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Oral Answers to Questions
(10 years, 5 months ago)
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Iain Stewart (Milton Keynes South) (Con)
1. What steps he has taken to promote national lottery funding to sport, heritage and arts groups in the past 12 months.
The Secretary of State for Culture, Media and Sport (Sajid Javid)
Through the work of the national lottery promotions unit and individual national lottery distributors, we continue to raise awareness of funding for good causes. Demand for lottery funding continues to outstrip supply, with over £1.5 billion spent on national lottery projects in just the past 12 months.
Iain Stewart
The Heritage Lottery Fund recently made a large contribution to the new visitors centre at Bletchley Park in my constituency and also paid for the restoration of some of the old codebreaking huts. May I invite my right hon. Friend to visit Bletchley Park to see for himself what a vital role the Heritage Lottery Fund plays in preserving the heritage of the country?
Sajid Javid
I have visited Bletchley Park a number of times, as I am sure all hon. Members have done, to look at its vivid story and see how that is brought to life. I would be more than happy to do so again. It is a fitting tribute to the remarkable men and women who worked there, including a wonderful woman in my own constituency, Betty Webb, who served there. I am delighted that Bletchley Park has received funding from the Heritage Lottery Fund for its restoration. My hon. Friend is right to give credit to John Major, as he has done in the past, for setting up the fund.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Secretary of State may know that as chair of the John Clare Trust, I have been the beneficiary of quite a lot of Heritage Lottery funding. I am delighted with it and would like more for projects going forward in my constituency, but will the right hon. Gentleman remember that it does not replace a Government committed to culture and heritage?
Sajid Javid
I am pleased to hear that the hon. Gentleman supports the work that the fund is doing for the causes that he holds dear, which are very good causes. The principle of additionality is very important and the distributors must adhere to it at all times.
Tracey Crouch (Chatham and Aylesford) (Con)
The Secretary of State will be aware that alongside the national lottery, society lotteries contributed £145 million to good causes in 2012-13 and could provide a lot more if the prizes, draw and turnover rules were deregulated. His Department has long promised a consultation on this but has yet to publish it. In the light of the recent Centre for Economics and Business Research report on society lotteries, can he tell the House when the consultation might come?
Sajid Javid
Changes in lottery and gambling markets have made it clear to us that the consultation on society lotteries should be more wide ranging than we had previously thought. The Gambling Commission is providing us with further information and advice, and we are planning to conduct the consultation later this year.
Helen Goodman (Bishop Auckland) (Lab)
The Arts Council announced this week that 99 organisations will be financed solely by the national lottery and it has to cut support to 58 other arts organisations because of the huge cuts in the Department. Local authorities have also been forced to reduce support to arts organisations. Given that London gets 20 times as much philanthropic money per person as the rest of the country, does the Secretary of State agree with the statement from the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey) that arts organisations that cannot raise philanthropic funds are totally misguided and “pathetic”?
Sajid Javid
The hon. Lady will know that I do not agree with her. She knows that Government grants for arts funding have been cut because the Government of whom she was part left our country with the largest deficit in the industrialised world and left us with very difficult decisions to make. The good news is that the Arts Council receives funding from other sources and, taken together with total funding of almost £3 billion during the life of this Parliament, the level of funding is virtually unchanged from the situation in the previous Parliament.
Mr John Leech (Manchester, Withington) (LD)
Given that many regions, particularly in the north, generate disproportionately more revenue for the national lottery, what further steps will the Government take to ensure that other regions where more money is generated get their fair share of sport, heritage and arts funding?
Sajid Javid
The hon. Gentleman is right to raise that important point about the regional distribution of the funds. It is something we discuss with the lottery, and I shall be taking it up with it further.
Sheryll Murray (South East Cornwall) (Con)
2. What steps he is taking to ensure that superfast broadband is available in remote areas of the UK.
The Secretary of State for Culture, Media and Sport (Sajid Javid)
The Government’s broadband programme will provide superfast broadband to 95% of UK premises by 2017. In February 2014 we announced nearly £3 million in further grant funding to support superfast coverage in Cornwall.
Sheryll Murray
One of my constituents who runs a small business in a not-spot area purchased satellite broadband after being told that they would not get a fibre-optic connection. Can they now bid for some money if Cornwall council is successful to enable other connections, and will it cost people more for any other type of connection?
Sajid Javid
Superfast Cornwall has a satellite broadband offer for premises that currently have slow-speed broadband and are not likely to gain a fibre-optic connection. The grant of almost £3 million that the Government gave in February in phase 2 will help increase coverage. My hon. Friend’s constituent can make an application to Superfast Cornwall, and that will be a decision for it to make. We are making progress on the issue, but I agree that there is much more to do.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
10. Finland and Sweden will cover about 99% of their populations with 4G networks capable of delivering high-speed broadband, but the UK’s model of coverage with 2G and 3G has failed many people in rural and island areas. Will the Secretary of State consider a different approach to 4G for rural areas, including mast-sharing and controls on rents at mast sites, especially as 4G will deliver up to 30 megabits and might wirelessly reach areas that cable broadband might not reach?
Sajid Javid
The hon. Gentleman will be pleased to know that there has been a significant increase in superfast broadband coverage since 2010, rising from 45% to 73%, but there is much more to do. There has also been a significant change in 4G coverage in the UK, which many people use for broadband, as he rightly highlights. For example, O2, which has a licence for 4G, is committed to extending it to 99% of the country.
Mr Speaker
Order. I do not know why this question was not grouped, but I will treat it as though it had been. Mr Stephen Metcalfe.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
7. Linford and parts of East Tilbury and West Tilbury in my constituency fall between the Tilbury and Stanford-le-Hope exchanges, which means that a small but significant community will not benefit from either the commercial roll-out of superfast broadband or the Government-funded programme. What options do I have to ensure that those residents are not disadvantaged by a geographic anomaly?
Sajid Javid
My hon. Friend will be pleased to know that the Government have announced additional funding of £10.72 million for Essex under phase 2 of our superfast broadband programme. The local project team for Essex should be able to advise him on the revised coverage targets. The Government have also announced eight market testing pilots to explore supply solutions for improving broadband coverage beyond 95%.
Stephen Timms (East Ham) (Lab)
The analyst, Redburn, has pointed out that claims that the UK is doing well on superfast broadband are
“only true using a rather unambitious definition of superfast”.
A number of European countries now have over 20% fibre- to-the-home penetration, with symmetric 100 megabits- per-second services. The Under-Secretary of State, the hon. Member for Wantage (Mr Vaizey), told me in a written answer on 23 June that he does not know how much of that we have in the UK, but the industry estimates penetration to be about 0.5%. Surely we need to be doing much better.
Sajid Javid
The right hon. Gentleman will be pleased to know that superfast coverage in the UK is the highest among the EU5 countries; it is higher than Germany, higher than Spain, five times higher than Italy and three times higher than France.
Mr Alan Reid (Argyll and Bute) (LD)
I was pleased when the Government announced the awarding of the contract to look into ways of using satellite to bring superfast broadband to remote areas of Scotland that fibre-optic cables cannot reach. It is very important that that work is done as soon as possible. What time scale does the Minister envisage for bringing superfast broadband to remote areas of the highlands and islands by satellite?
Sajid Javid
These pilots began in June, so they are very recent and it will take a number of months before any results are known. We have deliberately picked a number of different companies with different types of technology to ensure that we learn as much as we can. I envisage that we will have more information in six months.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
3. What steps he is taking to support the tourism industry.
The Secretary of State for Culture, Media and Sport (Sajid Javid)
The tourism industry is central to the Government’s long-term economic plan, which is why we are investing over £177 million, including partner funding, in the GREAT campaign and other international and domestic marketing campaigns. We recently re-launched the Tourism Council, a partnership between industry and the Government.
Dr Thérèse Coffey
The Suffolk coast is well known as a very attractive place to visit, with its open skies, beaches and cultural offerings. You are certainly most welcome—both you, Mr Speaker, and the Secretary of State—as the shadow Secretary of State will know. However, also adding to the long-term economic plan will hopefully be the construction of Sizewell C. My local businesses have understandable concerns about the impact of the construction phase on tourism in the area. Can he offer any helpful advice?
Sajid Javid
I can tell my hon. Friend that I will be more than happy to visit. I am sure that Mr Speaker has been a number of times himself. The Suffolk coast is indeed beautiful—it is a jewel in Britain—and everyone should be encouraged to visit. She will know that I cannot comment on any planning application that is taking place, but she will be pleased to know that the Government will continue to work hard to promote Suffolk through VisitEngland and other organisations. The wonderful Suffolk coastline featured in VisitEngland’s “Coastal Escapes” marketing campaign was funded by the regional growth fund.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The NATO summit in Newport provides an opportunity to promote Wales to the world, boosting tourism and the wider economy. What discussions are the UK Government having with the Welsh Government to ensure that the summit has a distinct Welsh flavour?
Sajid Javid
We work very closely with the Welsh Government on these issues. There is a lot to be gained from cross-co-operation, and a number of initiatives are in place.
Damian Hinds (East Hampshire) (Con)
8. Inbound tourism is as strategic a sector for this country as advanced manufacturing of pharmaceuticals, and the Tourism Council presents an opportunity for it to punch its weight. Will my right hon. Friend set his sights high in terms of productivity, skills development, and co-operative working on distribution channels in marketing this country to the world?
Sajid Javid
I absolutely agree. My hon. Friend will be pleased to know, as will other hon. Members, that last year inbound tourism hit a new record high of 33 million visitors spending a record amount of £21 billion in the UK. He rightly points out the importance of improving skills, and we are working with the Tourism Council on that.
Clive Efford (Eltham) (Lab)
Despite recent sporting setbacks, our enthusiasm remains at fever pitch. Will the Minister, like me, be among the 3 million people it is anticipated will go to watch the start of the Tour de France this weekend? The Grand Départ will showcase some of Britain’s most beautiful countryside. Will he join me in wishing Yorkshire every success in hosting this event and wish every participant well, and, of course, success to our British riders? What is he doing to ensure that the event goes smoothly and that the region continues to benefit from the boost to tourism that it will get from hosting this event?
Sajid Javid
I agree with the hon. Gentleman about the importance of the Grand Départ taking place in Yorkshire. It is a very important sporting moment for the UK. I will be visiting on day one, on Saturday, and I look forward to seeing him there. The Prime Minister will also be visiting, and the sports Minister, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), will be helping as well.
Mark Menzies (Fylde) (Con)
14. Fylde is the golf capital of Lancashire, with outstanding courses including the Open championship course at Royal Lytham and St Annes. What are the Government doing to ensure that Britain is getting the most out of this lucrative section of the tourism market?
Sajid Javid
My hon. Friend will be pleased to know that VisitBritain has a specific initiative on promoting golf throughout the UK. That campaign is showing early signs of working, but we will be looking to see what more can be done.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
4. What recent discussions he has had with England's international football representatives on allegations of corruption within FIFA.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)
These are very serious allegations. Of course, major sporting events need to be awarded in an open, fair and transparent manner, but, as the Prime Minister has already said, we need to wait to see the results of Michael Garcia’s inquiry before discussing next steps.
Michael Connarty
I thank the Minister for that very cautious response. I have just finished two years as chair of the sports committee of the Parliamentary Assembly of the Council of Europe, and I am its rapporteur on corruption and governance in sport. Now that the investigative journalists of The Times have revealed how much corruption is going on, and Greg Dyke has spoken out very boldly on this, does the Minister agree that it may be time for a Joint Committee of the House to look at this question in some detail before the beautiful game is mired by the behaviour of FIFA?
Andrew Gwynne (Denton and Reddish) (Lab)
What discussions is the Minister having with her colleagues in the Foreign and Commonwealth Office and with football governing bodies to bring about an end to the abuse of the migrant workers who are facing very serious human rights abuses building stadiums in Qatar?
Charlie Elphicke (Dover) (Con)
5. If his Department will commission research on methods of improving mobile telephone coverage; and if he will make a statement.
The Secretary of State for Culture, Media and Sport (Sajid Javid)
We need to improve mobile coverage in the UK, and I have been discussing with Ofcom and the mobile network operators what more can be done. The mobile infrastructure project will extend coverage to remote and rural areas that currently have no coverage.
Charlie Elphicke
Many visitors from the European Union travel by ferry to my constituency of Dover and, because of international roaming, those from France get better mobile coverage than my own constituents. How can this be?
Sajid Javid
As usual, my hon. Friend makes a very good point. It is true that French nationals who visit the UK get better coverage than his constituents because of international roaming. I encourage operators in the UK to go further and I am discussing the issue with mobile operators and Ofcom. No firm decisions have been taken at this point, but it is a very important issue.
Mr John Whittingdale (Maldon) (Con)
May I commend my right hon. Friend on his efforts to extend mobile coverage, but is he aware that many of my constituents have been without any mobile coverage for nearly three weeks due to Vodafone having to remove a mast from premises that the landlord required it to vacate? Will he consider looking at the electronic communications code to see whether it can be strengthened to give the same sorts of rights that already exist for other utilities, such as water and electricity?
Sajid Javid
I was not aware of that particular issue in my hon. Friend’s constituency, but now he has raised it I will certainly look into it and see whether we can help. The electronic communications code is a very important issue and I am looking into it right now, because I agree that it was set up for a different age and there need to be significant changes.
Miss Anne McIntosh (Thirsk and Malton) (Con)
6. What comparative assessment he has made of the extent of broadband coverage in the UK and other EU member states.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
As the House has already heard from my right hon. Friend the Secretary of State, the UK’s broadband coverage is among the best in Europe: 73% of premises can access superfast broadband compared with just 45% in 2010. Government investment will drive superfast coverage up to 95% by 2017.
Miss McIntosh
Sadly, rural areas will be left behind. I understand from NYnet that Thirsk, Malton and Filey will have only 78% coverage by 2015-16. Given that farmers will have to apply digitally for farm payments from 2015, they will be grossly disadvantaged. Will the Government please make it a top priority to ensure that those who have the weakest coverage will be fast-tracked to superfast broadband?
Mr Vaizey
We certainly will. NYnet is one of our most effective programmes and I praise the county council for its effective work. We have already passed 120,000 premises under this programme. We will have reached 170,000 by next spring and we have allocated further millions to take coverage even further.
Mr Dennis Skinner (Bolsover) (Lab)
The EU is a very big area, but Bridle road in Stanfree in Bolsover is relatively small. They told me to ask the appropriate Minister to sort out the broadband that they have been messing about with for four years in that Bridle road, Stanfree area. They must have a letter—get it sorted.
Mr David Heath (Somerton and Frome) (LD)
I am tempted to just say to the Minister, “Somerset—get it sorted.” The good news is that two more communities in my constituency—Fivehead and Milborne Port—will be connected over the next few months, but there are a lot of villages in exactly the position described by the hon. Member for Thirsk and Malton (Miss McIntosh) that will not be connected. Does the Minister recognise how critical Somerset’s bid to the superfast extension fund is in filling in some of those gaps and getting broadband to the rural areas that desperately need it?
Mr Vaizey
Yes, I do. The whole point of all the completely justified questions that have been asked is that people want broadband. That is why we are putting £1.2 billion into rolling out rural broadband and why total funding of something like £70 million from BT, European funding and Broadband Delivery UK is going into connecting Devon and Somerset. More than 250,000 premises are planned to be networked and we have allocated a provisional £22 million for the next phase.
Julie Hilling (Bolton West) (Lab)
This issue is not just a rural problem. At my recent business event, companies told me how lack of access to fast broadband is seriously hampering their businesses. How will the Minister ensure that areas on the edge of major urban centres also get superfast broadband?
Mr Vaizey
The whole point of the rural broadband programme is to help the areas she speaks about. Local councils are in charge of the roll-out, so they should know best where the money should go first for the most impact. As I say, we have had phase 1 to get to 90%; we now have phase 2 to get to 95%; and the money we have allocated for new technologies will give us the figure we need to get to 100%.
Mr David Nuttall (Bury North) (Con)
In some cases, the only way to improve broadband speeds is to install a new cabinet. Will my hon. Friend confirm that the cost of such installation is within the scope of the Government’s assistance scheme?
Sir Peter Luff (Mid Worcestershire) (Con)
9. What steps he is taking to ensure that Commonwealth countries are included in the commemorative events planned for the first world war centenary.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)
The important contribution of all our Commonwealth partners will be commemorated as part of our centenary programme, starting with a service of commemoration on 4 August in Glasgow cathedral.
Sir Peter Luff
It is right that we honour the remarkable sacrifice of so many members of the Commonwealth during the first world war, including the 40,000 Indian and Anzac casualties at Gallipoli. Will the Minister assure me, as someone whose father fought and so nearly died in that controversial campaign, that the centenary events for Gallipoli next April will include full recognition of the contribution of the 27,000 French casualties and the 120,000 British casualties at Gallipoli?
Mrs Grant
As my hon. Friend will know, Gallipoli is one of our key dates in the Government’s programme. My Department is working very closely with the embassy in Ankara to ensure that the event at Cape Helles on 24 April next year marks the British and Commonwealth contribution appropriately. We are also working with the Gallipoli Association on a UK-led event, and I would welcome my hon. Friend’s input into its planning.
Robert Jenrick (Newark) (Con)
11. What steps his Department is taking to encourage (a) national collections and (b) the royal collection to loan works of art to regional museums and galleries.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
First, may I welcome my hon. Friend to the Chamber? This is the first opportunity I have had the chance to welcome him to the House.
In 2012-13, national museums sponsored by the Department for Culture, Media and Sport lent objects to more than 1,500 museums around the country through touring exhibitions, star object loans, loans of local significance and long-term loans.
Robert Jenrick
Regional museums would benefit from a much more active programme of loans from national museums, which are sitting on hundreds of thousands if not millions of works of art that are rarely if ever seen by the general public. The Secretary of State recently viewed the site of the new Newark national civil war museum, which is a perfect example of a regional museum that would benefit from active loans from national institutions. What can the Department do to encourage national museums to review their civil war collections and to loan them to our museum in Newark?
Mr Vaizey
I know for a fact that the Secretary of State thoroughly enjoyed his visit to the new National Civil War centre, which was awarded a grant by the Heritage Lottery Fund of £3.5 million in 2012, and we look forward to its opening next year. I am certainly happy to meet my hon. Friend to discuss what we can do to encourage loans of civil war objects from national museums, but it is important for the House to remember that national museums are of course independent and do not simply do what the Government tell them.
Guto Bebb (Aberconwy) (Con)
12. What assessment he has made of the success of the broadband roll-out programme in Wales and that programme’s effect on the tourism industry in Wales.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
Independent research estimates that the Government’s investment will generate £20 for every £1 by 2024. Wales has received almost £70 million from the UK Government for the roll-out of superfast broadband. We are confident that this will benefit the Welsh tourist industry, as well as the Welsh economy more generally.
Guto Bebb
My hon. Friend will be aware that I consider his Department’s decision to allocate funding for rural broadband to the Welsh Government to be a mistake. A total of £120 million has now been allocated from taxpayer funds for the roll-out of broadband in rural Wales, yet my constituents and businesses in the tourist sector in my constituency are no nearer to getting any answers from the Welsh Government about when and where they will have roll-outs. Does my hon. Friend agree that transparency is crucial when £120 million of taxpayer funding is being spent?
Mr Vaizey
It is important that roll-out is as transparent as possible—people need to know when broadband is coming to their area. More than 160,000 premises have been passed but I am sure that Opposition Members will have a word with their Labour colleagues in Wales to encourage them to be more transparent with my hon. Friend.
Hugh Bayley (York Central) (Lab)
13. What long-term cycling legacy he expects from the Tour de France Grand Départ in Yorkshire.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)
There has been a strong legacy of cycling from the London 2012 games and I am sure that the Grand Départ in Yorkshire will inspire cycling across the region and the UK as a whole.
Hugh Bayley
I sincerely hope so. I know the Minister will join me in congratulating City of York council and the other local authorities involved, along with the cycling organisations, on all the preparations they have made for the race. In terms of public participation, cycling is the third most popular sport in the country. The biggest single disincentive for cyclists is the state of the roads and the danger. Will her Department set up a joint initiative with the Department for Transport to improve road safety and so get more people on their bikes and cycling?
Mrs Grant
I think that the Tour de France Grand Départ will be a tremendous success. All plans are on track, and I join the hon. Gentleman in thanking all those involved in the preparations—the teams in Yorkshire, Essex, London and Cambridge. It will be an amazing highlight for the year and one we will never forget. I am happy to have a chat with him about his suggestion. Thank you.
Mr Speaker
We are uncharacteristically ahead of schedule today, but as all the principals are present we should now proceed straight away to topical questions.
Diana Johnson (Kingston upon Hull North) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Culture, Media and Sport (Sajid Javid)
Although England’s footballers and Andy Murray have sadly fallen, our sporting season is still in full swing. This weekend sees the climax of the Wimbledon championships, the grand prix at Silverstone and the Tour de France Grand Départ, as we have just heard. Politicians who wish sports stars well seem to jinx them, so I would like to take this opportunity to wish all of Mark Cavendish’s rivals the best of luck.
Diana Johnson
The additional £5 million arts funding allocated to Hull this week is very welcome, but is a drop in the ocean compared with the money that goes to some of our national institutions, such as the National Theatre, which gets £18 million a year. What pressure can the Secretary of State bring to bear on national institutions to make sure they do everything they can to support our national city of culture for 2017, bearing in mind that Hull has had a 25% cut in our council funding during this Parliament?
Sajid Javid
I know that the hon. Lady is as excited as I am that Hull is the city of culture for 2017. It won against strong competition and has done extremely well. She is right to point out the recent announcement of additional funding from the Arts Council. It also announced that Hull will become a major partner museum, which is a significant step forward. The Hull initiative for 2017 and beyond will boost the local economy and jobs, which I am sure she will welcome. I am happy to look into what more can be done to help.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
T2. Given BT’s virtual monopoly in contracts for superfast broadband and the problems with that company that have been raised by hon. Members today and previously, is it not about time that the Government held an inquiry into its performance, or would that be better done by the competition authorities?
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
The National Audit Office conducted an inquiry. I am confident that BT is doing its job incredibly effectively. We are passing a total of 20,000 premises a week with broadband, and that figure will soon be up to 40,000 a week. More than £60 million has been allocated to Lancashire and more than 130,000 homes there will get superfast broadband as a result.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
The evidence before the Leveson inquiry laid bare the pain and suffering caused to victims of press abuse. The press felt they could act with impunity as there was no proper complaints system, and all parties in both Houses agreed to a new system of independent self-regulation for the press. Will the Secretary of State join me in welcoming the appointment of David Wolfe as chair of the recognition board for the new press complaints system? Does he agree that the rest of the board should be appointed as soon as possible, and will he join me in encouraging the press to establish and put forward for recognition a Leveson-compliant, independent regulator so that there is an effective complaints system that is independent of both politicians and the press?
Sajid Javid
As the right hon. and learned Lady points out, there was rightly a cross-party approach on this important issue. The key to that consensus was that whatever transpired needed to be independent of Government and that there needed to be a self-regulatory body. I will not comment on anyone who is appointed to the recognition panel, because I do not believe that that is a job for Government. It is an independent process and the Government, including my Department, have no role in it. It would therefore not be proper for me to talk about any individual.
As for whether a body should apply for recognition, it is up to the body to decide whether the incentives that we have put in place are enough to encourage it to join. The Government have done what they set out to do.
Andrew Bingham (High Peak) (Con)
T3. Last week, I organised a music skills day at Glossopdale community college in my constituency in conjunction with UK Music, at which more than 100 students from across High Peak learned about the different skills in the industry. The Secretary of State will know that the creative industries are a big economic force in this country and earn about £70 billion each year for the economy. The music skills event gave young people information about the opportunities to work in that sector. Will he say what else is being done to provide even more support to the creative industries across the country?
Sajid Javid
My hon. Friend makes an important point. I join him in welcoming the work of UK Music in promoting careers in that industry to young people. Just this week, a report showed that the creative industries have added more than £70 billion to the economy over the past year and that they employ more than 1.7 million people. Employment is growing five times faster in that sector than in the rest of the economy. Just yesterday, I helped to launch the industry-led creative industries strategy, which is full of more good ideas.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
T4. Will the Minister join me in congratulating the excellent Tyne and Wear Archives and Museums and other arts organisations based in Newcastle upon Tyne on their successful Arts Council bids? In doing so, will he acknowledge that there is still a problem with the disproportionate amount of private sector arts funding—the figure is 82%—that is drawn into the capital and not to the regions of England, and consider the remedy that is set out in “Rebalancing Our Cultural Capital”? If he has not read that report, I commend it to him.
Mr Vaizey
I am very happy to join the right hon. Gentleman in congratulating Tyne and Wear Archives and Museums—it is a fantastic place that I have visited on at least one occasion. I am pleased that following the Arts Council settlement the balance between London and the regions has shifted in favour of the regions. As he knows, I believe that every arts organisation around the country is capable of raising private funding and should be doing so.
Iain Stewart (Milton Keynes South) (Con)
T5. I thank the Minister for the assistance that he and Ofcom have given the community radio station in my constituency, MKFM, in its bid for a permanent FM licence. Will he assure me that he will continue to do all he can to assist such community radio stations to expand the vital service they provide to local communities?
Andrew Gwynne (Denton and Reddish) (Lab)
T6. Ministers will know that cyber-bullying is a growing problem, particularly among teenagers, but the offences fall, confusingly, between five different Acts. Is it not time for Ministers to talk to their colleagues in other Departments to bring about a specific offence of cyber-bullying that mirrors the offence of harassment in the real world?
Mr Vaizey
I hear what the hon. Gentleman says. I work closely with the Minister for Policing, Criminal Justice and Victims and the Under-Secretary of State for Education, my hon. Friend the Member for Crewe and Nantwich (Mr Timpson), on the UK Council for Child Internet Safety. I am sure that the hon. Gentleman’s representations have been heard and they will be considered in the usual way.
Mr Philip Hollobone (Kettering) (Con)
T9. Will the libraries Minister join me in congratulating Northamptonshire county council’s library and information service on being named the best council services team at this year’s Municipal Journal awards? Whereas other local authorities are closing libraries and cutting opening times, the Conservative council in Northamptonshire is extending opening to seven days a week and extending the range of services on offer, and has recruited more than 600 library volunteers.
Keith Vaz (Leicester East) (Lab)
T7. I congratulate the Minister for creative industries on his outstanding work in encouraging international film makers, especially from Bollywood, to come and make their films in the United Kingdom. Does he agree that it is important that that helps with jobs, growth and the diversity of UK film making?
Mr Vaizey
I am very pleased to have that question from the right hon. Gentleman. Although we obviously welcome investment from the west coast of America, particularly yesterday’s announcement by Warner Bros. that it will be filming J. K. Rowling’s “Fantastic Beasts”, it is important to remember that Bollywood is bigger than Hollywood, and we need also to encourage Indian film makers to make films in this country with our excellent crew and casts.
Neil Carmichael (Stroud) (Con)
T10. To reinforce points already made this morning, what assurance can the Minister give my constituents in Stroud valleys and vale that they will have access to broadband so that their businesses and lifestyles can thrive?
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
T8. The theme of much of this morning’s exchanges has been broadband and mobile coverage. Will the Minister meet me and other interested rural and island Members of Parliament to discuss how proper 4G coverage on a Swedish or Finnish model may help the aims of comprehensive mobile and fast broadband coverage in the years to come?
Mr Vaizey
Broadband is going extremely well in the UK, mainly because we are better together. We are working with Scotland and Wales to roll out broadband and 4G coverage. The hon. Gentleman should not be so modest: we have outstripped a lot of the Scandinavian countries. We have just laid 400 km of undersea cable to the highlands and islands. That could not have been done without the UK Government working with the devolved Government to bring broadband to our rural areas. We are better together.
Sir Bob Russell (Colchester) (LD)
Tourism is a major economic generator in Colchester. Does the Minister agree that the best way to support tourism is by reducing VAT on tourism to 5%? Will he have a chat with the Chancellor, please?
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)
As my hon. Friend knows, VAT is a matter for the Chancellor. We keep all taxes under review, but there is no plan to reduce tax for the tourism sector.
Mrs Mary Glindon (North Tyneside) (Lab)
Sarah Hunter from North Tyneside is part of the England women’s rugby squad. Despite what the Minister said earlier, will he join me in wishing Sarah and the team the best of luck as they head off to the women’s rugby world cup in Paris this summer?
Mr Nigel Evans (Ribble Valley) (Con)
I enjoyed visiting that wonderful rainbow festival, London Pride, over the weekend in our capital. It has become a magnet for hundreds of thousands of tourists, who enjoy the rich diversity of the United Kingdom.
With the ability to convert civil partnerships into marriage later this year, does the Secretary of State believe that there is even more to celebrate in pride festivals throughout the UK in the coming months and years?
Sajid Javid
My hon. Friend makes a good point, and I agree with him. He may be interested to know that the Government will today lay the draft regulations for converting civil partnerships to marriage. The Government previously said that the cost of conversion would be calculated on a cost recovery basis, and that is correct. We had indicated about £100, but I am happy to say that, in almost all cases, the cost will be £45. It would be unfair to charge couples who were in civil partnerships before same sex marriage was available, so I am pleased to announce that my right hon. Friend the Home Secretary has agreed to waive the conversion fee for one year from 10 December.
Jim Shannon (Strangford) (DUP)
Tourism is important to my constituency of Strangford. It definitely brings jobs and opportunities, as promoted by the Northern Ireland Tourist Board. Will the Minister consider joint tourism promotions with the Northern Ireland Tourist Board so that we can benefit from tourism throughout the United Kingdom of Great Britain and Northern Ireland?
Caroline Dinenage (Gosport) (Con)
Will the Minister join me in welcoming two pieces of excellent nautical news for Portsmouth harbour? Not only will it play host to Sir Ben Ainslie’s new America’s cup sailing team hub, but today it welcomes Oceans of Hope—the first yacht to complete a global circumnavigation with a working crew with multiple sclerosis, including my Gosport constituent Phil Gowers.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
The Minister will no doubt be aware that Northern Stage’s excellent adaptation of Joseph Heller’s “Catch-22” closed at the weekend at Richmond, following a successful nationwide run. What is the Minister doing to ensure that regions outside the north-east benefit from the excellent cultural talent that we produce?
Mr Vaizey
The latest round of Arts Council funding has pushed more money out to the regions, and I am particularly pleased about the new £15 million fund it has set up specifically to support talent outside London, and to keep people outside London working in our regional theatres and doing innovative work.
Philip Davies (Shipley) (Con)
Earlier this week I visited GamCare at its headquarters in Clapham to see the wonderful work it does helping people with problem gambling. May I urge the Secretary of State and the Minister to go themselves to listen to the counsellors, as I did, and to get their perspective on what we can best do to help people who sadly develop a gambling addiction?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I forgot to welcome the Secretary of State, so I do so warmly and ask whether he will support our all-party effort to get at least 150 MPs to read a poem of the countryside, and raise funds to get kids from poorer parts of our country out to the countryside this year?
Sajid Javid
I certainly will; that is an excellent initiative. Since A. E. Housman came from my constituency, that would be a good start.
Peter Aldous (Waveney) (Con)
There is concern that the Government’s approach to allocating funding for the superfast broadband extension programme will leave most rural areas at a disadvantage. What help and assurances will the Minister give to constituents in the villages of Rumburgh, St James and Ringsfield that they will not be penalised?
Mr Vaizey
The principle behind the programme is that we allocate funding in order to get to 95% coverage. We expect local authorities to match that, and we will then work with them to target the areas where it is needed most. I am happy to meet my hon. Friend to discuss the best way forward.
Neil Carmichael (Stroud) (Con)
1. What recent discussions she has had with her counterparts overseas on protecting the rights of women and girls internationally.
The Minister for Women (Nicky Morgan)
The Government are committed to the protection and promotion of women’s rights in the UK and internationally. I met many of my overseas counterparts at the global summit to end sexual violence in conflict last month, which brought together 128 country delegations, UN agencies and civil society. We discussed how best to achieve that aim, including providing opportunities for international collaboration and the exchange of best practices.
Neil Carmichael
I thank the Minister for that answer. What can the Government do to help prevent distressing cases such as that of Mariam Ibrahim which arose simply because she was a Christian?
Nicky Morgan
I am grateful to my hon. Friend for raising this case, and pleased that Mariam Ibrahim and her family have now been released. They are currently staying at the US embassy in Khartoum. The British embassy in Khartoum continues to follow the case closely and is in close contact with the defence team. We continue to raise our concerns about this case and the broader human rights situation in Sudan with the Sudanese authorities, including with a recent delegation of Sudanese female MPs whom I met. We will continue to work bilaterally and in international forums such as the UN to tackle violence and all forms of discrimination against women.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
Ministers are right to draw attention to the appalling sexual violence faced by women and girls in conflict, but we also have responsibilities when women seek sanctuary in the UK. Will the Minister set out what action is being taken following the serious allegations and concerns about operations at Yarl’s Wood detention centre?
Nicky Morgan
The hon. Lady is right, and it is important and extremely welcome that the Government set up last month’s global summit. Those who seek asylum in the UK need to be offered protection, and the Government are committed to making our asylum system more gender sensitive. We have made significant progress, including putting in place new enhanced guidance supported by high-quality training for all decision makers. Women who seek asylum can request a female interviewing officer and interpreter. They can also bring a friend with them to interviews to provide emotional support if needed.
Hugh Bayley (York Central) (Lab)
In last night’s Adjournment debate, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) talked about the case of the abducted girls in Nigeria. He made the point that the problem is not that those girls were abducted, or that others have been abducted since, but that many are at risk and are no longer going to school. Will the Minister look at that speech and prepare a written statement on behalf of her Department to respond to the points my right hon. Friend made?
Nicky Morgan
I certainly will look at that speech—I am afraid I did not have a chance to read it in full before this morning’s Question Time. The hon. Gentleman is absolutely right that one of the tragedies of the situation that has evolved in Nigeria is that the girls who were abducted were doing exactly the right thing—they were in school and taking exams. We absolutely do not want to put girls around the world off their education. The UK remains committed to helping to find the schoolgirls. I shall look at the speech and think about how best to respond.
Heidi Alexander (Lewisham East) (Lab)
2. What steps she is taking to close the gender pay gap.
The Parliamentary Under-Secretary of State for Women and Equalities (Jo Swinson)
Thank you very much, Mr Speaker. It is good to be back. May I place on the record my thanks to my hon. Friend the Member for Cardiff Central (Jenny Willott) for the fantastic job she did in covering my maternity leave?
The full-time pay gap has now been almost eliminated for women under the age of 40, but we must close the gap across all ages and for part-time workers. We are promoting transparency through the “Think, Act, Report” initiative. As the pay gap is partly driven by the different sectors and jobs in which men and women work, we are encouraging girls and young women to consider a wider range of careers through the “Your Life” initiative.
Heidi Alexander
I, too, welcome the Minister back to her place. The Equal Pay Act 1970 dates back some 44 years, so why does the Minister think that last year the difference between earnings for men and women went up and not down, and why have women in their 20s seen the gender pay gap double since her Government came to power?
Jo Swinson
The 0.1% increase in the pay gap in the past year is certainly not a sign of things going in the right direction, although it was a very small increase. The hon. Lady is absolutely right to highlight the fact that 40 years after equal pay legislation, it is not good enough that we still have a pay gap in this country. We need to look at the causes of that pay gap, which might include time out of the workplace. The new flexible working entitlements regime that came in this week will help to change the culture of our workplace. As I mentioned, we need to look at occupational segregation. We also need to look at discrimination and outdated attitudes when women are not being paid the same for the same work. We need to change that, which is why we are working with businesses.
Charlie Elphicke (Dover) (Con)
What more can be done to get women to consider a wider range of careers, particularly in science and engineering?
Jo Swinson
My hon. Friend is right to raise this issue. Only 7% of engineers are women. That difference in the sectors is a significant driver of the pay gap. The problems start very early in children’s lives, so we need to look at the messages that are being put out through the education system but also more widely in the media regarding stereotypes and what young girls are encouraged to aspire to. We are encouraging parents and schools to have the information they need to assist their children.
Gloria De Piero (Ashfield) (Lab)
I, too, welcome the Minister back.
Progress on narrowing the pay gap has all but come to a standstill. Progress was much quicker under Labour, so will the Minister admit that narrowing the gap by 0.1% in four years is just not good enough?
Jo Swinson
I certainly agree that we need to ensure that we close the pay gap. This is an important issue. It is ideal if we can work with employers to do so. The “Think, Act, Report” initiative means that 200 employers covering 2 million employees in the work force are working to improve the situation for women. They have already made significant steps forward since joining up and since that initiative started in 2011. Two thirds of those employers say that they now publish more information on gender pay. Nearly half of them now do pay audits. That would not have happened without this Government’s initiative, but we have said that we will keep the issue under review, because we need success.
David Morris (Morecambe and Lunesdale) (Con)
3. What discussions she has had with her counterparts overseas on the contribution of women and girls to the global economy.
The Minister for Women (Nicky Morgan)
In June I met many of my overseas counterparts at a global ministerial round table at the global summit of women held in Paris. This event brought together business, professional and governmental leaders to explore strategies and best practices in accelerating women’s economic progress worldwide. The most important task for the UK Government, as for the rest of the global community, is to build a stronger, fairer economy capable of delivering lasting prosperity. Women and girls are essential to the UK’s economic growth.
David Morris
I thank my right hon. Friend for that comprehensive reply. What issues were identified in those recent discussions?
Nicky Morgan
What was really interesting about going to the international summit—it was the same when I went to the Commonwealth summit in Bangladesh last year—was just how many of the same issues we share around the world in terms of enabling women to play their full part in economies. We talked about gender equality, parental leave, returners to work, supporting older workers, women’s access to finance and the importance of coaching, mentoring and role models in encouraging women to set up their own businesses.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Last week we had national women in engineering day. As the Minister says, only 7% of professional engineers in this country are women. What she did not say is that that is the lowest figure in Europe. In eastern European countries, the figure is 30% and countries such as China and India are far ahead of us. In her conversations, will she see what we can learn from other countries that are more successful?
Nicky Morgan
When I speak to counterparts overseas, I always engage with the lessons Britain can share and what we can learn from other countries. I am proud to represent Loughborough university, which has, I am told, the highest number of female engineers in the country. I understand that last night the hon. Lady was at the Royal Academy of Engineering awards, where more than one half the rising stars awards went to female engineers. There is, however, more progress to be made.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
We want young girls to achieve and to travel the world. Many young girls want to get into business and to travel. If they do not have science and maths as a basis for getting into business and getting good careers, they will not succeed.
Nicky Morgan
I entirely agree with the hon. Gentleman. I assume that he supports the EBacc and that he welcomes the work of the Under-Secretary of State for Education, my hon. Friend the Member for South West Norfolk (Elizabeth Truss), who I think has done more than anyone else in recent years to triumph and to talk about the importance of all students, particularly girls, studying science and maths. [Interruption.] I am glad to hear the hon. Gentleman was there supporting her, too.
Steve Baker (Wycombe) (Con)
4. What recent progress she has made on encouraging women to set up their own businesses.
The Minister for Women (Nicky Morgan)
The Government offer a wide range of support to women entrepreneurs—for example, the new enterprise allowance, mentoring, business advice and start-up loans. I also recently announced a £1 million challenge fund specifically to support women to move their businesses online and take advantage of superfast broadband. We know these measures are making a difference, with more women running their own businesses than ever before.
Steve Baker
Which particular areas have the Government identified where we can celebrate the success of women entrepreneurs?
Nicky Morgan
There are many different areas, but let me just pick one. The latest statistics from the Federation of Small Businesses show a dramatic increase in the number of women starting up businesses in the retail sector, and high streets across the country are seeing the benefit. Half of all small businesses established in retail in the past two years are primarily owned by women. That is in stark contrast with 20 years ago, when it was less than a quarter. That demonstrates the fundamental role that women are playing in helping the country to recover from recession. I hope that Members on all sides of the House will encourage retail businesses on their high streets to apply for the Future High Streets Forum’s Great British high streets awards.
Keith Vaz (Leicester East) (Lab)
Nobody doubts the Minister’s commitment to equality, but why are there so few black and Asian women sitting on the boards of our companies?
Nicky Morgan
It is a very good question. There is no doubt that more progress is needed. Earlier this week I was at an event for the 30% Club, which has been campaigning for a voluntary business-led approach, started by Lord Davies, to get more women in particular on the boards of companies. Part of that is about working with executive search companies and asking the chairmen of companies to think differently about appointments. Often the traditional and expected route of a CV is not something that women or others, particularly from black and minority ethnic communities, can put forward. We need to broaden the way in which chairmen of boards, and the boards themselves, appoint new directors.
Richard Graham (Gloucester) (Con)
6. The rise and rise of women in business is boosting growth and opportunity across the country. We have an inspiring role model in Gloucester, in the first female editor of the Gloucester Citizen in its 138-year history, Jenny Eastwood. The chair of the Gloucestershire local enterprise partnership, Diane Savory, is one of only three female chairs of the 39 LEPS. Will my right hon. Friend join me in recognising their achievements, and in encouraging both Jenny and Diane to do even more to promote new female “Gloucesterpreneurs” like Sarah Churchill of the award-winning Artisan Kitchen?
