries and chutneys to the Indian subcontinent. Of course, this business had none of the obvious difficulties in exporting: it knew its markets, what to sell and to whom. There were none of the usual problems of language barriers. It would be well worth while for UKTI to consider zeroing in on such companies as a particular sector and helping them to grow. We noted that the owners of these businesses were careful people, only using such finance as could be generated within immediate family and friends. I have been there. This is how I worked but, with better information and advice, we could have grown faster.
In fact, the incentives available to friends, family and investors in general to invest in start-ups have been immeasurably improved by the introduction of the small enterprise investment scheme which allows top-rate taxpayers a concession of 50% on any investment after the enterprise in question has been trading for a few months. This last was introduced after our report and the Government are to be congratulated on it. When we are once again the Government, we should keep it.
Small businesses have difficulty servicing debt. When I was in the start-up business, like the careful Indian businessmen we met, I tried to depend as little as possible on a bank. However, if you have to take on debt, the new government scheme, which allows small companies to borrow up to £10,000 at about half the rate that any bank would offer, provides a welcome and timely piece of help and encouragement for start-up companies.
In conclusion, we do not yet do enough to encourage very small businesses and small business start-ups. Our report recommended several measures that would help, including working through LEPs and chambers of commerce, which are not yet happening. The SEIS and the government loan scheme are of real value on the financial side, but they are necessary rather than sufficient. We and UKTI could do more, possibly by concentrating more attention in this sector, particularly with people who have a natural route to exports to the countries from which they come. Start-ups are difficult and so are very small companies, but they are the medium-sized and larger businesses of the future. I ask the Minister what the Government’s further plans are to provide increased services to this most critical area.
Lord Storey (LD)
My Lords, I thank my noble friend Lord Cope for securing this important debate. His chairmanship of the Select Committee on Small and Medium Sized Enterprises, of which I have the pleasure of being a member, was exemplary.
When my noble friend secured the debate in June last year on the Select Committee’s report, we had high hopes of an export-led recovery. Sadly, those prospects seem far less certain at the moment. The trade deficit has remained high, and the value of exports fell by 2.5% between August and November. I am glad to see that the trade deficit has been gradually reducing since imports have reduced. However, that demonstrates how precarious the situation can be, exacerbated by the fiscal situation of the eurozone. I suggest that we need to ensure that we look to the future and are thoroughly prepared for what it holds.
Britain may be the sixth-largest exporter in the world and number one for e-commerce in Europe, but we have a massive trade deficit and therefore need to double our exports to £1 trillion by 2020. Only 17% of mid-sized businesses generate revenues outside the European Union, compared with 25% in Germany and 30%—I stress—in Italy. While we have thousands of great exporters, others balk at doing business in countries embraced by our competitors. The CBI has reported that if mid-sized companies maximised their potential they would deliver an extra £20 billion to £50 billion to the economy. The House of Lords Select Committee’s report clearly and cogently identified what needs to be done and we can clearly see a number of very important initiatives coming forward. The International Festival for Business in my home city of Liverpool should be a must for every businessman and businesswoman, and I am sure that our Minister will be there as well.
I will give an example. The expansion of UK Trade & Investment has been vitally important. I will give noble Lords a local example of its sterling work, because it is on many occasions an unsung hero. It held an export week in the north-west that reached 400 businesses, with free events that explored opportunities that ranged from Africa and Europe to southern Asia and Japan. The challenge was for existing exporters to make this the year that they expand into at least one new market. In the weeks before it achieved its target of creating 1,000 new exporters in the north-west, the north-west UKTI director, Clive Drinkwater, said that if every current exporter in the region rose to the challenge,
“we could increase the GDP in the north west by an estimated £2 billion, significantly aiding economic recovery and giving a boost”,
to the competitiveness of the north-west itself.
On support, large companies have a knack for prospering, with their intangible assets and intellectual capital—Pfizer’s recent bid for AstraZeneca is a prime example. Meanwhile, budding SMEs struggle to gain any funding. Figures suggest that 57% of those innovative firms struggled to find funding in 2012, which represents a steady increase from 38% in 2007. Why am I voicing such concern? SMEs are particularly vulnerable: should unlucky circumstances befall them, they may have to sell their shares quickly at knock-down prices and lose the prospect of scaling up. What is worse, if they find themselves having to sell off their enterprises to foreign companies, the UK economy will face losses. If we solve this problem, the returns could be huge.
Take the following example from my city of Liverpool. Focus Commercial is a commercial finance house situated in the heart of Liverpool which aims to provide SMEs with funding without depending on high street banks. However, its support for SMEs does not stop there, as it also attempts to provide a plethora of financial options, with its remit extending to the property and construction sectors. Such co-operation is important, and the flexibility and tailored support that growing SMEs require depend on them not being boxed into a financial corner. Who knows—such support might just fulfil the premonition of the Centre for Economics and Business Research, which says that the UK could be the largest economy in Europe by 2030 if we continue to create businesses and jobs at our current rate.
SMEs are in disagreement about the precariousness of the exports market at the moment. Some feel that niche products are needed to tap into markets that have never been targeted before. It would be less difficult for more SMEs to make the most of those markets with a raised awareness of what UKTI can offer them. If 100,000 new exporters are required to double the value of exports by 2020, this support will be required. I am very glad that the report has raised the issue of awareness from both UKTI and SMEs. Enterprise is, after all, the driving force for economic growth.
I turn to education, an area of great interest to myself. It has been said for years that SMEs need to, and indeed should, invest in apprenticeships. In fact, ICM figures suggest that 20% of SMEs plan to take on at least one apprentice in the next year, with forecasts suggesting this figure will grow the year after. The Prime Minister has already made the step of subsidising workplace training and giving £1,500 grants to SMEs to take on their first apprentices, but this needs to be developed further. In Germany, apprenticeships generally last for three years; they consist of eventually assessed classroom learning for one day a week. While big companies can afford to do this, most enterprises cannot. As sanguine as it may sound, we need to make sure that the Government put in place a means of making sure that the terms, conditions and schedules of apprenticeships are clear from the outset. This is important for both the apprentices and the SMEs that hire them.
My noble friends will be aware that Madeleine Atkins, chief executive of the Higher Education Funding Council for England, recently expressed her desire for universities to improve their interaction with SMEs. The money that universities obtain could be put to good use by boosting knowledge exchange with SMEs. This proactive attitude is already evident. For a number of months now, Cambridge Regional College has been offering completely funded training to SMEs as part of a £2 million European Social Fund programme to improve professional skills at work. This initiative has been hailed as a good stepping-stone to formal qualifications such as apprenticeships, and these developments can be amplified only with a can-do attitude from Ministers in Parliament, SME owners and youngsters.
It is easy to see how young people can benefit from an apprenticeship; it is an alternative to further or higher education and is tailored to their vocational needs. It can also help SMEs, which reap benefits from apprentices; it is important that they make sure their business is sustainable and that they train those apprentices to understand the idiosyncrasies of that particular field of work.
I want to mention another opportunity, which I believe that we have not really thought through. I happen to be a member of the advisory committee of the Regional Growth Fund, which has given almost a £1 billion in grants and growth fund money to encourage business growth, particularly in the least prosperous regions outside the south-east. Businesses are encouraged and helped through the process, and the straightforward criteria are used of leverage ratio and job creation in areas too dependent on the public sector for jobs. It has been very adept at supporting business growth, but would it not be wise to consider whether we should look at targeting those businesses that have the capacity and will to export or those that want to expand their exports? Perhaps the Minister might consider taking up this issue with the noble Lord, Lord Heseltine.