Nicky Morgan
I congratulate my hon. Friend on coining the new word “Gloucesterpreneurs”, and I hope that he will campaign vigorously under that slogan over the next few months. I am happy to join him in congratulating Gloucestershire Media on its Women in Business awards. Through the work of the Minister for Cities—my right hon. Friend the Member for Tunbridge Wells (Greg Clark)—and the Deputy Prime Minister, the Government are focusing on regional growth, city deals and the power of local enterprise partnerships, and on encouraging growth outside London. That is why I am particularly pleased to hear about the new female entrepreneurs in Gloucester who have set up businesses during the past few years.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
5. What recent steps the Government have taken to encourage access for, and participation by, under-represented groups in (a) grass-roots and (b) professional sports.
The Parliamentary Under-Secretary of State for Women and Equalities (Mrs Helen Grant)
Sport England and UK Sport are committed to achieving equality in grass-roots and elite sport. They invest in a range of expert bodies to work with sport to remove barriers to participation among under-represented groups.
Eric Ollerenshaw
Does my hon. Friend agree that we might achieve even more success in international sporting competitions if our sporting authorities had deeper contacts among ethnic minorities, and were able to use their expertise in what we might consider to be minority sports, but what in their countries of origin are majority sports?
Mrs Grant
My hon. Friend has made an interesting point. UK Sport and national governing bodies capitalise on a wealth of diverse global expertise in order to get athletes on to the podium. Sport England also invests in organisations such as Sporting Equals to promote physical activity and diversity in all sport.
Susan Elan Jones (Clwyd South) (Lab)
I know that I speak for a certain proportion of people in this country who were dreadful at sport at school and never improved thereafter. What will the Minister do to encourage people who have never had a positive experience of sport to take our necessary exercise by that means?
Huw Irranca-Davies (Ogmore) (Lab)
7. What steps she is taking to ensure that mothers' names are included on marriage certificates; and if she will make a statement.
The Minister for Equalities (Sajid Javid)
The content of marriage registers has not changed since civil marriage was introduced in 1837, so it is about time we took a further look. I have discussed this matter with my right hon. Friend the Home Secretary, and we are currently considering a range of options.
Huw Irranca-Davies
The Minister has referred to a range of options. Given that Labour changed the law in respect of same-sex couples and adoption back in 2002, what consideration has he given to ensuring that any changes that may be made to marriage certificates reflect the fact that many individuals now have legal parents of the same sex?
Sajid Javid
I agree with the hon. Gentleman, who has raised a very important point. When the rules were drawn up in 1837, equality was not a priority for our society. Today, thankfully, it is, so those are just the kind of changes that we are considering.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Can the Minister tell us how much it would cost to bring marriage certificates into the 21st century? If he cannot, why are his colleagues in the Home Office team saying that it would be too expensive? What price do he and the Government place on equality?
Sajid Javid
If the hon. Lady had been listening carefully, she would have already heard the answer to that question; I talked about civil partnerships earlier. We have rightly said that when people are converting civil partnerships into marriage, having entered into those partnerships before same-sex marriage was available, we will waive the fee. I think that that demonstrates the Government’s priorities.
Business of the House
(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ms Angela Eagle (Wallasey) (Lab)
Will the Leader of the House give us the business for next week?
The Leader of the House of Commons (Mr Andrew Lansley)
The business next week will be as follows:
Monday 7 July—Estimates day [1st allotted day]. There will be a debate on universal credit implementation, followed by a debate on the implementation of the common agricultural policy in England. Further details will be given in the Official Report.
[The details are as follows: There will be a debate on universal credit implementation: monitoring DWP’s performance in 2012-13, Fifth Report from the Work and Pensions Committee, HC 1209, Session 2013-14, and the Government response published as Second Special Report, HC 426, Session 2014-15.
The lead Department is Work and Pensions.
There will be a debate on the implementation of the common agricultural policy in England 2014-20, Seventh Report from the Environment, Food and Rural Affairs Committee, HC 745, Session 2013-14, and the Government response published as Seventh Special Report, HC 1008, 2013-14.
The lead Department is Environment, Food and Rural Affairs.]
At 10 pm, the House will be asked to agree all outstanding estimates.
Tuesday 8 July—Second Reading of the Modern Slavery Bill, followed by proceedings on the Supply and Appropriation (Main Estimates) Bill.
Wednesday 9 July—Opposition day [4th allotted day]. There will be a debate on the subject of education, followed by a debate on housing supply. Both debates will arise on an Opposition motion.
Thursday 10 July—There will be a general debate on the UK’s justice and home affairs opt-outs.
Friday 11 July—The House will not be sitting.
The provisional business for the week commencing 14 July will include the following:
Monday 14 July—Consideration of a Bill, followed by a motion to approve the first report from the Committee on Standards on the respect policy.
Tuesday 15 July—A motion on the retirement of the Clerk of the House, followed by Second Reading of the Small Business, Enterprise and Employment Bill.
Wednesday 16 July—Opposition day [5th allotted day]. There will be debates on Opposition motions, including one on the subject of health.
Thursday 17 July—Business to be nominated by the Backbench Business Committee.
Friday 18 July—The House will not be sitting.
I should also like to inform the House that the business in Westminster Hall will be as follows:
Thursday 10 July—A debate on the second report of the Work and Pensions Committee on the role of Jobcentre Plus in the reformed welfare system.
Ms Eagle
I thank the Leader of the House for announcing next week’s business. On Monday, we will have the first allotted day for the debate on the estimates. That is an arcane and opaque process that does little to scrutinise the actual spending of the Government. Does the Leader of the House agree that we need to reform the estimates process to ensure real scrutiny? Will he support my call for the Chancellor of the Exchequer to answer questions in the Chamber on the estimates, separately from the Budget, and for each Cabinet Minister to have a yearly Budget question and answer on spending in their Department?
On Tuesday, we will debate the Modern Slavery Bill, which the Opposition support but which in some areas does not go far enough. Will the Leader of the House tell us whether his Government will accept our amendments to provide statutory legal guardians for child victims of trafficking, and greater transparency in supply chains to ensure that companies do much more to prevent slave labour?
Yesterday, private Members’ Bills were formally introduced. Labour Members brought forward a series of Bills to tackle the scourge of zero-hours contracts, to strengthen the minimum wage and to protect the NHS. However, all Conservative Members could do was cheer yet another Bill on the UK’s membership of the European Union. [Hon. Members: “Hear, hear.”] They are at it again. While we bring forward practical solutions to the crisis in living standards, all they can do is bang on about Europe.
It has been a year and a half since what was billed as the Prime Minister’s last speech on Europe, but what have we seen since? A Prime Minister too afraid to stand up to the Eurosceptics in his own party has been suffering rebellion after rebellion. The more they bully him, the more he appeases them by picking fights in Europe. The trouble is that he keeps losing. Only this Prime Minister could come to the Chamber and claim that losing 26-2 is actually a triumph. If that is what success looks like, I would not like to see what happens when he fails.
We have a PR Prime Minister who cannot deliver the goods. He promised to protect the NHS and keep waiting lists down, but four years later cancer waits have increased by nearly half. Two thirds of people cannot see their GP within two days and the A and E waiting time target has now been missed every week for almost a year. Instead of getting his facts wrong and smearing the Welsh health service, the Prime Minister should listen to the chair of the British Medical Association, who said that the NHS is
“palpably fraying at the edges”.
Will the Leader of the House finally admit that people cannot trust the Tories with the NHS? Will he arrange for a debate in Government time, so that the Secretary of State for Health can come clean about the scale of his failure?
The Government are living in a parallel universe. The Chancellor claimed that we are “all in this together” but Government figures show that in the last two years 1 million more people fell into absolute poverty. Lord Finkelstein, the Tory peer and one of the Chancellor’s closest confidantes, let the cat out of the bag recently when he said that future Tory cuts will
“undoubtedly fall on poor people”.
Does the Leader of the House agree with him, and will he tell me whether Lord Finkelstein was present last night at the Tory summer ball, where, I am told, a bottle of champagne was auctioned for £45,000? [Interruption.] Was that cheap champagne? We now know that last year’s event was attended by six billionaires, 73 financiers, the owner of a strip club and the judo partner of Vladimir Putin. While the Chancellor’s hedge fund mates and dodgy donors are getting tax cuts, millions of Britons are living in poverty, and now the Chancellor’s ally says they can only expect it to get worse. So can the Leader of the House arrange for a debate in Government time on the meaning of “all in this together”?
The Conservatives recently tried to rebrand themselves as the workers party. They produced that beer and bingo advert aimed at people they think of as proles, but this week they have had to abandon a photo-shoot for working-class MPs because they could find only 14 of them. That is far fewer than went to Eton. It is becoming harder for them even to pretend they are in touch with real life: the right hon. Member for Croydon South (Sir Richard Ottaway) thinks that Londoners who cannot afford the soaring rents should get on their bikes to Manchester; the family business of the hon. Member for Newbury (Richard Benyon) is buying up swathes of social housing, trebling rents and threatening mass evictions; and a Tory councillor in Coventry thinks that people who use food banks are selfish.
The Tories say they have changed on Europe, they say they have changed on the NHS and they say they have modernised the Conservative party, but we all know the truth: no matter what spin they put on it, it is the same old Tories.
Mr Lansley
I am grateful to the shadow Leader of the House for responding to the business statement, and to her and her colleagues for giving me the opportunity to announce the business for next Wednesday. She asked about reforming the estimates. As she knows, I am not proposing any reform of the estimates process as such, but Select Committees have considerable latitude and potential to undertake inquiries on departmental expenditure plans and, through the Liaison Committee, to bring forward, on estimates days, opportunities for the House to debate those. I recall that when I was Health Secretary the Health Committee undertook an annual substantive inquiry on all aspects of the health budget. That is not true of all Select Committees, but it is an important pointer to the direction in which we may go. She will be aware that the Public Administration Committee is in discussion with the National Audit Office and often emphasises the importance of NAO support, not only to the PAC but to other Select Committees, in the scrutiny of departmental expenditure.
The hon. Lady asked about the Modern Slavery Bill. Its Second Reading is coming up next week, so, if I may, I will leave things until that debate. We agree on the principles, and I hope the legislation will be of substantial importance. We need to get it right, but, working together, not least with the benefit of the pre-legislative scrutiny, which has been important in that context, I am sure we will have an opportunity to respond to the issues she mentions.
The hon. Lady referred, as did the Leader of the Opposition, to the NHS. I remind her that the Prime Minister was in no sense smearing the NHS in Wales. On the contrary, he was setting out some simple facts. The decisions that the Labour party has made on the NHS in Wales should be understood by people in England as well as by people in Wales. The Labour party has cut the budget for the NHS by 8% in Wales, whereas this year this coalition Government are increasing the budget for the NHS by £3.5 billion. Over this Parliament the NHS budget will increase by £12.7 billion—that is a real-terms increase. That is what is enabling the NHS to deal with rising demand and the very large number of additional patients: 1.3 million more accident and emergency attendances; more than 1 million more in-patient admissions; 6.5 million more out-patient appointments; and 3.5 million more diagnostic tests. Those are substantial increases in demand, and the NHS, with a small real-terms increase, is coping extremely well with that—better than in Wales, where the budget has been cut. For that reason, the latest report—the 2014 report—from the Commonwealth Fund in America put the UK at the top of its comparison of leading health systems across the world. We can be proud of that. All the data on which it is derived, contrary to what the shadow Health Secretary was saying, relate to the experience of the people in this country, in the health service, under this coalition Government.
The hon. Lady asked about private Members’ Bills. I am looking forward to debating those Bills, not least the EU Referendum Bill of my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) on 17 October. I do not understand why she thinks that that matter is not important to the people of this country. If the European parliamentary elections did nothing else they demonstrated that it is important to the people here. Let me say something that is quite unusual for me. The hon. Lady should listen to Len McCluskey and Unite, because they are telling her party that it should be supporting a referendum on our relationship with Europe.
The Prime Minister’s speech, the Bloomberg speech, was important as it made it clear to the people of this country that they had a right to expect us to enter into a renegotiation of our terms that would lead to reform and give them a choice. As the Prime Minister has said, at the end of the day it is the people of this country who will have a choice. He has fought and won in Europe before. He won in getting us out of the banking bail-out in which the Labour party would have left us. He got the budget cut. When we had a Labour Government, they gave away part of the rebate. Our Prime Minister protected the rebate and cut the budget, and that is important. He will win those battles again.
Finally, I did have the pleasure of going to the summer party last night. I did not see my noble Friend Danny Finkelstein—[Interruption.] I did not buy the champagne, which was bought not for drinking purposes but because it was signed by Margaret Thatcher. [Hon. Members: “Yes!”] The highlight of the evening was not the auction but a speech by my right hon. Friend the Prime Minister, who illustrated the positive achievements of this coalition Government and the increasing likelihood of a Conservative victory at the next general election.
Mr Speaker
Order. I gently remind colleagues that they might like to focus their questions on next week’s business.
Pauline Latham (Mid Derbyshire) (Con)
Can we have a debate on the eminent suitability of Derby as the location for the HS2 college? The land is vacant and it is a brownfield site. We can offer apprenticeships and everything that the HS2 college requires, and we are celebrating 175 years of the rail industry in Derby. It is the best place in the country for such a project, so I wish to have a debate on that.
Mr Lansley
I understand and applaud my hon. Friend for her support for that project and for her constituency. She will know that the HS2 college will act as a national college, operating on a hub and spoke model, with a main site linking a network of providers across the country. We launched a consultation to identify the most suitable main site for the new college. Bids were assessed and four locations were shortlisted: Derby, Birmingham, Doncaster and Manchester. Those locations gave presentations to support their bids on 27 June, and a final decision on the preferred site will be taken by Ministers shortly.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
Will the right hon. Gentleman ask the Foreign Secretary to make an urgent statement in which he condemns the murder by Israeli terrorists of the Palestinian, Mohammed Abu Khdeir, who was kidnapped yesterday? The murder was the outcome of the hysteria that was deliberately provoked by the Israeli Prime Minister following the kidnap and murder of three Israeli teenagers. Will he ask the Foreign Secretary to send our sympathy to the family of Mohammed Abu Khdeir; to join the American Secretary of State, John Kerry, who has described the murder as “sickening”; and to make it clear to the Israelis that we expect nothing more than the hunting down and bringing to justice of the murderers of this poor boy?
Mr Lansley
The right hon. Gentleman rightly calls these murders sickening, as are all murders of teenagers. The Government very much condemn the abduction and murder of the Israeli teenagers and the abduction and murder of the Palestinian teenager. It is vital that those who are responsible are held accountable, and in that respect we welcome Israel’s commitment to bringing those responsible to justice and President Abbas’s firm condemnation of the abduction of youngsters. It is essential, as the right hon. Gentleman knows, to avoid any action or rhetoric that could lead to further loss of life, and events such as these highlight the importance of reaching a negotiated two-state solution with the benefits that that would bring to all Israelis and Palestinians. I will of course, as he asks, draw his comments to the attention of the Foreign Secretary. As he knows, the Foreign Secretary and his colleagues are assiduous in keeping the House informed of events in the middle east. These events and others in the middle east are of serious concern.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
BT is still using its position as a monopoly supplier to hold up the roll-out of rural broadband. May we have time to discuss that in this place? I have just had the latest list from my constituency and it is pitiful how many places have been enabled. The time has come to send a clear message to BT from the House of Commons that we have had enough of its using its position to blackmail the people of this country and to slow down high-speed roll-out.
Mr Lansley
As my hon. Friend knows, BT has won many contracts across the country to provide the roll-out of broadband. As he will have heard during questions to my right hon. and hon. Friends in the Department for Culture, Media and Sport, the overall progress of broadband roll-out is now very impressive, but we must ensure that it reaches many parts. We both know how frustrating it is that, despite the rapid increases in demand for broadband services, in areas where the infrastructure for superfast access to broadband has not been put in place, services are deteriorating rather than remaining stable. It is vital, and I endorse what my hon. Friend says: we need BT and other contract providers—but principally BT—to be well aware of the requirements to put every effort into meeting and, if possible, exceeding their contractual commitments on superfast broadband.
Mr David Winnick (Walsall North) (Lab)
I endorse everything said by my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman), but on a domestic issue raised earlier by my hon. Friend the Member for Wallasey (Ms Eagle), may I suggest that we have a statement or a debate on political funding so that we may try to find out how many Ministers have been involved in meetings and social events with some of the richest people in this country in order to raise cash? Must the Tory party always prostitute itself with an election looming? And the Tories have the impertinence to criticise trade unions!
Mr Lansley
I have to tell the hon. Gentleman that there is no prohibition on social events, although perhaps he wishes for one; I am not sure. As far as I am aware, only one political donation in this country buys influence and that is the political donation made by the trade unions to the Labour party, with £12.6 million donated by Unite since the right hon. Member for Doncaster North (Edward Miliband) became the hon. Gentleman’s leader. They are now demanding the appointment of a Cabinet Minister for trade unions, no less, whose purpose will be, they say, to bring home the bacon. Since they already decide the candidates for the Labour party, determine the policy of the Labour party and effectively control the leadership of the Labour party, that is some bacon—or perhaps I should say some bacon sandwich.
Mr David Amess (Southend West) (Con)
Will my right hon. Friend find time for a debate on the publication of the Chilcot report? As someone who attended the debate and changed my mind on how to vote because of what the then non-working-class Labour Prime Minister Tony Blair told the House of Commons, I think that it is essential that the Chilcot report is published as soon as possible without redactions so that the House can judge the veracity of what we were told on that momentous occasion.
Mr Lansley
Those of us who did not support the invasion of Iraq in 2003 are as anxious as my hon. Friend to see the Chilcot report. In his letter of 28 May to the Cabinet Secretary, Sir John Chilcot said that it was the inquiry’s intention to submit its report to the Prime Minister as soon as possible. I can tell the House that it is the Prime Minister’s hope that it will be able to do so before the end of the year. The Government will not comment on the Iraq inquiry before the publication of the report.
Alison McGovern (Wirral South) (Lab)
Each and every time a Government Minister is asked about zero-hours contracts, they reference their hope to ban exclusivity clauses, but there are far more problems associated with zero-hours contracts than that, and many other ways in which people are exploited. May we therefore have a debate on zero-hours contracts in Government time?
Mr Lansley
The hon. Lady will be aware that the provision that Ministers refer to is in the Small Business, Enterprise and Employment Bill. There will be an opportunity, as I announced in the provisional business, for that to be debated.
Ian Swales (Redcar) (LD)
Control of discretionary social funds passed from the Department for Work and Pensions to local councils on 1 April 2013. In the first year, my local Labour council, Redcar and Cleveland, turned down 91% of applications from people in need and spent only £256,000 of its £765,000 allocation. May we have a debate on how councils are making use of these discretionary social funds?
Mr Lansley
My hon. Friend makes an interesting point, which might benefit from an application for an Adjournment debate, not least because there may be other Members elsewhere in the House who feel strongly, as he does, about this and their local authority’s decisions.
Ian Paisley (North Antrim) (DUP)
Boxing, swimming, running and cycling, though not all at the same time, are incredibly well followed and practised sports across Northern Ireland. Will the Leader of the House make time for a debate on the legacy of the Commonwealth games so that we can see how the benefit of those wonderful games will be applied to sportspeople across Northern Ireland?
Mr Lansley
The hon. Gentleman makes an interesting point. I do not know whether we have time available before the Commonwealth games for such a debate. We are very much looking forward to the Commonwealth games, which will be a tremendous event, and to the opportunity to see this country, not least Scotland, showcasing itself as a venue for great sporting achievement. In that context, in Cambridge and in my constituency, we are also very much looking forward to seeing the Tour de France coming through on Monday.
Bob Blackman (Harrow East) (Con)
At the end of this month NatWest bank proposes to close the final bank branch in Harrow Weald high street, which will have a devastating effect on businesses and individuals in the area. The key point nationally is why banks are allowed to close the last branch in a high street. May we have a debate in Government time on the future of retail banking and the effects on the high street?
Mr Lansley
I know that my hon. Friend raises a point that will be of interest to many Members across the House, not least at the moment when there is a sort of secular change taking place in the structure of retail banking, with the withdrawal of retail banking from many high streets, including in my own constituency, and the loss of the last remaining bank in some villages. It is difficult to go anywhere else for that kind of access. My hon. Friend and other Members might exploit the opportunity, through the Backbench Business Committee or otherwise, to see whether there is demand among Members for such a debate. He is a member of the Backbench Business Committee, so I know that he is familiar with how that Committee works.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Back in 2010, when I believe the Leader of the House was the Health Secretary, a promise was made to fund a paediatric neuromuscular consultant post for Birmingham. Would he be interested in a debate in which he can tell us what steps are needed to turn that into reality?
Mr Lansley
I do not recall the detail in relation to that, so I will ask my right hon. Friend the Secretary of State for Health to update the hon. Gentleman and me.
Andrew Percy (Brigg and Goole) (Con)
It is two years since the Chancellor halved the bridge tolls on the Humber bridge, and figures out this month show that local car users have saved £19 million in crossing tolls. At the same time the number of Humber bridge crossings have gone up. Businesses have also saved money through the halving of heavy goods vehicle tolls. May we have a debate next week on how our long-term economic plan is helping the Humber? That would give us an opportunity to explain to the House why the HS2 college should be in Doncaster.
Mr Lansley
I am glad that my hon. Friend can illustrate with evidence the success of what the Chancellor of the Exchequer has announced. It is part of the broader process of ensuring that we have effective infrastructure to support the growth that our long-term economic plan is generating. I am delighted that it is having that effect on infrastructure, as well as on employment, which is going up, and on the deficit, which is coming down, and with taxes now being able to be brought down and with education and skills being promoted, not least through apprenticeships. That is all very much part of the long-term economic plan for regeneration on Humberside.
Mrs Madeleine Moon (Bridgend) (Lab)
During the first and second world wars the majority of engineers in Britain were women, yet today women make up only 7% of the engineering work force, the lowest percentage across Europe. Iceland has 43%. May we have a debate on how we can ensure that women understand that engineering is a first-class career option, for example with companies such as Ford in Bridgend?
Mr Lansley
I have every sympathy with what the hon. Lady says and absolutely agree with the principle of trying to bring more women into engineering. Clearly that is very much in our interests, by supporting the further rebalancing of the economy and the growth in manufacturing. It has been pursued by successive Governments. I remember working as a civil servant, way back in 1980, on the Young Engineers campaign, and Women into Science and Engineering was established at that point too. That was 34 years ago and we have still not succeeded. We must ensure that engineering is at the forefront of careers advice, that there is support for the right courses and, indeed, that engineering role models are made available to young women.
Charlie Elphicke (Dover) (Con)
May we have an urgent debate on the independence of think-tank charities? Last year the Institute for Public Policy Research took up to £40,000 in donations from the TUC and then published a report calling for—wait for it—more trade union power. It looks more like a sock puppet than an independent think-tank charity.
Mr Lansley
I am interested in what my hon. Friend has to say. He might want look for opportunities to raise the matter himself, perhaps in an Adjournment debate. In any case, I think that it is an important subject for all of us to be aware of. Wherever we are engaged in public policy making, I hope that it will be evidence-based and objective. One of the Nolan principles is objectivity. That should be as true for those who seek to influence policy as it is for those who make it.
Ian Mearns (Gateshead) (Lab)
Last night I attended a function organised by the all-party group on rail in the north at which Northern Rail set out its future investment programme. Unfortunately, it will only go as far north as York. At another recent meeting, Network Rail outlined its proposals for the next control period, none of which will go beyond York. The current disparity in public infrastructure spending between London and the north-east is 520:1. May we have a debate on when this Government will put that right?
Mr Lansley
The hon. Gentleman will be aware, not least from the Chancellor of the Exchequer’s speech at the beginning of last week, of the importance that we attach to the further promotion on infrastructure that enables all parts of the United Kingdom to have maximum access to the economic growth being generated by this Government’s long-term economic plan. High-speed rail will clearly make a significant difference, but there are many other projects being promoted by Network Rail. I will draw the attention of the Chancellor and the Secretary of State for Transport to the point the hon. Gentleman makes as we approach the publication later this year of the infrastructure plans for the next 10 years.
Mr Speaker
Order. It is both exceptionally cheeky and thoroughly disorderly for the hon. Member for Stone (Sir William Cash) to be seeking to catch my eye at business questions, for which he arrived almost half an hour late. I do not doubt that he has a point of the highest importance in his mind, and of which he thinks the House needs urgently to be informed, but there are other mechanisms, including points of order, whereby he might be able to realise his objective. Meanwhile, I am concerned for his leg muscles and advise him to remain in his seat. I call Mr Nigel Evans.
Mr Nigel Evans (Ribble Valley) (Con)
Thank you, Mr Speaker; I will ask my hon. Friend’s question for him.
I want to be helpful to the shadow Leader of the House because of her view that Conservative Members are rabid fanatics obsessed with the issue of Europe. Will the Leader of the House find time next week for a debate on Europe in order that we can praise the Prime Minister for his valiant standing up for British interests against the election of President Juncker? We could also look at reform of Europe. There has to be something wrong when we spend £30 million of our money by sending it abroad to youngsters who have never set foot in the United Kingdom via the payments that we give in support to these children. I believe that we now have the support of Germany on this. I think it is therefore an area where real reform can now be made.
Mr Lansley
I noted the reports this morning about debates in the Bundestag about exactly these issues of transfer payments and benefit payments to other countries. That highlights the fact that there is a growing sympathy for what our Prime Minister and members of this Government have been saying about the necessity of the free movement of peoples being about free movement for the purposes of work, not of access to benefits, and that will form part of our reform programme. I cannot promise an immediate debate, although my hon. Friend will have noted that next week’s business includes a debate on the justice and home affairs opt-out.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Leader of the House agree that it is disgraceful that a very high percentage of children up and down our country never get to visit the British countryside? May we have an early debate on access to the countryside? Will he join my campaign, which is an all-party campaign that includes some very good Members on his Benches, to get 150 people in every constituency to read a countryside poem on video, thereby raising £5,000 that will go towards getting schools in poorer areas of our country to visit the countryside to love it and learn about it?
Mr Lansley
I have every sympathy with what the hon. Gentleman says. I am fortunate enough to have, and to live in, a constituency that is predominantly in the countryside, and I very much appreciate what a privilege that is. It is something that is not necessarily available to people in cities and urban areas, and we should give them access to it. I am very engaged with what he describes about the reading of poetry. I will talk to my hon. Friends at the Department for Culture, Media and Sport and the Department for Environment, Food and Rural Affairs about ways in which his admirable objective can be pursued.
Martin Vickers (Cleethorpes) (Con)
There is concern among residents in my constituency that the two hospitals that serve it, based in Grimsby and Scunthorpe, are having to share more and more services and the different specialisms at each location. May we have a debate to explore the reasons for this? Much of it is driven by medical professionals, which is quite right, but, as the Leader of the House will appreciate, it causes considerable concern to constituents.
Mr Lansley
I completely understand what my hon. Friend says. As he says, this is, and should be, clinically led, and it should be evidence-based. He will recall, no doubt, that this has been happening over the years; it is a steady process, not something that started under this coalition Government. It is sometimes the necessary consequence of securing access to sufficient staff with sufficient expertise and sufficient regular practice to be able to provide a 24/7 service; we need a 24/7 NHS. It should not, however, lead to a loss of access that has a damaging impact on outcomes; it should be outcomes-based. In relation to his local area, I will ask my hon. Friends at the Department of Health to respond specifically to his point.
Nic Dakin (Scunthorpe) (Lab)
This House has made real progress on scrutinising important public appointments. Will the Leader of the House outline what process will be in place to allow the House to scrutinise the Government’s nomination for the next European Commissioner?
Mr Lansley
I think that the Prime Minister in this House and my noble Friend Baroness Warsi in the House of Lords yesterday made it clear that while this nomination is one for the Prime Minister, it is open to the scrutiny Committees of the House to request, as they could on any nomination for commissioner, that evidence be given to them. It will be a matter for the nominee concerned as to how to respond.
Philip Davies (Shipley) (Con)
Earlier this week, my hon. Friend the Member for South Derbyshire (Heather Wheeler) raised the case of Keith Williams in Justice questions. He was released early from prison by the Parole Board, completely and utterly against the wishes and views of the victim of his terrible crimes. May we have a debate on how we can make sure that the victim’s views are paramount in the criminal justice system, so that before anybody is released on parole, moved to an open prison or released on temporary licence, the views of the victim are taken fully into account and put at the top of the priority list? Such a debate would also showcase the fantastic work of organisations such as Families Fighting for Justice.
Mr Lansley
I am grateful to my hon. Friend for making his case very well. I will ask my colleagues at the Ministry of Justice to respond directly to him. I am sure he will find further opportunities for a debate, perhaps on the Adjournment or elsewhere, in order to raise the issues properly. I hope he recognises that, through legislation and other action, the Government have sought continuously to put the interests of victims at the forefront of the criminal justice system.
Nia Griffith (Llanelli) (Lab)
As secretary of the all-party group on steel and metal related industry, I have received a response from the Exchequer Secretary declining to meet us. Given that this week, in announcing the devastating loss of 400 jobs in south Wales, Karl Köhler, head of Tata Steel Europe, cited problems with Government policy, such as business rates and delays in getting help for energy intensive industries, will the Leader of the House prevail on his colleague to meet the all-party steel and metal related industry group?
Mr Lansley
I was aware, of course, of the very sad loss of jobs at Port Talbot and sympathise with the hon. Lady’s constituents. I will discuss the issue with my ministerial colleagues. There may be a question about where ministerial responsibility lies: given what the hon. Lady has said, it probably lies more with the Department for Business, Innovation and Skills than directly with the Treasury.
Chris White (Warwick and Leamington) (Con)
This week is create UK week, giving us the opportunity to reflect on the £70 billion-a-year contribution to the economy from the creative industries. In my constituency there is an ever-expanding creative industry, providing some 1,200 jobs in the video games sector in my area alone. May we have a debate about the contribution of creative industries to our economy?
Mr Lansley
I understand the important role played by our creative industries, including the video games sector, in our economic recovery. Indeed, I think that was illustrated by the replies given by my colleagues to the preceding questions to the Department for Culture, Media and Sport. The creative sector is worth £71 billion to our economy, with its employment figure growing at five times that of the economy as a whole. It is a great success and we are committed to working with the creative industries to take the strategy forward. Create UK was launched just yesterday in order to make further progress, and I hope my hon. Friend’s constituency, which is such a leading location for firms in the sector, will be able to fully benefit from the strategy.
Diana Johnson (Kingston upon Hull North) (Lab)
Last week’s Sunday Express reported that a suspected terrorist was freely supporting and encouraging young Britons to travel to Syria to fight jihad. May we please have a debate in Government time on what additional powers we may need to introduce for returning radicalised young people who have been fighting jihad in Syria and Iraq?
Mr Lansley
I understand completely the seriousness and importance of the point raised by the hon. Lady. There will be Home Office questions on Monday. We also intend to introduce powers under the Serious Crime Bill, which is currently in the House of Lords, relating to extraterritorial jurisdiction in relation to acts concerned with terrorism, preparation for terrorism and similar. I know I may be asking the hon. Lady to wait a little, but this House will have an opportunity to debate that Bill in due course.
John Glen (Salisbury) (Con)
Salisbury cathedral’s repair programme has been ongoing for 27 years at a cost of £1 million a year. Therefore, I am very pleased to know that the Government’s first world war centenary repair fund offers an opportunity to provide a boost to the work at the cathedral. Will the Leader of the House make time for a ministerial statement on the outcome of the application, so that Salisbury cathedral can make use of that much-needed funding?
Mr Lansley
I am very glad that we have been able to give support to our cathedrals, which are a wonderful aspect of our overall heritage, especially as they are often the focus of commemorative events. Indeed, I was able to be with the Royal Anglian Regiment at a commemorative event in Ely cathedral just the Sunday before last. The cathedrals that have been successful in securing grants from the first world war centenary repair fund will be announced in a written statement on Thursday 10 July. I will of course ensure that my hon. Friend’s comments are noted by the Department for Culture, Media and Sport.
Andrew Gwynne (Denton and Reddish) (Lab)
Will the Leader of the House find time for a debate on transport connectivity in the north of England? This week, there was a suggestion—thankfully, a misleading one—that Denton and Reddish South stations may be forced to close. A review of the northern franchise is coming up. Frankly, it is no good for the Chancellor of the Exchequer to come up to Manchester to talk up improved connectivity between the city regions in the north of England if transport cuts make it more difficult to get to those city regions.
Mr Lansley
I do not think that the hon. Gentleman can talk about transport cuts at a time when we have an unprecedented scale of Network Rail investment in the largest rail investment programme since the Victorian era. What he said was equally misplaced in that it is absolutely appropriate, at the same time as we are investing to try to deliver improvements in the existing rail network, for the Chancellor to express his views about what the vision might be for further developments in connectivity in the years ahead.
Andrew Jones (Harrogate and Knaresborough) (Con)
Last week, my hon. Friend the Member for Skipton and Ripon (Julian Smith) and I attended an export fair run by UK Trade & Investment at Ripon race course. It was timed to coincide with the increased international attention on our area with the Tour de France departing from Yorkshire this weekend. The event was designed to encourage more companies to be exporters. May we please have a debate to consider the importance of export growth in our long-term economic plan and rebalancing our economy, and what more can be done to support British companies seeking to export?
Mr Lansley
My hon. Friend is absolutely right. I am delighted that he and our hon. Friend the Member for Skipton and Ripon (Julian Smith) are actively supporting businesses and UKTI, working together to achieve that. Other business organisations were no doubt party to it as well. We do need—and, happily, we are seeing—a growth in exports. Indeed, I note that the greatest growth in exports has been in the west midlands. Off the back of the Tour de France and the focus on the area’s attractions, Yorkshire might be able to come forward in encouraging people to undertake more exporting and get to the front of the pack.
Jeremy Lefroy (Stafford) (Con)
May we have an urgent debate on support for NHS trusts, such as my Mid Staffordshire NHS Foundation Trust, which have difficulties in recruiting key staff? It is vital that essential services are maintained, and the debate might consider the creation of a central pool of senior clinical staff who can help out at short notice.
Mr Lansley
I will draw the attention of my right hon. and hon. Friends at the Department of Health to that idea. As I know from past experience, it is sometimes possible to have collaborative arrangements between NHS trusts precisely to ensure that there is such support. The NHS works together, and it is the job of NHS England to ensure that it does so in order to deliver safe and effective care to patients. Where that is at risk in any location, it is important to provide support.
I am delighted that under this Government, because of the resources we are putting in and the savings we are making in administration—delivering £5.5 billion savings on administration in this Parliament, with recurring savings of £1.5 billion a year thereafter—we have been able to have some 16,000 more clinical staff and some 19,000 fewer administrative staff. That shift into front-line care is at the heart of enabling trusts, such as my hon. Friend’s, to deliver services in future.
Mr Philip Hollobone (Kettering) (Con)
This week, finally and at long last, the European Court of Human Rights has made a sensible decision about something. Given that it has this week decided that the ban on Islamic veils in France breaches no one’s human rights, will the Leader of the House or another Minister make a statement to the House next week to say that Her Majesty’s Government intend to introduce such legislation in this country? We will never have a fully functioning, fully integrated multicultural society if growing numbers of our citizens go around with their faces covered.
Mr Lansley
I noted that decision by the Court, but part of it was about the issue of subsidiarity and the right of countries to make such decisions for themselves. In that context I do not anticipate a statement by a Minister in the form my hon. Friend seeks.
Robert Halfon (Harlow) (Con)
Has my right hon. Friend seen my early-day motion 207 on excessive hospital car-parking charges?
[That this House notes that hospital parking charges can be a huge burden on patients and visitors at a vulnerable time in their lives; further notes that Nottingham City Hospital and Queen’s Medical Centre charge £4.00 for one hour of parking, that Royal Free Hospital, Guy’s Hospital, St Thomas’s Hospital, and Chelsea and Westminster Hospital charge £6.00 for two hours of parking, that Royal Free Hospital, Guy’s Hospital, St Thomas’s Hospital and South Bristol Community Hospital charge £12.00 for four hours of parking, that Royal Free Hospital charges £72 for one day of parking and £504.00 for one week of parking; recognises that these charges are disproportionate and onerous for patients; therefore condemns these hospitals and others which charge similar fees; and urges the Government to consider ways to reduce the cost of hospital parking.]
My right hon. Friend will be aware that 109 colleagues from all sides of the House have signed a draft Back-Bench motion on the issue. Despite Government guidance stating that hospital car parking charges should be fair and proportionate, 80% of NHS hospitals in England continue to charge their staff, visitors and patients extortionate amounts to park on their sites. May we have a statement on the issue and will he do all he can to deal with it?
Mr Lansley
I have read my hon. Friend’s early-day motion and had the pleasure of hearing him and colleagues make their application for a debate to the Backbench Business Committee. It will be for that Committee to determine whether a debate should take place. I will say—I freely admit that this is a personal view—that although there is a hospital in my constituency with very high parking charges, I am concerned about deciding simply to subsidise or pay for car parking, as happens in Wales. This is money that would otherwise be available for clinical—[Interruption.] It is a simple fact that that money would otherwise be available for clinical services. When the NHS in Wales is underperforming on standards and achievements relative to England, one has to reflect on whether that subsidy could form part of the problem.
Henry Smith (Crawley) (Con)
Earlier this year, Argentina absurdly started issuing a 50 peso note with a map on it of the Falklands Islands, in the colours of the Argentine flag. Far more sensibly, in contrast, earlier this year my right hon. Friend the Chancellor of the Exchequer announced a new £1 coin, which will be more secure and reaches back to the heritage of our coinage. May we have a statement from the Treasury as to whether the tails side of that new £1 coin could feature the coat of arms of the Falkland Islands and of other overseas territories, in the same way as England, Scotland, Wales and Northern Ireland feature?
Mr Speaker
The hon. Gentleman was too self-effacing to draw to the attention of the House that he is himself a renowned vexillologist.
Mr Lansley
Indeed, Mr Speaker. I will draw my hon. Friend’s views to the attention of the Treasury. I forget the precise title of his role in this regard, but the Chancellor is responsible for the Royal Mint, and there is an advisory committee to help him in that role, so it may be a matter of taking independent advice rather than that of the Government imposing their own view.
Points of Order
(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
The Leader of the House is in his place and I have a sense that the point of order from the hon. Member for Stone (Sir William Cash) is of a pressing topical character, so we will take it now before we come to the Select Committee statements.
Sir William Cash
I am extremely grateful to you, Mr Speaker. I entirely accept your observations on my attempting to get in during business questions, but I was not here earlier because I was waiting outside the Chamber, as I feared that the Government might introduce a Command Paper, of huge importance to this House and to the United Kingdom, on the issue of justice and home affairs and the opt-outs and opt-ins on 35 measures. That is the reason for my point of order. I fear that I have to say that the Government, knowing that that was the case, did not refer to that paper in the business statement. The difficulty is that by reason of it not being raised before, I was precluded from seeking an urgent question, because I was not entirely aware of the fact that it was going to happen. I simply make the point that I feel very strongly that we should have a debate as soon as possible on the issue. Perhaps the Leader of the House will be good enough to indicate the position through you, Mr Speaker.
Mr Speaker
I am grateful to the hon. Gentleman. I am not sure that that was a point of order, but he has put his concerns on the record. The Leader of the House will say whatever he wants to say, but I just point out that he did reference the general debate on the UK’s justice and home affairs opt-outs, which will take place on Thursday 10 July.
The Leader of the House of Commons (Mr Andrew Lansley)
Further to that point of order, Mr Speaker. I need say little more, other than to draw the attention of the House, as my hon. Friend the Member for Stone (Sir William Cash) has done, to the document that was published this morning on the decision pursuant to article 10(5) of protocol 36 to the treaty on the functioning of the European Union, which relates to the justice and home affairs opt-outs. The document may be debated, as you rightly say, Mr Speaker, next Thursday.
Mr Speaker
It would seem churlish and unkind not to allow the hon. Member for Harlow (Robert Halfon) to make his point of order.
Robert Halfon
On a point of order, Mr Speaker. Following the question from the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), I fear that the wrong impression has been given to the House. The Israeli Prime Minister and the mayor of Jerusalem condemned the death of the Palestinian in Israel in the last few days. There is absolutely no evidence that that atrocity was carried out by an Israeli.
Mr Speaker
We are grateful to the hon. Gentleman. His point is on the record.
Food Security
Select committee on Environment, Food and Rural Affairs
Mr Speaker
We now come to the first of two Select Committee statements. The Chair of the Select Committee on Environment, Food and Rural Affairs, Miss Anne McIntosh, will speak on her subject for no more than 10 minutes, during which no interventions may be taken. At the conclusion of her statement, I will call Members to put questions on its subject, and call Miss Anne McIntosh to respond to them in turn. Members can expect to be called only once. Interventions should be questions and should be brief. Front Benchers may take part in the questioning.
Miss Anne McIntosh (Thirsk and Malton) (Con)
On behalf of the Environment, Food and Rural Affairs Committee, may I say how delighted we are to have secured this time to launch our report on food production and the supply dimensions of food security? I welcome the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for North Cornwall (Dan Rogerson) to his place. The Committee would like to thank all those who contributed to the inquiry, submitted evidence or appeared before us. I give special thanks to the Committee staff who drew all the evidence together and helped us to reach our conclusions.
We believe that the Department for Environment, Food and Rural Affairs is the key to providing leadership on long-term food security. I should say at the outset that the food and drink sector accounts for 3.7 million jobs and 7% of the overall economy. Food security has been described by the UN Food and Agriculture Organisation as
“when all people, at all times, have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life”.
That implicitly includes future generations and requires food security methods in the UK and elsewhere to be sustainable.
The UK currently enjoys a high level of food security, but we believe that there is no room for complacency. I would like to take this opportunity to thank and pay tribute to all the farmers across the land who work so hard in all weathers to ensure that we have food on our plates. Food security is under severe challenge from changes in weather patterns, growing populations and rising global demand for food. The report therefore focuses on what food production, supply and systems we need to ensure that we have long-term food security.
What can we do? Our core recommendation is to have a single champion for farming and food security, and we believe that it should be the Department for Environment, Food and Rural Affairs. While it is right that other Departments are involved, such as the Department for Business, Innovation and Skills and the Department of Energy and Climate Change, there is a real need for cross-departmental communication, and DEFRA should step up to the plate and take the lead. We also urge DEFRA to appoint a food security co-ordinator from the Department to ensure a coherent and co-ordinated approach.
Self-sufficiency is in decline. Over the past 20 years, it has reduced from some 75% to around 62%. We need to stem and reverse that decline. We need to look to become more self-sufficient in food, but also aim to be a major exporter in those products that we can afford to export and that are surplus to demand in this country.
We applaud DEFRA’s efforts and congratulate it on its budget and on the work of the Secretary of State and Ministers here and in the other place in leading a vibrant export campaign to ensure that our farmers export more. On a visit to Denmark that the Committee undertook during the Danish presidency, we were struck by the ability of Danish farmers, often working through co-operatives, but with Government support, to export, particularly milk, cheese and other dairy products. We therefore applaud the Department’s efforts to open up new markets where demand is growing.
However, barriers remain, not least in certain emerging markets. I do not wish to single out China, but let me give a particular example. There is a joint operation between the Malton bacon factory and the Cookstown plant, and there will be many pig parts, such as pigs’ feet, that humans do not eat in this country but for which there is wide demand in China. That is a wonderful opportunity for export and we urge the Government—whether DEFRA, the Foreign Office or the Department for Business, Innovation and Skills—to intervene. Having just removed the barriers to cheese exports, we must act urgently to remove the very real barriers to pigmeat. In my constituency alone, in Malton and the hinterland, that will mean thousands, if not millions of pounds every year. We urge the Government to press for opening up those markets to allow such exports to grow.
The boost to food security is challenged by some food production systems and threats such as the impact of extreme weather events. We call for several measures. We need supermarkets to use shorter supply chains, and we applaud efforts on that and look forward to Professor Elliott’s final report and recommendations. We need to diversify if supply is to be safeguarded against disease, severe weather or other domestic supply disruption, and we must be open to imports where they are needed.
We also call on UK farmers to satisfy home consumer tastes and extend seasonal production of fresh fruit and vegetables in co-ordination with the Agriculture and Horticulture Development Board, and working with central and local government. We urge the Government to work hard to reduce dependence on imported soybean or animal feed, as increased demand for protein from emerging economies threatens current supply lines.
I ask the Government to produce a detailed emissions reduction plan for the UK agriculture sector. Agriculture currently accounts for 9% of all greenhouse gas emissions, and livestock production accounts for a staggering 49% of farm-related emissions. The headlines this week mentioned flatulence from animals, and we wish to reduce that wherever we can. The report applauds the work that is going on, particularly that being trialled by Sainsbury’s and other supermarkets, as well as the research that we have heard about to grow high sugar grass that will singlehandedly reduce such emissions.
We also welcome the £410 million that the Government are currently spending on agricultural research, and the £160 million for agri-tech strategy. We urge the Government to act, perhaps as a sort of Cilla Black, and to unite, go out and find partners and bring them to the marketplace—a sort of “Blind Date”, urging research institutes in this country to find other such institutes, including across Europe and internationally, and to ensure that farmers benefit and that research is brought to farmers and to the marketplace.
We believe that there needs to be an urgent public debate to allay public concerns about genetically modified crops, and the Government are best placed to do that. On extreme weather events, thousands of acres of land were flooded and taken out of production during the recent flooding, and we need better long-term forecasting so that farmers know what crops to grow and when. We welcome new entrants and believe that with land in limited supply, and with its conflicting uses such as for housing as well as farming, younger farmers and new entrants will embrace the technology available.
This is the first of two reports and it draws on the work of the previous Government, on which the Committee reported in 2009. I believe that it will be warmly welcomed by farmers, supermarkets and retailers. First and foremost, it is a vote of confidence in British farming, and places DEFRA as the champion for farming and food security.
Mr Speaker
I am most grateful to the hon. Lady for her comprehensive statement, and the House is obliged to her for providing Members with a helping hand through her graphic descriptions of what she had in mind. It is always useful, in my experience, to have a bit of information.
Huw Irranca-Davies (Ogmore) (Lab)
There is much to be commended and debated in this welcome report, and I hope we will have the opportunity to do so in short order, not least the acknowledgement that:
“Food security is not simply about becoming more self-sufficient in food production.”
as well as the imperative for the UK to boost its productivity for domestic and export reasons.
Why does the Committee feel it necessary, as its first recommendation, to urge the Government to
“identify Defra as the lead Department for food security”
given that that should be the Department’s raison d’être and a core part of its mission? Why is it necessary to highlight that, even though it is welcome?
Miss McIntosh
I welcome the welcome from the hon. Gentleman, and we are grateful to BBC 5 Live for using such graphic language, which I felt would also be acceptable in the Chamber. We stated that DEFRA should be a champion and a lead Department because in areas such as farming and—dare I say it?—also outside farming in tourism, which impacts on the rural economy more broadly, policy often cuts across many different Departments. In this instance, the agri-tech strategy is important in promoting and boosting food security and increasing self-sufficiency, and it potentially goes to the heart of exports, and cuts across the three Departments I mentioned. We just want to give DEFRA a little bit of welly to go out and be confident in discussions with other Departments. Farming remains at the heart of DEFRA. It is our fourth priority to grow the rural economy, and I believe that DEFRA is best placed to lead on that.
Neil Parish (Tiverton and Honiton) (Con)
As a member of the Committee, I very much welcome my hon. Friend’s report. It is right for us to talk about food security not only in this country, but throughout the world, because the world population is 7 billion and will rise to 9 billion by 2050. We can grow good grass, good meat and good vegetables in this country along with cereals, but with climate change, we will need to be able to adapt our crops more and more. Biotechnology is out there—there is a blight-resistant potato that does not need spraying—but we close our minds to it. We need the Government to be much more proactive so that people can believe they are safe, and so that we can produce more food in this country using fewer chemicals to do so.
Miss McIntosh
My hon. Friend makes a valid point. I should take this opportunity to thank him for the expertise and knowledge he brings to the Committee. On precision technologies and new technologies such as genetically modified foods, we must ensure that the public have an open mind. If it is the case that there is no cross-contamination, we need to go out there and sell the message. I believe it is for the Government to lead in that regard. Denmark is probably more focused on organic crops, but the UK has many producers in a niche market of organic foods. They need to know that their crops will not be cross-contaminated in that way. An interesting piece of research that the Department for Environment, Food and Rural Affairs could ask for is precisely on the yields compared with organic production—my hon. Friend gave an example. I understand that that work has never been conducted.
Fiona O'Donnell (East Lothian) (Lab)
I congratulate the hon. Lady and her Committee on the report. I am glad she raised the rather uncomfortable issue—it is uncomfortable for some of us—of the lack of progress in reducing emissions in the agricultural sector. She mentioned a taskforce and spoke of a wind of change running through the sector—that is just a pun—but what action could the taskforce take? Does she have any evidence that DEFRA and the Department of Energy and Climate Change are working together well to bring about further progress?
Miss McIntosh
I am grateful to the hon. Lady for her question and her eloquent description of the problem—it was much more eloquent than the one I was able to come up with in the time available. There is evidence that DEFRA, DECC and the Department for Business, Innovation and Skills are working closely together. The evidence we received in writing and on the visit to the Rothamsted institute showed the long lead times needed in respect of research on the long grass with the extra sugar content that can lead to the wind of change to which she referred. I make a plea to the Department for Environment, Food and Rural Affairs and the Department for Business, Innovation and Skills: we need longer-term security of research funding. That was the plea of the Rothamsted institute in its evidence to the Committee. If no other good comes from the report, it would be a positive step if we left that message with the House today.
Mr Philip Hollobone (Kettering) (Con)
I hope you have had your Weetabix this morning, Mr Speaker—if you had Weetabix, it came from the Weetabix plant located in Burton Latimer in my constituency. In congratulating my hon. Friend on her Committee’s excellent report, and with specific reference to the parts of the report that focus on supply chains and export opportunities, will she join me and take this opportunity to congratulate Weetabix, which sources all the wheat for its products from farms within a 50-mile radius of the Burton Latimer plant, and which is increasingly looking to export its product to help the British balance of payments?
Miss McIntosh
I congratulate my hon. Friend on his work, and I also congratulate Weetabix. The price of wheat was the talk of the barbecue held by the National Farmers Union and Morrisons this week. It is worrying indeed. It is to be commended that Weetabix turned to British producers to source its wheat.
Gibraltar
Select Committee on Foreign Affairs
Mr Speaker
I hope it is not necessary for me to repeat what I said prior to the delivery of the previous statement. I think everybody who is present now was present then. The same procedure applies to the second statement, which is heard for up to 10 minutes without interruption, following which there is an opportunity for brief questions to the Chair of the Select Committee on Foreign Affairs, whom I now invite to deliver his statement.
Sir Richard Ottaway (Croydon South) (Con)
When problems emerged in Gibraltar last summer, with seven-hour-long delays to cross the border, the Foreign Affairs Committee took a strong interest in the situation and in what the Government were doing, and were going to do, in response. On Tuesday, the Committee published its report, “Gibraltar: Time to get off the fence”. We concluded that the behaviour of Spain towards Gibraltar is unacceptable. A NATO and EU ally is, as a matter of deliberate policy, impacting the economy and functioning of a British overseas territory. In our opinion, it is time for the Government to take a tougher line.
The dispute has a 300-year-long history. However, in the past three years, the Partido Popular Government in Spain have taken a more hard-line approach to the dispute. They have significantly increased pressure on Gibraltar and its people, and Gibraltarians have suffered. They have suffered: the deliberately imposed border delays; aggressive maritime incursions; calculated pressure at the EU and the UN; and inflammatory rhetoric from Spanish Ministers about Gibraltar’s sovereignty and its economic affairs.
We acknowledge that Spain’s actions have placed the UK Government in a difficult position. They have a strong bilateral relationship with Spain that is in the interests of all British citizens, including the 1 million Britons who live in Spain. However, the Government also have responsibilities towards Gibraltar and cannot ignore actions by Spain that are intended to make the lives of Gibraltarians more difficult.
First, we regret that talks including all three partners—Spain, the UK and Gibraltar—have been suspended, and we ask the Government to set out what offer they have made to Spain in connection with these talks and how they intend to restart them.
We are deeply concerned about the dramatic increase in maritime incursions in British Gibraltarian territorial waters and the hostile tactics of some of the vessels that conduct them. The Foreign and Commonwealth Office rightly protests about each incursion, but we were disappointed to find that it sometimes lodges diplomatic protests weeks after the event, robbing them of all force. This gives the wrong impression to Spain about how seriously the UK takes this issue. We recommend that protests are lodged within seven days.
We have no doubt that delays imposed by Spain at the border with Gibraltar are politically motivated, and that the border is being used as a means of coercion. The Government should state publicly that they will take legal action against Spain in the European Court if there is little improvement at the border in the next six months.
The Committee considered the possibility of Gibraltar joining Schengen, while the UK remains outside. Although we saw the merit in this idea and the impact it would have, we suspect that the legal and economic implications could be considerable.
Spain continues to use international institutions as a means of applying pressure on Gibraltar. Gibraltar remains on the UN list of non-self-governing territories, despite repeated UK Government attempts to de-list it. Only a few weeks ago, Spanish MEPs in the European Parliament were trying to limit Gibraltar’s aviation rights. Spain also continues to refuse to allow direct military movements between Gibraltar and Spain, even among its NATO partners. As a result of this, Gibraltar feels it is under siege.
The Government’s laudable attempts to de-escalate the dispute have not worked. They were right to try diplomacy, but they must now take a more robust approach, as long as this is agreed with the Government of Gibraltar. We recommend that the Government take some immediate actions now, including: more prompt diplomatic protests against incursions and border delays, and summoning the ambassador; increased efforts at the EU and UN on Gibraltar’s behalf; renewed effort to establish trilateral talks that are currently not taking place; and withholding UK support for Spain’s international goals, such as its aspiration to membership of the UN Security Council, unless its attitude toward Gibraltar changes. As for more serious measures, we further recommend that the Government be more robust in their defence of the territorial waters around Gibraltar, and we have asked them to report back on how they intend to do that.
Finally, we recommend that if those measures do not improve the situation within six months, the UK should take Spain to court for infringement of EU obligations at the border. I commend the report to the House.
Mr John Spellar (Warley) (Lab)
I congratulate the Committee and its Chairman on a timely, well-balanced report, and look forward to a wider debate about it.
The report underlines the concern that is felt about the fact that no Minister from the Foreign and Commonwealth Office visited Gibraltar between 2011 and 2014. What reassurances has the Committee received that that is now a priority for the FCO and, indeed, for other Departments?
The Committee rightly expresses concern about the mixed message that has been sent by the delay in the delivery of protests about incursions into British Gibraltarian territorial waters, which it says—quite rightly—gives an impression of “going through the motions”. The Committee suggests a much tighter timetable. When does the right hon. Gentleman intend to seek a progress report from the Department on the implementation of that?
On 27 November last year, I said in the House:
“it is vital that the Spanish Government today hear a united statement from the House that such provocative and unlawful acts are not acceptable to this Parliament or to the British people. They cannot be ignored.”—[Official Report, 27 November 2013; Vol. 571, c. 263.]
Does the right hon. Gentleman think that the Foreign Office has heard that message?
Sir Richard Ottaway
I am grateful to the right hon. Gentleman for his support for the report, and for his comments. The report was agreed unanimously, and it has all-party support.
The right hon. Gentleman asked about visits by Ministers. I think, to be fair to the Government, that the Minister for Europe has been to Gibraltar twice during the current Parliament. The Minister for the Armed Forces went there in the autumn of last year, and the Chief Secretary to the Treasury was there earlier this year. I think that there has been a sustained level of visits, but I take the right hon. Gentleman’s points on board. Of course, there can never be enough visits of this kind.
As for the timetable for incursions, it is worth noting that the Spanish ambassador has been called into the Foreign Office—I think—six times since the escalation of this incident, and that only the Syrian ambassador has been called in more frequently. We none the less recommend that the criteria for calling in the ambassadors be reviewed in order to emphasise the impact, the significance and the importance of the incidents, while also taking account of the fact that if they are called in too often, the impact is sometimes devalued. There must be a balance.
The right hon. Gentleman asked how we expect the situation to develop. As I said, we recommend that if there are no improvements, action should begin in the European Court within six months. I think that that provides a suitable window allowing the Spanish Government to improve the situation.
Andrew Rosindell (Romford) (Con)
I thank my right hon. Friend for leading the inquiry conducted by the Foreign Affairs Committee, on which I am proud to serve.
This is a timely and an absolutely necessary report. We have seen, over a long period, shameful and disgraceful behaviour on the part of a so-called NATO and EU ally, Spain, against the people of Gibraltar. I hope that my right hon. Friend and all other Members agree that it is time for much more robust action by our own Foreign and Commonwealth Office to deal with the issue.
The report refers to high-profile visits. Leaving ministerial visits aside, I can tell the House that it was on 10 May 1954 that the Queen of Gibraltar, our own Head of State, visited the Rock. Does my right hon. Friend agree that it is time Her Majesty was advised that it would be timely for her to visit the people of Gibraltar?
Sir Richard Ottaway
I am grateful to my hon. Friend for the consistent support he gave me throughout the report’s preparation. He will be aware that the convention in this House is not to bring the royal family into debates of this kind. None the less, we recommend that a high-level visit take place, and I am sure that will have been noted in the Foreign Office.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
I thank the Chairman of the Committee for today’s presentation. He has worked very hard on the report and the Committee has come up with some robust recommendations, which I hope the Government will listen to. Why have the Spanish Government escalated the situation to almost crisis-level and put good relations with one of their most important allies at risk? Are the Spanish Government trying to take attention away from the serious economic circumstances in Spain?
Sir Richard Ottaway
I am grateful to my hon. Friend for her question and for the support she has given me in the report’s preparation. All the evidence we received suggested that this was triggered by the Government who took office in Spain in 2011. Spain was in a dire economic situation. Various scandals were going on in the Spanish Government. The evidence we received was that this was an attempt to distract attention from their own domestic policies. Leaders in other countries around the world have on occasion taken similar action.
Henry Smith (Crawley) (Con)
I commend my right hon. Friend for his robust report, which clearly sets out how objectionable it is for a supposed ally to treat the people of Gibraltar in such a way. Gatwick airport in my constituency is a major link to the airport in Gibraltar. I encourage the Foreign Affairs Committee to continue to be robust on that issue as well, so that it has is no effect on trade. As a member of the European Scrutiny Committee, I know that it would be interested in pursuing these issues, too.
Sir Richard Ottaway
Indeed. I understand that the European Scrutiny Committee is examining EU-Ukraine aviation rights. We will be watching with interest the answers to the questions that my hon. Friend has posed. The Spanish Government are using aviation rights as one of their lines of attack. Limiting aviation access to Gibraltar airport will have quite a profound effect on the economy. The Foreign Office is robustly resisting that and I understand that so far it has been successful, but it must persevere and be diligent in protecting aviation rights.
Mike Gapes (Ilford South) (Lab/Co-op)
The Chairman of the Committee has produced, with the rest of us on the Committee, an important and valuable report. One issue needs to be highlighted: the Partido Popular Government are against the policies of their predecessors, who negotiated the Cordoba agreement with the Labour Government. Things were improving. That was working well. Many people in Spain disagree with the current Spanish Government’s approach, particularly workers in La Línea and other Spanish citizens, who are going to work in Gibraltar every day. It is their work and their jobs that are being disrupted. Therefore, there are potential allies in this debate. The Chairman did not mention that Spain itself has two enclaves on the north African coast—Ceuta and Melilla. Could not the Foreign Office consider upping the ante on those issues and improving relations even more with Morocco to make it clear to Spain that there is a level of hypocrisy in its attitude to Gibraltar?
Sir Richard Ottaway
I am grateful to the hon. Gentleman for his support for the report, and for the work he has put into producing it. He is right to talk about the local Spanish community just over the border with Gibraltar. I think I am right in saying that he has engaged with the trade unions in the area. It is one of the more puzzling aspects of Spain’s behaviour that it is damaging not only Gibraltar’s economy but the economy of southern Spain. He makes a very strong point about Ceuta and Melilla. Spain argues that there is a constitutional difference involved, but I find it utterly hypocritical that it should take such a line. It is a matter of particular interest that Ceuta is being used to refuel Russian warships. If, as Spain maintains, Ceuta is a part of Spain rather than an overseas territory, that would result in the rather unusual situation of a NATO country refuelling Russian warships while NATO is in dispute with Russia over Ukraine.
Neil Parish (Tiverton and Honiton) (Con)
In a previous life, I had the honour of being one of six representatives in the European Parliament for Gibraltar and south-west England. My experience is that when Spain closes the border, it is the workers of La Línea and the people of Gibraltar who are really affected by the economic problems that ensue. However, Spain is affected as well. The whole situation is absolutely ridiculous. Aviation also plays a part in the economy of Gibraltar. I thank my right hon. Friend for his report. Spain is a real bully, and it must be stood up to. I am not a great believer in sending everything to the European Court, but I think it is time to refer Spain to it, because it is completely out of order.
Sir Richard Ottaway
Gibraltar’s loss is Parliament’s gain, following my hon. Friend’s move from the European Parliament to this House. He is quite right about Spain’s bullying approach. Over the past year, the Government have been right not to raise the temperature and to try to keep the situation calm. However, as the First Minister said in evidence to the Committee, a year has gone by, the queues are still there and the talks are not happening. That is why we are now calling for a more robust approach by the Foreign Office, and I hope that it will agree with us in its response.
Mr Philip Hollobone (Kettering) (Con)
I commend my right hon. Friend and his Committee for their excellent report. Given the growing number of major and minor maritime incursions into Gibraltarian waters by civilian and official vessels from Spain, and the great terrorist risk that Britain and her territories face, particularly at this time of tension in the middle east, someone is going to get killed sooner or later unless we prevent this escalation. I was concerned to read in the report that, despite Gibraltar being a self-governing territory with a constitution, legislature and Government, it is still on the UN list of non-self-governing territories. Given the UK’s presence as a permanent member of the Security Council and a founding member of the United Nations, should not Her Majesty’s Government make it a top priority to get Gibraltar off that list?
Sir Richard Ottaway
My hon. Friend is absolutely right to draw attention to the risk of further escalation leading to loss of life, and to the importance of getting a grip on the situation before it gets hopelessly out of control. He referred to the UN list of non-self-governing countries. I have to confess that I am not an expert on the internal machinations relating to voting rights inside the UN, but he makes a strong point. I gather from private conversations that the Foreign Office is actively looking at the situation and that it has made repeated attempts to take Gibraltar off that list. That would make it a self-governing territory, recognised by the UN, and I hope that the Government will address this point in their response.
Backbench Business
Protecting Children in Conflict
(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Fiona O’Donnell (East Lothian) (Lab)
I beg to move,
That this House has considered the matter of protecting children in conflict.
I begin by thanking the Backbench Business Committee for granting me the opportunity to have this debate today, and to thank the Members from all parts of the House who supported my application for the debate. This is a great opportunity to hear the voices of those who are often not heard. Children whose lives are impacted by conflict are all too often voiceless. It is also appropriate that this debate should follow on from the conference in London that called for action to end sexual violence in conflict. I congratulate the Foreign Secretary, the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for Boston and Skegness (Mark Simmonds), and the whole Department on holding that conference. Indeed, the Minister and I attended an event hosted by War Child, and I hope he will say what progress he believes will be made on these children’s issues. This is not just about ending sexual violence against children; it is about preventing children from losing their childhood.
One reason I am passionately and energetically campaigning in Scotland for a no vote in the referendum on 18 September is that we are better placed as Scots to be a force for good in the world as part of the United Kingdom. The humanitarian global summit in 2016 provides a further opportunity for the nations of the UK to work together and show leadership, and I hope the Minister will say today that the UK will continue to take a leading role in protecting children in conflict.
We need not only to protect children, but to be more active in promoting children’s rights within their own countries and their awareness of those rights. We should not just be promoting the UN rights respecting programmes in our own schools in the UK; we should be doing so wherever we are helping to fund education across the globe. Children need to learn that they have rights and that other children different from them have rights, too. Teachers and parents will then learn these rights and perhaps future generations will do a better job than this one of protecting children in conflict.
Children and youths constitute more than 50% of the populations of conflict-affected countries. As of 2010, more than 1 billion children worldwide lived in countries or territories affected by armed conflict. Sadly, changes in the nature of conflict have had profound consequences for children, who are being denied the special protections due to them under international law. Child injuries and deaths were traditionally seen as the collateral damage of war, but children are increasingly being targeted directly. Those trends need to be met with a renewed focus on how children can be protected in situations of conflict, alongside heightened scrutiny of duty bearers who are failing to safeguard children’s rights.
As a member of the Select Committee on International Development, I have been incredibly privileged to have seen with my own eyes the impact conflict has on the lives of children. The Committee’s most recent visit was to the middle east, where we saw how UK aid is working to support Syrian refugees in Lebanon and Jordan. Since the Syrian conflict began, more than 2.3 million people have sought refuge in neighbouring countries. In Lebanon, families are being settled in host communities. Although the vast majority of refugees in Jordan are in host communities, there are also large-scale camps, such as Camp Zaatari, which the Committee visited. The UK has pledged £600 million in aid and we can all be proud of that, but it cannot compare to the response from Lebanon and Jordan. It is almost impossible for us in the UK to imagine the scale of the challenges they face and the impact on their own country and people, be it on education, water security or employment.
Nicola Blackwood (Oxford West and Abingdon) (Con)
Does the hon. Lady share my concern that in situations such as that in Syria early enforced marriage is seen as a way of escape for young girls? Does she join me in welcoming the Department for International Development’s upcoming summit on ending female genital mutilation and early enforced marriage?
Fiona O'Donnell
Absolutely. When we were in Camp Zaatari we heard about families who suddenly had no prospects—they do not know when they are going to return to Syria and they have no way to earn a livelihood—and we were told that if they have daughters the temptation is to marry them off early and, in order for those daughters to be as prized as possible, to consider awful, gruesome child abuse such as FGM. We also heard about an increased prevalence of domestic violence in those camps. That has an impact not only on the women, but on the children in those families. I am grateful for the hon. Lady’s intervention.
Life for children can be very difficult in these situations, as many parents fled Syria with just the clothes on their back. At times, they live in horrific conditions, but even when the housing is of a satisfactory standard, children have needs, beyond the roof over their head, that are just not being met.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I thank my hon. Friend for giving way and congratulate her on securing this important debate. She describes a very terrible situation, but does she agree that it is wrong to incite to violence children in conflict situations? For example, a young boy who was speaking about a game being shown on Palestine TV in May said that Zion is Satan with a tail. Is it not terrible for someone to incite a young boy to make such a statement?
Fiona O'Donnell
If my hon. Friend bears with me, she will find that I come on to that matter later. I am not usually someone who speaks from notes, but I will today as this is such a complex issue,
On the IDC visit, we met a family living in an unfinished block of flats. Speaking to three generations of the family—children, mother and grandmother—living in that small space, I asked what life was like for the children. I was told that they were not attending school. The mother never took them out into the town and they were not allowed to play outside as she was worried that someone would complain about the noise. With no one able to say when the conflict will end, it is clearly unacceptable for children to continue to live in such a way. The family had sanitation, water, energy and food, but for children to grow and develop into healthy adults and to reach their potential, they need so much more.
I cannot say with any authority that the children in the camps had better lives, but there is an advantage in that services of scale can be delivered more easily. We saw evidence of that, with the delivery of psychological, health and education services. None of those services is a luxury that can wait to be delivered at some later date.
The children who manage to register for school in the community face many barriers to learning, such as social isolation, language difficulties, and, for those who had already started school in Syria, the problems of adjusting to a different curriculum. For children to be able to take advantage of the opportunity to learn, it is essential that they receive therapeutic services. When they are so traumatised, how can they possibly be expected to learn? Some 28.5 million children are out of school in conflict and emergency-related areas. The humanitarian response does not accord the same priority to education or child protection as it does to water, shelter and food.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
I congratulate my hon. Friend on securing this debate. She will be aware of the initiative of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) on safety in schools, particularly in Nigeria. Does she agree that that is a huge step forward, although, at the moment, the school girls are still missing? That initiative will allow other parents in the same state to send their children to school.
Fiona O'Donnell
Absolutely. Just last night I attended a meeting in the House in which the Finance Minister of Nigeria talked about the campaign to build safer schools. As a fellow Scot, my hon. Friend will remember the awful tragedy of the shooting in Dunblane and the action we had to take to make our children safe in school. Children in Nigeria, and girls attending school, deserve the same protection. Such is the power of education that many people see it as threat.
Jeremy Lefroy (Stafford) (Con)
I return to the hon. Lady’s important point about counselling. Does she recall the Committee’s visit to a centre in Jordan where we met some children who had recently come from Syria? The first things that they drew were AK47s and other terrible things to do with war. Now they are drawing pictures of homes and gardens and other things connected to a much more peaceful way of life.
Fiona O'Donnell
I thank the hon. Gentleman both for his intervention and for his comradeship—if he does not mind that term—during that visit to the middle east. He will also recall a visit where we saw children miming the experience of being refugees—how they were turned away from one country and then another before they were given refuge in Lebanon and Jordan, and just how moving that was. We also had a game on a 3G pitch. MPs, who are always competitive, managed to beat the refugee children 2-0. It was good to see the facility being used.
Analysis of the 2013 UN appeal tracking data shows that less than 2% of UN humanitarian appeal funds went to education and that only 40% of requests for funding for education were met. A coalition comprising non-governmental organisations, UN agencies and others under the banner of the “Education Cannot Wait” campaign is calling for education funding to be at least 4%, and I hope that DFID Ministers will support that campaign. Perhaps the Minister will give us an indication today of what he thinks about that.
I am pleased to see colleagues in the Chamber who have a record of defending children’s rights. I am sure that they will focus on individual countries, but I want to ensure that the debate today does not pass without our speaking up for the children of the Central African Republic The UN has reported “unprecedented” levels of brutality against children in the Central African Republic, including mutilation and beheading. Save the Children says that it is not aware of plans to deploy child protection experts on the new UN mission in the CAR, even though there is clear evidence of large-scale recruitment of children to armed groups and of other grave violations, including sexual violence.
The UK could and should be leading on such action by deploying its own experts on the mission or by insisting on pre-deployment training covering things such as how to work with children who have been recruited to armed groups. It should also be championing funding for child protection and education in the CAR. Will the Minister tell us what is being done as part of the preventing sexual violence initiative to ensure that there are experts in child protection in every team and that all staff have some training in child protection issues? Schools need to be safe places in which children can learn.
There is a rapidly growing international consensus in support of the Lucens guidelines, but so far the UK Government have yet to endorse them. By restricting the use of schools by armies in times of conflict, states can directly and substantially reduce the prevalence of violation of girls and boys in wars, and can facilitate the reintegration of survivors into their communities. Earlier this month, the Norwegian Government officially announced that they will lead in promoting the guidelines. Will the Minister commit the UK—and call for other states to do so—to adopting the Lucens guidelines on the military use of schools, amend the military codes of conduct and issue a clear and unambiguous prohibition of attacks on and military use of schools?
A 45% increase in the number of child casualties from explosive weapons use was recorded from 2011 to 2012. In November 2013, a report entitled “Stolen Futures”, which was released by the Oxford Research Group, identified explosive weapons as the primary cause of child casualties in Syria. It showed that of 12,000 then-recorded casualties, more than 70% of children died as a result of explosive weapons, illustrating the devastating impact that such use has on children.
The use of explosive weapons may not result in the killing or injuring of children, but its effects on their everyday lives are incredibly damaging. Such weapons may cause debilitating injury, displacement or long-term psychological scars and block life-saving humanitarian aid. It is time that states, including the UK, publicly recognised the humanitarian impact of the use of explosive weapons in populated areas and championed moves toward an intergovernmental political declaration against such practice. Norway is providing leadership, and hosted a meeting last month to build consensus. I am not sure whether the UK was present, but will the Minister today commit the UK to being part of a global campaign to protect the innocent victims of war?
This debate is about not just children’s rights but the hope of a safer, more peaceful world for us and future generations. Children are exposed to high levels of violence in conflict, which can significantly impact on their beliefs, behaviours, future opportunities and aspirations. As my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) said, beliefs, practices and habits that foster violence easily become deeply embedded and can fuel repeated conflict unless addressed. Every civil war since 2003 was a resumption of a previous civil war, and the majority of conflicts re-emerge within 10 years of a ceasefire.
The Israeli-Palestinian conflict makes victims of children on both sides. The Leader of the Opposition was right to highlight the tragedy of Israeli children learning in schools which have to be able to survive rockets attacks from Gaza. What kind of environment is that for children to learn?
I would be grateful if the Minister commented on last year’s UNICEF report which stated that the ill-treatment of Palestinian children in the Israeli military detention system was widespread, systematic and institutionalised. What discussions has his Department had with the Israeli Government and, given the recent loss of young Israeli and Palestinian lives, how is his Department working with the Department for International Development and NGOs to protect children, particularly in Gaza?
I have constituents who have spent time working in the west bank, ensuring that Palestinian children can walk safely to school. Sadly, the people from whom they need to protect the children are all too often other children. Israeli settler children are taught terms of abuse and encouraged to throw stones. That is a tragedy and an abuse not just of the Palestinian children but of the Israeli children. They are all victims. That is why I tabled an early-day motion and wrote to the Foreign Secretary asking him to reintroduce funding for Breaking the Silence so that ordinary Israelis can hear credible voices telling them what is being done in their name. Children’s involvement in violence goes far beyond that kind of activity, however.
Mrs Ellman
I take the point my hon. Friend makes very seriously; when wrongdoing occurs it must be put right. Does she agree with me that there is a consistent and relentless campaign of incitement to violence on the Palestinian media almost daily, which inevitably has an impact on young children who then start to commit acts of violence?
Fiona O'Donnell
My hon. Friend is right, and I saw that when I visited the area. As a mother, I thought how difficult it would be to raise children and try to prevent them from indulging in acts of violence while at the same time making them aware of their rights and encouraging them to challenge injustice. I welcome her contribution.
For children who have been involved with armed forces and groups, rehabilitation and reintegration tailored to their specific needs is essential. World Vision identifies the need for programmes targeting girls who have given birth during the conflict and their children. When children leave armed groups, reintegration cannot be seen as a short-term process to be completed in a few months. World Vision’s experience has shown that reintegration takes much longer and needs to be part of both peace-building and development work. It must be funded accordingly. We know that children’s involvement in violence goes beyond the kind of activity seen in the west bank. It is estimated that a quarter of a million children are active in armed groups. Work to try to prevent the recruitment of child soldiers must focus on stopping armed forces and groups recruiting and using children and on strengthening the systems that protect children, making them less vulnerable to recruitment.
As I draw my remarks to a close, I ask the Minister to support the recommendations from Save the Children, which could save the lives and outcomes of children in conflict. We need to mainstream child protection in conflict, ensuring that there are sufficient resources. Only 36% and 28% of appeal requests for child protection and education respectively are met in emergency responses. That is simply not good enough. The UN and regional peacekeeping missions must include adequate capacity to prevent and respond to the violation of children’s rights, including mandatory pre-deployment training. Governments and partners must provide co-ordinated assistance to children who are unaccompanied or separated as a result of armed conflict. Violations of children’s rights must be monitored and recorded and all reasonable steps must be taken to hold perpetrators to account.
Finally, I want to pay tribute today to the many NGOs who work in the most difficult and dangerous conflict zones, sometimes giving their lives to deliver life-saving aid to children. When we see the worst of humanity, they show us the very best.
Sir Edward Leigh (Gainsborough) (Con)
The whole House will be grateful to the hon. Member for East Lothian (Fiona O'Donnell) for initiating this debate on protecting children in conflict. She was right to deal with the Palestinian situation, but I will not follow her example in any detail as I do not want to get involved in the debate about the rights and wrongs of the Palestinian issue, except for noting the suffering of both the Palestinian people and the Israeli people in a very difficult conflict.
I want to make some general remarks about how the British Government could try to improve the protection of children in conflict areas, particularly when it comes to education. Education is the subject on which I want to focus and I would be grateful if the Minister could deal with that problem when he replies.
I should perhaps declare a family interest. I am speaking today because both my elder daughters work for charities in Africa and have worked in Kenya, Rwanda, the Democratic Republic of the Congo and the Central African Republic. They keep me informed of their work and what is going on and, a few years ago, I visited the Congo with War Child to look at the appalling privations that children faced, particularly because of the conflict and the use of child soldiers. My visit had a deep impact on me and I am sure that, even despite all the excellent work of my hon. Friend the Minister and other Ministers in the FCO and DFID, there is still more that we can do.
As I say, I want to concentrate on education, but why are children particularly vulnerable? It is an obvious point, but they are vulnerable because they are young. When a three-year-old loses their parents in a bomb attack, it is virtually impossible for them to survive alone. If a 25-year-old loses a parent, it is a tragedy, but they can survive. It is right that the House should focus particularly on the appalling impact of conflict on children, which is much greater than its impact on mature people.
Of course, children suffer appalling and severe trauma from witnessing events. They do not have the life experience or emotional maturity to integrate a particular scene into the rest of their life. We have been brought up in a very comfortable environment, but we all know how even quite small events from our childhood can have a traumatic effect later on. Imagine a child in a conflict situation witnessing their mother being raped or their brother being dragged off as a child soldier or witnessing murders or the appalling scenes that have happened in Syria. That trauma will live with those children for ever.
Children are targeted in conflict situations for sexual attacks. Girls and boys make up more than half the rape cases in such conflicts and that is an appalling statistic. Imagine the appalling emotional trauma of that. Children are also targeted by military groups that are keen to expand their ranks quickly and we have seen that in particular over the years in Congo. As I know from my visit to the Congo and as we all know, it is appalling to talk to former child soldiers who have been dragged into these events. They have committed terrible things and terrible things have happened to them, sometimes when they are just 13 or 14-years-old.
War destroys livelihoods, and children are often seen as a way for distressed families to get income. Girls can be married early for a price or used as sex workers and boys can be sent out to work in fields and factories or to collect rubbish from the streets. I occasionally visit the middle east, and we see the desperate struggle for survival, particularly for Syrian refugees in Lebanon or Jordan when there is no social security available to any significant extent. In conflict situations, families are desperate to survive, and we all know that children have to be used as part of that.
The point I want to stress and focus on for the rest of my speech is that it is children and not adults who lose their opportunity for education. Once that opportunity is lost, it is lost for ever and can never be repeated. Education is essential for children and particularly for children in conflict areas. It is a life chance that comes only once and a reasonable level of education is even more important for children who will be expected to build a peaceful recovery from conflict. Education keeps children safe. Obviously, if a child is in a school or in an educational environment, it is less likely that they will be married early, raped, abducted or recruited by armed groups. All that is much more unlikely when schools are open.
Actually, education is prioritised by families in conflict areas. We have seen on television, such as during the Iraq conflicts, and from our own experience how families that are often desperate and have nothing—owning nothing, surviving on nothing—still make the effort to dress their children in immaculate uniforms to walk through bombed-out streets to get school. Education is extraordinarily important for them.
Tim Loughton (East Worthing and Shoreham) (Con)
My hon. Friend makes a compelling case based on his experiences in Africa. It is deeply humbling when we go to developing countries in parts of Africa and elsewhere and see children who have walked miles and miles and miles to attend a classroom where they have no seats, but may have rocks to sit on, if they are lucky, and which have corrugated iron roofs. Their parents have made a contribution out of what limited resources they have, because they absolutely value education as the way out of poverty and conflict. Does my hon. Friend agree that that is deeply humbling for those of us here who take education for granted?
Sir Edward Leigh
My hon. Friend has made that point very movingly. We live in such a comfortable environment here where education is, frankly, of a fantastically high standard and is free—paid for by the taxpayer—that we simply do not appreciate the appalling sacrifices made in places where education is not free by parents who have nothing. They make that huge effort to try to educate their children, because they know, as we know, that education is everything.
We can establish a case that education is absolutely vital, therefore, in terms of taking children out of conflict situations and giving them life chances. So, having made that case, we would expect it to be prioritised by humanitarian agencies and Governments, but analysis of the 2013 United Nations appeal tracking data shows that only 1.9% of UN humanitarian appeal funds went to education. That seems to me to be very low, and I was surprised when I saw that. I cannot believe that the figure is so low, but that is what I have been told. Donors simply did not prioritise that part of the UN appeals.
Nicola Blackwood
Does my hon. Friend agree that one way we can encourage donor countries to prioritise education is by the post-2015 development framework including secondary, as well as primary, education as a core priority?
Sir Edward Leigh
That is a very good point and I hope the Minister has made a note of it, and perhaps will reply to it.
UN-funded education projects, largely delivered through non-governmental organisations, only reach 3.5 million of the children who were targeted for education in emergencies in 2013, and development donors do not get involved in education in emergencies even though they prioritise the education of children in other places. When a humanitarian agency arrives in an appalling situation where people are dying, starving and so forth, and it has to feed them and make sure they are sheltered, I can quite understand the mindset leading it not immediately to prioritise education. However, we must recognise—my daughter made this point to me—that these are often not the sorts of the intensely violent conflicts that we have witnessed in Europe and that last for three or four years; they are often low-level conflicts that can go on for many years and therefore children can be kept out of school for many years, because education is not seen as a priority.
Education falls between the two major funding streams, therefore, with the result that of the 58 million primary-age children not in school, 28.5 million are in conflict countries. Pretty soon the only children not in school in the world will be those living in conflict countries, not because they are hard to reach—mostly, they are easy to reach—but because the funding system has bypassed them almost entirely. That is a serious point for us and this House.
What needs to happen? First, humanitarian donors need to develop policies for education in emergencies that make education a central part of the first response phase, so when they go in, education is at the forefront of their minds. Secondly, the development side of Government donor offices need to stretch their understanding of education to include providing primary education in emergency settings—primary education is absolutely vital—and to do this in a way that builds, develops and protects the local education infrastructure. This has to be a prominent and early part of their investment. Thirdly, total funding for education within humanitarian responses needs to reach at least 4% of total humanitarian funding in emergencies. That figure was given to me by War Child and it seems a fair one. This is the target supported by the Education Cannot Wait campaign, which is backed by the Global Education Cluster and the International Network for Education in Emergencies, so presumably it is a well-researched figure and it makes sense. Fourthly, there is a need to conduct an urgent review of the amount of humanitarian aid DFID allocates to education and child protection; the Minister can no doubt defend the Government’s position. Inclusion of this point in party manifestos would demonstrate a strong commitment to meeting the needs of children affected by conflict.