I can only hope that the support objectives outlined in the report are fully achieved—and the sooner the better. We must never ignore the fact that SMEs are the driving force behind the sustainable growth that this country sorely needs.
Lord Green of Hurstpierpoint (Con)
I add my thanks to my noble friend Lord Cope for securing this important debate, and I add my congratulations to him and his Select Committee on a report that highlights the critical importance of ensuring that SMEs—and I am always conscious that that means small as well as medium-sized businesses—get as smooth a pathway and as effective a helping hand as possible on their journey on that path. I well recall appearing before the committee and being grilled closely on the details of the Government’s approach to the reform of UKTI and UKEF.
I shall make one general economic comment and three specific points about the continuing task. First, the economic point is in two halves, one a macro point and one a micro point. At the macro level we are clearly seeing a real economic recovery, continuing evidence of which was evident in the latest, first-quarter growth data. But it is also clear that we have to make a lot of further progress in rebalancing the economy if we are to achieve the ultimate objective of a more sustainable growth model for the British economy. None of us believes that growth is sustainable when it is driven too much by domestic demand and fuelled by debt. The fact is—we are all aware of this but we need to remind ourselves of it—that the trade account and, indeed, the current account more broadly, is still weaker than it should be. This has been the case for something like the past 40 to 50 years. Trade is not yet contributing properly and consistently to economic growth. In fact, it is still at best neutral and, more often than not, a drag on growth. So far we have not had a problem with financing that deficit but it would be folly to assume that that is always the case.
Therefore, at the macroeconomic level, there is a real, high-priority imperative to address this question of exports, particularly the role of smaller companies in the export performance of the country, to remove the vulnerability of our current account position and to achieve a more balanced approach to growth in the economy. I know that the Government recognise this and that they also recognise the importance of what might be described as the microeconomic imperative—that is, to get more companies, particularly smaller ones, into the international markets.
The evidence is clear and compelling. I used to cite it and make no apologies for calling attention to it again. A very impressive BIS study was done some two years ago but private sector studies also essentially demonstrate the same point—namely, that companies of all shapes and sizes in almost every sector which get into the international markets enjoy higher profitability, last longer, grow more and create more jobs. In other words, whether we look at this from a macroeconomic point of view or a microeconomic perspective, the conclusion is the same—we need to encourage more companies into the export markets.
I turn to my three specific points on the strategy. First, it is sometimes argued that all our focus should be on the emerging markets and on building the UK’s position and share in organisations such as ASEAN and in places such as China, the Middle East and what we might call the African lions, in recognition of the fact that six out of the 10 fastest growing countries in the world today are African. That is clearly undoubtedly important but it is wrong to conclude therefore that the EU somehow does not matter. We need to remind ourselves that the EU is a market of 500 million people. It may be growing relatively slowly but it is prosperous. As an aside, I think that it will surprise us by emerging on the upside in the coming year or two. Indeed, not all of it is slow- growing. Some of the east European markets in particular have many emerging market characteristics. Last but not least, the EU is near at hand and getting into it involves lower costs. It is also easier to navigate than many of the emerging markets and is often the best place to start for a smaller company exporting for the first time. In other words, this is not a question of either/or, as it is sometimes presented, but of both/and.
That leads me to stress the importance of the single market and of broadening and deepening it. This complex topic is perhaps worthy of a debate in its own right on another occasion in this House. However, a quick stocktaking suggests that good progress is being made in goods. You can export a car to 28 markets without making any adjustments because of the standardised EU regulations applying to goods in the single market. On the other hand, I think we all recognise that we have a long way to go on services, and on the digital single market we are barely off the starting blocks with regard to EU-wide broadband, roaming charges, consumer rights across borders, collective rights negotiation and so forth. I strongly suggest that the task of strengthening the single market and making its development, management and governance more efficient should be very high on the list of priorities for the reform of the EU. That is an interest, by the way, which all members of the EU share; this should not be presented as just a piece of British exceptionalism. I hope that my noble friend the Minister will comment on some of the key milestones on this important journey which has so much direct relevance to SMEs and their export opportunities.
My second point is that whether we are looking across the channel or further afield, proactive and high-quality support for SMEs is clearly essential. We should recognise that UKTI now stands reasonable comparison with many of its peers in the relevant countries; I think particularly of countries such as Germany, France and Italy. What does not stand comparison is the quality of business support for business. The role of chambers of British business groups around the world is critical, and their performance has been varied. At their best they stand comparison, but they are too often little more than lunch clubs providing no meaningful support for incoming British small businesses. Yet, at their best, they can provide a really welcoming environment providing mentoring and buddying, sectoral working groups and office space. They can showcase that country back at home to small business here, and so on. This is what the Germans do. We should not always shamelessly imitate the Germans but in this case we should. We began a journey some 18 months ago to work with business groups to upgrade these presences around the world, and I know that the British Chambers of Commerce is very active in developing an international programme to this effect. There is a lively interest in linking up among the more energetic domestic chambers and a rising interest among their members in exporting—so we have some good traction. I should be grateful if my noble friend the Minister can comment on progress, the way in which the Government have been supporting that initiative, how he expects it to pan out over the coming years, and the implications for UKTI as it is enabled to move into a more strategic role in those overseas presences.
Finally, much, though not all, of exporting requires effective financial support. The Government have begun over the past couple of years to rejuvenate UKEF, broaden its project range, make it better known to SMEs, strengthen its marketing, strengthen its presence around the country, and provide advice to banks—I am sorry that it has to provide advice to banks, but it is none the less there and it does and should do so—and, of course, to its clients. Anecdotal evidence is that progress is being made but I am sure we all recognise that there is a long way to go. Again, I ask my noble friend to comment on progress in developing UKEF’s offering to small businesses up and down the land.
My final comment is one that may well provoke a wry smile on the faces of the civil servants in the Minister’s office, because it is one that I made often when I had the honour to be in his position. We have lived with a weak trade position for many decades, we have lagged behind our obvious peers, we have fewer companies engaged in exports than should be the case and we leave great export opportunities on the table. There are many good stories as well, though. Many companies in many sectors in all parts of the country have their tails up and are exporting energetically around the world. Achieving more balanced growth with stronger trade performance is critical to us all and is a major task for us all. Furthermore, I believe that it is a task that is non-party political and that we have to stick at, probably for the next 20 years. It is a task that is collective because it involves government, of course, but also businesses and business representatives—and we need to keep at it. As I said—to the point where my civil servant colleagues were, I suspect, bored with hearing it—this is a marathon, not a sprint.
Lord Giddens (Lab)
My Lords, let me congratulate not only the noble Lord, Lord Cope, but all noble Lords involved in the production of this report. I speak as someone who was not on the committee. The report is wide-ranging, authoritative and packed with interesting ideas and proposals. As a social scientist, I particularly like the comparative parts of the report, including the well documented section on Bavaria. The Bavarian successes with small business start-ups are relevant not only to the UK but to other parts of Germany, some of which lag well behind that area. I also echo what the noble Lord, Lord Green, said about the importance of Europe to our export markets and the single market. I welcome his sort of “hmm, hmm” comments on Germany because I do not think that the way to go for Britain is just to copy Germany. That country was the sick man of Europe only about 10 years ago, it still has structural weaknesses alongside its strengths, and we should therefore be a bit careful about that and develop our own model.