As chairman of my party’s Back-Bench committee on DFID and foreign affairs, I am involved in helping to write the manifesto. I do not know how much notice the Foreign Secretary will take of my comments, but I will do my best. The Minister might take back to the Foreign Secretary the suggestion to include a phrase or sentence about education in our party manifesto, and perhaps the Labour party will consider doing the same thing, because manifestos are very important. Once it is there in writing in the manifesto, when whoever wins the next election comes to frame their humanitarian responses, education will be at the forefront of their minds. Also, Members of Parliament need to talk about these things and to raise them up the political agenda, which is why this debate is important.
Before I sit down, perhaps I can give testimony from a family from Irbil in Iraq, which I have visited. This family testimony was given to me by War Child. It was of interest to me because I have been to northern Iraq, not with War Child but with another charity, and the situation there is appalling. It was terrible to hear what people had to say. There was a mother. She and her family had been living in Baghdad, and her husband and son went to church and were never seen again. They just vanished—kidnapped, and obviously murdered. There was mother after mother like that. The situation in northern Iraq is, dare I say it, even more terrible than what is going on in Palestine, so may I give a tiny mention for a part of the population there with whom I have worked? In the conflict in northern Iraq there is no doubt that the Christian communities around Mosul— I have visited their villages—are in an extraordinarily stressed situation now. They are being driven from their villages by the Islamic State of Iraq and al-Sham, and what is happening to the children does not bear thinking about.
So let me read out this family testimony from Irbil in Iraq, because it is important for me to put it on the record as it is personal experience, which is always more interesting than general comments:
“War Child met with a mother of two young boys aged nine and twelve who had suffered displacement three times as a result of the recent violence and ended up having to smuggle themselves into a place of safety. Their reason for leaving their home town was the mother’s fear of her sons being recruited to fight in the violence. The devastated 12-year-old told War Child, ‘I just want to be in school’. He has been forced to leave his education during his exams which will mean all previous years of schooling will count as a ‘fail’ within the system. He is unable to go to school as an Internally Displaced Person (IDP) because when the family fled they had to leave all belongings, including the necessary certification, at home.”
The report continues:
“They are sharing rented accommodation with another three families and will run out of money at the end of the month. ‘We have nowhere to go’, the mother told us. ‘When our money runs out we will have no choice but to sleep in the public park.’ There are many families already sleeping in the rough and engaging in casual labour or begging for survival. ‘We are so frustrated and so humiliated. I used to work and have a normal life and now I have no idea what will happen to us,’ the mother said.
Let me sum up the arguments. To me, the education part of this debate is one of the most interesting and the most important. Sadly, humanitarian actors still often do not prioritise education programming at the start of an emergency. I accept, as I said, all the problems that they face, but education must be at the forefront of their minds. This is still considered something to pick up six months into or after a conflict. Instead, there is no reason why children cannot continue in school if authorities or humanitarian actors have the right support. Surely we can all agree that children have a right to education throughout their childhood. Schools can keep children safe and they are important environments for being able to provide other services such as social care to address trauma.
In the Central African Republic where an appalling conflict is going on, most of the schools in the capital are not open. This is largely due to the collapsed Government’s inability to continue paying teachers’ salaries, and the humanitarian NGOs that are providing most of the services in the city cannot access enough funding for education in particular, so reopening schools is not the priority. As a result, in the capital city large numbers of children are not in school. It is not just a question of funding. Unfortunately, the reality is that aside from conflict, the quality of education on offer in these countries is incredibly low. We need to ensure that once in school, children actually learn. Levels of violence are also shockingly high, with corporal punishment widely used. Organisations such as War Child and Save the Children are trying to address all these issues. I know that my hon. Friend the Minister, on behalf of the Government, will try to help them. Schools need to be safe spaces, with zero tolerance being shown if they are attacked or used by armed groups.
Thank you, Madam Deputy Speaker, for calling me to speak this debate. I am grateful to the hon. Member for East Lothian (Fiona O'Donnell), and I am sure we can continue to highlight these issues and ensure that in these desperate situations our children all over the world get a decent education.
Grahame M. Morris (Easington) (Lab)
I congratulate my good and hon. Friend the Member for East Lothian (Fiona O'Donnell) and the Backbench Business Committee on allocating time for such an important and timely subject for debate.
I want to cover some areas of interest relating to the protection of children in the conflict in Palestine and Israel, child prisoners and the situation of children in Gaza. I shall be interested to hear the Minister’s response. Clearly, the events of the past few weeks have once again brought to our attention in this House and throughout the world the enduring suffering of children as a result of the Israel-Palestine conflict. I draw to the attention of the House my entry in the Register of Members’ Financial Interests.
I would like to express my heartfelt and sincere sympathy to the families of the three Israeli youths abducted and killed in cold blood. My youngest son is of a similar age and I cannot begin to comprehend the grief that their parents must be experiencing at this time. There is no greater tragedy than that of a young and innocent life full of potential being taken away by conflict. In response to an urgent question earlier this week, the Minister of State, Foreign and Commonwealth Office, the right hon. Member for Faversham and Mid Kent (Hugh Robertson) said something that I found poignant. He commented that there is no “hierarchy of victimhood” and that the deaths of innocent Palestinian children are equally tragic. I wholeheartedly agree with that sentiment.
For Palestinians, this week’s kidnapping and murder of a 16-year-old boy in a suspected revenge attack and the two innocent teenagers shot dead by Israeli soldiers at Ofer in May this year are just as painful and just as tragic to the Palestinian communities as the deaths of the Israeli youths are for Israel. Since 2001, 1,407 Palestinian children have been killed by Israeli military forces and Israeli settlers as a consequence of an unjust and illegal military occupation. Worryingly, according to the United Nations, the instances of Israeli soldiers using live fire against the Palestinian civilian population in recent weeks have increased. I place on record my condolences to all the families who have lost children in this conflict, and I emphasise my desire to see those responsible brought to justice under the rule of law.
It is my wish that no more families on either side should have to suffer such tragedies in the future. I know that that wish is shared by right hon. and hon. Members, some of whom are here today, who have participated in other debates and spoken knowledgeably about their experiences, bringing their insight and knowledge of international law and treaties. Right hon. and hon. Members who share this sentiment recognise that the conflict will continue, and children will continue to be harmed and killed until a fair and just settlement is achieved. Until international law, United Nations resolutions and international conventions for peace are implemented in the middle east, parents of the region will continue to worry for their children’s safety and young people will continue to suffer and die as a result of a conflict that is not of their making.
There is a danger that the current climate of vengeance and retribution will worsen the situation. Uri Ariel, the Israeli housing Minister, has called for a “proper Zionist response”, meaning an acceleration of Israel’s illegal expansion of settlements in the west bank and East Jerusalem and a programme of punitive house demolitions. The Israeli Deputy Minister of Defence, Danny Danon, said that Israel should make the entire Palestinian leadership pay a heavy price for the killing of the three Israeli teenagers, and Mr Lieberman, the Israeli Foreign Minister, advocated a full-scale invasion of Gaza as a legitimate response. In the name of security, rights, justice and peace, the demands of these politicians must be rebutted, resisted and challenged by the international community.
Children are never the causes of conflict, but too often they are its victims, and if the cycle of revenge and violence is accelerated, they will pay the heaviest price. I was interested in the intervention from my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), in which she pointed out the radicalisation of Palestinian youth as a consequence of broadcasts in the Palestinian media. We should also think about the consequences of their day-to-day experience of being brutalised by the occupying power and the impact that that has on young minds. That cannot be discounted and the effects attributed to brainwashing by their own communities. These are relevant issues, but we cannot discount the huge pressures on the Palestinians’ day-to-day existence. Israel has by far the greater ability to make the Palestinians suffer. I fear that it will escalate its policy of punishing them collectively—a crime under international law—for the violent actions of a minority.
The subject of this debate is “Protecting Children in Conflict”. I would like to refer briefly to the plight of children in Gaza. The Israeli blockade of the Gaza strip has now entered its seventh year, spelling despair for its population of 1.6 million, 42% of whom are children aged 14 or younger. Some international organisations are suggesting that the situation cannot continue. The International Monetary Fund, for example, has said that the blockade and other restrictions imposed by the Israelis on Gaza cost the Palestinians 78% of their GDP, or an estimated $6.3 billion a year. With 80% of families in Gaza dependent on humanitarian aid, the consequences are more than economic.
Gaza’s children suffer immeasurably as a result of the severe restrictions Israel places on imports, exports and the movement of people, whether by land, air or sea. Restrictions on the import of construction equipment mean that vital infrastructure, such as housing, health care facilities and schools, are not fit for purpose. More worryingly, water and sewage treatment services are starting to break down. The blockade causes endemic and long-lasting poverty, preventing families from being able to put nutritious food on the table. That manifests itself in malnutrition among the children. Stunting as a result of long-term exposure to chronic malnutrition is found in 10% of children under five in Gaza. Anaemia affects 68% of children and a third of pregnant women. Some 90% of the water extracted from Gaza’s only aquifer is unfit for human consumption, and the UN has warned that it will be irreversibly damaged by 2020.
Fiona O'Donnell
My hon. Friend is making a powerful speech. Unfortunately, the Israeli authorities would not allow the Select Committee to travel to Gaza. Does he share my concerns about salt in the water? When mothers have to make formula with water that contains salt, that has huge implications for their young children’s physical and mental development.
Grahame M. Morris
I am grateful to my hon. Friend for making that point. I was a member of a delegation that visited the west bank, and we, too, were refused entry to Gaza. I have certainly heard from other right hon. and hon. Members who visited Gaza and can corroborate exactly what she says. I think that the Minister should make representations to the Israeli authorities on humanitarian grounds.
The UN Under-Secretary-General for Humanitarian Affairs has said that the blockade is
“a collective punishment of all those living in Gaza and is a denial of basic human rights in contravention of international law”.
I completely agree. There is no moral or legal justification for Israel’s collective punishment of over 800,000 children. Although they are kept apart by military checkpoints and separation walls—my hon. Friend the Member for East Lothian and I were unable to gain access to Gaza because of the restrictions imposed by the Israeli authorities—the children of Gaza’s fellow Palestinians in the illegally occupied west bank and East Jerusalem, and indeed in the refugee camps, also suffer profoundly as a result of the conflict.
The rights of Palestinian children are routinely violated as Israeli military detention fails to safeguard basic human rights or to adhere to international law in relation to detaining children. The most recent figures indicate that 196 Palestinian children were being held in Israeli military custody at the end of April, but I suspect that the number has increased dramatically in recent weeks. I am disturbed that the Israeli authorities are no longer releasing information on precisely how many children are being held in military detention.
My hon. Friend referred to the independent report “Children in Military Custody”, which was authored by seven senior lawyers from the United Kingdom and funded by the Foreign and Commonwealth Office. It highlights how two distinct legal systems are applied by the Israeli authorities to residents of the west bank depending on an individual’s race or national identity. When that policy was applied in South Africa, it was called apartheid, and international politicians, including John Kerry, have used that term with respect to what is happening in the west bank. That independent report by leading lawyers, commissioned by our own Foreign Office, concluded that Israel is in breach of seven articles of the UN convention on the rights of the child, including in relation to discrimination, the child’s best interests, premature resort to detention, non-separation from adults, prompt access to lawyers and the use of shackles.
When I was first elected, I had the opportunity to visit the west bank and see one of those military courts in operation. Some of the children are very young. Some are arrested in midnight raids. The crime for which they are most commonly arrested is throwing stones, and there is often little evidence that the arrested child is the one responsible. They are then shackled and blindfolded before being questioned without their parents being present and without access to any legal representation. There are extensive reports indicating that physical and verbal abuse by the Israeli authorities against those children is commonplace. They can be detained without charge for 188 days and then be made to wait two more years before the conclusion of their trial. They are often arrested in the refugee camps or the occupied territories, but they are held in military detention within Israel. Again, I am not a lawyer, but I believe that that contravenes a United Nations convention.
Most of those children are forced to sign confessions in Hebrew. They might have some understanding of Hebrew when it is spoken, but not when it is written. They often sign the confession in the hope of speeding up the trial. Unsurprisingly, given the flagrant disregard for international law, the overall conviction rate for Palestinian children in Israeli military courts—I should not laugh, but this number is like something from North Korea—is 99.74%.
I believe that a form of psychological warfare is being waged on an entire community and that it is children who are being made to bear the brunt of Israel’s punitive measures. I have witnessed those court proceedings while visiting Israel. Indeed, the image of a young boy the same age as my youngest son being marched along by soldiers with his hands and feet in shackles was truly shocking and will stay with me for the rest of my life.
Recent events have served as a stark reminder of the brutality of life for children in conflict areas. As a parent, I wish that no mother or father had to experience the tragic loss of their child. For a serious commitment towards that end, we must understand that recent tragedies are rooted in a conflict that will not end until Israel acts in accordance with international law, United Nations resolutions and the overwhelming consensus of the international community in order to realise peace and justice in the middle east.
In conclusion, I ask the Minister, in conjunction with his ministerial colleagues, to press the Israeli Government to adhere to these international conventions, particularly in relation to the rights of the child.
Jeremy Lefroy (Stafford) (Con)
It is an honour to follow the hon. Member for Easington (Grahame M. Morris) and my hon. Friend the Member for Gainsborough (Sir Edward Leigh), who made a particularly important speech about education. I will refer to that as well, but he has covered the ground extensively. I thank the hon. Member for East Lothian (Fiona O’Donnell) for introducing the debate so well and so eloquently, and for her comradeship on International Development Committee trips to the middle east and elsewhere.
Syria, Iraq, the Central African Republic, Nigeria, Somalia, Palestine, the Democratic Republic of Congo, Afghanistan, Pakistan, South Sudan, and many other places: there is a growing list of terrible conflicts, particularly civil conflicts, around the world. In all these, women and children, in particular, are at risk in many different ways: violence, of course; education, as my hon. Friend the Member for Gainsborough explained; health; and, as the hon. Member for East Lothian said, the way they think about things—their freedom of thought and freedom of faith.
In a powerful article in The Independent, the head of War Child, Rob Williams, wrote:
“Sexual violence in conflict zones includes extreme physical violence, the use of sticks, bats, bottles, the cutting of genitals, and the sexual torture of victims who are left with horrific injuries.”
Against anybody, these would be terrible, terrible acts; against children they are just unspeakable. Yet this kind of thing is going on day in, day out in many countries. It is not just about the violence itself but its consequences—not only the medical consequences that are so severe, but the rejection that can occur within these children’s communities and families because of things that have been done to them that are absolutely no fault of theirs. We hear of stories where girls and women who are raped are prosecuted for adultery. What an upside-down world we live in when that happens.
The article refers to the HEAL hospital in Goma in the Democratic Republic of Congo. Three years ago, the International Development Committee and I had the privilege of visiting that hospital, which was under the admirable leadership of Dr Lusi. Sadly, Dr Lusi passed away not so long ago. She was the subject of an outstanding obituary in The Economist that showed the sort of work that she and all those who worked with her in that place have done. In the first half of 2012, 74% of sexual violence survivors in the hospital were children—I repeat, 74%. We often hear about violence against women, which is absolutely terrible, but this is against children.
Then there is the issue of child soldiers, where I would like to introduce a slight element of hope. Although child soldiers are still recruited pretty much everywhere there is conflict, there can be a life after that. During the Committee’s most recent visit to Sierra Leone and Liberia, we saw two countries where child soldiers were commonplace—children as young as 10 taken and forced to carry arms and to kill members of their own families. Yet now, thanks to the intervention of the international community—in Sierra Leone, particularly the intervention of UK forces—those two countries are at peace, and many of the young children who were forced to be child soldiers are gradually adapting to a more peaceful life. A few years ago, I was involved in setting up a business in Sierra Leone, and some of the young men we were able to take on were former child soldiers. It is absolutely critical that those who have been involved, through no fault of their own, are able to re-engage in normal life afterwards. At the same time—we saw good evidence of this in Sierra Leone—there has to be emphasis on reconciliation: on truth coming out and on making sure that what went on in the past is not just brushed under the carpet. There is hope. There are examples in west Africa of how countries can come out of this, albeit with great pain and grief.
What are the answers? Perhaps “answers” is too trite a word to use. In his admirable work, together with many others, on violence against women in conflict and violence in conflict more generally, the Foreign Secretary has rightly focused on prosecution. War Child mentions volunteer committees, which are a more local solution in helping people to educate their own communities about what is going on and, perhaps, how to prevent it. There are also child safety centres. Last night, I attended the excellent debate on education led by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), the former Prime Minister. Focusing in particular on Nigeria, he talked about safe schools where children could be protected in that most vital of all activities, education. My hon. Friend the Member for Gainsborough said—I believe I am quoting him—that a central part of the first response to a crisis must be a focus on education. I entirely agree. When the Committee visited Lebanon and Jordan, we saw the work that DFID was doing in supporting education. I congratulate DFID and, indeed, the Foreign Office on their rightful focus on that.
I would like to put on record my admiration for the welcome that Lebanon and Jordan have given to refugees. Let us not forget that Lebanon, with a population of 4 million, now has more than 1 million refugees from Syria. Twenty per cent. of its population are now refugees, yet they were welcomed pretty much with open arms. The same is true of Jordan. Not only that, but those countries have accepted refugee children into their own state education systems. Quite a high percentage of the children being educated in Lebanon’s state system are now Syrian refugees. Let us think about whether we would do the same in similar circumstances. In relative terms, that would mean 12 million refugees coming into the United Kingdom, and probably millions—because a high percentage are children—being educated in our state schools. Would we be prepared to be as hospitable as that? I hope so, but Lebanon is doing it now.
I am glad of the support that DFID is giving those countries in upping their numbers of school places, because that will need to be done. As my hon. Friend the Member for Gainsborough said, education is not just a matter of going in and sorting it out for a few weeks or months—it takes a matter of years. The conflict in Syria is not going to go away; it is going to continue, regrettably and painfully. Therefore, our support for the education of those children must continue, wherever they are, including in Syria itself, where DFID is also helping, although obviously our Committee was unable to go there.
There is a serious problem, specifically, with girls’ education. In many countries, as the former Prime Minister said last night, girls are treated very much as second class in education. If there is not enough money to go round, they will be the ones who are not educated, or ideologies will say that it is not worth educating girls and they should not be educated. For Boko Haram, western education is forbidden, specifically education of girls.
Again, I want to introduce an element of hope. When we were in Sierra Leone, we saw examples of second-chance schools supported by DFID—schools for children who have completely missed out on education because of conflict but who are now able, in very difficult circumstances, to receive an education. Often, the buildings used are schools during the day and teachers go there in the evening or late afternoon to provide an education. It was humbling to see children crowding into those dirty classrooms, which had broken desks and no facilities and where white boards were a million miles away, desperate for a second chance at education, because they knew how important it was.
The impact of conflict on health, particularly that of children, is another issue. Worryingly, we are seeing the re-emergence of polio in Syria as a direct consequence of conflict. That is a problem not just for Syria, but for all of us. We had believed that we were close to eradicating polio—a magnificent achievement over the past 20 or 30 years—but its re-emergence in Syria may mean that many of those gains have been lost in that part of the world. Leishmaniasis, which is a terrible, disfiguring disease caused by the sandfly, is also on the increase in Syria. That is another disease that we were perhaps on track to, if not eradicating, certainly minimising around the world.
There are other diseases. In order to reduce the incidence of malaria, people need to sleep under insecticide-treated bed nets. I declare an interest as chairman of the all-party group on malaria and neglected tropical diseases. When people are in a conflict situation and are being driven from pillar to post, it is very unlikely that they will have access to bed nets, so they, and children and pregnant women in particular, will be more liable to catch malaria and possibly die from it.
I pay tribute to those organisations that provide health services in the most incredibly difficult circumstances, including Médecins sans Frontières, Christian and other faith-based hospitals that provide assistance all the way through conflicts, even though they are under desperate pressure, and the committed individuals who sometimes give their lives in the service of their fellow women and men.
I want to touch briefly on the question of thought, belief and freedoms. At a time of conflict, people’s way of life and the way in which they have been brought up can come under tremendous pressure, because sometimes conflicts are driven by ideology. Children are taken away and brainwashed into thinking something completely different, perhaps into hating their parents and their upbringing to the extent that some who have perhaps also been given drugs are prepared to kill their own parents or other members of their family. We sometimes forget that this not just about health, education and violence itself, but about the emotional trauma of conflict and the way in which all the certainties with which a child has been brought up are taken away and replaced by hatred by vile men.
I also want to talk about the United Nations and what the world can do that it is not doing at the moment. The United Nations Security Council has set out six violations against children in conflict: the killing and maiming of children; the recruitment or use of children as soldiers; sexual violence against children; attacks against schools or hospitals; denial of humanitarian access for children; and abduction of children. Sadly, we have read about all those things in our newspapers in recent weeks and months, yet too little is happening at the United Nations.
I am a great believer in the United Nations—it is the only game in town and the only thing we have internationally to work together—but it must do much, much more. First, it must speak up constantly about this issue, which is relevant not just to one, two or three countries, but to dozens of countries across the world. Secondly, as has been said, peacekeepers play a vital role. Personally, having seen peacekeepers in various countries, I do not think we make nearly enough use of them. They are often sitting in camps, just protecting themselves. They do not have a robust enough mandate. That was particularly true in the DRC, where they were not able to go out and deal with the very problems that we as taxpayers believed we were paying them to deal with. Yes, they were there—this is not to take anything away from the peacekeepers themselves—but their mandates were not strong enough, particularly for the protection of children and violence against civilians.
I believe that the UK has a very important, perhaps unique, role to play. We are involved in training peacekeepers in many of the regions affected by conflict. Our armed forces and trainers do a fantastic job, but I believe we could do much more. As we draw down from Afghanistan, I believe our armed forces can play a very important future role in providing training in peacekeeping and the protection of civilians, particularly women and children, and in perhaps more muscular peacekeeping than is the case at present around the world.
We also need to see action from local citizens. We have seen how the great example of Malala Yousafzai and her courageous stand galvanised the world, but we need to see far more of that and we need to protect and endorse such people.
We also need to see more mediators and more women in particular involved in mediation. Far too few women are involved in the reconciliation and mediation that needs to take place in order to bring peace. That is not because of a lack of incredibly capable women, but because they are not thought of or they are not in the right place at the right time. We need an active programme to train and develop women mediators internationally, so that they can go in and help those countries achieve peace.
In conclusion, we face a difficult situation. The situation for children in conflict is, I believe, getting worse, not better. We have seen some encouraging examples of how countries can come out of it, particularly Sierra Leone and Liberia, and what can be done to reintegrate children affected by conflict, whether they have been involved as child soldiers or damaged by conflict. However, current events in Africa and the middle east in particular are throwing the issue into stark relief. We need much, much more robust international action. The United Nations needs to step up to the plate. I hope that in his response the Minister will outline what the UK Government are doing, particularly at the United Nations and with regard to the individual countries suffering from conflict at the moment.
Tim Loughton (East Worthing and Shoreham) (Con)
I am delighted to follow the very thoughtful contributions made to the debate so far. I pay tribute to the hon. Member for East Lothian (Fiona O'Donnell) for making it possible, and I apologise for missing the very first part of her speech. I was talking about conflict and children in another context elsewhere. I had not anticipated taking part in this debate, but such is its importance that I want to pick up on some of the points made by previous speakers and draw on my own experiences of visiting conflict zones.
This is, of course, a timely debate, for the most tragic of reasons. The images we saw from Palestine earlier this week of the three Israeli children who became victims of war starkly brought home to us the ghastly things and tragedies that are occurring daily in other parts of the world. Another image that brought that home was that of the Nigerian girls, who were the subject of last night’s excellent debate—of which I read, but, alas, was not part—led by the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). For hundreds of girls to be taken by terrorists from their schools, where they expected to be educated and to do all the things our children take for granted, and for their lives now to be in the balance—they have perhaps already been sold into the sex trade or whatever, because such threats have been made under the nose of that country’s Government—is absolutely alarming.
So alarming is that situation that we now have to talk about “safe schools”. Schools should be places of safety. When we send our children off to school, we expect them to be looked after and safeguarded. The fact that terrorists can make them pawns in some misguided holy war—that is how they try to portray their terrorism—is quite inconceivable to us today.
A third image that sends a chill down all our spines was one I saw on a news report from the conflict involving the so-called ISIS forces in Iraq: on the back of a pick-up were two boys, who could not have been more than 10 years old, with two AK47s and belts of ammunition to go with them. Those 10-year-olds are combatants of war, who have been expected to join, and coaxed and promoted into, the front line of the ghastly and misguided conflict in that country. We recently debated an amendment to the Criminal Justice and Courts Bill—I supported the amendment, which was tabled by my hon. Friend the Member for Enfield North (Nick de Bois)—to make sentencing mandatory for 16 to 18-year-olds caught in unlawful possession of a knife as a second offence. That is something pretty ghastly in this country, but to have children routinely taking AK47s into places of conflict perhaps puts it into context.
Those three images starkly portray the tragedy that we are debating today, but they are of course the tip of the iceberg, as are the 250,000 children—surely an underestimate—who are child soldiers, including the notorious ones in places such as Uganda. I repeat the tributes paid by all hon. Members to the staff of the NGOs, whom many of us have visited and worked with in places of conflict. They absolutely put their lives on the line to try to protect and to give some safety and security to children who, through no fault of their own, find themselves victims of conflict. I particularly want to repeat the tribute paid by my hon. Friend the Member for Stafford (Jeremy Lefroy) to Rob Williams and the excellent charity, War Child. He does such a good job with that charity, as he previously did with UK-based charities involved with families. Such images haunt all hon. Members and, I am sure, all our constituents.
There are, however, things in which we should take great pride, and I am sure that we will hear more about them when the Minister sums up. As in so many cases, the UK is setting the example—putting its money where its mouth is and leading the world—in trying to turn around the juggernaut of children’s involvement in conflict zones.
The international protocol on the documentation and investigation of sexual violence in conflict, which was launched by the UK, is working to establish international standards to help to strengthen prosecutions for rape in conflict, and it is increasing the prospects for successful convictions. We have got to bring people to book to show that such sexual violence is unacceptable. In whatever part of the world, developed or undeveloped, it must not happen and the perpetrators must not get away with it. We must all work together against the forces of evil who allow it to happen.
Fiona O’Donnell
The hon. Gentleman is making a powerful speech. In looking at our record on international prosecutions for acts of sexual violence so far, would the suggestion made by one of his colleagues about having a local form of justice, rather the western developed world being seen to impose its standards on other countries, be a better way forward?
Tim Loughton
I absolutely agree. If there can be a home-grown solution—so that people have ownership of it, and it can be adapted to their cultures and to the baggage of tribal conflicts, histories and cultural identities that have been asserted through violence—that has to be better. Otherwise, there is a risk that the former colonial power is seen as trying to reassert its ways.
There are some common basic moral standards that we should not resile from asserting in the international context, including that children are children, not young adults to be sent into war zones or to become victims of war in all its ghastly forms. They are children, and we treat children differently—they need our protection and respect—whether they are in Khartoum, Boston, Worthing, East Lothian or anywhere else in the world. We should not resile from the expression of such international values, in which we should take pride.
The Government have already committed to providing more than £140 million to the survivors of sexual violence and their supporters. In the context of the many victims of historical cases of horrendous sexual abuse that have recently hit the headlines in the United Kingdom, a key factor is making sure that victims who have had the bravery to come forward get the support they need in order to come to terms with the trauma that befell them, often as children. In this debate, we are talking about victims who have perhaps seen their parents gruesomely killed in front of them, their homes burned, their sisters raped, or their brothers, sisters and school friends kidnapped and taken off into slavery or the sex trade. These children need our support, and they need rehabilitation to get over traumas caused by what happened in front of their eyes, which is why that project is so important. The Government have also called for all soldiers and peacekeepers to be trained not only to understand the gravity of sexual violence in conflict, but to help to prevent it and to protect people. Those are all practical measures that we can sometimes overlook.
The Government, particularly the Foreign Secretary, should be given great credit for the great initiative of the global summit to end sexual violence in conflict—quite rightly, it hit the media, including our television screens—which he co-hosted with the special envoy Angelina Jolie last month in the east end of London. It brought together more than 140 countries and more than 900 experts, making it the biggest global meeting ever convened on the issue. Let us hope that it was not just a talking shop, but that delegates from nations where such violence happens daily could take comfort, ideas and support, could make contacts and could engage with projects that will help them in the future.
The preventing sexual violence initiative—again, the Government are spearheading it—aims to strengthen and support international efforts to respond to sexual violence in conflict, including by enhancing the capacity of countries, institutions and communities to support survivors and to end impunity for perpetrators. A team of UK experts has been deployed to conflict-affected countries at the heart of the problem, such as Libya, Syria, Bosnia and Herzegovina, and Mali, to name but a few. The initiative provides good practical experience, and we should be proud that DFID, our Foreign Office and this Government are pioneering, leading and setting such an example on the global stage.
Education is absolutely vital in all this, as my hon. Friend the Member for Gainsborough (Sir Edward Leigh) mentioned. That is why I welcome DFID’s pledge that by 2015 it will spend half of its direct educational aid on unstable or war-torn countries where more than two fifths of the world’s out-of-school children are found and where a lack of education can contribute directly to conflict. In such a revolving doors scenario, kids are indoctrinated to hate other kids and families from other tribes and religions in other parts of the country. If they are brought up to accept that as normal, it is little surprise that they are susceptible to taking up arms when a conflict happens. We have to start at the beginning, by educating against conflict and the mentality of vehement retaliation right at the outset. Education is so important. The United Kingdom’s commitment of up to £300 million for the Global Partnership for Education over the next four years is therefore particularly welcome.
Many children out of school are marginalised and hard to reach, and nearly half of them live in fragile and conflict-affected areas. Marginalisation affects children right through the education system, from early education to university level. In post-conflict environments and fragile states, getting children back into school and addressing out-of-school youth, some of whom may have been child soldiers or refugees themselves, helps to bring back a sense of equity, justice and cohesion to what can be a fractured society. That has to be the start.
Girls’ education is a big issue. The girls’ education challenge will give up to 1 million of the world’s poorest girls the opportunity to improve their lives through education. The point made by my hon. Friend the Member for Stafford was important: if more women were doing the educating—and, indeed, the negotiating before or after a conflict, as well—there might be a better chance of avoiding the worst excesses of conflict in the first place.
We will perhaps think of places such as Afghanistan, where under the Taliban regime girls were excluded from education. Despite all the horrors that have taken place in that country, one great success that we should never cease to emphasise is that so many young women and girls in Afghanistan now have the opportunity to get an education in school and to go on to university. We should never underestimate the importance of that. However, there are other countries, which are not in such familiar conflict zones, where young women do not get access to education. There is so much more to do, particularly in parts of Africa. That is why DFID’s priority of concentrating aid on getting more girls into education across the world is a good one that many of us can support.
I have seen projects in places such as Ghana. In my constituency, I run the EYE project—it stands for Eco, Young and Engaged—and every year we have an eco-summit; recently we had our seventh. A very enthusiastic local man called Jib Hagan runs a charity called CARE—Collecting and Recycling Ecologically. He collects old computers that are being thrown out by local schools and businesses, takes them to Ghana and puts them in schools, pre-loaded with lots of information about how to be more environmentally friendly, how girls can get better education, engagement in the democratic process and so on. In return, he brings back lots of wonderful shopping bags made from old plastic carrier bags by some of the kids and the families out there.
A few years ago, we did a satellite link-up with the British Council between one school in a very impoverished area whose pupils were using those computers and the 250 local kids at my eco-summit. Incredibly, the technology worked. British kids and Ghanaian kids in completely contrasting environments spoke to each other, and understood and empathised with one another. It was a wonderful moment. To see the advantage that a bit of old technology that we were throwing out had brought to those kids—it was going to transform their educational opportunities and, I hope, keep that country out of conflict—was deeply humbling, and a very proud moment for those of us who had helped to make it happen.
Girls’ education is a particularly important part of preventing conflict in the future. I will draw on a couple of examples. I do not need to go over all the statistics about what is happening in Syria at the moment, but there are now 2.3 million children in Syria who are out of school or at risk of dropping out of school. Many hundreds of thousands are refugees outside Syria, as well. I am due to visit some Syrian refugee camps in Jordan later this month—they are vast camps—just as some years ago in Syria I visited what was then the largest refugee camp run by the United Nations High Commissioner for Refugees in the world. It was for Iraqis fleeing conflict who had gone to Damascus. I saw the great efforts of the UNHCR and other charities, which were trying to make sure that there was some normality in the lives of those kids. Getting some ongoing education for them was absolutely key. We must make sure that children who are displaced because of the horrible war dragging on in Syria can at least have some semblance of a normal childhood by continuing some form of education. The crisis in Syria has placed many women and girls at risk of violence, exploitation and insecurity. We often forget that.
Drawing on some of my previous trips, the very first parliamentary delegation that I went on, some 15 or so years ago, was to Ethiopia. That country had been riven by civil war under a particularly nasty Marxist regime. People had been driven out of their properties and sexual violence was part of the conflict. I remember visiting the Fistula hospital in Addis Ababa. It is a charity set up by some wonderful medics, where visiting clinicians go to help out. Daily I saw 12-year-old, 13-year-old and 14-year-old women—in some cases they had walked hundreds of miles—who had had bad experiences of giving birth because they had been too young. They were victims either of conflict, of misguided forced marriage or of being raped, effectively under the noses of their families in their villages, and had then been cast out. The only sanctuary and help they could get was by walking literally hundreds of miles to that wonderful hospital in Addis Ababa. The war in Ethiopia did huge damage but the country is, I hope, on a better path now.
I visited schools in the drought-affected areas, and, as I said earlier, kids were walking 10 miles or more each day to and from their homes to attend school, because it was such a big deal. They loved it. Nobody was playing hooky there; no truancy officer was needed. They went to school because their parents wanted them to go, as they could see it was a good thing. The kids themselves wanted to go to school and get an education, because that was their ladder out of poverty. It would stop them getting sucked into the conflict that so often happens in these impoverished zones, where people will fight over a little dustbowl of land.
I remember going to Mozambique—again, a country riven by vicious civil war over many, many years. There were many displaced kids who had fled parts of Mozambique and had gone to what they thought was the relative safety of South Africa, but had ended up in the sex trade. I worked with some hugely dedicated charities in Mozambique that were trying to rescue those kids.
A few years ago I went to Tajikistan, where I was taken to a school in Duschanbe, because I wanted to see some of the refugees from Afghanistan—there were a lot of them there. They asked me to give a class to kids of all different ages. They spoke wonderful English and were really enthusiastic about being there. They were there because they had been driven out of Afghanistan. There had been a big spate of kidnappings: brothers and sisters had been kidnapped; indeed, the teacher’s own children had been kidnapped and she had never seen them again. Tajikistan was giving them sanctuary, and had given them a school and some teaching resources, because the way forward is education.
There are many other subjects that we could mention in this debate. Forced marriages are another form of conflict, frankly. Female genital mutilation, of which we have been hearing so much recently, is another form of violence inflicted on children. It is not acceptable in the modern world, and we should not be afraid of saying so, whatever cultural differences might separate us from those people who say it is all right. It is not all right. It is not acceptable in this day and age. It is violence against girls and women.
There is no excuse for children being caught up in war and conflict. Children are different and special, and as adults we have a duty to do whatever we can to protect them, in this country or in any far-flung corner of the globe in which they are involved in conflict. In many of the countries that we are talking about, almost half the population is under the age of 18, so we are talking about huge numbers of people who are the future of those countries. If we do not get it right for those war-torn countries now, we will not get it right in the future. If they get back on the road to peace and prosperity, their kids might at last get an education and a chance to prosper.
Kerry McCarthy (Bristol East) (Lab)
I thank my hon. Friend the Member for East Lothian (Fiona O'Donnell) and the Backbench Business Committee for providing the opportunity to debate this subject. It is sadly not the best attended debate, but that is often the case on Thursday afternoons. However, the speeches have been genuinely excellent, if a little depressing in content.
We have heard much about the suffering of children who are affected by conflict and about the disproportionate, devastating and far-reaching impact that conflict has on children’s lives. Armed conflicts continue to take the young lives of thousands of children each year, whether as civilians or as child soldiers. My hon. Friend said that, whereas children used to be caught up in collateral damage, they are increasingly being targeted during conflict, whether to be recruited as child soldiers or as the victims of sexual violence.
When children are affected by conflict, it has a lasting legacy, even when countries emerge from that conflict. Some people have physical injuries because they have been maimed in the conflict. My hon. Friend spoke about the concern over the growth of indiscriminate explosive weapons such as cluster bombs. Other people are harmed psychologically and suffer trauma because of what they witnessed or took part in during their childhood. Quite often, people suffer because they have missed out on education or suffered health consequences. My hon. Friend the Member for Easington (Grahame M. Morris) spoke of the suffering and deprivation of the children living in Gaza.
Eight years ago, I had the opportunity to visit Uganda with Oxfam. It was the first overseas visit that I made as a Member of Parliament. What I saw there still resonates with me today. I went to the camps for internally displaced people in the north. That was at the beginning of the peace talks between the Government and the Lord’s Resistance Army, and there were about 1.5 million people living in the camps. I heard horrific stories about child soldiers who had been abducted by the Lord’s Resistance Army. More than 25,000 children, some as young as 10, were abducted, indoctrinated and forced to become child soldiers or, in the case of girls, soldiers’ wives. Some were forced to commit atrocities against their own families, such as killing or amputating the limbs of their parents, brothers or sisters, so that they lived in fear of returning to their villages and would not escape.
Being forced to become a child soldier does not necessarily condemn someone for the rest of their life. The hon. Member for Stafford (Jeremy Lefroy) talked about setting up a business in Sierra Leone that recruited former child soldiers. I commend him for that. If he has not read Ishmael Beah’s excellent book, “A Long Way Gone”, I recommend it to him. It is aptly described as “a child’s journey to hell and back”. Ishmael Beah was recruited at the age of 13 by the Government army in Sierra Leone, but was eventually released. It is the amazing story of how he was helped by a UNICEF rehabilitation centre. I think that he is now living in New York and has published his first novel. He is a compelling writer and the book offers inspiration and hope for those who are suffering a similar fate today.
I also pay tribute to Emmanuel Jal, who is a former child soldier from South Sudan. I was privileged to meet him at Glastonbury last year in his new incarnation as a rap artist and political activist. That just shows what people can achieve. The fact that those two men are out there as spokespeople for former child soldiers is incredibly inspiring.
Many Members have spoken about the importance of education. The hon. Member for Gainsborough (Sir Edward Leigh) was very specific in what he asked of the Minister. I look forward to what the Minister has to say about education often being neglected and underfunded in the humanitarian response to conflict. The hon. Gentleman argued that education should be included in the first phase of the humanitarian response and that at least 4% of the funding in such situations should be targeted at education. I look forward to hearing what the Minister has to say about that.
As we have heard, this is a timely debate, given the publication on Tuesday of the UN Secretary-General’s annual report on children and armed conflict, which documents 23 conflict situations in which children were recruited, maimed, killed or subjected to sexual violence and other grave human rights abuses in 2013. The UN reports that seven national armies recruited child soldiers, as did 50 armed groups in 14 countries. The Secretary-General concluded that last year was marked by “worrisome trends” that necessitate “a redoubling of efforts”, including
“a significant spike in the killing and maiming of children”.
There were 4,000 cases of the recruitment and use of children. Of course, those are only the documented cases and there could have been many more. The report also noted the continued detention of children allegedly involved with armed groups.
In Afghanistan, the Secretary-General documented the recruitment of boys as young as eight to be suicide bombers or sex slaves, or to manufacture and plant improvised explosive devices. In December, there were 196 boys in juvenile rehabilitation centres in Afghanistan on national security related charges. The UN has received several reports of alleged ill-treatment of child detainees, including sexual abuse. The number of child casualties in Afghanistan increased by 30% last year and the UN verified reports of sexual violence against girls and boys committed not only by the Taliban and the Haqqani network, but by the national police. Children were also affected by attacks on hospitals and schools. Schools were attacked on at last 73 occasions, resulting in at least 11 children losing their lives.
War Child reports that one in seven Afghan children will not reach their fifth birthday. There are no social services to protect the poorest and most vulnerable children. One in three children under the age of five is moderately or severely underweight. I could go on with the horrific statistics that are revealed by the report. Some 49% of Afghanistan’s internally displaced people are under 18. That all demonstrates the need to maintain a focus on Afghanistan after the withdrawal of the international security assistance force.
As we heard from my hon. Friend the Member for East Lothian, the Central African Republic presents one of the most pressing challenges. The recruitment of child soldiers in that country is described as “endemic”. I have been contacted by many constituents, as I am sure have other Members, who support the Save the Children campaign for the more than 1 million children who are desperate for life-saving assistance. Save the Children has highlighted the threat of sexual violence in the CAR and I know that the Minister has focused on that issue. Indeed, I was pleased to attend his “Voices of Children in Conflict” event at the global summit to end sexual violence, as did my hon. Friend the Member for East Lothian, where we heard more about the efforts to help the estimated 6,000 child soldiers in the CAR, 40% of whom are girls and are more at risk of sexual violence. As the Secretary-General summarised it, children are suffering “abominable atrocities”. We have heard of cases of boys being beheaded, for example.
I understand that the international contact group on the CAR is due to meet next week. I would be grateful if the Minister updated us on his priorities for that, and on what he thinks can be achieved. He will know that Save the Children has called for the appointment of a special envoy and the deployment of UK experts.
In the Democratic Republic of the Congo, the picture is a little more mixed. Some 30,000 child soldiers have been demobilised, according to the World Bank’s figures from 2011. There has been progress in prosecuting the people responsible for recruiting child soldiers. The UN has reported that 910 children were recruited in 2013 to be used as combatants or for supporting roles in the camps. Most of the girls who were recruited were subjected to sexual slavery. The UN was able to verify 209 cases of conflict-related sexual violence. UNICEF has done excellent work to help nearly 5,000 children who had been associated with the conflict. It is imperative that such work continues.
My hon. Friend the Member for Easington made a powerful speech about his personal experiences of visiting Israel and the occupied territories. I am contacted regularly by constituents who are concerned by the plight of Palestinian children in particular. As we have heard, by the end of December, 154 boys were being held in Israeli military detention, most in pre-trial detention. There is concern at the fact that that more than 1,000 children were arrested by Israeli security forces last year. As my hon. Friend said, that conflict is a tragedy for the children on both sides and for the families on both sides who have lost children, who have seen their children suffer or who have had to watch their children grow up with the ongoing conflict, perhaps being stoned on the way to school, suffering abuse or living in fear of rocket attacks. I look forward to hearing what the Minister has to say about that.
Grahame M. Morris
While my hon. Friend is on that point, I would like to ask her opinion on the specific recommendations of the report that the Foreign and Commonwealth Office and Baroness Scotland commissioned on the treatment of Palestinian child detainees, which the Israeli authorities have largely ignored.
Kerry McCarthy
I have read the powerful “Children in Military Custody” report, to which my hon. Friend refers. Obviously, the Minister is not in a position to take it forward with the Israeli authorities, but the recommendations should be acted on.
Burma, too, is an ongoing concern. We had an excellent debate in Westminster Hall a week or two ago about the continuing conflict, particularly as it affects ethnic minorities in Burma, especially in Rakhine state, but also in other areas where it remains a problem. Given the time available, and that fact that we documented it in some detail in that debate, I will move on. However, at the end of the sexual violence summit, the Minister said that addressing the problem of children in conflict was a personal priority for him. Will he therefore tell us whether the training offered by the UK to the Burmese military was conditional on ending the use of child soldiers? There is also the problem of the prevalence of sexual violence in the Burmese military and the immunity enjoyed by the army. Given that we are providing some support for the Burmese army, it is important that we flag up the use of child soldiers with Burma.
As we have heard, the devastating crisis in Syria has created more than 1.2 million child refugees. I pay tribute to the work of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) on ensuring that children are not the forgotten victims of the conflict. Several Members paid tribute to his Adjournment debate last night on the abduction of the Nigerian schoolgirls and the need for safe schools there. I was a present at a debate that he held a couple of months ago about education for children, particularly displaced Syrian refugee children in the camps in Lebanon. He brought forward an amazing initiative. He had been talking to the Department for International Development that day and the Minister said that he would act upon the former Prime Minister’s suggestion for sharing school time: there are two shifts in a school, and the Lebanese children would attend for part of the day and the Syrian refugee children would attend for the rest of the day. Several hundred thousand children would benefit from that initiative, and I commend my right hon. Friend for that, and his work on addressing the problem of Boko Haram and the Nigerian schoolgirls. Boko Haram was added to the Secretary-General’s list published this week, and many other countries, such as Sudan, South Sudan and Somalia were also included.
Slightly more positively, the national army in Chad has met all the requirements of its action plan and has been removed from the list of those recruiting children, which is good news. That shows the difference that the UN can make. It is imperative that the international community pushes for, first and foremost of course, an end to all those devastating conflicts, but also for special consideration for how children can be protected, and for these countries to work with the UN on the development and implementation of action plans.
The examples we have heard today demonstrate the multiple and severe ways in which children are affected by conflict, necessitating a multifaceted, variable and enduring response from the international community. The UN Children, Not Soldiers campaign launched this March works in Afghanistan, Chad, DRC, Burma, Sudan, South Sudan and Yemen to end and prevent the recruitment of child soldiers by Government security forces by 2016. I would be grateful if the Minister set out how the UK is supporting this, and what discussions there have been on deploying child protection experts. It is important, too, as I am sure that the Minister agrees, that the FCO provides robust protections for human rights defenders speaking up for children who are denied a voice.
I am sorry—I am making an awful lot of demands on the Minister in the time he has—but it would be helpful to have an update on how enforcement of the arms trade treaty could protect children and deter the recruitment of child soldiers. I am sure that the Minister will, when he speaks, reiterate the personal commitment he has shown to helping children in conflict. He will know that the FCO has our full support for its work to end sexual violence.
I hope that the Minister can tell us a little more about the concrete steps taken at the summit last month to protect some of the most vulnerable children around the world from such appalling crimes and to ensure that survivors can access age-appropriate support, given the particular difficulties children will face in speaking out about the sexual violence that they have endured.
Today’s debate has also highlighted DFID’s role in working to secure access to education, health care and humanitarian assistance. I have not spent so much time talking about education because several hon. Members have done more than justice to that topic today. It is obviously incredibly important.
I conclude by thanking my hon. Friend the Member for East Lothian again for leading the debate. She understandably cares passionately about the subject and I commend her for her efforts to ensure that the specific needs and vulnerabilities of children in conflict are not overlooked or subsumed in a homogenous approach that neglects the complexities of these atrocities.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
I congratulate the hon. Member for East Lothian (Fiona O'Donnell) on securing this important debate and on the passionate, informed and articulate way in which she introduced it. She was right to highlight some of the complexities of these important issues, and I will come to some of the very specific points that she asked about later.
It needs to be said that the subject has been at the forefront of the Government’s agenda, coming as it does after the recent global summit to end sexual violence in conflict. The hon. Lady was right to congratulate the Foreign Secretary and all the officials who were involved in organising the summit, which was the largest ever held on the issue. It set in motion a series of unprecedented practical steps and commitments, such as the first ever international protocol on how to document and investigate sexual violence in conflict, and a statement of action, uniting Governments, UN agencies, civil society, experts and survivors in a shared determination to tackle sexual violence.
When it comes to children’s lives, all efforts must be made. That is why I am personally committed to tackling this issue, not least as the father of three children. I am concentrating my efforts on raising awareness and helping to prevent the recruitment and use of children in armed conflict, focusing on demobilising child soldiers and preventing sexual violence against children, working with multilateral agencies and encouraging those with successful track records to assist those who still have challenges.
During visits to Somalia, South Sudan and the DRC, I have witnessed at first hand the devastation that conflict causes not just to children, but to whole communities. I have also seen the excellent work of NGOs such as War Child, which make a real difference to children’s lives on the ground. I take the opportunity to join other Members of all parties in acknowledging and thanking all the NGOs involved in the issue for their tireless commitment and energy.
As several hon. Members highlighted, on the fringes of the ESVC summit, I held and spoke at a meeting on children and armed conflict in front of a knowledgeable and large audience. There were powerful testimonies from a survivor of the war in Sierra Leone and a child soldier from Uganda, both of whom spoke bravely and articulately about their experiences. Closer to home, a very brave lady, who was affected by the conflict in Bosnia, spoke. That collectively underlined the grave dangers that children face during conflict and the need for us to take urgent action to prevent this from affecting a greater number of children around the world.
In addition to that fringe meeting in the ESVC summit, I also brought together Ministers from the DRC and Somalia along with countries that have experience of successfully tackling the issue. My hon. Friend the Member for Stafford (Jeremy Lefroy) rightly mentioned Sierra Leone, whose Minister underlined the importance of disarmament, demobilisation and reintegration programmes to ensure that children have crucial access to education and training. As other hon. Members have highlighted, that is vital in ensuring that children become less vulnerable to recruitment and sexual violence. As the hon. Member for Bristol East (Kerry McCarthy) rightly said, those who have made progress more recently, for example, Chad, have a significant role to play in assisting others.
At this stage let me tackle head-on the point made by my hon. Friend the Member for Stafford about the role of the United Nations. It has been 15 years since the Security Council recognised children in armed conflict as an issue of international peace and security, with the adoption of resolution 1261. As my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) rightly pointed out, the United Kingdom continues to play a leading role at the United Nations and internationally on that issue. I was therefore pleased that under the UK’s presidency of the Security Council in July last year, the UN adopted a strong presidential statement to protect the robust mandate of the UN special representative for children affected by armed conflict, as well as introducing steps for tackling persistent perpetrators. That was followed by UN Security Council resolution 2143 in March this year, which outlines practical steps for combating violations against children, while drawing attention to attacks on schools.
I commend the efforts of the United Nations in tackling that issue, and in particular the excellent UN special representative of the Secretary-General for the initiative Children, not Soldiers, which is designed to end the recruitment and use of children by Government armed forces in conflict by 2016. As a result of the SRSG’s excellent work in that area, more than 20 countries have agreed action plans with the UN, and to halt the recruitment and use of children—including, most recently, the Government of Yemen. Those action plans play a crucial role in putting pressure on the perpetrators of those abhorrent violations against children.
In Africa, as I mentioned, we have seen progress in Chad with a completion of its action plan, and a recommitment from South Sudan this month to the action plan it signed in 2012. We must be clear, however, that this issue does not only affect African countries. As we saw in the Secretary-General’s annual report on children and armed conflict, which was released on Tuesday, grave violations have been committed against children in 23 countries, including Iraq, Syria and Burma, and all those countries have been rightly mentioned in this debate.
In Syria and the wider region, 5.5 million children are in need of education, and more than half are out of school. There is danger of a “lost generation” of Syrian children experiencing trauma, displacement and missing out on education, which is the cornerstone for brighter futures. Their lives have been disrupted and potentially wasted. That is why the UK is supporting UNICEF and others in Syria and the region through the No Lost Generation initiative, which aims to increase support for education, psychosocial support, and protection for Syrian children. In addition to education, support partners are running child-friendly spaces that provide a safe place for Syrian children to play and study. This is therefore a global issue that requires a global solution. I highlight to the House the importance that the Prime Minister and Government attach to the girl summit that will be held in July in the United Kingdom, which will hopefully mobilise domestic and international efforts to end female genital mutilation, and early and forced marriage.
Fiona O'Donnell
To return briefly to the Minister’s comments about Lebanon and Jordan, does he recognise a possible future problem in that our aid is supporting refugees whereas the Jordanian and Lebanese populations are struggling as rent prices are forced up? We must guard against that possible tension in the future.
Mark Simmonds
The hon. Lady is right to make that point and there are huge challenges, primarily because of the scale of what is happening in Syria and the displacement of people, both inside Syria and across geopolitical boundaries. In a moment I will detail some of the support that the Department for International Development is providing to people still within Syria, and those who are outside.
Let me use this opportunity to respond to some of the important points that the hon. Lady raised. Hopefully, she will be aware that the UK is an active member of the UN working group on children and armed conflict, and right at the forefront of the international response to issues of child soldiers and child protection. The UK pushes at multilateral level for the inclusion of child protection in peacekeeping responses through UN mandates, both as they are renewed and initial resolutions. Child protection advisers are currently deployed through the UN missions in Mali, the Central African Republic, the Democratic Republic of the Congo, South Sudan, Somalia, Haiti, Côte d’Ivoire, Darfur, Iraq and Afghanistan.
The hon. Lady was right to ask forcefully about child protection training for front-line staff, and the UK is providing £232,000 for the UN Department of Peacekeeping Operations to develop pre-deployment child protection training modules for military and police peacekeepers who encounter children affected by armed conflict. She mentioned the draft Lucens guidelines, and the Department welcomes that those underline existing rules for international humanitarian law to promote better understanding and implementation of the Geneva conventions and their protocols. The draft guidelines form part of our wider protection of civilians approach. A decision on UK Government support for those guidelines needs cross-Whitehall agreement, and we are engaging with our colleagues across Departments.
My hon. Friend the Member for Gainsborough (Sir Edward Leigh) made an excellent speech that articulately and strongly highlighted the terrible events and crimes that affect children. I know he has been to the DRC, and he will therefore be aware of the funding that the Foreign and Commonwealth Office provides to a project in that country led by War Child. I recently visited Goma and saw for myself the excellent work being done by the UN on disarmament, demobilisation and the reintegration of children back into communities. It must also be acknowledged that authorities in the DRC have made good progress in removing children from the ranks of the Congolese army, and they are significantly committed to implementing their action plan, which they discussed in the ESVC summit and the fringe meetings that took place.
My hon. Friend also, quite rightly, mentioned the importance of education, and as part of the package to support the Nigerian Government after the terrible events that have occurred in northern Nigeria, DFID, along with the United States Agency for International Development, is hoping to put in place policies and funding that will draw back into education more than 1 million children in northern Nigeria. DFID is the largest bilateral education donor. Some 11% of its funding goes on education aid, half of which is committed to being spent in fragile and conflicted-affected states. The UK funds partners to provide education supply kits in refugee camps in Syria, and is committed to providing packs of textbooks to benefit 300,000 Syrian children and to funding programmes in Syria to provide basic education. I inform my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) that an open working group at the UN will conclude a report on post-2015 goals for discussion at the General Assembly. Education will clearly form an integral part of that, and those discussions are ongoing.
The hon. Member for Easington (Grahame M. Morris) made a powerful contribution discussing primarily the challenges that are raging in the middle east, particularly as they relate to the Israel-Palestine conflict. I reiterate that we utterly condemn the appalling murders of both Israeli and Palestinian children, and we stand ready to help bring those responsible to justice. We are concerned about the recent increase in violence in Gaza and the risks to children. Rockets coming from Gaza into Israel must stop. We call on Israel, Egypt and the Palestinian Authority to work together to allow for the legal use of the Gaza strip for innocent people. I also inform the hon. Gentleman that DFID has a number of initiatives to protect children specifically in the region, including psychosocial support and clearing schools of unexploded devices.
My hon. Friend the Member for Stafford has knowledge of, passion for and interest in Africa. He was right to highlight the appalling actions there, including women being raped and then prosecuted, and ending up in prison, as I have seen for myself, and the extraordinary challenge of child soldiers. He was right to suggest that progress can and is being made in reconciliation and rehabilitation. Like the hon. Member for Bristol East (Kerry McCarthy), I saw for myself the displaced peoples camps up in Gulu in northern Uganda—it sounds as though we were there at a similar time—and the extraordinary work being done by NGOs such as Oxfam and Christian Aid, not just on assimilating people back into communities, but on forgiveness in such difficult and challenging areas.
My hon. Friend may also be interested to know of the significant progress that has been made by Chad, Sierra Leone and Liberia on stopping recruitment in the first place by putting in place policies on, for example, birth registration. The safer schools initiative is important. Hopefully, he is aware that the UK has invested in that initiative in northern Nigeria, which is being ably led by our ex-Prime Minister.
My hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) was right to crystallise some of the horrific events we have seen recently. Hopefully, he is aware of the support that the UK Government are providing to the Nigerian Government specifically to deal with the challenges in northern Nigeria. He was right to highlight the fact that the UK is leading in that area, whether on ending impunity, building capacity, training, assistance for rehabilitation or allocating funding.
My hon. Friend was correct, as he concluded his remarks, to highlight the importance of forced marriage and female genital mutilation. In July, the Prime Minister will host the UK’s first girl summit, but I should take this opportunity to be unequivocal on the UK position on FGM and forced marriages. In the UK, both are criminal offences, and they are child abuse when minors are involved. We are fully committed to tackling those issues, for example through the work of the joint Foreign and Commonwealth Office and Home Office forced marriage unit, and through providing funding for NGOs.
The hon. Member for Bristol East, who spoke for the Opposition, was right to mention the challenges and the horrific events that have taken place in the Central African Republic. We have contributed £23 million to the CAR, providing emergency health care and support for hundreds of thousands of people. The CAR interim president has rightly referred the situation in the country to the International Criminal Court, which has the scope to investigate the allegations, but the situation is dire, particularly outside the capital, and we are doing everything we can to ensure that UN Security Council resolution 2149, which was adopted earlier this year, is deployed by 15 September.
I recognise the hon. Lady’s points on Burma, but I want to ensure that the House understands that the Burmese Government are committed to ending the practice that she mentioned, building on the progress since signing the action plan with the UN in June 2012. Some child soldiers have been released in Burma, but we are working closely with the Burmese authorities to ensure that releases continue.
All parties to armed conflict, state and non-state alike, must abide by international law. The protection of civilians during armed conflict is a priority for the United Kingdom and forms an integral part of our building stability overseas strategy. We therefore remain committed to making progress. I believe that such abuse of children, wherever it is in the world, but particularly in conflict areas, should not and must not be tolerated. The words “children” and “soldiers” should not and do not belong in the same sentence.
Fiona O'Donnell
I thank all hon. Members for taking part in the debate. As my hon. Friend the Member for Bristol East (Kerry McCarthy) said, we might not have had quantity, but we have certainly had quality in the contributions. The hon. Member for Stafford (Jeremy Lefroy) was right to say that the situation regarding protecting children in conflict is getting worse. I was pleased that my hon. Friend drew attention to the UN report published on Tuesday that makes that clear.
There was hope in the debate. If we had had a debate before the Syria crisis, we would not have emphasised education as much as we have today. The hon. Member for Gainsborough (Sir Edward Leigh), in an in-depth, considered and informed contribution—it was not lengthy—told us of his personal experience of the benefits that education can bring. It is not an add-on, but an essential part of our response to humanitarian crisis. The difference is that the Syrian refugees are not people for whom conflict was the last straw. Those people had quite good lives by middle eastern standards—in many cases, they are professional people.
For children who have seen and experienced things that no child should ever see, there is not a loss of hope, because children have a wonderful quality—resilience. All we need to do is give them that bridge to a life that was good. That can mean education or an attachment to one person in their lives who makes them feel valued. I presume the hon. Member for East Worthing and Shoreham (Tim Loughton) was talking about going to the Zaatari camp. One amazing thing that struck me is that families there now have a supermarket to go to. It would be the most amazing therapeutic experience for a child to be in a supermarket trolley, because it is a bridge to a life in which that child was a happy child. We need to offer children all the time those bridges and opportunities to a better and happier time, and to a childhood.
I thank the Minister for the work that he and his Department are doing. He has the support of Members on both sides of the House. Today, it seems that we are all comrades.
Question put and agreed to.
Resolved,
That this House has considered the matter of protecting children in conflict.
Social Mobility/Child Poverty Strategy
(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Hazel Blears (Salford and Eccles) (Lab)
I beg to move,
That this House has considered social mobility and the child poverty strategy.
I was tremendously moved and impressed by the depth of knowledge of my hon. Friend the Member for East Lothian (Fiona O'Donnell) and the other Members who contributed to the previous debate. It was a pleasure to listen to their contributions.
The second debate this afternoon is also on a very important topic on which there is a great deal of cross-party consensus. We may differ on some issues, but, like protecting children in conflict, social mobility raises a sense of passion, commitment and determination to improve things, which should be a matter for celebration among hon. Members. I look forward to their contributions.
I thank my fellow members of the all-party group on social mobility, some of whom are in the Chamber, although Baroness Tyler cannot be here because she is a Member of the other place. I pay tribute to her work on character and resilience, and on the manifesto she has published. I also pay tribute to the in-depth academic and practical information she has drawn together, which almost gives a new perspective on social mobility, and which we have debated for a considerable period. I will mention later a couple of the points she makes.
I also thank Alan Milburn, chair of the commission on poverty and social mobility. All the members of the commission are doing a tremendous job on behalf of the House. In the introduction to his “State of the Nation” report, he says he was appointed to hold the Government’s feet to the fire. He is pleased about that, and he has not pulled any punches in his recommendations. He has excellent people with him on the commission. In my view, they make not only academic observations, but practical recommendations not only for the Government but for employers, hon. Members, parents, families and citizens of our country. For the Government, taking the step to appoint the commission was brave, because having an external body that holds their feet to the fire is not always the most comfortable situation, as I can testify as a former Minister. However, external bodies give different views, information and perspectives. The report has therefore been tremendously helpful for all of us. The work that has been done is absolutely meticulous. The research conducted means that we now have a body of evidence on child poverty and social mobility that we did not have previously. That has been translated into pretty accessible language that I think most people can understand. The commission has given us a new impetus to take these issues forward.
The question we will all be asking ourselves at the outset is this: why does social mobility matter? Why is it the subject of regular debates in the House? Why, increasingly, are employers concerned about it? Why does it affect every bit of our community?
For me, this is a very personal issue. My mum and dad left school at 14. They did not have the opportunity to stay on into further education, let alone have access to higher education. They were absolutely determined that their children would have the opportunities that they had not had. My mum probably coined the phrase “Education, education, education” long before our previous Prime Minister did. That has been the sense for many years in our country: the people who did not have the educational opportunities, money and resources to pursue their own dreams wanted to make sure that the next generation would have that chance.
My mum—I just want to place this on record as a tribute to my mum—won a scholarship to the Royal Academy of Arts when she was 14 years old. She was an immensely talented artist. Her father was at the war. She came from a very poor background and did not have the money to take up the scholarship in London. She was, therefore, unable to go. If anything, that absolutely redoubled her commitment to education. She took her first O-level at the age of 38. She took an A-level in English in her 40s. Her lifelong love of education was absolutely apparent. In our lives, sometimes the people in our families are our inspiration to try to make things better. She was certainly my inspiration.
I think the issue matters because it is about fairness. Most of us are committed to fairness and ensuring that, as far as possible, people have a platform to succeed and to reach their potential. It is also about merit—a characteristic that is deeply embedded in most of us in this country and in countries across the world. That sense of a meritocracy—that if someone is good enough they will be able to get on in life and break through barriers—is a really powerful driver.
It is also, perhaps in more prosaic terms, a financial issue. Research undertaken by the Sutton Trust states that if we do not tackle the issues of social mobility, the subsequent waste of talent and skills could cost this country £140 billion by 2050. There is an ideological justification, but also an absolutely compelling practical and financial justification too.
Where are we at the moment? I am afraid that the report does not paint a very happy picture:
“We see a danger that social mobility – having risen in the middle of the last century then flat-lined towards the end – could go into reverse in the first part of this century.”
It is part of Britain’s DNA that everyone should have a fair chance in life, but at the moment Alan Milburn warns that Britain could become “a divided country”. Those comments should make us all take a step back, reflect on where we are and redouble our efforts to make sure that the situation does not continue, and does not continue to get worse, in the coming years.
There has been some extremely good research by the Sutton Trust and I want to outline a few sharp bullet points that might help to put the debate in perspective. The state we are in now in the 21st century, in a modern industrialised, relatively wealthy affluent nation, causes us all a great deal of concern. Children in the poorest fifth of families are already nearly a year behind children from middle-income families when they start school at the age of five. I see this in my constituency day after day. I see children coming to school with speech and language problems—they are not even ready to access education. I see children, because of difficult family backgrounds, falling behind almost immediately when they come to school because they do not have the back-up from home and the community.
At the other end of the scale, 3,000 state-educated pupils achieve the A-level grades necessary to enter the country’s most selective universities, but who, for a variety of reasons, do not end up there. There are 3,000 children who are good enough academically, but are not able to take that next step into higher education. Four private schools and one elite college sent more students to Oxbridge over three years than 2,000 schools and colleges across the United Kingdom. State school pupils, when they do get there, are far more likely to get a 2:1 or a first class degree at university than their private school counterparts with the same A-level results. It is therefore not that children from working class backgrounds are not capable of achieving some extremely high academic outcomes; it is that there are barriers in the system that prevent them from achieving their potential.
Those are worrying facts. We clearly need to take action to ensure, as far as possible, that we get rid of the barriers that are not about how clever, bright, determined or hard-working pupils are. They are systemic barriers that have dogged us for generations. We are making some progress. I acknowledge that Government action is taking us along, but it is so slow and so inch-by-inch that I think there is more we can do more quickly to make that happen.
Alan Milburn, in a very important previous report, raised the ability of children to access professions. He talked about the rising use of unpaid internships to access many professions, whether law, journalism, fashion, couture and, dare I say it, politics. Internships increasingly became the way to access professions, but they were denied to many young people from less-affluent backgrounds. Working for free does not come cheap. Most of the internships that provide access to professions are based here in London. If people cannot afford accommodation and do not have the bank of mum and dad, it is virtually impossible to come to London and take them up.
Many companies have made progress on internships in the past few years. The social mobility business compact, working with employers, has begun to highlight the fact that offering long-term unpaid internships is utterly unfair. It is a bad practice and it should not be carried out by the best firms in our country. We now have a whole range of companies providing first-class paid internships, with proper development opportunities. Companies such as KPMG, Ernst and Young, the British Academy of Film and Television Arts, and Fujitsu, which operates in my area, are offering paid internships and developing young people’s skills and talents. CH2M Hill, a massive engineering firm, has just set up a scheme for paid internships, particularly to draw more women into science, engineering and consulting. Johnson & Johnson, the medical and pharmaceutical industries and BP are just some of the examples I know about where firms have changed their practice. In the past, they may have had unpaid internships, but now that practice is no longer acceptable. That is making a key difference to young people, not just in attaining education but in providing the access to professions and jobs that will ensure that they earn a decent income and can have an exciting future.
We used to have a lot of unpaid internships in the House some years ago. I am delighted to say that with the advent of the Speaker’s Parliamentary Placement Scheme, which I helped to establish with the 100% backing of Mr Speaker, I think and hope the number of MPs who take people on unpaid internships can now be counted on the fingers of one hand—maybe just one or two Members. We all now recognise that that might have been the culture in the past, but excluding young people from working-class backgrounds from getting into politics is not just unfair to them: it is bad for our politics. We have a lot of complaints about the political class. I did some research. In 1979, 3% of MPs of all parties came from that career transmission belt of being special advisers working for Ministers and so on. At the last election, it was nearly 25%. We have a real problem getting people from diverse backgrounds to Parliament. I am pleased to say that Mr Speaker’s scheme is making a significant difference. I am grateful to the companies that have supported the scheme. I am beginning a dialogue with the Government on how we can ensure that it is sustainable in the long term. I am extremely encouraged by the all-party commitment to the scheme, which has been endorsed by the three party leaders. That is evidence of consensus across the House. I hope we can achieve sustainability.
There are problems at the beginning of life and with early-years development. There are problems with A-level achievement, problems with access to university and problems with access to professions. These are all systemic barriers.
However, as we get better at tackling each of those issues, the problem seems to settle in different areas. An example of that arose from a case in my constituency involving postgraduate education. At first I wondered why postgraduate education was a social mobility issue: surely, I thought, by the time people reached that stage, they would have gone through the system, obtained their degrees and so forth. However, when a young man in my constituency, Damien Shannon, applied to Oxford for a place on a postgraduate course, he was required to meet certain conditions. Not only did he have to find £11,000 for tuition fees; he also had to find just over £10,000 to cover living expenses, and he had to prove that the necessary liquid cash was available to him. The “living expenses” included entertaining, dining in hall, and being able to sustain an “Oxford lifestyle”.
Damien comes from Salford, and he is a very bright young man. He decided that, one, the requirement was not fair, and two, he could not possibly meet it. He could get a career development loan for the tuition fees, but there was no way in which he could get a loan to enable him to have an “Oxford lifestyle” in the form of dining and entertaining. He therefore decided to bring a legal challenge, and we have worked on that together for the last 18 months. I initiated a very good debate about the matter in the House, to which the Minister for Universities and Science responded. We had endless conversations with Oxford university, which, I am delighted to say, has now changed its admission requirements for postgraduate education, and has abandoned the requirement for applicants to show that they have sufficient living expenses.
Damien has taken up his place at Oxford. He is absolutely delighted, and he is doing really well. I want to place on record my admiration for a brave, clever, determined young man who was not going to let the system beat him. I have no doubt that he will have an absolutely brilliant career in the future. However, we really cannot have that in this day and age, in our top universities. We cannot allow them to hark back to another age when people may have spent slightly more time punting than they spent attending lectures and gaining academic achievements. There is still a wide range of barriers, and I think that we still have a long way to go.
The report also deals with poverty and poverty pay. Many children are finding it very difficult to achieve in the same way as their colleagues because of poverty. The Government will tell me that many more families are now in work, and that the number of completely workless households has been dramatically reduced. However, there is still poverty in families who are out there working hard, doing all the things that we ask them to do, playing by the rules and supporting the system.
The problem of the cost of living and low incomes is a really stubborn one. We need to deal with it, because that poverty is feeding through to children. It is very difficult for them to have a platform for achievement when they are living in difficult housing conditions with no room to do their homework, their parents are extremely low paid, and life is a real struggle. The report recommends that the minimum wage should be increased, and that we should try to give people access to the living wage. I think that that is the least that we can do if we want to give children and young people a chance to get on in life.
Another significant issue raised in the report is one to which I referred earlier. The issue of character and resilience is very new in this area. In the past, people used to say that children at private schools somehow acquired the character and resilience that they were taught in that environment, whereas children at state schools did not have the “grit” that is, increasingly, a foundation for success. As was shown in the “Character and Resilience Manifesto” produced by my noble Friend Baroness Tyler, that quality of character and resilience is not something that people are born with. It is not necessarily in their genetic make-up, and they do not have it because they come from the best families in the land. Character and resilience can be taught.
I have been fascinated to learn that character and resilience, and the ability to get on in life, are about three things. First, one must have a work ethic and be prepared to focus, concentrate and apply one’s mind to a task for a long period. That can be taught. Secondly, one must be prepared to accept deferred gratification and be prepared to invest for the longer term, rather than wanting success immediately. That means saying “If I work now, I will get results. I may get them a little further down the line, but it will be absolutely worth it.” Thirdly, in the context of social mobility, one must have the ability to bounce back from adversity. There is an increasing body of evidence to suggest that those three things can be taught, and they are crucial to the personal ability of someone to succeed in life.
Let me ask the Government specifically to look into what we are doing in our state school system to inculcate in youngsters from tough backgrounds the ability to work hard, focus and concentrate, the ability to accept deferred gratification—it will not all come now—and that essential resilience and ability to bounce back from adversity. If we do that, we shall be doing something which I think will be sustainable in the long term. Rather than developing a programme or a specific initiative, we shall be training our young people to recognise that it is their responsibility as well to acquire the tools that they need in order to make progress.
Alan Milburn has made some very interesting practical recommendations about what the Government could do in regard to educational attainment in particular. He refers to, for instance, the need to ensure that we can have the best teachers in the worst schools. We have talked about that for a long time. I remember, before I was in the Government, looking at our manifesto and asking “Is there a way in which we can reward the teachers who are prepared to come and teach in difficult inner-city schools where life can be really tough?” We have experimented with various schemes and programmes such as Teach First, but I think we must recognise that teaching in some of our most challenged schools is an extremely hard job. I should like to see something in the system, rather than a scheme or a project, which recognises that and rewards teachers for doing it.
Mr Graham Stuart (Beverley and Holderness) (Con)
The right hon. Lady is making a powerful speech, and I think that she and Alan Milburn are absolutely right to focus on the need to embed those incentives in the system. The combination of the pupil premium and the changes in accountability are systemic approaches to provide the wherewithal to reward people for coming in to teach in those schools, and to ensure that we do not have an accountability system whereby those in more prosperous areas are less likely to be found wanting than those in areas where the educational fight is fiercest.
Hazel Blears
Obviously I support the pupil premium, because it is a way of putting a substantial amount of money into the system to be targeted at the children and young people who need the most help. However, I have to say that I have been very disappointed by the monitoring and the accountability of the pupil premium. I know of many schools where—unsurprisingly, at a time of really tight budgets—it is being used to back-fill what could be described as conventional posts, rather than being targeted at the children for whom it was designed. The challenge for us is to ensure that the money is used in the way in which it was intended, to raise the achievements of the poorest children to the level of, at least, the average achievements of the rest. I shall refer to some schemes that have been able to do that, but let me say to the Minister now that better monitoring of the use of the pupil premium is essential.
Alan Milburn also talks about action by employers, and refers to the living wage, apprenticeships and fair internships. Those are practical measures, and if we can persuade all employers to adopt them, we shall make a difference. Alan also makes what I think is quite a brave suggestion; he is well known for being prepared to be brave. He talks of breaking the last “taboo”, which he says is parenting.
I am a former Home Office Minister who was responsible for the antisocial behaviour programme, the respect programme and the beginning of the troubled families programme. The Government are continuing some of that work, but at the time it was highly controversial territory: why were the Government telling parents how to bring up their children? However, all of us will know from our constituencies that in some families the responsibility for setting boundaries, and for supporting children and encouraging them to do their very best, simply is not there. I believe that there is still a huge gap in that regard. There should be more support for parents to enable them to do for their children what they no doubt want to do, but for various reasons are incapable of doing. All politicians should be as brave as the commission has been in saying that we need not just to talk about that problem, but to take action on it, before the family are so dysfunctional that we have to have a troubled families programme, with all the intrusion and intervention that that entails.
What practically can we do through early intervention? In his most recent Ofsted report, Michael Wilshaw said that the big problems of educational under-attainment have moved from the inner cities to some very poor coastal areas, remote areas and suburban areas. I was fascinated to see how that has happened. A lot has been said about the London challenge and how that has transformed schools in London. When I came into Parliament in 1997, about 22% of children in Salford were getting five A to C grades. Now the figure is 76%. There has been a fantastic transformation in the quality of the schools in my inner-city constituency. That is where the focus has been. The big problems of social mobility are now in communities that have not had access to such provision and are not well-off—they are quite poor and almost not on the radar. Michael Wilshaw has done us all a great service in highlighting that. He said:
“Today, many of the disadvantaged children performing least well in school can be found in leafy suburbs, market towns or seaside resorts.
There are stark consequences for our nation if we do not act with sufficient urgency.”
That reinforces the view I took when I was Secretary of State for Communities and Local Government that there were pockets of deprivation in otherwise affluent areas and that, for reasons to do with the data and the information we had, they were not addressed. What are the Minister’s plans to ensure that children in those areas receive the attention that they need?
I find it fascinating that, if there is early intervention in schools through a specific programme where there is evidence that it can make a difference, the transformation can be dramatic. I want to single out two schemes of which I have personal experience. The Place to Be scheme operates in six primary schools in my city and helps families and children who are in the most difficult circumstances imaginable. Many of the children’s parents have problems with alcohol and drug addiction. Many of the children are not able to go to school sometimes because of family difficulties. Place to Be provides a support and counselling service. It has been operating with the pupil premium—that is the reason that money has been provided. I have seen evaluated evidence that is incredibly impressive. The rate of progress of the children in the worst families is now the same as the average rate of progress among the other children in those schools. It is almost a miracle, dare I say it. The head teachers who chose to use the pupil premium for that project have done a great service to their community.
The Shine on Saturdays scheme does Saturday schools. It does Serious Fun on Saturdays. It has a fantastic evidence base. Owing to the work it does on Saturdays, it is helping the most deprived communities. In many places, people will say, “We do not have the money to do that extra programme, on top of what we are already doing.” I ask the Minister to consider carefully—I have spoken to the Secretary of State about the matter—the possibility of mobilising social investment to fund such community-based interventions, which are able to make a dramatic impact and have a strong, rigorous evidence base. That social investment can be repaid through the savings that we make when those children get on in life, rather than causing myriad problems, including welfare dependency and criminal action, which cost us a fortune. It is an excellent way to invest for the long term. Now that we have an evidence base, we have a responsibility to find out how we can spread that across the country. I will declare my unpaid interest as a member of Big Society Capital’s advisory board. The things I have seen, which can be done if we mobilise private investment for public good, are impressive and I ask the Minister to take that into account in his closing remarks.
I had a couple of other questions for the Minister; I think I have raised most of the questions that I had. I have no doubt that he will be pressed for time. Social mobility is sometimes a relatively academic term for something that most of us know in our hearts: all families want their children to have a decent start, to get a good education to get on in life and to be able to bring up their own family. If we are not careful, we are in danger of not seeing that generational improvement. I do not want to live in a society in which people are not motivated to get on and do their best and succeed. It is a primary responsibility of any society to provide a framework in which that can happen.
I was always told growing up, “If you work hard, the world’s your oyster. You can do anything. You can achieve anything.” That has motivated me throughout my life. I want us to be able to say that to every child in this country—if they work hard, the world is their oyster, they are as good as anyone else in this country and they will succeed. It is a huge challenge for us and I look forward to what colleagues and the Minister have to say.
Mr Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in the debate and to follow the right hon. Member for Salford and Eccles (Hazel Blears), who made a powerful speech. In her closing remarks, she put her finger on a key point: if children work hard, they are as good as anyone else and they can get somewhere. Perhaps at times it has been suggested too often in this country that it is not about working hard. Yesterday and the day before, 32 maths hubs around the country were launched. They are designed to ensure that the methodologies used in the eastern countries, which have such a big lead over us in maths education, are brought here. What are the core principles there? They do not say to someone who does well in maths, “You are very clever at maths.” They say, “You’ve worked hard and mastered those skills.” They emphasise the fact that with practice and application, every child can do well.
A number of years ago in Japan, all the children in a class would be judged by the performance of the weakest child in the class, which is an interesting concept of communal working on the basis that every child can learn. Sometimes in our education debate—it will be the primary focus today—we talk too much about differentiation and insufficiently about ensuring that every child comes up to a standard. More of them are capable of it than we have realised. Sometimes perhaps we have been so quick to recognise the different pace and different circumstances of each child that we lose the idea that they are capable of a lot more if we ensure that they are aware that if they work hard they will get on.
I thank the Backbench Business Committee, chaired by the hon. Member for North East Derbyshire (Natascha Engel), for granting the opportunity to discuss this important issue today. As has been said, last week the Government published their child poverty strategy from 2014 and 2017. It has three main strands: supporting families into work, raising living standards and raising educational attainment. It is on the last of those three that I will focus.
The work of our education system will go a long way towards determining whether we are able to break the connection that the right hon. Lady touched on between demography, deprivation and destiny. Because of that, the Education Committee held a pre-appointment hearing to scrutinise the appointment of Alan Milburn as the chairman of the Social Mobility and Child Poverty Commission two years ago. The Government have two main education priorities: raising standards for all and narrowing the achievement gap between the most disadvantaged pupils and the rest. Those aims underpins the reforms that the Government have undertaken in the past four years.
That is most obviously apparent in the introduction of the pupil premium, now extended to cover the early years. The right hon. Lady made some telling points about ensuring that that money is used to best effect. Perhaps too often in the Government in which she served, there was ring-fencing to try to ensure that ministerial will was translated into action. Often that had counter-productive results. What we have now is a framework in which Ofsted, when it inspects schools, looks at the way in which they use the pupil premium, and data are used to try to ensure that the performance of children on free school meals, or the “ever 6” is watched carefully from the governors downwards and informs their questioning of the head to ensure that every school offers opportunity to all those children. The right hon. Lady made strong points about the need constantly to ensure that that money is used for the purpose for which it was provided.
That thinking also lies at the heart of the structural changes made by Ministers. An example is the extension of free child care, and the refining of accountability structures so that teachers can focus on the whole class rather than just on the pupils at the C-D grade borderline. I welcome the fact that these reforms focus on the whole cohort of young people. It means that school leaders can place equal emphasis on pushing a child on an A grade up to an A* or perhaps—this would not be captured by the accountability mechanisms, but I would hope that the system would acknowledge it in spirit—pushing a child on an A* from their present score to a higher score still.
Too many children have been “warehoused”—I use the word advisedly—because those in authority believe that they are unlikely ever to contribute to the A to C grades in a school. They therefore see it as a sensible deployment of resources to assign the least able teaching practitioners to the most needy pupils. I do not recognise that as the right thing to do, but I recognise that it is what a head teacher would be tempted to do if they were being held to account and stood to lose their job if they failed to meet that threshold. The practice has had a detrimental effect.
This goes to the heart of a whole series of issues relating to incentives in the system, to which the right hon. Member for Salford and Eccles and Alan Milburn have referred. It is important to get those incentives right. Otherwise, there is a risk that successive Governments who have a genuine commitment to closing the gap will create an uneven playing field for the key resource in education—namely, teachers. I am referring in particular to quality teachers. Not all teachers are the same; there is a massive difference between those at the top of the performance levels and those at the bottom.
As well as trying to increase the overall quality of the work force, we need to put in place incentives to ensure that teachers are deployed in the most equitable way possible. Some of the most idealistic people are committed to doing their best to help in the most deprived areas, but at the moment they are being incentivised to teach elsewhere. A head teacher in a prosperous leafy suburb is far less likely to be fired than one in a deprived inner-city school. The same is true for department heads and other teachers. The Government say that they want to close the gap, yet the key resource—quality teachers—is being incentivised to roll down the hill towards where they are least needed.
This reminds me of the Select Committee’s recent report, “Underachievement in Education by White Working Class Children”, which found that this was not just a boy problem. It was thought that white working-class boys had a particular problem, but the report showed that white working-class boys and girls now constitute the lowest performing ethnic minority group. One of the most telling pieces of information I saw during that inquiry related to what free-school-meals children were achieving in the four different Ofsted categories of schools. The percentage of such children getting five good GCSEs—grades A to C on the current measure—in inadequate schools was about 25%. In outstanding schools, the figure was 50%. There was a 100% increase in the number of children from the poorest groups getting five good GCSEs. The difference between the inadequate and outstanding schools for children not in the poorest group was only 50%.