I shall concentrate here on only a few issues among the many powerful points made in the report. One is the core question of finance. It is disturbing to see in the report that:
“Lending had dried up even to SMEs with full order books and strong collateral and strong cash flow”.
What interventionist measures would the Minister suggest for breaking through this somewhat disastrous situation over and above those contained in the response already made? Would he not agree that it reflects structural factors, not just the hesitancies of the banks in the aftermath of the financial crisis? The economy has become dominated by finance-to-finance lending, often on the large scale, and lending to small productive enterprises comes very low down on the list. Microfactors are very important too. Does the Minister not agree that the demise of relationship banking, to which the report quite rightly draws attention, needs to be put into reverse? Speaking as someone who has studied the German economy quite intensively, the comparison with Germany, or at least the avant-garde sectors of the German economy, is quite telling here. What policies would the Minister propose to revive relationship-based banking in a speedy way? It seems to me that what one needs here is a new combination of high tech and low tech: on the one hand burgeoning processes of automation and, on the other, a distance between the banking system, the finance system and customers, including productive enterprises. I think that some structural reorganisation is needed here.
The report mentions that many SMEs are “born globals” in the internet age but I am not sure that this thought is followed up in the detail needed. To me, the advent of the internet, the coming of the internet of things and the transformations in manufacture linked to this are absolutely extraordinary. I do not think that there has ever before in human history been a period of transformative change of such an intense kind, and it is very important that we surf the wave of these changes. Even tiny start-up firms, through using internet-based collaboration, can produce and sell around the world, and indeed they are doing so. They come into existence one day and, almost the next, sell on a global level.
Tiny companies can now make use of facilities once available only to very large enterprises. McKinsey estimates that in the United States one-third of all SMEs now make extensive use of cloud technologies. That is a quite remarkable statistic. Whole departments were once needed to harness facilities that are now available either for free or at very low cost. Some cloud computing services cost only 10 cents an hour to utilise gigantic computing capacity. We have quite a range of microstudies which indicate that SMEs in this country are on average well behind those in the US and in some of the leading European countries in making use of these facilities. I ask the Minister what more can be done to get this country more into the forefront of these extraordinary transformations. Of course, many small businesses are local but we are seeing the fusion of local and global in a way that has never been seen before, and this is where enormous productive and export capacity will lie in the future.
The report does not discuss import substitution. I understand why but I think it is a pity. I do not think, as has been conventional wisdom up till now, that we should accept the inevitability of offshoring and deindustrialisation. A feature of history is that it does not move in a unilinear way—it quite often goes into reverse. I think that active policy should be engaged to try to push some of these trends into reverse, no matter how dominant they have been over the past 20 or so years. In this country we should actively seek to reverse these trends, both in manufacture and in the service industries. 3D printing is just the cutting edge part of what looks to be a thoroughgoing revolution in manufacture—perhaps even bigger than the original Industrial Revolution because of its global scope. Not just 3D printing but digital production more generally will be an enormous boon to SMEs, even tiny enterprises, and at the same time will serve to relocalise production.
Does the Minister agree that we should seek to reverse some of these trends that have previously been so dominant? It is not stupid to talk about the possibility of a partial reindustrialisation of the British economy. It is not stupid to suppose that the service industries will become massively more productive as a result of these emergent trends, and that policy should therefore follow and support them. What are the Government doing to help accelerate these trends of such potentially massive significance?
Lord Cotter (LD)
I thank the noble Lord, Lord Cope, for initiating this very important debate. It is very important for our country’s growth and it is so essential that the committee has addressed the issue of exports.
SMEs in particular need every possible help they can get to enable them to negotiate such a difficult and challenging path of business growth. There are many issues to raise and I shall quote from the Federation of Small Businesses which made four key points. It called for more effective sign-posting of existing export support and said that finance is important for small businesses. It talked about more effective targeting of support to microbusiness exporters and said that UKTI should perhaps consider setting up a microbusiness first-time exporter desk in each region so that businesses starting out had an accessible place to go for advice. It also wanted more readily available advice on export finance at local level with the UK export finance regional advisers.
A number of colleagues have already raised the issue of financing. It is a continuing issue for SMEs generally. The business bank was mentioned in the report. In practical terms, will the Minister say how the business bank is operating, in particular with regard to exports? How is it bedding down and doing the work that it needs to do? When it comes to finance for SMEs, in times past there used to be a strong local focus, whereby the local branch manager generally had a good understanding of local businesses. I can attest to that as back in the 1980s and 1990s I was managing director of a small plastics manufacturing company of tubing, cables, and such like, which went to the aircraft and defence industries. We were able to export successfully, but it was very much with the help of a local bank and a local bank manager. The importance of regional finance is just as important today.
Perhaps I may raise a general point on the issue of late payment, which particularly affects small businesses. It comes to quite a point of concern when many small businesses have to wait for 30 or even 60 days to get paid by big contractors, some of which have been given contracts by the Government. This is a general issue, but of course if a small firm has difficulty in financing, it will have difficulty in being able to export.
Will the Minister look into a specific issue that came into the report about UKTI and the Overseas Market Introduction Service? Concern about the Government’s discount scheme, which is covered by OMIS, has been raised because until recently the Government had a discounting scheme whereby 50% was taken off the charge by OMIS to small businesses with their first order. I understand that will not continue after 31 March because the Government say that discounting is not sustainable. But it is really helpful as a doorway for those firms that need this help to get it. Has there been any assessment of how discounting has helped in the past in increasing exporting? It is so important for businesses and this country. Has an examination been done about how the discounting, which will no longer be available, has helped?
Many points have been made by colleagues and we look forward after this debate to the Minister and the Government looking to address the many issues that have been raised. In passing, I would like to ask the Government whether they feel that the local enterprise partnerships have a strong enough focus on export towards the firms in their areas. This debate has been very worth while and I hope that it will encourage more and renewed efforts to help SMEs to export.
Lord Leigh of Hurley (Con)
My Lords, I too thank my noble friend Lord Cope for initiating this welcome debate. The report by the Select Committee was published before I was introduced to the House. Accordingly, I have had the advantage of looking at it from the outside. As a relative new boy, it is sometimes easier to make observations. I have observed that the House has had relatively few debates and questions on the area of finance and enterprise. As the noble Lord, Lord Cotter, has just said, nothing can be more important to the well-being of our country than a flourishing economy from which everything else is generated.
Our success as a society stems from the ability of government to raise money from the domestic population and, essentially, other than mineral extraction, this relies on businesses growing, employing more people who pay taxes, generating revenue on which people pay VAT, generating profits and dividends on which tax is paid, and helping entrepreneurs to build businesses, which eventually leads to capital gains tax being paid. It is therefore vital that everything possible is done to help and encourage SMEs which, of course, are typically not multinational, but domestic. As they grow, they are more likely to pay taxes in this country than in other jurisdictions and employ more people in this country. In this context, I welcome the tremendous focus on business growth by a number of government departments. The Treasury has created an environment in which investment into the UK and UK business is proving to be extremely popular and attractive, which is something that I see regularly in my day job. The Department for Business, Innovation and Skills is helping business and young people to gain employment through apprenticeships and, as a result, according to a recent CBI survey, growth expectations among SME firms is the highest since 2003, with manufacturing growing at its highest rate.