That reinforces the long-standing view, which the Committee has examined, that poor children are peculiarly sensitive to the quality of leadership and teaching in their schools. This is not just a social equity point; the pupils that we need to get the most effective teaching to are the poorest children. They are also the ones who are the most responsive to it, and if they are provided with it, they can do a great deal better.
I support initiatives designed to help talented youngsters from deprived backgrounds to achieve great things. Ultimately, however, the goal of increasing social mobility is best served by taking action at system-wide level, which will benefit children of average and below-average ability as well. I am often told that this country is dominated by a public school elite, but it is frequently people from poorer backgrounds who have made it to the top who tell me this. There is some truth in the observation, but those powerful people from poor backgrounds are often obsessed by people like themselves. A lot of the social mobility agenda appears to be about getting a tiny number of very bright kids out of the poorest homes and into the top universities and the top jobs. That is indeed an important aim, but the question of whether someone goes to the university that is ranked 30th rather than second is not our society’s biggest problem.
The biggest problem in our society is that we do such a dismal job for those people who are not only poor but do not have massive academic ability. They are not hopeless, however. We know that, if they have the right teaching, they can do well. Our problem as a society is that so many young people end up on the dole. In other countries, such as Austria, Switzerland and the Netherlands, the education system does not leave similarly disadvantaged people in the dole queue; it enables them to enter employment.
I am just throwing this into the debate because social mobility is very popular with people such as Sir Peter Lampl of the Sutton Trust, which does fantastic work. He is from a fairly underprivileged background and has reached the top. I say to him that the challenge is not people like him. It is not our biggest problem if people like him end up in middle management instead of becoming multi-millionaire philanthropists like him. Our biggest problem is that so many people have lousy, miserable, deprived lives because we did not give them the basic tools that they needed, along with a bit of self-belief and the idea that if they worked hard, they could do maths and pretty much anything else they wanted to do in life. I just throw that in to be controversial.
It cannot be emphasised too often that the key lies in the quality of teaching. Professor Eric Hanushek from Stanford university, working with Professor Steve Machin and Richard Murphy from the London School of Economics, calculated that one year with a very effective teacher adds an extra 25% to 45% of an average school year to a pupil’s maths score performance. There is an idea that there is an enormous difference between a teacher in the 90th percentile and one in the 10th percentile. The figures that I have already mentioned show that good teachers have a peculiarly positive impact on children who have less support at home, and a peculiarly negative impact on those same children as well. The effects of high-quality teaching are especially significant for people from disadvantaged backgrounds, who gain an extra year’s worth of learning under very effective teachers, compared with poorly performing ones.
These findings underline the importance of good recruitment and teacher training, which are critical. They also show that we must ensure that the best teachers work where they are needed the most. In its 2013 report, the Social Mobility and Child Poverty Commission found that fewer than a third of schools in the most deprived areas in the north-east had teaching rated as good or outstanding, compared with 85% in the least deprived areas. That this does not have to be the case is shown, as the right hon. Member for Salford and Eccles said, by the statistics from London, where 77% of the teaching in the most deprived areas was good or outstanding. We need to put in place the right incentives to encourage the best teachers and school leaders to work in those schools. Governing bodies’ newly granted flexibility to design attractive pay packages to recruit and retain teachers will help, especially when coupled with the additional financial firepower of the pupil premium for schools that serve particularly deprived communities.
Linked to this, we also need to encourage schools to work together to share expertise. The Education Committee has recommended that the Government should widen the funding available to schools to support collaboration beyond academy sponsorship, so that it could be used to assist other partnerships. The Government’s own figures provided to the Select Committee in February showed that the majority of academies were not currently part of a formal partnership. More needs to be done to build on the greater collaboration that exists in our schools, between schools in academy chains and across academy groups as well as between academies and other maintained schools. We need to go further to ensure that we have the right incentives in place to make that collaboration genuine and much more prevalent than it is now.
The Select Committee also recommended that the Government reintroduce targeted seedcorn funding for sustainable partnerships between independent and state schools. School leaders could be encouraged to sign up to partnerships by introducing the excellent leadership awards proposed by Ofsted’s Sir Michael Wilshaw, which would be available only to those who supported underperforming schools in disadvantaged communities. Never again should anyone be able to be seen as a national leader in education or a significant player in our education system—or to be given an award of any sort—if they are not working in some of the deprived communities. We have to make working and being successful in those communities the sine qua non of recognition of someone doing the best job in the toughest of circumstances.
On other possible measures, the Education Committee has advised that it would be helpful if school accountability measures could be redesigned to incorporate encouragement for schools to work together. I am not yet clear exactly what that would look like. Head teachers must be held to account for the performance of their schools, but we must consider how we ensure that someone’s work in collaboration with others is recognised and encouraged. When considering how to support pupils from deprived backgrounds we need to remember that patterns of deprivation are complex. Ofsted’s “Unseen children” report highlighted that the places where the most disadvantaged children are being let down are, as the right hon. Lady said, now no longer so much in the inner cities, but in rural and coastal areas. In 2012, four of the bottom five performing local authorities on attainment outcomes for pupils on free school meals were Peterborough, West Berkshire, Herefordshire and the Isle of Wight. The weak performance of many schools in rural and coastal areas is yet another reason, alongside basic fairness, why launching a national funding formula that is based on need rather than on skewed political priorities should be such an important priority for the Government.
In the relatively short time available to me, I wish to discuss a second area where performance needs to improve if we are to increase social mobility: careers advice and guidance for young people. At the moment, organisations ranging from Ofsted to the CBI and to my Select Committee are clear that careers provision in schools is patchy in its availability, too often underwhelming in quality and frequently affected by perverse incentives, such as those that discourage some struggling schools from advertising further education or apprenticeships properly for fear of losing the funding that follows the pupil and because of the need to keep pupils sitting on seats. For too many school and college leaders, in a system with very sharp-edged accountability structures, careers advice and guidance is simply not a priority. If it is to improve, we need more challenge in the system. The Department’s development of destinations data, showing where pupils go on to work and study, may help to build this challenge in the medium term, although they also may not be the silver bullet that some hope for. Time will tell how useful the data are, not least in driving behaviour and accountability in schools.
A more immediate such challenge can be posed by school governors, particularly where the school appoints a designated careers governor to focus on this area—that person could be from a local employer. That is what is recommended by the Humber local enterprise partnership, which has just published its gold standard assessment criteria for schools in Hull, East Yorkshire and North Lincolnshire. The document sets out, in comprehensive detail, the work that schools and colleges should be doing to provide a first-class careers education, and I recommend it to Ministers. Its stipulations include a requirement that schools offer young people face-to-face careers guidance and that employer engagement and external expertise are integrated into the programme through mentoring, work experience and enterprise clubs. Too often, it seems as though schools can be hermetically sealed worlds with their own drivers, cut off from the real world into which the young people in them will come blinking, and too many will be left on the dole as a result. We need to open up the schools and allow the world of employment into them in multiple ways. I know that Lord Lucas is working on a programme to get employers to help to do the practicals that will be part of the science A-levels in future; they will move to being on a pass/fail basis because of the difficulty of externally monitoring standards there. If employers are getting involved in practicals in all our sixth forms, that will not only help to embed a careers perspective into that learning, but it will make the learning richer and more interesting, and make the practical skills learned seem relevant in an exams system that might have appeared to have downgraded their importance.
The local enterprise partnership gold standard stipulations also include targeting and prioritising those most at risk of disengaging from learning or of becoming NEET—not in education, employment or training. The Humber gold standard is being piloted in a small number of local academies and maintained schools, with a view to a roll-out across the LEP area from this autumn. There will be lessons to learn from the pilot experience, but this approach, which is being complemented by an integrated online portal and the employment of dedicated advisers, appears to be a potential model of its kind. Helping young people to make informed choices about the courses they take and the careers they follow is vital to boost their success in finding employment.
A couple of years ago, the Education and Employers Taskforce undertook a major survey of 15-year-olds, asking them where they thought they would be working in years to come and then mapping their responses against the national data on where the jobs are expected to be. It showed a horrific mismatch. If I recall it correctly, it showed that 29% of young people thought they were going to work in culture, media and sport, even though fewer than 5% of jobs are expected to be in those areas. It showed that only 5% of young people expected to work in finance, yet 20% of the jobs are expected to be in that area. We have to find ways of making this information available to young people and their parents, not so that they can discard their dreams, hopes and desires, but so that they can be informed by the realities of the labour market when they make their choices, both in school and beyond.
The ultimate goal of the £57 billion a year that the Department spends is to help young people get on in life. Getting a decent job is the first step in climbing the ladder in a socially mobile society, as the Government’s child poverty strategy acknowledges. This is a huge and complex area of policy, and I look forward to hearing the thoughts of colleagues and the Minister today. When considering this issue, we must remember that the extent to which social mobility is achievable goes to the heart of who we are and what we are about as a nation, and what we achieve in this area for the next generation will determine the sort of country Britain will become.
Mr William Bain (Glasgow North East) (Lab)
It is a pleasure to follow the hon. Member for Beverley and Holderness (Mr Stuart). I congratulate my right hon. Friend the Member for Salford and Eccles (Hazel Blears) on securing this important debate and launching it with such an excellent, passionate speech. I also congratulate the Backbench Business Committee on granting the time to discuss this study, which was published last October by the Social Mobility and Child Poverty Commission. I have a particular interest in this issue for several reasons, the principal one being that the commission’s chair made a very well-received speech last year at Springburn academy, in my constituency. The experiences of my constituents in communities suffering from multiple deprivation will form the context to my contribution.
My parents, like those of my right hon. Friend, both left school before the age of 16. They had to work hard in jobs as teenagers, because that was needed in order to provide for the rest of the family. The concern that many millions of people across this country have is that their dream of seeing their children do better than they did—a dream we thought would continue through generations to come—is in danger not only of failing to be realised, but of actually going into reverse unless we make big policy changes. I also endorse entirely what my right hon. Friend said about the need for universities and colleges to reach out and be open to talent in every part of the country, regardless of someone’s ability to pay or family connections. That was a big part of my job when I was a university admissions tutor in London and in Glasgow. Links between universities, colleges and schools are central to breaking down the old boy and old girl networks that are too prevalent in many professions and in our politics.
The underlying causes of child poverty are numerous and its solutions complex, but there should be a commitment by all Members across this House to end it. There are real divides of wealth and opportunity in every part of these islands. It cannot be the mark of a decent society that, in the ward in which my constituency office is based, nearly one in every two children is in poverty, while just a few minutes away, in the constituency of the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson), the number stands at only one in 12. Some in this House might envisage the answer as being the creation of new state borders across these islands, but the more progressive solution is to bring down the barriers that hold back too many of our talented young people. The concern that many Members will have is that the detail of the Government’s child poverty strategy simply does not meet the scale of the commission’s report, or indeed the need of the people whose voices deserve to be heard in this debate.
The Institute for Fiscal Studies has said that, with no change in current policies, there will be big rises in child poverty. I hope that this debate will give the Government an opportunity to reflect on that and to work with the Opposition on a long-term approach to defeating and ending child poverty.
The first key point is that we are facing a crisis in the nature and security of employment that previous generations in recent times did not encounter in the same way. Global flows of labour, services, goods and capital and the hollowing out of the jobs market, which saw the loss of tens of thousands of skilled manufacturing and construction jobs, has meant that there is an even bigger premium on skills for people at every stage of their working lives.
Glasgow Kelvin college, which sits across the road from my constituency office, is now the beating economic heart of my constituency. It gives young people from very difficult family backgrounds—I am talking about backgrounds in which there is alcohol abuse, violence in the home or drug abuse—the first, second or third opportunity to get the literacy, numeracy or other vocational skills that are required to get the jobs of today and the future. It is only by doing that that we will begin to see genuine shared prosperity across this country.
Two weeks ago, the principal of that local college told me that nearly one young person in five in the north and east of Glasgow lacks skills at even level 3. If we continue with that level of illiteracy and innumeracy, we will not see a rise in social mobility in our country. That is the scale of the crisis that we see in one of the poorest parts of these islands.
The analysis published by the OECD last autumn, with data from England and Northern Ireland—Scotland and Wales were not included—also provides us with a stark warning about reduced living standards in the future compared with other countries if we fail to get to grips with the skills agenda. In the decades to come, inequality in skills will be as big a barrier to a good life as inequality of financial wealth.
I hope the Government will work with the Opposition to look at the impact of the 16-hour rule on many of our colleges. Recently, I spoke to some young people who said that they are unable to get state support if they want to train and improve their skills to level 3 or above at a local college. The rule also limits what courses colleges can offer to improve skills. My local college principal is excited about the prospect of removing that rule and designing new courses that would allow young people to improve their skills and be able to get into the employment market.
Recently, members of the Business, Innovation and Skills Committee, of which I and the hon. Member for Worcester (Mr Walker), who is in his place, are members, saw the huge benefits that come to our society and economy from strong links between business and universities. We must break down the barriers that suggest that universities are ivory towers. Universities give people real skills and experience in engineering, which is the kind of career that we need if we are to thrive and see opportunity flow throughout the country.
Secondly, the biggest reason for the rise in wealth in many households in the past 40 years is the increase in the female employment rate. If we are to continue that progress, which is in danger of being reversed, we need to get real about the need to invest in quality, affordable child care as that is the biggest barrier to some 1 million women being able to get back into the labour market.
I hear over and over from mothers in my constituency that the costs for after-school care are rising and that the hours of child care that they need even to work part-time simply are not available. In an era when public spending will remain tight, we need to ensure that we invest available funds in building institutions for people in their own communities, recognising that social action without state support and vice versa will not bring about the permanent reductions in poverty that we seek. In an era of tight public spending, I urge the Government to work with the Opposition to see how we can increase investment in child care. It is essential to our country’s future and to reducing the inequality gap.
Thirdly, the Government should think again about the design of the universal credit system, if it ever gets off the ground in any meaningful way, and about the tax credit system overall. As Gingerbread and other charities have pointed out, the new system will mean that tens of thousands of mothers in two-earner households with children will face an uphill battle to be better off in work should they work more than 20 hours a week. The tax and benefit system ought to be rewarding such households, not setting a cap or limit on their aspirations or efforts. I urge the Government to look at these rules and at the work allowance for universal credit to ensure that mothers and families do not lose out as a result.
Fourthly, we need to become a living wage society. Two out of every three families in which people are in work are now poor and they see little way of improving their standard of living in the future. More hours at work are not available, and pay is continuing to fall in real terms even now. As few as three in 10 of the people who go out to work in my constituency bring home a living wage. Encouraging employers to pay a living wage to their staff will have the benefits of reducing staff turnover, contributing to greater productivity, which is stagnant in our economy, enhancing satisfaction at work and helping to reduce the bill for tax credits and housing benefit.
The Government can also use their procurement powers to favour living wage employers. They should also be inviting the Low Pay Commission to revise its remit to give proper forward guidance on raising the minimum wage across the economy and to examine the case for a higher sector-by-sector floor so that as many people as possible can be taken out of the low-wage economy. Nearly 3 million people have been trapped on pay around the minimum wage for five years or longer. Without a ladder out of that low-paid trap, they will never see an improvement in their living standards and we will face mass inequality in this country.
Fifthly, as my right hon. Friend the Member for Salford and Eccles has said, we need new pathways to boost social mobility, which is showing worrying signs of reversal. Too few people on low incomes, for example, have the opportunity to save, so the gap between those who have capital, whether it is in a home or another vehicle, and those who do not have capital or any savings at all is growing. Not only in discussions in this city about Thomas Piketty’s book but on the doorstep in every community across the country, we see the impact that that increase in asset inequality is having on communities. A young person might be unable to save to get the car that would allow them to get their first job. Other people might be unable to save to get the money together to allow them to take up a university course. Courses for adult learning are also being cut, particularly in Scotland because of some of the misguided decisions taken by the Scottish Government. The lack of assets is a driving factor in the growing inequality between our poorest communities and other parts of our society.
We also know that the professions have to throw open their doors. I have experience from the law, which has some good and innovative schemes to include people from difficult backgrounds. I know from my experience as a university lecturer, however, how difficult it was for people to get pupillages to become barristers just because they came from certain universities. The law and other professions must break down these barriers. We must remove these old boy and old girl networks if we are to see a proper meritocracy in our country, and see people who have the talent given the opportunities they deserve.
There is nothing inevitable about poverty. Inequality is not a natural state for any society. Let us hope that this debate can serve the purpose of ending the stop-start approach we have seen in policy in this area for too long. More opportunities and a fairer society are not optional extras if we are to pay our way in the world. In the 21st century, they will be essential for this country’s success.
Simon Wright (Norwich South) (LD)
I congratulate the Backbench Business Committee on giving us the opportunity to debate this important subject, and I support many of the points made by Members on both sides of the House.
It is a cause of great shame that in the 21st century the best indicator of a child’s future outcomes remains their social class. Education is one of the most important tools we have to effect change. Quality education can transform a child’s life chances, yet over several decades our education system has not adequately driven social mobility.
Poor children are, however, doing better at school. The proportion of children on free school meals getting five good GCSEs including English and maths increased from 31% in 2010 to 38% last year. That is welcome, but the attainment gap between children from disadvantaged backgrounds and their peers remains too wide.
The pupil premium is supporting the progress of students from poorer backgrounds. It is vital that head teachers retain the freedom to use this funding in a way that provides the greatest benefit to the circumstances of those it is intended to support. It also vital, however, that head teachers can make well-informed spending decisions through an evidence-based understanding of what works. The Education Endowment Foundation is providing resources to help schools identify the most effective interventions and its toolkit is now used by nearly half of all school leaders, but the attainment gap opens at a very young age, before children have even started school. The Sutton Trust believes that there is a 19-month gap at the start of school between the most and least advantaged children.
The coalition has taken important steps through the provision of 15 hours of free early-years education for disadvantaged two-year-olds, which is so important because this is the age at which the attainment gap becomes detectable, and I strongly welcome the published consultation on the new early-years pupil premium for disadvantaged three and four-year-olds. Just as schools have been learning how to get the most out of the pupil premium, it is also vital that early-years settings have the tools and evidence they need to ensure that the early-years pupil premium will help youngsters from disadvantaged backgrounds.
One of the most effective interventions would be to attract more highly qualified early-years specialists, and I am encouraged that the remit of the EEF has recently been extended to include the early years. The challenges in raising awareness of what works in the early years will be different, owing to the diversity of provision, but this is important work.
At every stage of a child’s education, the greatest support that a school or provider can give comes through the quality of its teachers and work force. Liberal Democrats believe that all teachers in state schools should hold qualified teacher status, or be working towards it. Recruiting, training and retaining a highly skilled teaching work force is crucial for all young people, and particularly for those from disadvantaged families.
To improve social mobility, we need to encourage the strongest teachers into schools that serve high numbers of disadvantaged children. We also need to support the continuing professional development of teachers and ensure that research is applied to classroom practice, perhaps by encouraging a profession-led royal college of teaching.
One of the Liberal Democrats’ proudest achievements in government is the increase in the income tax threshold, which will rise again to £10,500 next year. In October, the national minimum wage will rise to £6.50. The combined effect is that every person working full time on the national minimum wage will pocket £1,579 more from their earnings than in 2010. As has been highlighted in the debate, there is also a role for a living wage based on local circumstances for low-pay households, and I am delighted that the Houses of Parliament have this week been accredited as living wage employers. Aviva, which employs around 6,000 people in Norwich, has recently joined other employers in my constituency by committing to be a living wage employer. I encourage others to follow its lead, and I commend in particular the work of the Norwich living wage campaign, which is looking at how we can do that. The Government could build on their own approach to making work pay by encouraging more employers to pay a living wage, starting with Government and public sector employers and their contractors.
Finally, I refer briefly to an unresolved question regarding the definition of child poverty. The previous Government worked to a relatively narrow definition based on relative income. Using this as a driver for policy comes with perverse risks—for example, Governments would find it easier to reduce relative child poverty by freezing the state pension over a period of time. Doing so would take many children closer and over an arbitrary median income line, but would make absolutely no difference to the lives of those in poverty.
A relative income definition of child poverty by itself, therefore, fails to capture the experiences and barriers faced by those in poverty, such as health inequalities, educational attainment and quality of housing. An effective definition of child poverty should include relative and absolute poverty, but it must also account for the causes and consequences of poverty. An effective definition of child poverty would become the driver of Government policy in this area, with appropriate indicators providing the accountability for Government action as we seek to eliminate child poverty by 2020.
There are few issues more important than ensuring that no child in a poor household grows up expecting a lifetime of enslavement by poverty. The distribution of opportunity is a key indicator of the fairness of a society, and it is our duty to ensure that where children start off in life should not determine where they end up in life.
Damian Hinds (East Hampshire) (Con)
I thank the Backbench Business Committee for allowing time for this important debate, and I congratulate the right hon. Member for Salford and Eccles (Hazel Blears) and my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on securing it. I pay tribute to my hon. Friend for the work that his Committee has done on crucial aspects of social mobility, including most recently the report on poor white children, and to the right hon. Lady for not only talking about these things but doing them in a practical way, not only in her constituency but more broadly. She is to be commended and thanked in particular for the Speaker’s Parliamentary Placement Scheme. I benefited from having one of the fantastic young people on the scheme, who has gone on to work for the civil service.
For so many of us, opportunity for the many, making society fairer and relieving poverty are the things that brought us into politics in the first place, and they go to the heart of today’s debate. Bringing up the rear of the debate, as I do, there is the tiniest danger that I might repeat some of the things that have gone before, but I see that as positive as it reflects the commonality across the House on some of the challenges that we face.
There are big challenges today. We have entrenched multigenerational poverty in parts of our country, massive geographical differences, and social mobility that is low by international standards and seems to have been stagnant over a number of decades. For the avoidance of doubt, none of these issues has arisen since 2010, or indeed since 1997, and will not be solved within the term of any one Government. But we have to get our act together and work together because whatever the problems are today there are more difficult headwinds coming tomorrow in the form of globalisation, the further effects of technological change and the differential effect that has on people, whether their job is enhanced and enabled by the computer or is in competition with the computer. Those effects are partly responsible for the hollowing out of the labour market that the hon. Member for Glasgow North East (Mr Bain) referred to, where there are more jobs in the so-called knowledge economy at the top of the scale, lots of jobs in the low wage service sector at the bottom of the scale and relatively fewer in between.
We must think about mobility, fairness and distribution within our society, but we must also think about those things collectively on behalf of our society, relative to the rest of the world. The two go hand in hand, because unless everyone’s talents are optimally deployed, economic efficiency is impossible.
I think that the Government are on the right track. The child poverty strategy is right to focus on the root causes of poverty, because although cash transfers can alleviate and mitigate poverty, they cannot cure it. Curing it, of course, is about many things, including regulatory measures, such as the national minimum wage, and tax, but it is also about bearing down on the extra costs incurred as a result of being poor. It is about building more homes, because the single biggest cost in most people’s lives is rent, and we will not solve that issue structurally until we have more housing. It is about affordable credit and trying to help people to save and build up a cushion of resilience against the nasty shocks that life inevitably brings. Most of all, it is about work: getting into it and getting on in it, and building up the skills required to do that. I am proud to support a Government who are grasping the nettle on welfare reform, especially through universal credit, and addressing the crucial issue of work incentives.
I am also proud that, as my hon. Friend the Member for Beverley and Holderness said, everything that the Government are doing on education—I pay tribute to the Schools Minister, who is sitting in front of me, and his colleagues—is about both raising the average level of attainment and narrowing the gap between the rich and the poor. We see that most obviously in the pupil premium, but it is in so many other measures as well, such as the early-years extensions. We also see that in measures, such as the English baccalaureate, that act as signalling devices to give young people a clear message about which subject choices will keep their options most open in case that advice is not forthcoming from other directions.
I will focus the rest of my remarks on social mobility. When people talk about social mobility, they are generally talking about one of three subjects. They often assume that everybody else is talking about the same thing, but they are distinct subjects that are in danger of being conflated. The first subject is what I call breaking out, meaning breaking out of severe poverty. That is the link between social mobility and child poverty. The subject at the other end is what we might call stars to shine, which is about nurturing outstanding talent. My hon. Friend the Member for Beverley and Holderness talked about how that sometimes develops into an obsession with a relatively small number of people who do amazing, stellar things, going from very humble backgrounds to running the world. The danger is that we forget the third group, the 70% or 80% in the middle, where social mobility is about helping everybody to get on, to be the best they can be, to make the most of their talents and to achieve some security in life.
The three policy areas that I want to focus on cross-cut those three subject areas. I want to focus on teachers, parents and character development. We know that education is fundamental to social mobility. At the heart of the social mobility debate is a close correlation between the circumstances, social class and income of parents and the eventual circumstances, social class and income of their children—but it is not a direct causal link. Rather, disadvantage among parents tends to be associated with low educational attainment, and it is that which drives the child’s eventual circumstances. If we can break that link between poverty among parents and low educational achievement we can achieve a good degree of social mobility.
The pupil premium is the structural measure that enables many of the initiatives for doing that, but it does not actually tell us what to do. The right hon. Member for Salford and Eccles alluded to that, as did the hon. Member for Norwich South (Simon Wright).
Thanks to the Educational Endowment Foundation and others, we now know more about the things that can make a difference. We also have to face up to some of the things that apparently do not make a difference but are favoured policy areas of lots of people in this House and elsewhere, such as reducing class sizes a little, which, according to the data, does not seem to make a huge amount of difference, or the deployment of additional teaching assistants, which again, according to the data, does not seem to make a lot of difference. I can see people looking at me as though I must be mad to suggest that. These are still controversial things to say in such debates.
What we do know, and I think everybody can agree on, is that the most important thing in education is the person standing at the front of the room. When the Secretary of State says that we have the best generation ever of teachers in this country, he is absolutely correct. A number of things have raised the status of teaching, one of which is Teach First. The figures are remarkable, even compared with when I was at school. A couple of years ago, 6% of Russell Group graduates and 10% of Oxford graduates applied to be teachers. Teaching has become one of the top graduate employers at our great universities. That, in itself, is a good thing.
It is also true—this is another controversial thing that one sometimes finds it difficult to say—that qualifications alone are not a great predictor of who is going to make a great teacher. When I served on the Education Committee, we produced a report on attracting, training, retaining and developing teachers. When we tried to address the question of what makes a great teacher, we kept finding ourselves unable to answer it, except to say, “You know it when you see it.” In having great teachers, we need to start with the premise that we have to see it in order to be able to know it.
Teaching is a very high-stakes profession. It is one of the few occupations left where the assumption is pretty much that someone who starts in it at 21 will still be doing it in their 60s. It is a massive decision for someone to go and do an undergrad degree in teaching or a postgraduate certificate in education. I think we need more auditioning in teaching. If we know it when we see it, we have to be able to see the person have a go at teaching, not just at the stage of interview for a post in a school but in pre-initial teacher training. People also need more opportunity to see it in themselves. It is very difficult for anybody to know whether they would make a great teacher—I am pretty sure I would not—and they need opportunities to see that in themselves. I would welcome more taster sessions for undergraduates who might think about doing a PGCE or sixth formers who might think about doing an undergrad degree in teaching.
There is another side to this, I am afraid. People say quite readily and easily, “Everyone remembers a great teacher.” The truth is that we can all also remember someone who really was not a great teacher. We cannot just wait a generation or two generations for brilliant teachers to come through. There is a big challenge today in making sure that continuing professional development is good. Slightly more controversially, there is the issue of performance pay for teachers—not as a way of punishing those who are not so good but encouraging those who are good to stay in the profession and rewarding them accordingly.
One of the lessons from the London Challenge, which we do not see so much in the reports but always hear from the people who ran it—who were absolutely at the top of it—was that a key aspect was the attitude of not quite ruthlessness but an intense focus on quality of leadership in London schools in saying, if it was not working out, “There’s another job for you somewhere, but this one is not quite the right one for you.” We need to have a great focus on making sure that we have the right people in place.
There is a group of people who are far more important even than teachers, and they are, of course, parents. Everybody who has ever looked at social mobility knows that the earlier the involvement in a child’s life, the more impact—the more leverage—it is possible to have on where they end up. Between years zero and five, children are not with teachers, nursery workers, the early-years work force, or whomsoever, all that much—they are with parents. Studies of children who succeed against the odds—who are born into backgrounds and circumstances where all the academic literature would predict they are not going to do well but manage to break out from that and do, in fact, do well—suggest that that has a lot to do with parenting style. We can define that to the nth degree and in a very complicated way, but I would use “books and boundaries” as shorthand for the parenting style that emerges.
As the right hon. Member for Salford and Eccles has said, Alan Milburn has called parenting the last taboo in public policy, and he is right. It is a scary thing to talk about and I think that everybody is reticent to do so. There is good reason for that: nobody wants to try to tell parents how to bring up their children. Many people probably feel qualified to advise other parents on how to do so, but it is dangerous territory for the state or, indeed, anybody else. It is vital, however, that we somehow start to take steps to break through the taboo, do more work in this area, build up knowledge and find new ways to provide support to parents when they want it.
Speaking of parents and parenting, I am reminded of another vital factor in social mobility—character. We all know of kids from among those we grew up with who got either no or one or two GCSEs—or, from my generation, O-levels—and have gone on to do brilliant things. We also know of people who had A grades to spare who have ended up doing nothing that exciting. The difference between them tends to come down to self-belief, drive, tenacity and, admittedly, a little bit of luck. There is a big overlap between those things and the employability skills that firms are looking for and that we hear about so much these days. It is claimed that they are less prevalent now than they used to be—although it is difficult to say whether there was ever a golden age for such things—but in the new world economy they are more important than ever. However, our education system now and ever since I was born has been all but exclusively focused on young people’s exam results.
The all-party group on social mobility’s character and resilience manifesto was written by a think-tank, along with Baroness Tyler of Enfield. We had a simple definition of character and resilience: people need to believe they can achieve; understand the relationship between effort and sometimes distant reward; stick with the task at hand; and bounce back from life’s inevitable setbacks. That is easier said than done, but if people can master those things they will have a very good shout in doing as well as they can in life. The key question is: are those things inherent, or can they be taught? As has been said, the evidence tends to suggest—although we have to be careful about being dogmatic about this—that they can at least be developed and enhanced through life. That can be done through all sorts of things, including volunteering and Saturday jobs, which have been in massive decline, and the National Citizen Service, competitive team sport and the scouts, the guides and the cadets.
The question for public policy is how to institute those character development strands into the social mobility strategy. The process has to start early, so thinking about character should be part of how we think about school readiness. Schools have a key role to play. When our all-party group asked the headmaster of one of Britain’s leading public schools what it was about his school that meant it apparently did so well on character, the first thing he said was, “We teach boys how to fail—the ability for things to go wrong—and then how to bounce back.” I think there are lessons to be learned from that, not only by individual schools but by the system as a whole.
Perhaps the most obvious thing of all is extra-curricular activities. It seems that the gap in extra-curricular activity between better-off and worse-off kids is more about take-up than availability: a lot of programmes are made available, but they are not used that much. I would like to see more emphasis on extra-curricular activities not necessarily happening in schools, but being led, driven and encouraged by schools. That could be a legitimate use of pupil premium money, given how important we know such activities are for how young people get on in life, and I would like Ofsted to pay even more attention to the issue in future. The Government are looking at this in earnest and I hope it will end up becoming a key part of the social mobility strategy.
I want to talk about some of things that we do not know. In many public policy areas, we think that if we know the facts we need only to have a bit of a barney to find solutions or ways forward. On social mobility, we still do not know many of the facts and the situation is still evolving.
We are blessed with one example of a place in Britain that has gone from zero to hero in educational attainment, and probably in wider social mobility measures as well, which is London, particularly inner London. When we look at the data, it is striking to see how far inner London in particular has moved. Today, disadvantaged children growing up in London do half a grade better per GCSE than those growing up elsewhere; they appear to be twice as likely to go to university as those growing up elsewhere; and they are even more likely than that—the maths becomes quite difficult because the numbers are small—to go to a top university than disadvantaged kids growing up elsewhere.
The stock answer that rolls off everybody’s tongue when we say that is, “Oh, yes, but those children had the London Challenge.” Hon. Members should not get me wrong, because the London Challenge was good and positive, and it is difficult to argue against elements of it, but there are several reasons for believing that it was not the sole or primary cause of the change. The first reason is that the improvement predated the London Challenge: the London Challenge began in 2003, which was also the year in which GCSE results in London caught up with those elsewhere. The second reason is that the improvement was in primary schools as well as secondary schools, but at that time the London Challenge covered only secondary schools, and from the limited data we have, it appears that disadvantaged kids in London do better even in nursery, before their schooling has even begun. The third reason is that the improvement was very concentrated among poor kids. The fourth reason is that when the London Challenge was tried in Manchester and Birmingham—again, hon. Members should not get me wrong, because there was some success—the results were not replicated in nearly the same way.
We now have to cope with or come to terms with the strange situation that coming from an ethnic minority and/or having English as an additional language is a predictor of doing better at school, which challenges policy makers a great deal. Given the massive population change in London during the past 20 years, we must at least entertain the possibility not just that that situation is related to the fact that schools are now different and have got better in London, but that it has something—not entirely, but partly—to do with the population make-up of people living in London. That brings us back to questions about parenting.
Mr Graham Stuart
Has my hon. Friend seen the articles by Christopher Cook, who is now the BBC’s education correspondent, which suggest that there is a link between the London effect and graduates, particularly graduate teachers, marrying?
Damian Hinds
I have not seen the marrying study, although I have seen several of Chris Cook’s articles in the Financial Times. There are another two reports. At one launch, the Minister for Schools rightly said, “Londoners are used to this sort of thing. You wait a long time for a report about schools, and two come at once.”
Damian Hinds
Three reports have come along at once.
Lots of different effects are taking place, and we need to understand them much better. What we can be sure of is that there is no one simple and obvious answer, because it would have been found by now. More generally, we do not know enough about the patterns of uneven opportunity in this country. We know that some big areas are worse than others, and we can identify pockets of poor schooling, sometimes in affluent wider areas, where school results are not good enough. However, we do not understand enough about our country as a whole in relation to who stands to do better than others, why that should be the case and what we can do to mitigate it.
In the United States, a recent study on equality of opportunity, led by Raj Chetty of Harvard, has helped us as never before to understand inequality of opportunity and the patterns of inequality in the United States. It found that the chances of achieving the American dream are two and a half times higher in Salt Lake City than in Charlotte, North Carolina. To put that in context, average social mobility in the UK is about halfway along the range for cities in the United States. There is every reason to believe that there will also be quite a range, perhaps for different reasons, in this country. The Chetty study has some challenging findings on the potential causes of inequality, including the de facto segregation that still exists in some American cities and the family structures in different places, as well as dealing with the more obvious issues that we might expect: income inequality, school quality and social capital.
That study was carried out by linking tax data to school records to track how people did through life and look at the differences—seeing how someone was affected if they moved to a different area, and so on. I do not know whether I am the only Member in the House today to have had the benefit of some e-mails from 38 Degrees this week on whether it is legitimate to use data from Her Majesty’s Revenue and Customs for other purposes. I totally recognise and share the massive data security concerns about that, but I hope that the Government will look at the potential of using the data to understand this issue better so that we are able to do something about it.
Social mobility alone will not solve poverty or child poverty, but it can solve a part of those problems. It is a huge issue for both social justice and economic growth. It is self-evident that every person in our land should have equal opportunities to fulfil their intrinsic potential. It is also true that maximisation of national income requires optimal deployment of resources, including human resources. It could bring an extra £150 billion a year of national income, or a one-off 4% rise in growth, and that is an opportunity that we as a country cannot afford to miss.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I congratulate my right hon. Friend the Member for Salford and Eccles (Hazel Blears) on securing this important debate, and thank the Backbench Business Committee for providing time for it.
Throughout her time in Parliament my right hon. Friend has made an outstanding contribution on improving the life chances of young people, as I know from direct experience. I established a charity called UpRising, which has the support of the three party leaders. It works on empowering young people to get into politics and public life, promoting social mobility and supporting young people with regard to skills and employability. When I was working to establish that charity, she was Secretary of State for Communities and Local Government and her Department supported UpRising through the empowerment fund; the current Government have continued in that effort. Her work on the Speaker’s parliamentary placements scheme has been outstanding in providing excellent support to young people who want to find an opportunity to work in Parliament and join us here in this Chamber in the future.
My right hon. Friend spoke powerfully about the inspiration her mother provided to her in everything she has achieved. The phrase, “The world is your oyster if you work hard,” is one that I can associate with my own experiences. It echoes the message I received not only from my mother and the rest of my family but from my teachers, who had a profound effect on what I went on to do and the opportunities I had to get a great education in Tower Hamlets, where I then lived. Other Members have talked about their own direct experience of how education has provided the critical chance for them to achieve their aspirations and make a contribution.
That is the context for this debate on the importance of making sure that young people today do not do less well than their parents’ generation. We all have a duty and a responsibility to make sure that the next generation does better than the current one, as has been the case previously. All Members who have spoken have highlighted the grave position that we are now in as a society. The twin challenges of tackling child poverty and powering social mobility should demand the most urgent attention from this House, the Government, employers and wider society.
Figures that came out this week show that, on this Government’s watch, 2.6 million children are now living in absolute poverty. That means that almost one in five young people face profound threats to their childhoods, aspirations and life chances. Many Members across the political divide represent constituencies in which child poverty is a widespread reality. In my constituency, 42% of children are living in poverty. That is one of the highest levels in the country. I was a commissioner on the London Child Poverty Commission for a number of years and we highlighted the dangers of the stubbornly high level of child poverty in this city, which results from the high cost of living, including the cost of housing, and the level of worklessness.
The hon. Member for East Hampshire (Damian Hinds) said that we must build homes and create opportunities for people to work. He is absolutely right. That is what we must do to help children in poverty not only in London, but in other parts of the country. He was particularly right about work. Parents must have the opportunity to earn a decent wage so that they can provide a decent living for their children.
What is coming into sharper focus is that more than two thirds of children in poverty are growing up in families in which someone works. Not only is early intervention, such as support for child care and Sure Start centres, critical to children’s development; it enables parents, especially mothers, to secure work and contribute to the family income so that their children do not live in poverty. Labour’s proposals to link the minimum wage to average earnings and to address insecure work are badly needed to tackle low pay and the child poverty that occurs as a consequence.
Last year’s landmark report by the Social Mobility and Child Poverty Commission condemned the Government’s failure to produce a credible strategy to tackle in-work poverty. The Child Poverty Action Group has rightly highlighted the importance of promoting second-earner employment among couples with children. It points to the Resolution Foundation’s estimate that 1 million women are missing from the Labour market. We will never meet the child poverty target without addressing that problem. That means that we must address the serious flaw in the proposals for universal credit that makes second-earner work incentives worse than under the current system. The universal credit rescue committee submitted its report to the Labour party last week. On second-earner work incentives, it said that
“Universal Credit will weaken the incentive for second earners in couples to work. One in five children in poverty now lives with a single-earner couple, and ensuring that more second earners, principally women, are able to take up employment will be critical to reducing child poverty rates.”
The last Labour Government reduced the number of children in poverty by almost 900,000. In the final years of the last Government, child poverty went down to its lowest level since the ’80s. However, there was much more to do and this Government needed to continue that trend of reducing poverty. This should always be a collective effort. What we have seen is an increase in poverty that threatens to obliterate that progress. Save the Children, the End Child Poverty campaign and the Joseph Rowntree Foundation have warned that the Government will miss their own 2020 target by a staggering margin. That cannot be acceptable, whichever end of the political spectrum one is on.
The Social Mobility and Child Poverty Commission gives us no reason to hope that the Government can turn the situation around. It says that, despite the Government’s decent intentions, their recent work on child poverty reads like a “list of policies”, rather than the coherent strategy that our children and young people need; lacks any
“clear measures to assess progress”
over the coming years; and fails to “engage with independent projections” of rising poverty. Experts are united in the belief that the strategy simply lacks any credibility. The commission goes on to say that the strategy is a “missed opportunity” to create momentum towards securing a high-mobility, low-poverty society. We desperately need decisive action to support young people in realising their aspirations and talents. I hope that the Minister will address the concerns that have been expressed by the commission and hon. Members.
That analysis underpins much of the discussion today about declining social mobility. Family background, educational attainment and later life chances remain closely bound together in the UK. Organisation for Economic Co-operation and Development research shows that intergenerational mobility in the UK is weaker than in most comparable nations, including France and Germany. The Government have so far unfortunately failed to close the attainment gap between those who have free school meals and those who do not.
The hon. Member for East Hampshire talked about the success of the London Challenge and I am grateful for his remarks about that. He is right to point out that some areas were already doing much of what the London Challenge did. In my constituency, head teachers led the way, along with those in Newham and other parts of the country. It is clear that the lessons learned from specific examples, such as in my borough throughout the late 1990s and beyond, were pulled together to promote collaboration, joint working, good management and leadership by head teachers and other teachers working with the wider community. That was an important way of driving up standards in London, which has experienced the most improvements in the country. It is a great shame that the Government are not speaking up for those sorts of initiatives, trying to ensure that educational standards are improved throughout the country and that lessons are learned from what has worked, whoever happened to introduce it.
Mr Graham Stuart
The shadow Minister is being a little churlish, which is not in her nature, so I am sure she will want to correct what she has said. After all, the results for children who have free school meals have improved against a tougher level, and that is worth celebrating. One of the interesting aspects of our report was looking at the gap between free school meals children in inadequate schools and those in outstanding schools. That gap stayed roughly the same, but doubling outcomes for them is something to celebrate, regardless.