There is a feeling in the country that the Government are providing a joined-up approach to promoting business, which has not been seen in the UK for many years. Undoubtedly, the recruitment of my noble friend Lord Livingston as Trade Minister was a real coup for the Government. Having someone with tremendous business expertise and experience leading UKTI sends a message to international business that the UK Government understand what needs to be done and are urgently seeking to promote our businesses. I saw UKTI action at first hand when I accompanied the Prime Minister and Ministers on the trade trip to China in December. However, despite my praise and admiration for UKTI, I have a number of observations and, I hope, helpful suggestions to make in three main areas.
The first is in many ways a function of our own success. There is a plethora of schemes available to SMEs to finance their growing businesses for export. In fact, last week I attempted to put myself in the shoes of such an SME businessman and visited the government website to seek help. As your Lordships may know, the new entry portal for all government help is www.gov.uk and on the very front page there is a link to business. Within two clicks I reached a page that enabled me to read about government-backed support and finance for my imaginary business. This in itself is incredibly impressive. However, unfortunately the clarity ended there. To my horror, the next page offered a choice of 791 different schemes to assist me. Equal prominence was given to the somewhat parochial Barking Enterprise Centre and the Crofting Counties Agricultural Grant Scheme in Elgin. While undoubtedly very worth while, they were given the same prominence as the perhaps more relevant export credit guarantee scheme. There is of course the opportunity to filter down your requirements, and I did then select finance for a business based in London with up to 250 employees in the service sector at the growth stage, and this managed to narrow the schemes down to 42, although surprisingly no filter was offered for people looking specifically for export finance. Accordingly, I would like to suggest providing a very early help button in the government website so that potential SME exporters can have short but direct conversations with experienced UKTI advisers about the route through the maze that is offered to them—because the help is actually there. I believe that this was included in Recommendations 11 and 12 of the Select Committee report, but I have not found any real evidence of their being implemented.
My second point relates to the excellent work being done by the Foreign Office to help SMEs export, and while not strictly on the point of finance for SMEs, it is part of the road to success. Many large UK corporates have consistently mentioned to me that they have noticed a dramatic change in the approach by the Foreign Office in parts of the world where they are seeking to do business. Perhaps it reflects a change in the role of diplomacy abroad, but more likely it reflects the commercial approach to life taken by the current Foreign Secretary to ensure that UK plc benefits from our existing foreign service facilities. Perhaps I may encourage my noble friend the Minister to publicise these enormous benefits that are of value to both the large corporates and SMEs. They are able to obtain advice from UKTI representatives in our embassies abroad and, of course, from Foreign Office personnel. It seems to have worked for large corporations and there is no reason why it should not work for SMEs.
Thirdly, and finally, is the issue of the relationship between the large retail banks and SMEs, which I believe needs further examination. It is a large topic so I will not take too much time here, but even last week the Treasury Select Committee heard that some of the banks really did not cover themselves in glory during the last recession, and there needs to be a realisation that they may not be the long-term answer for SME lending. I therefore welcome the initiatives that have been started to encourage new entrants to the market.
Lord Haskel (Lab)
My Lords, I, too, congratulate the noble Lord, Lord Cope, on arranging this debate. It is nice to know that someone has listened to us and has read our work, and that the Government have kept their promise to report back. I also thank the Minister for his letter of 27 March. He told us what has been and is being done in response to the matters we have raised. From his letter, it seems that quite a lot is happening: refocusing the work of UKTI; building more partnerships and working with intermediaries in order to create more awareness and confidence; and focusing on medium-sized businesses. All this is very positive and a welcome response to our report. So, like the noble Lord, Lord Cope, I have to ask: does UKTI have the resources and back-up it needs for all this increased activity? Are adequate staff with business experience available, especially to satisfy the needs of medium-sized businesses, which will be more demanding?
As we have not taken any evidence, it is only indirectly that we can find out how effective all this work has been. For instance, the noble Lord, Lord Leigh, spoke of the various finance schemes. Parliamentary Questions last month in the House of Commons revealed that the export refinancing scheme has still not helped a single business. The direct lending scheme has not helped a single firm. These schemes were designed to replace the export enterprise finance guarantee scheme, which was abandoned after it assisted only five firms. Yes, the number of transactions by UK Export Finance has increased, up to a not very impressive 370, but how many of these deals apply to SMEs? Judging by the briefing received from the Federation of Small Businesses, not many do.
The point is that, as many noble Lords have said, this is a long-term project and it will take time. There will be mistakes, which have to be put right. While working on our report, we went to Bavaria, which interested my noble friend Lord Giddens. The state of Bavaria exports more to the UK than the whole of the UK exports to Germany and we wanted to find out why. Of course, having Mercedes there helps, but the real point is that the state of Bavaria has been supporting exporters for 60 years. There has been unbroken political support, whoever was in power.
That is why I was rather disappointed that the heading on page 9 in the Minister’s document Britain Open for Business: The Next Phase spoke about:
“Sustaining the many good initiatives of the last three years”,
as if it all started when the coalition came to power. The Minister is misinformed. There was government help for exporters when Labour was in power and before that. Many noble Lords have spoken about the need for continuity. For that, Ministers have to show that we are building on the past, not blaming previous Governments as this Government seem to like to do. This is what will help to convince small businesses that government is and will be serious about exports.
To give credit where it is due, I welcome the Minister appointing trade ambassadors from all the political parties and none. Do the ambassadors work with SMEs, or do they concentrate on big deals in special countries? Does that mean that the staff are organised on a sectorial or a geographical basis? I hope that the Minister will listen to other noble Lords, and take politics out of the equation and keep commitment and cross-party continuity in.
We also have to move with the times, which means looking at exports more broadly—perhaps more broadly than in the Minister’s report. The noble Lord, Lord Storey, mentioned intangible assets. On 31 March, the Minister’s own department told us that intangible investment,
“continues to outstrip investment in tangible assets”.
Perhaps this different kind of investment explains the success of many of our younger and newer rising SMEs. Is UKTI doing enough to encourage exports by this business sector? Events such as Export Week and the Liverpool festival that the noble Lord, Lord Storey, told us about are very welcome. They must help many business sectors, but do they help the knowledge sector?
Last month we won a contract to run 16 FE colleges in Saudi Arabia—yes, helped by a government unit designed to boost exporting education. Great—it is a welcome sign of co-operation between government departments and of using exports to assist building capacity. Were SMEs and UKTI involved? Education and intangibles are all part of the knowledge economy, requiring the best brains. So why does the Home Office put barriers in the way? The Minister does not need me to tell him of the problems between the Home Office and BIS over visas for students, technicians and engineers. We need them if we are going to build our exports of knowledge. Indeed, the Minister’s report speaks about this. It is no use saying, as the Minister does in his report, that because this is part of the cross-government industrial strategy there are no longer any problems. Every businessman or researcher’s day-to-day experience tells him or her otherwise. This is where there is growing export potential for SMEs, so let us have a unity of purpose over this.