Rushanara Ali
I referred to the failure to close the gap. The hon. Gentleman is right that there have been improvements, but that is not enough. It is not satisfactory. As the Education Committee’s commendable work highlights, the position of white working-class children—boys and girls—is deeply disturbing. As a society, we have failed them. Most of them are in that category of having free school meals, so the position is not good enough. The Government should take seriously the hon. Gentleman’s work, which has cross-party support, on the plight of white working-class children. We need to step up and address the challenge.
It is clear from the speeches that we all want children to do well, regardless of background. We want their talents to be maximised, not wasted, so that their abilities are recognised and they can contribute to our economy and our society.
The Government’s policy of scrapping the education maintenance allowance has had a direct impact on social mobility. I know that from the experience of several groups. More than 80% of ethnic minority children, for example, from Pakistani and Bangladeshi backgrounds, relied on that grant. Young people from parts of the country where they spend money on transport now struggle to commute to their further education colleges. Many have highlighted the challenges they face because they do not have the support that they need. Some go to their further education colleges not being able to feed themselves. In a climate of high levels of poverty and deprivation, provision such as an education maintenance allowance was a great help and its removal has contributed to taking away the ladders to progress.
I know from direct experience with young people that other changes, such as the proposal to scrap support for young people under 24, are deeply troubling. Without support and access to benefits, one young woman whom my charity supported would not have made it from a broken family and having been made homeless to what turned out to be an incredible opportunity: she got a place at Cambridge.
She would not have had that ladder of opportunity if the support system offered by the state had been removed. We must consider many welfare changes to ensure that the barriers to young people being socially mobile are not added to, and that we all work hard to remove them.
The hon. Member for Norwich South (Simon Wright) highlighted the importance of qualified teachers and the need for a royal college of teaching. I am delighted that he emphasised the importance of qualified teachers, and his party’s support for that. It is a great shame that the Government, the Secretary of State and the Conservative party do not support that provision, but I hope we can get agreement on that.
Rushanara Ali
I did not give way to the hon. Gentleman, but if he insists—if I am allowed to continue then I am happy to, but I will give way.
Damian Hinds
The hon. Lady was talking about London a moment ago. Can she tell the House which region has the highest proportion of unqualified teachers?
Rushanara Ali
Perhaps the hon. Gentleman will say why his Secretary of State said that there is no need for qualified teachers, when evidence suggests that qualified teachers play a profound in role in young people’s attainment. On his point about London, I suspect he is referring to the last Labour Government. We increased the supply of teachers by introducing teaching assistants who then got qualifications. We have called for teachers and for those who are not trained to be able to work towards training, and that is what we did. Perhaps the Conservative party will address that point given that the Conservative Chair of the Education Committee has said that qualified teachers make a massive difference to young people’s potential to achieve.
Rushanara Ali
I will not give way any further because I have already given way twice to the hon. Gentleman—[Interruption.] A number of times to his colleagues then. I would like to make progress because I know the Minister will want to address some of these points.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. It might be helpful to say that it is up to the shadow Minister whether she wishes to give way. It is in the hands of Rushanara Ali whether she gives way or not.
Mr Stuart
I am grateful to the hon. Lady since she mentioned me. As she has made clear, qualified teachers can do a great job, but I trust heads to make that decision. Given the accountability they are subject to, the idea that heads would take on people who they do not think will improve the education of their children is false, and there are fewer non-qualified teachers than when the Labour party left office. I just throw that in—it is a bit of a distraction when such a tiny percentage of the work force do not have that particular piece of paper, which is not all that indicative of quality.
Rushanara Ali
I am rather disappointed that the Chair of the Select Committee is taking such a partisan view. The point is that if a policy is introduced and a message sent that there is no need for qualified teachers or to invest in their qualifications, that is wrong. It means that the supply of qualified teachers in the future will decline, which is a huge concern. Evidence shows that qualified teachers make a massive difference, particularly when they are dealing with large class sizes, as is the case in most state-funded schools—unlike in private schools, which is often the comparison made by the Conservative party.
Let me move on to the point about professions, which I hope Government Members might agree on. Institutions, whether Parliament, the legal or financial professions, journalism, and many others, all have a major job to ensure that young people from working and lower middle-class backgrounds have the opportunity to access those professions. Those young people’s chances of being able to access those professions remain much lower than for those from upper middle-class backgrounds, and there remains a massive disparity between those who are privately educated and those who go to state schools, although progress is being made. There is a role for ensuring that private schools, which have to pass a public benefit test, make more effort to work with state schools, and share not only their physical assets and facilities, which many do, but their social capital, which they have in abundance. Such sharing could support and promote learning in both private and state schools—private schools have much to learn from the work of state schools and vice versa. My right hon. Friend the Member for Salford and Eccles mentioned the work on resilience and on how young people adapt and learn in the state sector. That is an important aspect of shared learning.
A number of hon. Members, including the Chair the Education Committee, referred to careers guidance in education, which is a deep concern for all hon. Members. As the Committee report points out, major challenges need to be addressed. Changes made by the Government have led to massive problems in what schools offer to young people. We need to rectify that quickly. The CBI’s verdict is that the Government’s changes mean that careers guidance in our country has been left on life support. The Chair of the Committee highlighted some of the conflicts of interest that can arise. Schools have been given a statutory duty, but they might not be in a position to provide independent advice and guidance to young people, which is important if they are to keep their options open and have the broadest awareness of what is on offer, whether that is university or training and apprenticeship opportunities, and of the institutions they will go on to.
Furthermore, the removal of the entitlement to work experience means that many working-class parents—the majority—are struggling to find placements for their children, whereas those from professional backgrounds are better placed to use their networks to provide work experience opportunities for their children. We need to ensure that schools and other educational establishments can work together to provide work experience opportunities, mentors and a ladder for recognising, and learning about, professions that are not accessible to many young people in our country because of their social class background. Enabling that requires Government action. The careers co-ordinator role and careers support are critical in helping to orchestrate and provide such help and support for young people. Families are being left to their own devices, which is creating more disparities, not only in work experience—horizons are either opened or left closed for people from working-class backgrounds—but in careers information and guidance, which are limited in some places and virtually non-existent in others.
There are many great examples of great work—all hon. Members know of it in our constituencies—but we need to be concerned about those who do not have access to independent guidance and advice. I hope the Minister takes on board the concerns raised by hon. Members of all parties. The lack of independent guidance and advice blocks young people from realising their aspirations, whatever their background.
Youth unemployment remains incredibly high—850,000 young people are still unemployed. We need to ensure that, in future, young people who are unemployed get the support they need. My hon. Friend the Member for Glasgow North East (Mr Bain), highlighted the importance of ensuring that the 16-hour rule is flexed so that young people can get the appropriate training and skills to get into the labour market. That is critical.
I hope the Government reconsider the Opposition’s proposal for a youth jobs guarantee. The Labour Government introduced the future jobs fund, which showed dramatic and positive results. The current Government’s Work programme has had limited success. In constituencies such as mine, only 14% of those on the Work programme have gone into a job, and the numbers nationally are much worse. I hope the Minister and his Government will be pragmatic and look at what works, learn from it and reform proposals to ensure that young people’s life chances are not further worsened.
Rushanara Ali
I am not going to give way. I want to conclude and let the Minister make his speech. If Mr Deputy Speaker says that I should give way then I might consider it.
Rushanara Ali
I will make some more progress and then I will consider giving way.
Apprenticeships are critical. The number of apprenticeships for 16 to 18-year-olds has actually gone down over the course of this Parliament. Although the number is beginning to go up for other groups, we want more apprenticeships for young people. I hope the Minister will consider why the figure is so low for 16 to 18-year-olds and what his Government will do to improve it.
The hon. Member for Beverley and Holderness (Mr Stuart) highlighted the challenges faced by those who do not go to university and are being left behind. I know he would not want to use the term coined by the leader of my party, “the forgotten 50%”, but whatever we call that group, this is a serious issue. Successive Governments have overlooked the need to ensure that young people have a world-class vocational, educational and training pathway into work or higher education, if they choose to go into higher education later on. We must all take action to ensure they have the opportunity to gain meaningful work and the skills they desperately need to avoid long-term unemployment, despair and hopelessness. It is important, particularly in times of economic downturn, that we do not lose out on their potential to make a contribution to our economy.
Child poverty and social mobility are of paramount importance. We have, as was evident from the reaction of Government Members to some of my comments, massive disagreements on how we get there, but we all want to get to the same destination: making sure that young people, whatever their background, can reach their full potential. We want to ensure that the barriers that can be removed, such as class, social connections and lack of opportunities, are removed whoever is in government.
We cannot have a situation in which so many children are in poverty and more are likely to be in the future. We need a step change to ensure that we eliminate poverty, not just halve it. If we want to reduce global child poverty, we need to practise what we preach here at home. I hope we can all agree that that is a task we must all work towards. We must ensure that we agree to do what we can to make sure that young people have the best possible opportunities. We need leadership, resources and investment in young people’s life chances to tackle those inequalities and barriers.
Did the hon. Member for Reading East (Mr Wilson) want to intervene? I note that he has been restless.
Mr Rob Wilson
I thank the hon. Lady for giving way and for being so generous with her time. I would like to take her back, briefly, to her comments on youth unemployment.
Mr Deputy Speaker
Order. I am sorry, but I just need to clear up this matter. It is up to the shadow Minister, the Minister and any Member to decide whether to give way. It is not up to the Chair and I want to keep out of any disputes that may arise.
Mr Wilson
I would just like to take the hon. Lady back to her comments on youth unemployment. From what she said we would not know that youth unemployment is falling rapidly. She did not state how the policies she is putting forward would make that fall more rapid than it is at the moment. What is the solution to making it fall even more rapidly than it is falling at the moment?
Rushanara Ali
If the hon. Gentleman looks at the evidence, he will find that the future jobs fund got young people back to work very quickly. His party rapidly scrapped it without replacing it, and the massive delay that followed meant that people all over the country, including people in my constituency, had no programme at all. His party then introduced the Work programme, which was and continues to be a disgrace. It is not getting people back to work. Last year, only 3% of my constituents were getting jobs. If the hon. Gentleman looks at the facts, he will find that the future jobs fund was a success and the current programme is still struggling. He ought to stop being so obsessed with something that is not working, and start looking at policies that work and encouraging his Ministers to implement them.
Despite the fall in youth unemployment, 870,000 young people are still unemployed. [Interruption.] Is the hon. Member for Reading East denying that? I think it is a scandal if he is in denial about it. Those people are desperate for work and desperate for opportunities. He needs to recognise that instead of living in denial, because otherwise people will think—quite rightly—that he and his party are completely out of touch.
Let me end by returning to the subject raised by my right hon. Friend the Member for Salford and Eccles, whose work in this field has been phenomenal. She has stood up for young people, and not only in relation to this agenda. She mentioned her work in supporting troubled families, her work on the respect agenda, and her work in supporting families and education, promoting empowerment, and tackling powerlessness and exclusion during her career here in Parliament. I am sad that she is leaving Parliament, and I know that Members in all parts of the House will be sad as well. However, we look forward to working with her in fighting for young people, tackling child poverty, and promoting social mobility. We will all be there, whatever our political leanings, to support the causes for which she will continue to fight, including the very important causes that we have discussed today.
The Minister for Schools (Mr David Laws)
I thank the Backbench Business Committee for giving us the opportunity to debate this very important and wide-ranging subject. I also thank the right hon. Member for Salford and Eccles (Hazel Blears) and the Chair of the Education Committee, the hon. Member for Beverley and Holderness (Mr Stuart), for sponsoring the debate and for opening it in such a powerful way. Their extensive speeches covered a great many of the major policy areas relating to social mobility.
I especially enjoyed the right hon. Lady’s speech. I enjoyed her challenges on some of the issues about which she thinks the Government should be doing more. I was interested to hear about her own family background, and her mother’s efforts to take all the opportunities that life presented. I congratulate her particularly on her success, and the success of her constituent, in helping to change some of what sounded like the rather backward-looking arrangements for the admission of postgraduates to Oxford university. I imagine that it is even more difficult to change the arrangements for admissions to Oxford university than it can sometimes be to change Government policy, so I think that that was something of a victory for her and her constituent.
The Government are committed to the principle that where people start in life should not determine where they end up, and that forms the basis of a huge amount of work that we are doing on both economic and social policy, which we have set out in the recent child poverty strategy and the social mobility strategy. It was good to hear not only the two opening speeches, but the speeches made by other Members including the hon. Member for Glasgow North East (Mr Bain), my hon. Friend the Member for Norwich South (Simon Wright), the hon. Member for East Hampshire (Damian Hinds) and, of course, the hon. Member for Bethnal Green and Bow (Rushanara Ali). They made powerful speeches which covered different aspects of the debate, and which signalled that in all parties, whatever their philosophy and whatever their ideology, there is a strong commitment to changing society in this regard, and ensuring that there is genuine opportunity for everyone regardless of background. That national consensus comes across clearly in the foreword to the Social Mobility and Child Poverty Commission report from the autumn of 2013, where Alan Milburn and his fellow commissioners said:
“It is part of Britain’s DNA that everyone should have a fair chance in life. Yet too often demography is destiny in our country. Being born poor often leads to a lifetime of poverty. Poor schools ease people into poor jobs. Disadvantage and advantage cascade down the generations.”
That is the challenge that we all face. The last Government faced it and we face it in this Parliament.
It is our ambition to build not only a stronger economy out of the rubble of the crash of 2008 but a fairer society, even in these challenging times. We are not only getting on with that job but making progress, as we have set out in our strategy report and as is highlighted in parts of the Social Mobility and Child Poverty Commission report. The economy is now escaping from the worst recession in generations. We have already helped record numbers of people into work and put in place far-reaching measures to improve the educational attainment of the poorest people in society.
The right hon. Lady praised Alan Milburn and all members of the Social Mobility and Child Poverty Commission for their work, commitment and dedication to that shared cause. I join her in thanking Alan Milburn and the commissioners for their work. She was also kind enough to praise the Government for their bravery, I think she said, in taking the novel step of setting up an independent watchdog and asking a leading former Cabinet Minister from the Labour party to chair it and to be our critical friend on those issues. That demonstrates how serious the coalition Government are about that policy agenda. We decided to take a risk in setting up a body that we fully expected would be not only a friend but a critical friend and would challenge us on our ambitions to address social injustice and create a society of real opportunity for every individual.
The Government’s child poverty strategy sets out that our approach is rigorous and evidence-based. We are focusing on sustainable solutions that will work in the long term and make our society fairer. I acknowledge that the last Government also had a strong commitment in that area. It did some important work, not least in schools policy. In the debate, we have talked about the success of London schools in the last 15 or so years. I pay tribute to former Education Secretaries and individuals such as Lord Adonis who played a large part in some of those education reforms.
It is also true that, in their strategy in this area, the last Government became very dependent on public expenditure through the benefits and tax credits system. By the end of the last Parliament, it became clear to most commentators and people in the House that the strategy of relying on ever more means-tested benefits was not sustainable in the long term, particularly in an environment where the public finances were deeply in deficit.
Therefore, we are now focusing on tackling the causes of inequality and social injustice. That is why we are putting a particular focus on some of the areas that right hon. and hon. Members have raised today: on investing in the early years, on improving the quality of our schools system, and on ensuring that people get more opportunities in work and make progress in work, rather than simply being in work on low pay. I would like to set out some of the Government’s plans in those areas and to try to respond to some of the points that right hon. and hon. Members have made.
The right hon. Lady placed a heavy emphasis on the importance of tackling disadvantage in the early years, as did a number of other Members, rightly. The Government fully share the view that, in order to address disadvantage and inequality of opportunity, we have to be able to act early on. Far too many young people start off way behind as they join our schools system. Schools then struggle to try to make good the disadvantage that has already been embedded in the early years. We have to do more in those crucial early years to prevent these gaps from opening up, so across the early years we are helping disadvantaged children to gain access to high-quality education and we are providing more help to parents who want to get back to work. Our new entitlement for the parents of the most disadvantaged 40% of two-year-olds will mean that about 260,000 disadvantaged two-year-olds will be entitled to get a Government-funded early education place from September.
Earlier this year, we also announced that from 2015-16 we will extend the pupil premium, which is having a profoundly important impact in schools, into the early years, so that we ensure that three-year-olds and four-year-olds from the most disadvantaged backgrounds can get the best start in life. That is extra money to raise the quality of teaching and pay for more qualified teaching staff, particularly in settings with a large number of disadvantaged youngsters. We have announced the consultation on that and the level of the early years pupil premium for 2015-16, and I very much hope that the party or parties in government after the next election will continue to be committed to the early-years pupil premium and to the schools pupil premium. I hope we will significantly increase the early-years pupil premium so that it is at least as great financially—if anything, I hope it is more—as the pupil premium for primary schools, on a full-time equivalent basis. We know that investment in these areas makes the biggest impact when we invest early, which is why we decided in 2014-15 to put almost all the increase in the pupil premium into the primary setting rather than into secondary education. We are also doing other good work.
Stephen Timms (East Ham) (Lab)
The pupil premium is based on free school meal eligibility, but we still do not know which recipients of universal credit will be entitled to free school meals for their children. We have been waiting for this decision for about three years, and I think the delay is because of a disagreement—or an inability to reach agreement—between the Department for Work and Pensions and the Department for Education. Is the Minister able to tell us when that very important policy decision will be made?
Mr Laws
I can tell the right hon. Gentleman that there is no disagreement in government. This is a very important decision to get right, for the reasons he explains, and we have no intention of undermining support for disadvantaged youngsters through the decisions we take. We have to make sure that we use the new mechanisms that will be available, including through universal credit, to target money effectively. We will be taking decisions shortly—Ministers often say that—on this matter, but in the meantime it is perfectly reasonable for him to ask questions about it, because it is important for us to get it right.
We are also taking other action to support families in the early years: for working families on universal credit, we are further increasing support for child care costs to 85%, as Alan Milburn’s commission urged us to do, making sure that for these families work will always pay; we are introducing tax-free child care; and the Deputy Prime Minister recently announced the commencement of flexible parental leave, so that all parents can get the support they need to go back to work. As the Social Mobility and Child Poverty Commission has consistently argued, the early years are the most important years in young people’s lives. That is why we are investing so heavily to make sure that all our children get the very best start they can and why we are giving a priority in public expenditure terms to this area, even in these times of austerity.
Understandably, education in our schools system has been a major area debated today, and it is one of the Government’s big priorities. I am very proud, as a member of the coalition Government, that even in these times of austerity, when we are trying to deal with the massive deficit we inherited, that we have made the commitment to fund a pupil premium for schools. As hon. Members have said, we are focused not only on raising attainment for all school pupils, but on closing the unacceptable attainment gap between richer and poorer pupils, and we are making progress. Under this Government, poor children are doing better than ever at school. The proportion of children on free school meals and the pupil premium who are getting five good GCSEs has increased, as my hon. Friend the Member for Norwich South said, from 31% when the coalition came to power to 38% now. That is a very significant increase over a relatively short period, and comes at a time when we are ensuring that there is no grade inflation in the system, which means that these improvements in recorded results are real improvements.
We are also making big improvements in narrowing the gap at key stages 2 and 4. At key stage 2, the acceleration in narrowing the gap seems to have been present since the pupil premium came in, and we need to ensure that that acceleration is sustained in future years and that it is present in both key stages 2 and 4.
As hon. Members have said, a massive amount more needs to be done in this area. It is still the case that, despite the progress, six in 10 children on free school meals fail to secure five C grades at GCSE, including English and maths. I hope that all of us across the House agree that that is entirely unacceptable in an advanced country such as Britain. As the Chair of the Select Committee pointed out so powerfully, we can see that that is unacceptable when we look at the levels of attainment and the reduction in the gap in some of the best schools where they have large numbers of disadvantaged young people. In those schools, including in areas such as inner London, the teachers and the head teachers are proving that there is nothing inevitable about this level of underperformance. There are parts of the country today where almost 80% of young people who are considered disadvantaged are failing to get those five Cs, and that is not something that any of us can accept.
We are continuing to put our money where our mouth is —through the pupil premium. Since 2011, we have invested almost £4 billion to help schools directly to address educational disadvantage. This year, the pupil premium will increase to £2.5 billion a year—the full amount that we promised in the coalition agreement. That means that children who are poor and who receive the pupil premium throughout their school career will now receive—or their schools will receive—an additional £14,000 to boost their attainment, which is a significant amount of money. Schools will be able to make powerful use of that money, and they will be informed by the mechanisms to improve education that the Education Endowment Foundation has flagged up as things that work.
I have been to schools in very disadvantaged neighbourhoods around the country, and recognise that this boost to the budget is quite transformational. With my hon. Friend the Member for Redcar (Ian Swales), I visited a school in his constituency with very high levels of deprivation—80% or 90% of young people were entitled to the pupil premium. It is a community that never really recovered from the de-industrialisation of the 1980s and a community where aspirations have been very low. This additional money is giving that school the opportunity to change the life chances of those young people.
Of course we have to ensure that, even though we give discretion to schools to spend this money in the way they think best, there is accountability for it. The right thing to do in the school system is to have more freedom and autonomy, but those things have to come with accountability. The accountability mechanism that we have chosen is through Ofsted. When Ofsted goes into a school, it will look to see whether the disadvantaged pupils are making good progress and it will see whether the gap is closing. If those things are happening, it will not have to ask lots of questions and it will not be wasting the time of school leaders and teachers by creating a bureaucracy around this. Where there is not progress and where the gaps are not closing, it will challenge schools. Schools that thought they might be outstanding will discover that they are not so graded because they are failing in this area. Schools that are weaker will be highlighted. Head teachers today know that this is now an important area for their school’s performance, and Ofsted will recommend pupil premium reviews by outstanding system leaders of schools that are not using this money sensibly.
Later this month, Ofsted will report on its view of how the pupil premium is being used in schools. Although I would be the first to accept that not every school is using every penny perfectly, I believe that the evidence will show that the school system increasingly does understand what this money is for and is using it and targeting it in the right way.
Another important thing that we have done is to change the accountability systems for both primary and secondary schools and in 16-to-19 provision. For too long in primary education we have set the bar too low for schools. At one stage, we accepted that 40% of young people could fail to reach the level of attainment to which we were aspiring and we now know that even that level was too modest and was, for those people who were just achieving it, a passport to failure later in life and in their educational career. We are raising the bar and we are expecting more young people to get over it.
As the Chairman of the Select Committee pointed out, by focusing more on progress and not on the C-D borderline, we are giving a real incentive to schools to value the progress made by every pupil—the B-grade students going to A, the A-grade students going to A* and, critically, the F-grade students going to E, the E-grade students going to D and the D-grade students going to C. One of the disappointments under the previous Government, in spite of the progress made in some areas of education, was that a lot of the progress was across the C-D borderline on which schools had an incentive to focus. A lot of the most disadvantaged youngsters who were not on that borderline saw almost no improvement in performance under the previous Government. They and many of the most disadvantaged communities saw precious little improvement during the last Parliament and I hope that our accountability reforms will change that.
I am optimistic. We had the pupil premium awards recently and saw some splendid best practice across the country. Schools are doing the right things, with high expectations and good teaching. That includes schools such as Mossbourne academy. The recent destinations data show that a large number of young people from those schools are going to first-class jobs and first-class educational settings, and are going on to places such as Oxford and Cambridge. More people from that school did that than was the case from some entire local authority areas, as, disgracefully, there are still some parts of the country in which no pupil at all goes on to our best universities.
Mr Graham Stuart
The Minister will know that thanks in part to the flexibilities that this Government have introduced, there is an increasing correlation between the amount of money that schools get and their efficacy in a way that there was not in the past, which is probably a good thing. That shows the need for a new national funding formula that ensures equitable distribution of funds across the country. We do not have that now. London is doing well, and we are all delighted about that, but it is also the best-funded part of the country.
Mr Laws
I entirely agree. Money is of course not always the answer—if it is spent badly, for instance—but it is really important. If we did not think that money was important we would not have the pupil premium, which is about money, accountability and best practice. We must make sure that we have a fairer national funding formula. We are making the biggest step for 10 or 20 years towards fairer school funding through the minimum funding levels we are introducing, and I hope that my right hon. Friend the Secretary of State will be able to say more about the additional funding we can give to underfunded parts of the country when our consultation concludes.
As well as addressing attainment in education for disadvantaged groups, we need to help them to secure the right jobs so that they can get on in life. Apprenticeships are at the heart of our drive to equip people of all ages with the skills employers need to grow and compete, and we are very proud that more than 1.6 million new apprenticeships have been started in this Parliament at more than 200,000 workplaces. More than 860,000 people undertook an apprenticeship in the past academic year, which is the highest recorded figure in modern history. Our new programme of traineeships will help young people to develop the skills and attributes they need to secure apprenticeships and other sustainable jobs.
We are also pleased that the work we are doing with young people means that the number not in education, employment or training has been falling. We will continue to do more to help young people from 16 to 18 and to ensure that, as a number of hon. Members have said, we have proper careers advice and guidance, and proper incentives for educational establishments to focus on destinations.
We are also helping young people in work, helping parents to find jobs and helping to ensure that take-home pay after tax increases. We are incentivising employers to take on more young people by abolishing employer national insurance contributions for most employees under 21 from April of next year. We are raising the national minimum wage to £6.50 per hour, which represents the biggest cash increase since 2008 and will increase the pay of more than 1 million people. We are cutting income tax for those on the minimum wage by almost two thirds and we have increased the personal allowance five times, from £6,475 when the coalition came to power to £10,500 in 2015-16, which is a massive support to many people on low pay in employment—people who are also, incidentally, going to benefit from the free school meals for infant-age pupils from this September, and that will also be extended for the first time to disadvantaged young people in college settings who previously, for no rational reason, were excluded from the entitlement that there was to free school meals for those in schools. I am pleased that this Government have resolved that very long-running injustice.
We are also working with business to ensure that it helps people to progress, earn more and have responsible terms and conditions. We are addressing exclusivity clauses in zero-hours contracts and are committed to the social mobility business compact. I am proud that, as a consequence of the work the Government have done and of the recovery of the economy, employment has increased by nearly 1.7 million. In just the past year unemployment is down by almost 350,000, and we have one of the highest employment rates in the history of our country.
Because we know that work is the best route out of poverty, our welfare reforms will incentivise even more people into work, and ensure that work always pays and that work pays more than benefits. We provide intensive, personalised support for parents who have been out of work for 12 months or more through the Work programme. To date, around 300,000 people on the Work programme have found lasting work. We are also supporting families with multiple disadvantages to get back to work through the troubled families programme, in order to help young people.
We cannot highlight the importance of social mobility and of tackling child poverty enough. They are central to the Government’s mission and to what the coalition hopes to achieve over our period of five years in government. Quite simply, no child should become a poor adult for the simple reason that their parents were poor.
I have set out the steps we are taking in early-years education and 16-to-19 education, and in trying to improve employment outcomes, but we know there is more to do. We have listened carefully to the proposals made by hon. Members and we are listening carefully to what comes out of Alan Milburn’s reports and the work of his commissioners. We will seek to build on the success so far, to make sure we break this unacceptable link between social backgrounds and success in life.
Hazel Blears
I record my thanks to the Backbench Business Committee for allocating time for this debate. I hope it will agree with me that the time was extremely well spent.
We heard a number of very high quality, well-informed, accurate and passionate speeches from Members on both sides of the House. I want to thank in particular the chair of the all-party group on social mobility, the hon. Member for East Hampshire (Damian Hinds), who again gave us a formidable tour de force of his data analysis. I like to think my politics are evidence-based. Occasionally he does manage to convince me, but occasionally my emotions also play a part in my political ideology, but I have great respect for the work he does in this area.
I also thank my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) for her contribution, and I would like to say to her that I hope electoral circumstances may result in her having the chance to achieve her undoubted potential to be a very successful Minister in future.
I thank the Minister for his response, his personal commitment and his passion for this area. He has acknowledged that a lot has been done and there is a lot more to do. That is a familiar phrase that we all should subscribe to.
I thank my hon. Friend the Member for Glasgow North East (Mr Bain), too. I had no idea he was a university admissions tutor. It is amazing how much information we discover about each other in these debates.
I thank the Chair of the Education Committee, the hon. Member for Beverley and Holderness (Mr Stuart), for his support in going to the Backbench Business Committee to request this cross-party debate.
My final thanks are to the commission on social mobility, and to a particular member of it. I would not normally single out a member of that commission, but David Johnston, chief executive of the Social Mobility Foundation, is a key member of it. For many years he has not just been talking about the problem; he has been running the Social Mobility Foundation. He and that organisation have helped thousands of young people become doctors, lawyers and engineers or get jobs in the finance professions. Those young people would never have got to university without the residential programmes, one-to-one mentoring and face-to-face careers guidance—all the things that we talked about today. My thanks go to David Johnston because he stuck at it.
That is the message for us on this agenda. It will still be here when we come and go. We have to stick at it and work together, as we can. In that way we will continue to make progress to ensure that everybody in this country has the chance to achieve what they are capable of and to do well. It is an incredibly optimistic agenda and one that I am delighted to be part of.
Question put and agreed to.
Resolved,
That this House has considered social mobility and the child poverty strategy.
Data Transparency (Banking)
(10 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Andrew Love (Edmonton) (Lab/Co-op)
The debate is starting a little earlier than expected, but I am pleased to see that all are present and correct.
The debate is about the voluntary agreement for the disclosure of bank lending data for every community in Britain, which came into effect last December and has been, on the whole, well received. Thanks are due to Members of both Houses, the British Bankers Association, Her Majesty’s Treasury and the seven participating banks and building societies—Barclays and Clydesdale and Yorkshire banks, HSBC, Lloyds Banking Group, Nationwide building society, Royal Bank of Scotland and Santander—for agreeing to work together to create a voluntary framework for the disclosure of bank lending data. I echo the words of the Minister and welcome the positive engagement of the UK’s largest lenders to make this agreement happen.
The first tranche of data was released in December 2013, the second in April 2014 and the next is due in a couple of weeks. Among the advantages of disclosure is that it clearly identifies the availability of bank lending in all communities—who the banks are reaching and who they are excluding. At the time of its announcement the Chief Secretary to the Treasury said that the agreement
“is a major step forward in terms of transparency and should encourage competition by helping smaller lenders to identify gaps in the market and allowing businesses to hold their local bank to account where they aren’t lending.”
This is an important first step, but today I will ask the Minister to go further.
For the Community Investment Coalition, the objective of the disclosure is to create clarity about which communities are well or poorly served by mainstream banking institutions and the action that is required to fill the gaps in areas that are poorly served. As a result, it is hoped that every adult household or business will eventually have access to appropriate and affordable financial products.
Bank data disclosure, as I understand it, means providing information about a range of banking activities in defined geographical areas. The data show the ways in which banks invest the money that the public deposit with them. Disclosure of lending data can also provide an opportunity to deepen understanding of market trends and refine products and services better to serve local markets. Moreover, data disclosure highlights whether the main high street lenders are concentrating the provision of credit in certain areas, leaving other areas to become credit deserts, with businesses and consumers in these areas struggling to access affordable credit.
The voluntary framework is a major step forward in terms of transparency, as the new data will allow the public to see clearly how the bank and building society sectors are serving the wider economy. Publishing data in such a detailed way will assist competition, allowing new entrants such as credit unions and community development finance institutions to identify where there is unmet demand and pursue new business in those areas.
Disclosure of lending figures will, it is hoped, clearly identify those who are effectively excluded from the banking system. That type of financial exclusion is often localised, meaning that the framework needs to disclose information on a local area basis, and hopefully in a way that is consistent with local measures of diversity and deprivation. Without that type of local area disclosure, communities are left in the dark on how their savings are being invested.
At the time of the launch in July, the Government indicated that they expected more lenders, including banks, building societies, credit unions and other types of finance providers, to sign up to the voluntary framework. What progress has been made on improving the coverage of the voluntary framework and what new lenders have been, or are being, signed up?
As part of the voluntary agreement, the British Bankers Association and the Council of Mortgage Lenders jointly publish quarterly aggregated data detailing the outstanding stock of lending that has been committed to customers in three different categories: loans and overdrafts to small and medium-sized enterprises; mortgages; and unsecured personal loans to individuals.
Each postcode sector is broken down by category to show the exact lending being made to each. Wherever possible, any figures for an individual lender that either could not be attributed to a specific sector postcode or had to be redacted for data privacy or other reasons have been added to the area totals. In a small number of instances, data privacy reasons prevent the attribution of specific amounts to certain postal areas. That means that aggregate figures might not be exactly comparable across different postal areas. Therefore, sector postcodes do not necessarily map across readily or exactly to alternative geographic classifications.
If we are to make the most of the data released by the voluntary framework, surely they must be truly comprehensive and presented consistently, making them easy to analyse. They must also include all lenders, large and small, other than possibly an exemption for the smallest providers. Only that will give a fully inclusive picture of lending in all communities.
That is borne out by the experience of the wide range of organisations that are beginning to use these data to identify gaps in the supply of lending. They include: universities and academics working on financial exclusion; local authorities and local enterprise partnerships looking to extend access to affordable credit to support economic growth; and decision makers developing effective approaches to support innovation in the supply of affordable credit and the provision of financial services to all communities and businesses. For example, Birmingham city council has already analysed its local data and is now working with partners to fill the gaps in lending, for instance by supporting the development of local credit unions and community development finance institutions.
In response to concerns regarding consistency in the format of the released data, it has been suggested that that could be overcome if the framework scheme were to be managed by an independent organisation such as the Office for National Statistics. What more can the Government do to ensure the consistency of the data disclosed in the voluntary agreement, and what consideration is being given to bringing in an independent body to manage the scheme?
The methodology used for data collection centres on the postal addresses represented by Royal Mail postcodes. The data published reflect borrowing in live postcodes and give an up-to-date picture of its geographic distribution across Great Britain. However, there are no figures provided for Northern Ireland, Jersey, Guernsey or the Isle of Man. What efforts are being made to extend the voluntary framework to include the whole of the United Kingdom, not just Great Britain? For as long as the framework remains voluntary, it is open to many financial services providers to choose not to participate. There is also the possibility that those currently participating will pull out, for whatever reason. What assurances has the Minister received on future involvement in the framework? Is consideration being given—
Mr Love
That rather surprised me, Mr Deputy Speaker. I should have realised that when we got to 5 o’clock that announcement would have to be made.
Is consideration being given to putting the framework on a statutory basis?
It is important to take considerable care in interpreting local-level figures, as they will not necessarily be truly representative of the current picture for lending as a whole. For example, personal loan figures for participating lenders together represent fewer than 30% of the total national unsecured credit market and only an estimated 60% of all personal loans. There are no figures for larger payday lenders or for credit unions. Similarly, SME lending figures relate only to borrowing through loans and overdrafts. Other forms of finance, including business credit cards and asset-based finance, are widely used by SMEs but are not included in the data. SME loans and overdrafts for participating lenders represent about 60% of the total national market for all lending to SMEs, but this does not include community development finance institutions. The picture for the mortgage market, which includes most buy-to-let activity, as well as borrowing by home owners, is slightly better, with participating lenders together reporting on about three quarters of the national market.
Recently, following the Minister’s predecessor’s speech to the Community Development Finance Association conference in Bristol, the Community Development Foundation wrote to him outlining the additional data sets that would help to better explain which communities struggle to access affordable credit. These include the number of applications and loans in each area; the demographics of applications, including age, gender and ethnicity; and, regarding the loan itself, the interest rate and length of the loan. Greater transparency on all these issues will help to inform strategy to promote competition. What steps is the Minister taking to ensure that the data enable an accurate understanding of patterns of lending and highlights communities that struggle to access affordable credit?
Recently, in a comment on the disclosure framework, the Minister, in launching the Business Banking Insight survey said that,
“postcode lending data has highlighted the more deprived areas where larger banks are often not willing to lend and that will enable; challenger banks, smaller building societies, credit unions and community development finance institutions to move into those areas and to offer finance to those customers who are crying out for support to make their business grow”.
With that in mind, what use is the Treasury making of the data on bank lending to promote greater competition and enable smaller lenders to pursue new SME business?
We would like to see further progress and a clear Government plan to increase the amount of data released, and a strategy to fill gaps in the provision of financial services where they exist. It is crucial that the Government and regulators start to use the data to inform policy and market interventions, and we would like to understand plans and time scales for this. Has the Treasury made any request to the Financial Conduct Authority to undertake an analysis of these figures as part of its objective to “have regard” to competition and accessibility to better inform policy and decision making? Is the Treasury developing a clear Government strategy to tackle the “credit deserts” in many of our communities up and down the country?
The release of more consistent and comprehensive bank lending data has the potential to make a significant contribution to tackling financial exclusion, generating more fairness in the provision of financial services, supporting the growth of the SME sector and benefiting consumers by opening the door to a more competitive market. I commend that to the House.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I am grateful to you, Mr Deputy Speaker, and to my hon. Friend the Member for Edmonton (Mr Love) and, indeed, to the Economic Secretary for allowing me to contribute to this brief debate. The Economic Secretary is a Minister of particular intelligence and sophistication, and I hope as a result she will be sympathetic to my hon. Friend’s request for clarity on whether the Financial Conduct Authority and, behind it, the Treasury and the Bank of England are really using the data on lending patterns that are being disclosed in order to identify the credit deserts across the UK which clearly exist.
One lesson from the United States, where similar disclosure of lending data takes place, is just how important the data are in identifying where credit unions or community banks—the community development financial institutions to which my hon. Friend referred—can help to plug the gaps. If the FCA or the Bank of England look with vigour at the lessons that can be learned from the data, that might help steer the work of the credit union expansion project being undertaken by the Department for Work and Pensions and the efforts of local enterprise partnerships to support CDFIs in plugging the lending gaps.
I support my hon. Friend in all the different points he made and urge the Minister to press the FCA to undertake open and rigorous scrutiny of the data following the forthcoming second disclosure, so that we can begin to get a sense of the emerging patterns and as a result better direct our resources to drive the expansion of alternative sources of lending in the credit deserts.
The Economic Secretary to the Treasury (Andrea Leadsom)
First, I congratulate the hon. Member for Edmonton (Mr Love) on securing this debate and presenting his case so eloquently. He was, of course, one of my partners in crime on the Treasury Committee, during which time together we held the Government to account. Therefore, given that this is our second debate together in as many months, I am very glad that he is doing just as good a job of holding the Government to account now that I am not on the Treasury Committee. I am grateful to him for that. The other thing that he and I share is a huge enthusiasm for greater competition, greater transparency and far greater choice and diversity of financial services for businesses and customers. We have worked together on that agenda for a very long time.
Before I get on to the hon. Gentleman’s specific points, I want to highlight the many measures that the Government are taking to try to improve that competition, choice and diversity. As he will know, we are currently consulting on whether to make the large banks provide referrals to challenger banks when they do not wish to lend to a small or medium-sized business. We are already looking at legislating through the small business Bill to require banks to share credit histories with credit reference agencies so that challenger banks with permission can look at other areas for lending. We are supporting peer-to-peer funding and crowdfunding.
Last week, in our bid to support the credit union movement, and quite apart from the funding from the Department for Work and Pensions, we put out a call for evidence to look at the future of the credit union movement and what is wanted from communities and the credit unions themselves. The Government therefore have a big agenda to promote precisely the transparency and competition on which the hon. Gentleman and I have worked very hard over the past few years.
The hon. Gentleman has raised a number of specific issues, but before turning to them I would like to provide a brief reminder of how far along we are with the work on postcode lending data and why we believe it is so important. As the hon. Gentleman has pointed out, the Government secured an agreement with the major banks last July to publish lending data across nearly 10,000 postcodes. It is worth reminding hon. Members that the measure has made the British banking industry into one of the most transparent in the world.
As the hon. Gentleman well knows, improving competition in banking is a No. 1 priority for many jurisdictions, not least the UK. The publication of the data will therefore play a big role in improving competition by enabling challenger banks, smaller building societies, credit unions and CDFIs to identify and move into areas that are not currently served by the larger banks. It will also mean that our economy is better served by their offering finance to customers who are crying out for support to help their business grow. I certainly believe that the project is vital, and that it will play a key role in improving lending in areas where it is currently lacking. I am sure that he agrees with that overarching sentiment.
I turn now to the specific points made by the hon. Gentleman and the hon. Member for Harrow West (Mr Thomas). On the comments of the hon. Member for Edmonton about expanding coverage across institutions, the Government made a clear commitment during the passage of the Financial Services Bill that the data would initially involve the lending of the seven major lenders. That decision was taken because of their dominance in the market. The Government also made it very clear that we intend to discuss with interested peers and the industry exactly how the data could be extended to cover other types of institutions, including banks, building societies, credit unions and other finance providers. It is, however, important to bear in mind that the cost of such a level of disclosure, particularly for smaller institutions, might be prohibitive and might increase the costs they pass on to their customers. We therefore want to consider the matter very carefully before we act.
With regard to expanding coverage across the country, the hon. Member for Edmonton will know that the first dataset did not include lending in Northern Ireland, due to the differing banking markets and reporting requirements for Northern Ireland banks. However, I assure him that the Government will ensure that any future extension includes the main Northern Ireland banks, and I confirm that the Government, with the British Bankers Association, are discussing with the Northern Ireland banks how the agreement might be extended to them.