In our report we emphasise the importance that SMEs attach to working with local organisations. The Minister hardly mentions this. There seems to be little in the Government’s report about the softer or more technical skills of exporting that are so important to SMEs—language and culture, licences, training, signposting. The noble Lord, Lord Cotter, got the same briefing as I did from the Federation of Small Businesses, which speaks of their absence. These are serious barriers and will become more so as normality returns.
At the IMF spring conference the Chancellor said that normality is returning—normal interest rates, normal rates of inflation and normal growth. This is already affecting our exchange rate and the price of our exports. How does UKTI see this affecting our export performance and what advice is it giving to SMEs to prepare for this?
At the same time lots of negotiations are going on under the auspices of the WTO. How are these going to affect our SME exporters? Are their interests being taken into account? Most importantly, how does UKTI respond to the promise of an EU referendum and the uncertainty that that creates, bearing in mind the importance of the European single market that was stressed by the noble Lord, Lord Green? I assume that UKTI has answers to these big questions because all exporters, large and small, must be thinking about them if they have not started asking already.
Finally, last month we were told that from September the Office for National Statistics is going to overhaul our national accounts. All our R&D, knowledge and intangible business are now going to be included in our GDP instead of being seen as a cost of production. Of course, this will bolster our GDP numbers. Leaving aside that this usefully coincides with the run-up to an election, and that there is more to life than GDP, what about exports? Will this reform bolster our export figures as well, to show that really we have been doing better than we thought and are getting closer to the admittedly very testing targets mentioned by the noble Lord, Lord Storey? If so, I hope the Minister will assure us that in no way will this reduce the commitment, hard work, energy, investment and support that UKTI and Ministers from other departments will put into encouraging SMEs to export. Whatever the new figures say, more exports will remain an essential part of balancing our economy in the general economic interest, as the noble Lord, Lord Green, explained, not just for business but for our common good. That is why we have to continue with our efforts, and I wish the Minister every success.
Lord Grade of Yarmouth (Con)
My Lords, I join those who have thanked my noble friend Lord Cope for securing this debate and for chairing the committee—but, most particularly, I want to thank him for allowing me to participate in that committee and for listening to me drone on during the many hours of debate. Speaking this late in a debate, you always have that sinking feeling that everything you wanted to say has been said. That is not particularly true in this case, although I have great difficulty in disagreeing with any of the points made by so many distinguished Members of this House.
The issue that I want to raise is by way of the tradesman’s entrance into this debate: I want to talk about salesmanship, a word that has not been used during the past hour or so. Behind every successful company is a successful salesman or saleswoman. That was graphically illustrated to the committee by a wonderful woman from Harrogate who came in and told us that she had been to a conference organised by Goldman Sachs. She had a small speciality cake company and had decided that she was going to export her speciality cakes to the most difficult and competitive market in the world: the United States. So what did she do? She did not go on to a website; she did not seek help. She bought herself a cheap ticket to New York, smuggled in a few tins of cakes from Harrogate and did what everybody has done in their time: pounded the pavements until she had sold some cakes—which she did to some high-class hotels and establishments. Her business is now thriving. I rest my case.
The importance of salesmanship was drummed home to me by my late and beloved uncle, Lord Grade of Elstree, who is probably one of the greatest salesmen that this country has produced. He was into the American market, selling television programmes to the Americans in the 1950s and 1960s, which was unheard of. He valued his salesmen; he loved a good salesman. He was a great salesman himself, if not the greatest. He was asked to give a final interview to somebody who was more or less the successful candidate, subject to his sign-off, for the new head of advertising sales in his media empire, which included a commercial television contractor. The salesman came in and Lew said to him, “They tell me you know how to sell, young man”. He said, “Yes, Lord Grade, I think I do, sir”. Lew was smoking a 10-inch Havana cigar—he was on about his fifth, because it was 7 am. He picked up the jug of water on his desk and said, “Young man, sell me that jug of water”. The guy scratched his head and he got up and went behind Lew’s desk. He picked up the waste-paper basket, which was full of paper, put it on the desk, picked up Lew’s matches, dropped a lighted match into the basket and said, “How much will you give me for this jug of water?” The point of the story is lost in this country in a whole history. We have used the word “salesman” in the past as a term of abuse—“Oh, he or she is just a salesman”. My goodness, how the world has changed. In the world of casual work, the kids in the schools have got to learn to sell themselves into jobs; they have got to learn how to sell themselves.
My noble friend Lord Leigh alluded to the Foreign Office and the wonderful prosperity agenda. Diplomats in embassies around the world are trying to help our exporters. What training has the Civil Service had in selling and salesmanship, or even in recognising who is capable of selling? Where is the training to back up the prosperity agenda of the Foreign Office? It is a very important initiative to go to a new country and to have the support of the British Government locally. It can open many doors that pounding the pavements would not. It is terribly important, but the training is very important.
My noble friend the Minister has many issues to deal with here. I am absolutely convinced that he understands the issue. The initiatives coming forth from the Government, not least in their response to this report, are hugely valuable and demonstrate beyond doubt the importance that they attach to the SME exporting agenda. If I could ask him to do one thing, it would be to have a word with his colleague in education to see what can be done in schools to teach children the importance of learning how to sell themselves. Anybody who is selling a product has to sell themselves first; then they can sell the product if they believe in it.
Salesmanship is at the heart of everything we do in business. Without it, we are going to be lost, and we need to recognise that. The Government’s assistance through all their initiatives—UKTI, banking and export credit guarantees—is invaluable, but in the first instance somebody has to make a sale. They have to eyeball somebody and say, “Here’s a product—will you buy it?”. To have exports, somebody has to import. It is a two-way deal and that takes salesmanship, so my last word is to implore the Government to try to move the art of salesmanship up the curriculum a little. We should celebrate and not denigrate people who are great salespeople.
Lord Stevenson of Balmacara (Lab)
My Lords, I thank the noble Lord, Lord Cope, for securing this debate, which has been very interesting. It is obviously just my luck to follow the best speech. I seem to have a habit of finding myself in the list immediately after the noble Lord, Lord Grade of Yarmouth. This time I am going to turn it back on him, as he did not tell us whether the guy got the job, and without that I think that his story lacks a certain amount of credence. Nevertheless, he made a very good and important point which had not been made before—that somehow in our British make-up, we do not yet recognise that salesmanship ethic. I do not believe that this is a political point. We do not really understand what it is that people who trade do, nor do we embrace them. We also have problems with engineers and others who are at the heart of what we can make out of our society in terms of the growth, jobs, employment and prosperity that we hope will flow from that. That is a good context for what we have been listening to today.
I thank the noble Lord, Lord Cope, for getting us into the debate, although I understand that the earlier credit has to go to the noble Lord, Lord Popat, for suggesting this proposal. As my noble friend Lady Cohen said, this seems to be a report that gives and gives—which is nice as we have had a second chance to come back and look at the issues that were raised. They are important and I agree that they are not party political; these are issues that we can all get behind and support. The original report had a government response, and what we are looking at, in a sense, is that response. What have the Government made of the original report and how much has changed since then? We are grateful to the Government for doing that and particularly to the noble Lords, Lord Green and Lord Livingston, whose work in this field we all applaud because they have put a huge amount into it. Having done his stint the noble Lord, Lord Green, is now able to reflect and give us the elder statesman-like view, which was very nice, while I am sure that the noble Lord, Lord Livingston, has much more to give us.
However, one of the themes that comes through is that we do not really focus enough on SMEs—and it is “S” and “MEs”, because there are differences. As my noble friend Lord Haskel said, some of the original recommendations have not really picked up on some of the particularities in the report. In many cases, there is not quite enough detail on what we are doing. We are a trading nation and we cannot survive in the modern world without generating a much greater level of exports than we currently have. It is important, as the report makes clear, that attention is paid to small firms. That is not just because they export less while larger firms export more, which is obvious from both the macroeconomic and microeconomic side, but because of the potential that they have, being smaller, to grow and employ more—and to generate more wealth.
My noble friend Lord Giddens mentioned the different world that we are in: the age where we have the internet of things as well as the internet of ideas. As we know, in that world there are often real opportunities for small to be big without having to go through some of the difficulty with growth and the other difficulties in earlier traditions of the way in which the world of commerce and business works. I think we are agreed that there is a need for strong government intervention, working with partnerships and existing business organisations. As I have said, it is not a party-political point and we support that.
There are perhaps four areas which I would like to pick up because the list that the noble Lord, Lord Livingston, has to respond to is very long and covers a wide range of things. I would not want to particularly burden him but it might help him if I signposted the areas where there is some need to make points.
The noble Lords, Lord Cotter and Lord Green, and my noble friends Lady Cohen and Lord Haskel picked up on the need for more integration at a local level between SMEs, local enterprise partnerships, chambers of commerce, UKTI and UKEF—a point that was picked up originally in the report by the noble Lord, Lord Heseltine, No Stone Unturned—to ensure that the whole group of people who are involved in the process of getting exporting happening has a fructifying base of activity within those groups. It would be interesting if we could understand a little more about that, so perhaps we could have a comment from the Minister on what UKTI has been able to do with UKEF, the chambers of commerce and LEPs in relation to that work.
There is a point related to that which has been touched on only a couple of times but it is important: there has been a growth in the number of international trade advisers. My noble friend Lord Haskel asked for a bit more information about that. I tried to look this up beforehand—I keep bumping into people who say, “I’m off being a trade ambassador these days”, and, as has been said, they are from all parties and none—and it would be useful to have a list of them but I could not find one anywhere. I wonder if in fact it is published and perhaps it is just me who cannot find it. What exactly is the task that those ambassadors have and what performance indicators are they measuring up to? I am sure that they are a good thing but I lack some detail, and this subject was picked up in the report as something about which more information would be available.
The bulk of the comments received today have been on recommendations 5 to 8 about access to appropriate finance. It is a point that reaches way beyond the main focus of the report, which is about export, because it is also about import substitution, which my noble friend Lord Giddens spoke about, as well as general activity within the domestic market. Why are we so bad at financing those who seem to be able to generate wealth, who have full order books and who want to grow, in a way that will allow them to do that? The latest report that I was able to find was the NAO report on the combined Treasury and BIS work in relation to SMEs. It is interesting that that report comments that there have recently been reports about the flow of new bank term lending to SMEs. The latest figures show that it fell by 23% between 2009 and 2012; that 70% of SMEs whose loan applications are rejected can find no alternative finance, and the younger and smaller firms are obviously the worst affected by that; and that—this is quite an important figure—the funding gap, which the NAO defines as the difference between the funding required by SMEs and the funding available, is about £10 billion to £11 billion, and it may reach about £22 billion by 2017. The point being made by the NAO is that there are significant problems in this area. Not surprisingly, it concludes that there are a lot of data on SMEs seeking finance,
“and there has been a renewed focus on research into SME financing. Many of the individual schemes have been delivering against their individual targets. But BIS and HM Treasury have not managed the range of initiatives sufficiently as a unified programme, and have not clearly articulated what the schemes are intended to achieve as a whole, given the resources available. As a result … at present, value for money has not been demonstrated”.
That is a fairly critical point. Time has moved on since that report in 2012, but I would be grateful if the Minister could pick up on that point because I think we need a new fix on some of it.
It is easy to be critical about that, although clearly there is good work going on in UKEF, but maybe we need some new initiatives—perhaps more support for bodies such as the British Growth Fund, which seems to have been doing good work in getting companies from an early stage of development up to the next phase where they are developing greater coverage domestically and exporting. What about, as has been suggested in some areas, a tax break for those who wish to export? We currently have tax breaks in the entertainment industry, for instance, which is a good thing for film, high-end television, animation and now for games, but there is no tax break for exporting. I wonder if that is something that the Government might look at. I am sure that the Minister will say that that is a matter for the Treasury and not something that he could possibly dare comment on, but I hope that it might feed into thoughts in those areas.
The point made in recommendation 14 about language and cultural differences is one that often throws up problems for the relevant bodies. My noble friend Lady Cohen mentioned this and had a solution for how perhaps to get people up to the first stage of this, but there is a point in the original report asking for a language management strategy. I wondered how much progress had been made with that.
The noble Lord, Lord Storey, talked about skills training and particularly about apprenticeships. It is always important to ensure that the training elements that are required to see the current generation supported but also to help future generations to grow are in place, whatever the size of the organisation, so perhaps we could have some comments on that.
The final item in my list—although, of course, there are many others—is intellectual property. It was originally raised by the noble Lord, Lord Cope, and is something that I have had to spend some time on as it falls within my brief in my BIS activities.
There has been a significant number of changes in the way that the Government have approached intellectual property in the UK, and there are limited opportunities to make changes because we are subject to substantial international agreements, particularly European ones. That is not necessarily wrong, but what is wrong is the feeling that there is a lot you can do on this. I suspect that the grounds for movement are very small. However, I worry that the changes that are being brought forward are largely changes for change’s sake rather than part of a coherent approach. Given what has been said about the future of IP and the internet of things as well as of individuals’ thoughts, we need to get intellectual property right. I do not think that it needs a root-and-branch review, because there is limited scope, but it would be helpful to think again about the balance between innovation, the premium that you need in order to get people to innovate, the IP framework that is required to protect that innovation and the reward that comes from it. I wonder whether life plus 70 years is the right tariff for that equation. That is a big question. The original arrangements for design rights, which limited them to a more patent approach, have a lot going for them. It is a pity that we have seen government proposals moving away from that in the past couple of years. This is not an easy area, but we have to get our thinking absolutely right on IP and the way forward if we are to make a success of the new world.
There are a number of points that I am sure the Minister will want to cover in the brief time available to him. If there is not time for him to respond to them all, perhaps he will write to us, because this debate has been so good that it would be helpful to have more detail. I look forward to hearing from him.
The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)
My Lords, I thank my noble friend Lord Cope for initiating this important debate and I thank all noble Lords for their contributions, particularly those who were members of the committee which produced such an excellent report last year. I particularly thank my noble friend Lord Popat, who not only initiated the report but chose to keep me company on the Front Bench.
It is clear that those who have spoken this evening understand the challenges small and medium-sized businesses face and the advantages to be gained from trade not just for them but for the UK economy more widely. Many good points were made, and I will try to pick up as many as I can. Noble Lords will understand if I focus particularly on exports rather than on wider economic policy, given the time available.
The noble Lord, Lord Grade, raised sales and salesmanship. I can assure him that in the Government I have seen a huge focus on selling the UK and UK trade around the world. In fact, the Prime Minister is one of the best salesmen for Britain, and the reason I am standing here doing this job today is that he is such a good salesman. We note the need for very good salesmen. I come from a family background of sales, a bit like the noble Lord does.
UKTI recently issued Britain Open for Business: The Next Phase. It was called The Next Phase because it builds on the very good work of my predecessor, my noble friend Lord Green, who spoke in the debate today. We are seeing progress. We are seeing more companies than ever being helped by UKTI. That means that more companies are receiving advice on how to enter new markets; more companies, particularly small ones, are being helped to go to trade shows; and more are using UKTI to improve their digital presence around the world—again, particularly small companies. Indeed, in the current year, we are looking to double the numbers of companies assisted four years ago. It will be a substantial improvement, and that means more small and medium-sized companies are getting help.
The noble Baroness, Lady Cohen, asked about overseas chambers of commerce, and my noble friend Lord Green highlighted the point. We are supporting chambers of commerce around the world to improve the services they offer to exporters. As part of this initiative, I have been travelling around the world. In the past few months, I have opened British business centres where British businesses, particularly small businesses, can go, meet people, use the facilities and get advice. I have been to Mexico City, Dubai and Budapest, to name but three. We will continue to work with the chambers of commerce and see the overseas business networks as very important. We will encourage those chambers which do not exist to exist and those which do exist to be better, and those which are good to become real champions of exporting for UK companies.
My noble friend Lord Leigh stated that Britain’s diplomatic network overseas is now a real asset to British business. Our diplomats and UKTI officials are helping new businesses export every day. I have had so many unsolicited comments from companies of all sizes about the help they receive from embassies or people in post. Of course there is more work to do, but the improvement over the past five years has been outstanding. We are also seeing a positive impact from some of these changes. We have seen surveys from the CBI and chambers of commerce showing a high degree of confidence among manufacturers in exporting.
A number of noble Lords raised the point about recent falling exports. This is of course one of the impacts of the high pound. Just translating goods sold in foreign currencies into sterling has an impact. For instance, in dollar terms, in February our exports actually rose by 8%. Certainly, a 10% increase in the value of the pound will have an impact on the translation of foreign currency exports, which many of them are, into sterling. Indeed, despite all the improvements, I recognise, as many noble Lords in the House have said, that there is a lot more to do. That is what I want to talk about.
Before I get into the details, I want to make an important distinction. We talk about SMEs but, actually, medium-sized companies—the “M”—are different from the small. Medium-sized companies are typically small versions of large companies rather than large versions of small companies. They have to be treated differently. They are also the area, as was highlighted by some noble Lords, where the UK underperforms our competitors. This is what the CBI calls “the forgotten middle” and focusing on them as a country, the CBI believes, could be worth to our economy overall somewhere between £20 billion and £50 billion.
That is why I recently wrote, as was mentioned by a number of noble Lords, to the 8,900 MSBs in the UK to raise awareness of how UKTI can assist them. A UKTI team will then contact each and every one of them, as long as they can get through on the phone, and find out, first, if they are exporters, and, if they are not, whether they could be exporters. If they can, they will offer them a tailored programme and a named account manager. Simply, there should not be a medium-sized company in the UK that does not fulfil its potential as an exporter because it is unaware of the help that government can provide. That named adviser will also be able to point them to other government assistance; the noble Lord, Lord Leigh, raised this point. That may be relevant to their business, because they will get to know them as salesmen and account managers do. They will also form a first point of contact for many government issues for these businesses.
Moving more generally to companies of all sizes, I say that the issue of awareness is very important. It was raised by my noble friends Lord Cope and Lord Cotter, among many others. We are very much revising our marketing strategy, first to ensure that we understand what smaller, often first-time, exporters need, and improving our communications to make them, frankly, more relevant for businesses. We will also be significantly improving our use of the internet. The “Exporting is Great” campaign, of which many noble Lords will be aware, will raise awareness of the benefits of exporting and of the support available. Export weeks continue to bring in new customers. Last year, we held two export weeks which brought in 8,600 customers to UKTI. Our latest export week took place just a few weeks ago and reached over 3,000 companies on its own.
We are also working with intermediaries, whether they are business representative bodies—such as the CBI, the Engineering Employers Federation, the FSB or the British Chambers of Commerce—professional service firms and even the banks, to increase awareness of UKTI among their members or customers. We are also co-ordinating with other government bodies to ensure that this is a cross-government effort to raise the profile of our export efforts.
My noble friend Lord Storey kindly advertised some of the conferences we are holding. I echo his comments on the Liverpool International Festival for Business: noble Lords should visit it. I will be speaking there, but there will be other, better speakers. The noble Lord advertised Liverpool, and if he does not mind, I will advertise Glasgow. At the Commonwealth Games we will have the British Business House and a business conference which will encourage both inward investment and exports. Also, so Yorkshire does not feel left out, I mention that the Tour de France is leaving from Yorkshire—Le Grand Départ. I was up there recently and we will shamelessly use this as an opportunity to sell the UK around the world.
As my noble friend Lord Leigh highlighted, government could generally simplify the business assistance proposition. I can assure him that senior BIS Ministers are currently engaged in a Star Chamber process to look at how we can improve matters. UKTI itself, however, talks directly to companies and tries to provide a tailored service which depends on what they need rather than trying to sell them individual products.
On the question of access to finance, availability of finance is a topic that arises whenever the issue of companies—in particular our smaller companies—is debated. That issue was raised by many noble Lords, including the noble Lords, Lord Giddens and Lord Stevenson. While there is some improvement in the position, bank lending remains muted at best. The Government have introduced a number of schemes to assist with this, such as Funding for Lending, the Start-Up Loan Scheme and the establishment of the British Business Bank. We are also trying to encourage a number of challenger banks and non-traditional sources of finance. Unfortunately, to discuss all those initiatives in depth would take a full debate on its own, so I hope noble Lords will excuse me if I concentrate on what UK Export Finance is doing to help exporters.
Our aim is to make UK Export Finance one of the most competitive export credit agencies in Europe and to substantially increase the numbers of companies it supports. It is a reasonable criticism that it concentrates on the large companies, but we are seeing some improvement in that position. The number of companies that UKEF helped last year has risen by 50%. However, there is more to do. We have doubled UKEF’s lending facility to ensure that more businesses are able to take advantage of it. We have improved and widened UKEF’s product range to better support exporters and their customers who want to buy British. We are doubling the number of export finance advisers that are available to UK companies. They will not only advise on what UK Export Finance can do but will also provide advice to smaller companies on how to structure their help from banks, which is very important.
We also have a marketing campaign to raise awareness of UK Export Finance, which is, unfortunately, somewhat lower than UKTI—which in turn needs to improve its awareness. Further, we hope to introduce new legislation next year that will enable UKTI to lend to exporters rather than just supporting individual contracts, which it cannot currently do under the law. It will also widen the type of exports that can be covered by UKEF in future. We are consulting with businesses and business groups such as BExA on further improvements to both products and processes within UKEF and are in close contact with the banks to ensure that they are geared up to play their part in expanding our activities.
My noble friend Lord Cope raised the issue of intellectual property. UKTI works closely with the Intellectual Property Office. There is a significant amount of joint working both with the UKTI regional network of international trade advisers and the geographical desks. IPO trains business advisers through its IP Master Class, which is integrated into UKTI programmes. UKTI posts overseas also provide help locally through our IPO advisers in key markets and the regions around them such as Brazil, China and India and south-east Asia. They work with local IP enforcement agencies to protect British products, alerting companies to IP exposure and supporting UK businesses with IP issues. Indeed, they helped over 200 companies in the last year alone.
Many noble Lords highlighted the issue of confusion among companies around the Bribery Act; I can provide some help on that. The MoJ and BIS are currently engaged in a project which seeks to obtain feedback from small companies on the impact of the Act and the MoJ’s guidance on it. I hope that that will provide some guidance to us on our next steps to make matters clearer for smaller businesses.
I turn now to the digital economy, which is becoming more and more important for exporters. We should be proud that the UK is the leader in the whole of the EU in online selling, but we should note that we can build on that position. That is why UKTI has launched the Grow Online, Expand Worldwide campaign, which delivers training and advice to exporters and provides funding to help to improve their web capability and capitalise on the rapid growth of mobile technology and social media.
In addition, UKTI’s digital acceleration programme is designed to enable companies to exploit the opportunities in the world’s online shopping malls. For example, the Prime Minister and I, on our trip to China in December mentioned by the noble Lord, Lord Leigh, announced a partnership with the massive online shopping platform Alibaba Tmall, which will support UK brands and have a UK channel. In doing that, we see a great opportunity; in just a few months since we announced the deal, 100 companies have applied to join the scheme and roughly a quarter have their products online.
I turn to free trade agreements, which this Government are championing between the EU and its trading partners around the world. One of the most important of these would be with the US. TTIP, as it is known, is a huge opportunity, but there is often a misconception with it, in that people think that it is about large companies—and that is the same for free trade agreements more generally—but, actually, it is the smaller companies that cannot cope with regulatory differences between countries, non-tariff barriers or the impact of tariffs on their businesses. Our role in championing free trade agreements is most important for small businesses, and that is what we will continue to do.
My noble friend Lord Green pointed out that completing the single market was a very important part of that. Again, this will help small businesses. Often the UK is painted in terms of what it is against with regard to the EU; I would like to state what it is for. It is championing the single market, free trade and competiveness for EU companies, and we will continue to do that for companies of all sizes.
A number of noble Lords mentioned languages. Of course, the English language is used around the world, but we need to improve the language capabilities of our exporters to give them an edge in competitive markets. UKTI recently commissioned an academic report to review the impact of language skill deficiencies on UK exports. I have to tell noble Lords that it was significant. We have provided funding to each English region to create language and culture adviser posts, which will deliver advice to small and medium companies who are exporting. UKTI also provides small companies with an export communications review, a bespoke report that will look on how they can overcome language and cultural barriers when working overseas. Over 700 companies are expected to take advantage of this service in 2014-15.
In direct response to this report and debates in this Chamber, we have recently announced the launch of the Postgraduates for International Business scheme. This aims to improve language capacity for smaller and mid-sized businesses by placing postgraduates with language skills, who usually have come from other countries, in companies to undertake project work, either during or shortly after their degree. I also remind noble Lords that we have a large number of locally engaged FCO and UKTI staff in posts around the world who are expert in the local language and business culture and who offer day-to-day practical advice to new companies on doing business in the countries that they are based in.
I shall pick up a number of other comments that were made. My noble friend Lord Storey raised the issue of LEPs and the RGF. It is up to LEPs to bid for funds, and we will continue to work with them to raise the funds that they need to improve exports and inward investments. The LEPs, the chambers of commerce and UKTI regional staff work together very well in a number of regions. However, I will not pretend that it is uniform or effective in all places; we are certainly looking to bring the best as a model and bring the others up to that standard.
The noble Lord, Lord Giddens, raised the issue of reshoring. The Prime Minister announced at Davos that we would establish Reshore UK, a one-stop shop, as part of UKTI and the Manufacturing Advisory Service, to enable UK companies to come back to the UK and set up again. I believe that, with the attractiveness of the UK as a market, this presents a real opportunity to reinvigorate our manufacturing and supply base.
The noble Lord, Lord Cotter, referred to OMIS, which is a heavily subsidised service. The cost is usually about £1,000 to £1,500, which I think is reasonable for a very valuable service. As always, we have to balance priorities. We will continue to review its use, and our support for it, along with the many other services we support, virtually all of which are done on a subsidised basis.
The noble Lord, Lord Haskel, and, I think, the noble Lord, Lord Stevenson, mentioned business advisers and trade envoys. I should clarify that we have business advisers who are usually business experts who travel round the world on behalf of their companies. They tend to be the CEOs and chairmen of large companies. When they do so, they raise the profile of British businesses free of charge, particularly in the sectors they represent, whether that be professional services, automotive or whatever, and do an excellent job. The trade envoys are geographically based. In fact, many of them are Members of this House and also do an excellent job. They seek to promote the UK in countries which do not get the level of ministerial visits that others do. I would be very happy to provide a list of them, as requested by the noble Lord, Lord Stevenson, and take this opportunity to thank all of them for the very difficult work that they do. It is unpaid and sometimes thankless but is very important.
A number of noble Lords raised the possibility of introducing some sort of tax credit for exporters. As anticipated by the noble Lord, Lord Stevenson, of course I would say that this is a matter for the Treasury but I know that it is aware of this suggestion. There are challenges with such a scheme, not least that of people exporting and reimporting but, as I say, I know that the Treasury is aware of this suggestion.
I apologise if there are any matters that I have not covered. I have tried to pick up the main issues and will follow up any others in writing. I end as I began by thanking my noble friend Lord Cope and his committee for the report. I also thank all noble Lords who have taken part in the debate. I thank noble Lords for their continued interest and for being salespeople—that seems to be the phrase of the day—for our export effort and ask them to continue to be so.
I echo what my predecessor said. I expected him to say that this issue is not a sprint but a marathon, and, sure enough, he said just that. We have suffered for decades from a weak trade performance over a number of Governments and it will take some years of sustained effort to change this. I assure the noble Lord, Lord Haskel, that we will continue with this effort and work tirelessly. Irrespective of what the figures may say, we will continue to push to make exports and our export efforts for companies of all sizes, but particularly for small and medium businesses, a key priority of our Government.
Lord Cope of Berkeley
My Lords, I thank everyone who has contributed to the debate. I thank particularly my noble friend the Minister for a clear and encouraging speech, for which we are grateful. I am grateful to all those who complimented the Select Committee’s report, particularly those who were not on the Select Committee.
I am excited about the prospects for Britain in the digital revolution, which I think are as great as they were in the Industrial Revolution all those years ago. That is partly why I worry about IP and issues of that sort.
The Minister spoke about “salesmanship” being the word of the debate, as it were—at least following the speech of my noble friend Lord Grade. After all, if the House of Lords cannot confer respectability on salesmanship, who on earth can? It is our job to try to do that, and I would add engineers to the list—as was suggested from the opposite side. By the way, if anyone wants to look up the exquisite hand-made cakes, the reference is on page 65 of the report. One can follow up from there, and I believe that the cakes are delicious.
Also mentioned was my noble friend Lord Green’s reference to the task of rebalancing the economy as being a marathon, not a sprint. That may also prove to be true of debates on SMEs and exports. I feel sure that we will contrive further debates to monitor the progress of UKTI in particular and rebalancing the economy in general. My noble friend Lord Popat started something when he godfathered the creation of the committee. This will run and run until the economy is rebalanced.