I am sure that the hon. Gentleman will agree that it is important that due time is given for discussions to ensure that any agreement is proportionate and that data provided will be beneficial. I am also sure that he will welcome the news that, just yesterday, the BBA published composite bank lending data for Northern Ireland businesses and households for the first time. The Northern Ireland data have been sought after for some time, and their publication has been encouraged and helped by the joint ministerial taskforce on banking and access to finance.
The hon. Gentleman suggested that the framework in question should be managed by an independent organisation, such as the Office for National Statistics, but the BBA already collects and publishes a range of comprehensive data on lending to individuals, households and businesses, so it is very well positioned to agree the necessary standards on data release and accessibility. However, as he would expect, the Government will keep the situation under review.
Andrea Leadsom
Yes, the Government are keeping the matter under review, and we will discuss exactly that with the BBA.
The hon. Gentleman expressed concern that postcode lending data do not give a full picture of lending in the UK, and suggested that a wider set of lenders and products might be included. For example, he noted that SME figures represent about 60% of the national market, covering loans and overdrafts only. Other forms of finance, such as business credit cards and asset-based finance, are not included at this stage. He is therefore right that it is important for public data to be as broad as possible, but as I have mentioned, we must bear in mind that, particularly for smaller institutions, the cost of making such disclosure might be prohibitive and might increase the costs passed on to customers and businesses. It is important to see postcode data as part of a wide range of data to which the Government, banks and businesses have access, on top of data from the Bank of England, the BBA and other surveys.
Those other surveys, including the SME Finance Monitor and the new Business Banking Insight, can also be of real importance. The latter, which the Government announced in the Budget and I launched just over a month ago, is a really useful tool for UK businesses, as it lets them see which banks are in a good place to offer them the products and services they need at the right prices and will give them a decent service in their area and their particular market.
Finally, the hon. Gentleman asked what use the Government are making of the data on bank lending and whether we have a clear strategy for tackling any credit deserts in UK communities; the hon. Member for Harrow West also raised that issue. I reassure them both that the Government regularly interrogate these data as part of our wider analysis of bank lending conditions across the UK. However, the full usefulness of the data will only really be known once we have been able to identify longer-term series and trends.
At the current time, the data do not appear to show any regional imbalances, but we will continue to monitor that. As the dataset grows and trends become more readily identifiable, we plan to make increasing use of the data. We will of course take action on the issue if we think it is needed.
Mr Thomas
Will the Minister give us a little more clarity on who is analysing the trends? I ask, having asked the Financial Inclusion Centre specifically to give me a sense of the bank lending data for London; its analysis suggested that there was a wide disparity among different postcodes—potentially 50% to 300% of the average per capita lending per postcode. As my hon. Friend the Member for Edmonton mentioned, my sense was that there was a need for one particular organisation to analyse those data.
Andrea Leadsom
As I have said, at the current time the data do not seem to show any major regional imbalances, but my officials, the Bank of England, the BBA and the banks themselves are looking at the data. If the hon. Gentleman wants to write to me on a specific point where he believes that there may be evidence of a distinct imbalance I would be delighted to look into it and respond to him. We will continue to monitor the data and ensure that as trends become more identifiable we can make more use of the data to assess potential areas where there is a lack of banking facilities.
In conclusion—
Mr Love
I apologise—when the Minister said, “In conclusion,” I thought I had missed my opportunity. The Financial Conduct Authority has an objective of looking at particular areas, specifically for the purpose of researching into credit deserts. Have Treasury Ministers had any discussions with the FCA on that?
Andrea Leadsom
I assure the hon. Gentleman that officials meet the FCA on a regular basis, as do I. If it will make him feel better, I shall make a point of raising that issue with the FCA the next time we meet to ensure that it is looking at it carefully.
I thank the hon. Members for Edmonton and for Harrow West again for raising this important issue. As they know—the hon. Member for Edmonton certainly knows this—transparency and competition are central to the Government’s work on financial services. My interest lies very much in that area, so the hon. Member for Edmonton and I are aligned on that. Although I am sorry that I cannot give him the answers that he wants right now, because the new policy has not been in place for long and we do not have enough material as yet and because of our natural reticence to increase the costs for smaller institutions in the early days, I hope that I have reassured him that we will continue to monitor the data and look for ways to improve the service. Ultimately, I am confident that we will end up with a banking system that better serves people and businesses up and down the country.
Question put and agreed to.
Ministerial Correction
(10 years, 5 months ago)
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Electoral Register
(10 years, 5 months ago)
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Chris Ruane
To ask the Deputy Prime Minister if he will consider the merits of ring-fencing funds allocated by his Office to local government for the purpose of voter registration.
[Official Report, 12 May 2014, Vol. 580, c. 359W.]
Letter of correction from Greg Clark:
An error has been identified in the written answer given to the hon. Member for Vale of Clwyd (Chris Ruane) on 12 May 2014.
The full answer given was as follows:
Greg Clark
Both the paper forms and the new online registration channel to be used under individual electoral registration have been designed to meet a wide range of accessibility needs. The Government has no current plans to commission such research, but the Electoral Commission is currently aiming to publish its assessment of registration rates under individual electoral registration in July 2016.
The correct answer should have been:
Greg Clark
In the 2010 spending review, the Government ended ring-fencing of all main revenue grants from 2011-12. The removal of ring-fencing from local government grants has given councils the freedom over the money they receive and allows them to work with their residents to decide how best to make their spending decisions.
As part of the preparation for the transition to individual electoral registration (IER), the Government has paid grants to EROs and in advance of this sought a signed declaration from all Section 151 officers in local authorities in England and Wales, and electoral registration officers in Scotland, agreeing that they would not reduce the level of funding to electoral registration over the transition to IER.
Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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
North and West Africa (UK Response)
(10 years, 5 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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
Sir Richard Ottaway (Croydon South) (Con)
It is a pleasure to have this important debate under your chairmanship, Mr Amess.
Two weeks ago, the Prime Minister warned against the threats posed by extremists fighting in Iraq and Syria. He said:
“The most important intervention of all is to ensure that those Governments are fully representative of the people who live in their countries, that they close down the ungoverned space and that they remove the support for the extremists. We must do that not only in Syria, but in Iraq, Somalia, Nigeria and Mali, because these problems will come back and hit us at home if we do not.”—[Official Report, 18 June 2014; Vol. 582, c. 1108.]
Those words remind me of the Prime Minister’s statement in January 2013, just after the al-Qaeda-linked attack on the In Amenas gas facility in Algeria in which 39 foreign workers, including six Britons, lost their lives. The terrorists hit Algeria a couple of days after France intervened in Mali in order to push back Islamists. At that time, the Prime Minister said:
“Those who believe that there is a terrorist, extremist al-Qaeda problem in parts of north Africa, but that it is a problem for those places and we can somehow back off and ignore it, are profoundly wrong. This is a problem for those places and for us.”—[Official Report, 18 January 2013; Vol. 556, c. 1167.]
He warned that those terrorists posed an existential threat.
That threat, and the spread of jihadist extremism in Africa’s western Sahel-Sahara region, was considered by the Select Committee on Foreign Affairs, which I have the privilege of chairing, and we published a report entitled “The UK’s response to extremism and instability in north and west Africa”. We considered three case studies: the French intervention in Mali, the In Amenas gas facility attack and the emergence of Boko Haram in northern Nigeria. Crises in Mali, Algeria, the Central African Republic or even Libya do not ring a bell with much of UK public opinion. The abduction of more than 200 Nigerian girls by Boko Haram is an exception, but only due to the global social media campaign and international press coverage. Sadly, the girls have not yet been rescued, and, worse, the kidnappings continue.
The situation in north and west Africa is serious. The region has become a new front line in the contest with Islamist extremism and terrorism, and those threats must be addressed, not only by regional powers but by the west. African problems will not be fixed only with African solutions—not yet, anyway. The African Union and its affiliated regional bodies do not yet seem able effectively to impose peace on a troubled area. Latent or open clashes can suddenly turn into far-reaching conflicts that can result in general instability, kidnappings, sexual violence, the imposition of sharia law, humanitarian crises and even mass killings.
As we look back over the events of the past 12 to 18 months, what is striking is the speed with which things change and how new groups appear. According to the United Nations, terrorist acts in the Sahel and the Maghreb increased by 60% in 2013 compared with 2012, reaching the region’s highest annual total for the past 12 years. This is not a criticism but an observation: the UK and other western countries seem to have been caught out by the eruption of successive conflicts in Africa’s western Sahel-Sahara region. The region has always been subject to local ethnic rivalries and power plays between states, and now it has become a powder keg. Jihadists and drug smugglers have taken advantage of its marginalised areas and porous borders and have capitalised on economic misery, chronic unemployment, weak state security and popular anger with corrupt governing elites.
The downfall of the Gaddafi regime in Libya has only worsened the situation. The western military intervention was a success in that it stopped Gaddafi bombing his own people and thus averted a humanitarian disaster in Libya, but international powers, including the United Kingdom, failed to foresee and mitigate the regional fallout. The former regime’s arms have spread all over the region, old mercenaries have made alliances with jihadists and extremists have settled in southern Libya. Libya has also become the busiest transit route for illegal immigration from Africa to Europe.
On the UK’s role in the situation, the UK Government pledged in January last year to increase their political security and economic engagement in north and west Africa, but in all honesty, since then, their actions have not matched their ambitions. The evidence points to a mismatch between the Government’s rhetoric and the UK’s scant diplomatic resources in the region. If the Government want to engage more effectively in the region, they must accumulate deeper specialist expertise and knowledge about the western Sahel-Sahara, and they must expand their diplomatic network in the francophone part of the region. Here the UK’s soft and hard power could be of great help, but the UK cannot do it on its own; it must co-operate closely with other western powers.
We as a Committee advocate that the UK should press for an international accord aimed at bringing security and stability to the region. The prime responsibility for implementing that agreement should rest with the tripartite leadership of France, the UK and the United States, assisted by the European External Action Service. This is a golden opportunity for the EEAS to get its teeth into something and come up with a solution. The three powers have already worked together, when France sent its troops to Mali; both the UK and the US supported Paris with logistics and technical assistance. Although Operation Serval has routed the jihadists from their northern stronghold, the fight is not yet over. Recent events in the city of Kidal, where the Malian army was humiliated by Tuareg separatists, have forced France to prolong its military mission in the country.
Obviously, the UK must co-operate with regional powers on foreign security and military policies. Algeria and Morocco, two stable countries in the region, are key to delivering stability there. They are natural partners for the UK and other western countries. However, the issue of western Sahara still divides them, and its resolution should always be on the Foreign and Commonwealth Office agenda. The same goes for Nigeria: the UK should assist Nigeria in its battle against Boko Haram, and it is rightly doing so. However, we should never forget that country’s poor record on human rights, its lack of leadership and widespread corruption and the brutality of its security forces.
A new opportunity for military co-operation will open by the end of the year, following the final withdrawal of UK troops from Afghanistan. I think I am right in saying that it will be the first time for many decades that we have not had an overseas deployment. We thought that the suggestion made by the previous Chief of the Defence Staff—that we should seriously consider the possibility of sending some of those well-skilled soldiers to training missions in Africa—was a good one, and I am pleased that the Minister, in his evidence to us, confirmed that the CDS was not just flying a kite. The UK is already providing military training to Kenya, Mali and Somalia, and it would assist the security and stability of fragile states, which could lead to assistance with good governance. Once stability was achieved, we could move on to economic aid packages. I think that that would contribute a lot to providing stability and security in the region.
Aid development is an issue that needs to be reviewed. All the evidence points to the fact that in some places, international aid development programmes may have become part of the problem instead of the solution. That is not to decry the good intentions of the aid providers, but in Mali the Committee was concerned to note that western help may have inadvertently inhibited the development of responsive and responsible government and entrenched corruption in the country’s political culture. We also believe—this is an old chestnut, but it is highly relevant—that development assistance should be redefined. At present, the OECD describes development assistance as
“promotion of the economic development and welfare of developing countries”.
We believe that in a rapidly changing world, security assistance should be included in that definition. Such an enhanced definition would guarantee financing for the security of inland borders, as well as funding for training and non-lethal equipment.
Illegal immigration facing southern Europe is another pressing issue. Despite the family planning programmes that the UK is now funding, there are unsustainable levels of population growth right across the Sahel. Millions of young men and women are being born into an economic desert, with little or no economic prospects, which is leading to increased political instability, organised crime and the spread of radical views. It also pushes people to risk their lives to find a safer place to live. Unfortunately, that often turns into human exploitation and sometimes death. Only last week, the Italian navy rescued more than 5,000 migrants who were trying to cross from north Africa. On one boat carrying 600 people, the navy discovered 30 bodies. That has echoes of the incident off Lampedusa last winter, when hundreds of dead people were found in a boat of migrants.
Illegal immigration and human trafficking from north Africa into Europe is a growing problem facing more and more EU countries. What really bothers us is the fact that the European Union does not seem to have a clear strategy for dealing with it. My question to the Minister—it was posed in our report, but I am afraid that the Foreign Office did not really take it up in its response—is this. If a boatload of refugees is found in the middle of the Mediterranean, is the policy to shepherd them to safety or to encourage them to turn back to the port they have come from? That is a fairly straightforward question.
We need quick action. Islamic extremism is a dynamic phenomenon. All eyes are now on advances in Iraq and Syria by the Islamic State of Iraq and al-Sham, but we should not forget the spread of extremism in north and west Africa. Concerted and quick action is a must, so I urge the Government to outline soon their strategy for dealing with the regional insecurity and crawling terrorism that are blighting a continent with which Britain has had so many connections over the centuries.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
The Foreign Affairs Committee report is important, and unfortunately it did not get the coverage that it deserved when it was published. I wonder whether that would still be the case today, given everything that has happened in the region, especially in Nigeria.
The spread of jihadist groups in the region is becoming more and more apparent, and it represents a new front line in violent extremism, which is spreading and becoming increasingly assertive and networked. We are concerned by the seeming failure of the states concerned and the international community to anticipate events and respond quickly, despite the statement in the Government’s response to our report that the UK and its partners had identified Mali, the Central African Republic and the wider Sahel region as being at risk of conflicts several years earlier due to the factors the Committee identified in our report. Those factors included weak governance, failure to address historic disputes, ungoverned spaces and organised crime, as well as the presence of terrorist groups. That prompts the question, why was more timely action not taken? What lessons can be learned and what is to be done now to stem the escalation of those problems?
Among the report’s recommendations, we make the point that the UK Government should match the rhetoric of their ambitions to increase their political, security and economic engagement with the region with substantive diplomatic input and resources. Even within the current financial restraints, they should make it a priority to support humanitarian efforts where people, especially women and girls, are being displaced and subjected to the most heinous atrocities. The prioritisation of such action is entirely consistent with the Government’s initiative on tackling violence against women and girls in conflict, and I know that the Department for International Development is doing a lot of work in northern Nigeria. Such action is also a priority if we are to protect the UK’s long-term interests and play a leading role with France and the US in developing an international security and stability policy for that region.
Although I am a member of the Foreign Affairs Committee, I joined the Committee mid-way through the inquiry, so I participated mainly in the aspects of the report that relate to Nigeria. The Committee’s visit to Nigeria was one of the most shocking experiences I have had during my time as a member of the Defence Committee and, now, the Foreign Affairs Committee. There is no doubt that violent extremism has taken root because of the inadequacy or absence of state institutions and the abandonment of huge sections of the population in remote and marginalised—mainly Muslim—areas, where the need to address socio-economic disadvantage has been met by complacency, even though Nigeria is the richest country in Africa. The country has been unable to provide security for its people.
Government officials in Nigeria informed us during our visit that measures will be taken to tackle unemployment and poverty, and they said that they recognised the link between deprivation and extremism, but more action is needed, rather than words. The fact that the Government have undertaken to work with international and regional bodies to build resilience and capacity to prevent state structures from being overwhelmed is welcome, but those structures have already been overwhelmed. In Borno state, it has been reported that Boko Haram has free rein in the area. It is doing what it likes, when it likes. Far from defeating those forces, the state of emergency declared more than a year ago in north-east Nigeria has failed to curb the Islamist insurgency and attacks have increased. In the past couple of months, Boko Haram has attacked several military bases. It is extending its reach beyond its remote north-eastern heartlands, and on two occasions has bombed a bus terminal in the capital, Abuja. Only last week, it bombed an upmarket shopping district in the capital, killing 21 people. As we all know, in April it kidnapped 276 schoolgirls from Chibok, an event that shocked the world.
The military have no public credibility because of their record of human rights abuses, and they lack modern equipment, training and motivation. They also lack air cover, and they requested help in that area from the US and the UK while we were in the country. Compared with the size of the population, the military are small in number and do not have the capacity to prosecute large-scale counter-insurgency operations. As the Chair of the Foreign Affairs Committee, the right hon. Member for Croydon South (Sir Richard Ottaway), has said, there are constraints on the military support that the UK can provide because of human rights concerns, which have been highlighted by Amnesty International and Human Rights Watch. The sale of lethal weapons is prohibited by UK law because of those concerns. That is a Catch-22 situation, because without training, the Nigerian military cannot get equipment or dramatically improve their capacity. Without those, they will remain weak in the face of the most ruthless and determined attacks from Boko Haram.
The UK has a large Nigerian diaspora and trading links with Nigeria, so UK bilateral input to that part of the region is particularly relevant. I therefore support the Committee’s recommendation that the UK Government should provide as much security and intelligence as is consistent with their human rights values. However, years of intensive commitment will surely be required for that to have any real effect. I wonder how much the international community and the regional groupings, including the African Union, are committed to that.
Inadequate military capacity is only one of the impediments to addressing the insurgency. Political will, accountability and credibility are also key to regaining stability and preventing the continuation of radicalisation. At the moment, the political leadership of the three states in the north-east is aligned with the opposition All Progressives Congress. On 14 May, the BBC reported that Mr Ledum Mitee, a former activist from the same region as President Goodluck Jonathan, had been quoted as saying:
“People around the President, his closest allies, all tell him this Boko Haram is manufactured by the northerners to play politics… This leads him to distance himself from the whole affair.”
He also said that the military commanders have to play politics because if
“they give the impression it is a very bad situation, they risk being branded incompetent, so they give a less bad picture to their bosses.”
He went on to say that when the crisis erupts, no one is able to deal with it effectively because it is so confused. That is just one person’s analysis, and he is probably no friend of the president, but if that was the situation previously, recent developments have surely proved that Boko Haram is only too real.
At the meeting last night, chaired by the Speaker and attended by Nigerian Finance Minister Ngozi Okonjo-Iweala, I was pleased to hear that the president has been meeting with people across the political spectrum and across civil society to bring the people of Nigeria together at this time of crisis. She also said that the search is being stepped up with a greater and better equipped Nigerian army presence to take on Boko Haram in the northern states.
The recent relentless violence—including a bomb in a vehicle carrying charcoal that exploded in a busy market in north-east Nigeria, killing at least 20 people—has led to widespread concern, including in the capital, Abuja, and that is showing itself in public demonstrations. International pressure over the kidnapping of the girls from Chibok has forced the Nigerian Government to take notice and allow advisers from China, France, Israel, the UK and the US to assist its forces, but their presence is likely to be limited to assisting the search for the kidnapped girls, and will not include a general role in improving the Nigerian military’s capacity, over and above what is already being done.
I was pleased to hear from my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) that President Goodluck Jonathan has announced a plan to co-ordinate international anti-terrorist capability in the fight against Boko Haram and al-Qaeda-linked groups. That is precisely what our Committee has asked for—not just in Nigeria, but in the whole north-west Africa region. I add my support to my right hon. Friend’s request that the UK Government support the initiative.
Mike Gapes (Ilford South) (Lab/Co-op)
I want to highlight a wider aspect of this issue: the ongoing conflict within Islam, which is taking place not only in north and west Africa; it is a global struggle. It is not helpful to refer to moderates and extremists, because there are complex historical religious disputes and power struggles in which individuals are using religion to try to gain political or economic power.
There was a justified intervention in Libya in 2011, to save the people of Benghazi from being killed, as Gaddafi intended, house by house, like rats. One unfortunate consequence of that intervention was that the country, which was in many senses an artificial creation—as are many countries in the middle east, too, lines having been drawn on maps in the colonial period—has ceased to function in any way as what we would regard to be a state. Because of the weaponry stockpiled by Gaddafi’s regime, and the way he used mercenaries and citizens of other states as part of his elite forces, an unintended consequence of that intervention has been that masses of weaponry have come out of Libya, much of it going to other parts of north and west Africa, but some is going to Syria, Iraq and elsewhere in the Muslim Arab world.
We have already heard mention of the instability in Mali as the Tuaregs swept across the desert and reinforced the incipient disaffected insurgency in the north of the country. I went with the Select Committee to visit both Mali and Nigeria, and we also visited Algeria. It is very revealing to visit a country and get the sense that the lines on the map have created an absolute nightmare. In terms of its borders, Mali must be the strangest country of almost any. There is a round part at the bottom and a triangle going out at the top. There is a completely ungovernable desert area, called Azawad, and the River Niger bending round. All the population lives alongside the river, and there are huge areas of desert and ungovernable space. In any state where the mass of the population is in the capital in the south, I do not know how any Government would be able to govern areas hundreds or thousands of miles away, with virtually no people—except small communities living in areas with access to water, and nomadic populations—and lots of poverty. How any Government, even the most advanced, with massive economic resources, would be able to govern that space effectively is beyond me.
The Chairman of the Select Committee, the right hon. Member for Croydon South (Sir Richard Ottaway), quite rightly referred to the attack on the BP facility in In Amenas in Algeria. People swept across from desert areas and launched a terrorist attack; workers were taken hostage and killed, and there was the terrible long-term consequence of instability in the region.
We now have a nexus of robbers, bandits and criminal bands who would normally be smuggling tobacco or other products across the desert, or smuggling people to the coast to try to board the very same vessels heading across the Mediterranean that were referred to earlier, and that nexus is linked to Islamist ideology and the weaponry that has come out of the Libyan conflict. The Governments in the region face enormous, insurmountable problems.
Mark Hendrick (Preston) (Lab/Co-op)
My hon. Friend said “linked”; what is the link between criminal gangs that are smuggling, arms dealing and dealing in drugs from south America, and those who claim that their movement is about faith, ideology and the Islamic religion? What is the connection between the two? I cannot see one, so how does my hon. Friend make that link, and, for that matter, how do they make links with each other?
Mike Gapes
Unfortunately, there are a number of examples of groups in different parts of the world that have used illegal activities to finance their organisations. The pattern is not just prevalent among Islamist groups; the IRA used to rob banks, so such criminal activities are not confined to Muslims. I believe that some people use the ideology and label as a way of getting external support. When we were in Nigeria, we were told that Boko Haram had originally started as a localised conflict group, but managed to get itself endorsed as an al-Qaeda franchise. Presumably that means that people in parts of Saudi Arabia may be indirectly financing those groups; that is something that we have to confront.
The essence of the point I am trying to make, which the former Prime Minister Tony Blair correctly made, is that there is an ideological aspect. One of the problems that we face, as we touched on in our report, is that we are not only dealing with what is happening in the region; there are diaspora communities, as has been said, but there are also people who have been radicalised by the internet. There are also people who have come back from conflicts to which they went as foreign fighters, and of course there are people who have converted. The terrible murder of Lee Rigby was carried out by people who were born into Christian families from Nigeria but who, at a later stage, converted to become part of the same radicalised, Islamist terrorist network. The roots of the problems are therefore complex, and they are with us not just this year, next year or even next decade; they are probably with us for decades. Those of us who believe in societies in which men and women are equal, in which we do not discriminate and in which minority religions are protected have a difficult dilemma. My hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) referred to that dilemma when she talked about the human rights problems in Nigeria.
The same argument applies—I referred to this in our debate on Africa a few weeks ago—to the attitude that the British Government should take to the situation in Egypt. The best can be the enemy of the good. We can insist on stepping back because things are difficult, or because we do not want to be associated with a Government with whom we do not agree on all matters, but such Governments are infinitely better than societies that are either ungoverned or taken over by Islamist, al-Qaeda-linked terrorist organisations, or worse. That is a recipe for disaster.
People who think that all the world’s problems were caused by the 2003 intervention in Iraq will not agree with what I am about to say, but we are dealing with fundamental issues that are related to a conflict within Islam that goes back decades or centuries. We cannot solve that conflict from outside, but we can at least try to help people whose view is closer to that of western European and north American society. Given that Islam is a religion within our country, we cannot sit on the side and ignore it. The radicalisation and de-radicalisation of young men, and some young women, in our European and British society is part of the domestic debate in this country, too.
What goes on in north and west Africa also affects us. The Prime Minister is right that we have to engage on those issues as internationalists, and as people who believe in human values and defending women’s rights, the right of girls to go to school and all the other things to which we agreed when we signed the universal declaration of human rights, which was written by Eleanor Roosevelt and a few other people in 1948. Those values are under attack from activities not only in north and west Africa but in other parts of the world. Countries such as Egypt, Nigeria and others therefore need our support and solidarity as they engage with such difficult issues.
Finally, non-intervention also has consequences. We will see spill-over consequences in neighbouring states if we sit back and say that it is too difficult: “Some 170,000 people have died in Syria—well, it’s too difficult. Nine million people have been internally displaced or made refugees—it’s too difficult.” The same issue could arise if extremist Salafists destabilise the Sinai peninsula. What if, as a result, a more extreme situation arises in Gaza? I am still in Africa when I talk about Sinai, but I do not think I am when I talk about Gaza, although it is a complex issue. We are able to understand those issues, but nevertheless, for perhaps understandable reasons, there is great reluctance to address them. People ask why we should get involved. The reason why we should get involved, and why we should support people who are working for equality of men and women, for girls to go to school and for human rights, is because these things affect us, too.
I recognise that our report did not get the publicity it deserved, but the people who look at these issues in detail will understand that the report makes a valuable contribution to the debate and raises questions for the Government, particularly on our co-operation with other partners. We were right to support Operation Serval, the French intervention in Mali, and we are right to be involved in the European Union training mission, but much more needs to be done, not just in Mali but in other countries in the region. One country that has not been mentioned is the Central African Republic, where there has been terrible Christian-Muslim violence. As a permanent member of the UN Security Council and a member of NATO, the European Union and the UN Human Rights Council, we have an important international responsibility to ensure that the world does not forget and assists countries in north and west Africa.
Mark Hendrick (Preston) (Lab/Co-op)
The Chairman of the Foreign Affairs Committee, the right hon. Member for Croydon South (Sir Richard Ottaway), rightly highlighted the three case studies in the report: Mali, Algeria and Nigeria. We wanted to establish the principal causes of the extremism that we saw in those countries and what we, in Britain, could do about it. We found a heady mix. As I am sure is of no surprise to many people in the Chamber, the combination of poverty, inequality, corruption and misgovernance contributed to the situation we found in Africa. Those things are not unique to Africa, and they occur in the middle east, Asia and many other parts of the world where terrorism is beginning to flourish. They are a recipe for instability.
If we look back to 19th and 20th century Europe, we see that, from the beginning of the industrial revolution through to the nuclear age, there was affluence and wealth but a huge difference between rich and poor. That mix spawned the revolutions and instability of those centuries. We are seeing the same in the 21st century, but it is much worse and on a global scale. We particularly see that in Africa, where there is newfound wealth from oil, gas, valuable materials, diamonds and gold. Africa has become a battleground extraordinaire between rich and poor because it is a continent where, in many ways, economic development seems to be going backwards while there is huge wealth and potential prosperity from which very few people benefit.
Different things happened in our three case studies. There was French intervention in Mali. In Algeria we particularly looked at the In Amenas incident, and I still get inquiries to this day from people who work for oil companies attached not only to Algeria but to other parts of north Africa. I can draw on what members of the Committee learned from travelling to Algeria. The third country that we looked at, Nigeria, has hit the headlines at the moment. Visiting Nigeria had a big impact on me, as it did on my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne). To see the rampant and explicit nature of the terrorism in northern Nigeria was indeed a shock, and of course since our return it has become much worse; I will refer to that development later.
One of the conclusions of the report is that north and west Africa has become a new front line. We all knew about the existing front line. In the east, it started around Chechnya, in what was a southern part of the Soviet Union; it reached through to the middle east and north Africa; and it covered Somalia in eastern Africa. Now it has extended across to north and west Africa, the region that we are considering today. It is an arc reaching from north-eastern Europe through the middle east and across the whole of Africa, and it is encircling Europe. The UK is obviously a bit further afield because of our geographical location, and I will discuss the UK later. Nevertheless, the effect is being felt not only in mainland Europe but in the UK, as we are already beginning to see; my hon. Friend the Member for Ilford South (Mike Gapes) mentioned that earlier.
The report outlines many of our findings, but let me go through some of the events that have taken place in Africa this year alone. I believe that there is no end in sight to the current instability in the region of north and west Africa, particularly in the three countries we looked at but further afield as well. In Libya, we have seen continued instability, with political assassinations and attempted coups, and there is now fighting in the capital between the rebels and the army. On 11 January, the deputy Industry Minister, Hassan al-Droui, was shot dead during a visit to his home town of Sirte, which is east of Tripoli. The identity of the shooters is still unknown. On 20 February, Libyans went to the polls to elect a panel to draft a new constitution. Just 1.1 million of the 3.4 million eligible voters went to register, compared with the more than 2.7 million people who participated in Libya’s first free election in July 2012.
When Labour was in Government and Mr Blair went to embrace Colonel Gaddafi, Libya quite openly and willingly discarded its nuclear weapons. We thought that would possibly be a new beginning in Libya. Since then, however, we and the French have intervened in what was the beginning of a civil war. Afterwards, when we thought we had what we would call a result in Libya, the situation became even worse, and currently there is great instability.
Two coup d’état attempts have been made in 2014 by forces loyal to Major General Haftar, the commander of the Libyan ground forces. First Haftar took control of Libya’s main institutions, before announcing on TV that he had suspended the General National Congress and the Government and made a constitutional declaration. On 18 May, it was reported that the Parliament building had been stormed by troops loyal to him.
As my hon. Friend the Member for Ilford South said, there are consequences of intervention, even if it is very difficult to say what they are. Then again, we know the consequences of non-intervention, because the people of Benghazi would have been slaughtered by Colonel Gaddafi’s forces if the west had not intervened in the way that it did and he had remained in power.
We have seen the ousting of the sitting Prime Minister, and on 11 March the rebels sold oil to North Korea; the Morning Glory tanker reportedly took at least 234,000 barrels of crude oil there. It was the first vessel to have loaded oil from a rebel-held port since the revolt against the Tripoli authorities erupted last July. Such unchecked activities are going on in the background, and a rogue state such as North Korea can receive support from a country such as Libya. There has been further fighting by rebels in Libya, too. We could not have predicted what is going on today, and that is the problem with intervention.
The French intervened in Mali. In May, the ceasefire was broken with clashes between the two sides in the northern city of Kidal, which killed at least 36 people. Mali’s army launched an operation to seize Kidal but was defeated by the rebels, who then seized two more towns. Also in May, the fragile truce with the Tuareg National Movement for the Liberation of Azawad separatists broke down in the north of the country, and the separatists seized control of Kidal and the towns of Menaka, Aguellok, Anefis and Tessalit.
In Nigeria, things are also getting worse. On Tuesday, the military said that it had broken up a Boko Haram cell that had masterminded the kidnapping of more than 200 schoolgirls in April, but hours before that a bomb blast struck a busy market in Maiduguri, the capital of the Islamist insurgents’ home state of Borno. At least 2,000 people have been killed this year, compared with an estimated 3,600 in the four years since the insurgency began. This year alone, there have been 20 attacks by Boko Haram that have been officially reported, in which at least 1,158 people have been killed, and an estimated 12,000 people have died so far in the five-year insurgency.
As I said at the beginning of my contribution, the link between economic inequality and extremism is well known and well developed. Nigeria has the resources to beat Boko Haram if it was determined to do so, but most of its staggering oil wealth—up to $70 billion annually—is held by a small, politically connected elite, who remain insulated from Boko Haram’s terror tactics and seem almost indifferent to the war. As far as many people in Lagos are concerned, Boko Haram is Muslims killing Muslims. Those people in Lagos are Christians, so do they care? No, they do not. That attitude permeates the political realm in Nigeria.
When we were in Nigeria and spoke to people there, we learned that Nigerian MPs are paid a salary 10 times that of a Member of this House, and if they are not corrupt people think that there is something wrong with them as a politician. It is the sort of society where corruption is endemic and self-serving politicians are rife, so what is going on in the north of the country is of little or no consequence to people in Lagos.
Nigeria has nearly 16,000 millionaires, a number that has jumped by 44% in the past six years. As I have said, much of the wealth is concentrated in Lagos, Nigeria’s biggest city, where the northern rebellion by Boko Haram feels like a distant rumour. The divide between the Christian south and the Muslim north is huge, and the extent of relative poverty and inequality in the north has led several analysts and organisations to argue that socio-economic deprivation is the main factor behind Boko Haram’s campaign of violence there.
The communities of northern Nigeria are being wrecked by poverty, deteriorating social services and infrastructure, educational backwardness, rising numbers of unemployed graduates, massive numbers of unemployed youths, dwindling fortunes in agriculture and the weak and dwindling production base of the northern economy.
As for Mali, after Gaddafi’s fall in Libya the Tuareg people who had fought for him went home to Mali. Poor and with no livelihoods, within months they had tipped northern Mali into full-scale armed rebellion and there was a takeover of the region by Islamist fighters. The Tuareg have traditionally been a nomadic people with little personal wealth.
As I have said, Libya is reliant on oil and much of the current fighting is about the oil revenues going to the capital and not to other parts of the country. There is a strong argument in many places for greater autonomy. What the Tuareg separatists in Mali, Boko Haram in Nigeria and the Islamist rebels in Libya all have in common is a desire for their own state, as we have seen in Syria and Iraq with ISIS. Extremist as they may be, they feel that they are not getting a fair deal from the existing establishment. A lot of that stems from the growth inequalities that I have spoken about. Ultimately, they desire to govern their own affairs.
In Mali, the separatist movements demand greater autonomy for the north, which they term Azawad, as my hon. Friend the Member for Ilford South mentioned. Yet Governments in the region continue to be mistrustful of Islamists in politics, as they would put it. The Prime Minister of Mali, Moussa Mara, said:
“Say we give the Kidal region more resources and a lot more decentralized power, and they elect a jihadist to lead Kidal. That means we would have given our territory to jihadists, and democratically. This is what we want to avoid”.
A similar sentiment is offered by many Governments throughout the region and the throughout the west.
We know that boundaries in many of these countries do not reflect historical tribal land occupations, religious differences that exist between groups and locations of resources. In the aftermath of colonialisation, the development of cities and the exploitation of resources do not take account of population needs. That is the reason for the current conflict.
What can we do? Diplomatic effort by the UK in Africa may have a little effect, but many African countries remember the colonisation of Africa by the United Kingdom. As much as Britain has good intentions, given that history, it is not always trusted in Africa.
We have tried intervention in Libya and Iraq. As my hon. Friend the Member for Ilford South said, we have also tried inaction sometimes, and non-intervention, for example in Syria, although that is not a response. It seems contradictory and inconsistent to have invaded Iraq, as we in the west did with the Americans, where there were no weapons of mass destruction and no chemical weapons, but not to have invaded Syria when we had the option to do so, albeit from the air or by helping separatists, when there were chemical weapons.
Maliki is blaming Saudi Arabia and Saudi Arabia is blaming Maliki. In America, the Republicans are blaming Obama and the liberals are blaming Bush. Everybody is blaming each other when looking at the separatists, whether ISIS or terrorist operations in Africa. Everybody in every country has to take some responsibility.
Aid is helpful if it is targeted, but there are governance problems and corruption. In Africa and elsewhere around the world, post-colonialism, there was a move towards nationalism, whether in Africa or in the Arab middle east—Assad in Syria, Gaddafi in Libya, Mugabe in Zimbabwe. However, many nationalist leaders have, as a result of impoverishment and inequalities, now been swept away by religious movements. People are now saying, “Perhaps we should have supported Gaddafi, Saddam Hussein or Assad, because what we are seeing now is much worse.” We will never know the answer. However, we are now sure that pure military intervention is no solution.
A long-term solution may be to shape events, win hearts and minds and try to secure economic development where it is needed, but that cannot be done by Britain alone. Many of us think that because of our colonial past—hon. Members can see that I am a product of our colonial past—Britain has all the answers. However, we do not and neither does the United States. Although we have good intentions, the future of this country’s wider international influence is in helping people shape events for the greater good, rather than just attacking or intervening because we do not like people or standing back because we are too scared about public opinion. We have to be brave about this. I look forward to hearing the Minister’s response.
Ian Lucas (Wrexham) (Lab)
It is a real pleasure to serve under your chairmanship, Mr Amess, and it has been a pleasure to listen to the debate.
I thank the Chair of the Foreign Affairs Committee, the right hon. Member for Croydon South (Sir Richard Ottaway), and Committee members for undertaking this inquiry and producing an incredibly valuable report, which I found helpful, dealing with profound issues affecting this region. As we have heard, it is difficult to limit discussion of the region to this geographical area alone. As hon. Members have indicated, many themes and big issues confront us within this region and beyond it; these are common and reach across into north-east Africa and the middle east. These are some of the major issues of our time, which we must confront. The Committee Chair’s introduction was valuable.
I should like to make a point that I do not think has been emphasised enough in this debate. This area of the world has a great deal of potential. When visiting Algeria, I was struck, on meeting a huge number of young people at the university of Algiers, by the fact that they were intensely ambitious and knowledgeable about the world, including the United Kingdom. They were keen to develop close links with the UK in particular, especially through the medium of the English language. This has been recognised by our ambassador to Algeria, for example, who is working hard to try to develop better connections. There is also a good, developing relationship between Morocco and the UK in terms of trade and education, which is a force for good, and a way that we can try to begin to address some long-term issues.
The Committee Chair made an important point, which I, too, would emphasise, about Algeria and Morocco being natural partners. These two countries in the region are stable, albeit that they have different histories, and we know that they are rivals. During my visit to Algeria and Morocco, I had constructive discussions with politicians in both countries, until I mentioned either Morocco or Algeria. My hon. Friend the Member for Preston (Mark Hendrick) mentioned the European historical context; their relationship reminds me of the French-German relationship. For example, the Western Sahara situation has parallels with Alsace-Lorraine.
It would be a major step forward if those of us developing good relations with both Algeria and Morocco could emphasise the importance of trying to find a way forward on the Western Sahara issue. The border between Algeria and Morocco is still closed. We cannot conceive of a good trading relationship and real economic development in that region while that situation pertains.
Mark Hendrick
Some 30 years ago, when I was a student in Liverpool, many students on my electrical engineering course were from Algeria. I think that Algeria is relatively stable now because many of those students who came to the UK and elsewhere in Europe to study engineering went back with degrees, although they had little opportunity to exploit and use them. The experience of the tremendous upheavals in Algeria 20 years ago has made it much more stable and more resistant to terrorism than many other countries in the north of Africa.
Ian Lucas
There was indeed a dreadful civil war in Algeria that predated the Arab uprisings, and stability there is a product of recent history. There is an opportunity in Algeria, which is on the cusp of change, in my view, having had various discussions about it. There have to be better relationships within the region—that is important—and we must try to find, within the region, improved mechanisms for dealing with issues, because the people who are most profoundly and immediately affected by all the instability that the report outlines are those who live in the region.
Another country that has not been mentioned is Tunisia. It is an important country that has struggled hard since the beginning of the Arab uprisings, which started there. It has managed to accommodate different viewpoints and, through hard work in difficult times, it has created a constitution that will hopefully lead to elections in the near future. I would like to see Tunisia work together with other countries, along with those of us who wish for this part of the world to stabilise, to make progress. I know—there have been references to this—that there is profound unease in Tunisia and Algeria about the instability in Libya, and that unease extends to Egypt, as the Chair of the Select Committee knows. The instability in Libya is a real worry, and it is affecting many countries in the region.
The debate has highlighted the different pressures and the seriousness of the situation, but there is an opportunity, through the more stable countries in the region, to build an approach that confronts many of the issues that my hon. Friend the Member for Ilford South (Mike Gapes) raised. They are profound issues for us all, and he is right to emphasise that they are not distant from us. Anyone who has been to the strait of Gibraltar knows how close Europe is to Africa. In the days of the Roman empire, the quickest routes to Africa were across the sea from Italy to places such as Libya. Such places as Leptis Magna show the common culture that existed in that part of the world. Instability in north Africa will inevitably affect all of Europe—not just southern Europe. The important issues highlighted by my hon. Friend are part of why we need to engage so strongly with young people in places such as Algiers, Morocco and Egypt, in order to encourage them and understand why some people—not just in north Africa; it has happened in the United Kingdom—are radicalised and commit heinous crimes.
It is important that we deal with the economic disparities in the region. On Nigeria, which my hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) focused on because she joined the Committee when the inquiry was looking at that country, it is intensely frustrating that a country that has so many millionaires, and so much wealth and potential, seems incapable of administering the area that it governs. That must play a part in why some people feel that they have no stake in that country and see extreme ideologies as offering something that is not being offered by the Government.
The issues are long term, but the questions of economic stability and economic opportunities for young people are urgent. In these days of the internet and global connectivity, a common theme among young people is ambition, and a common theme across north Africa is the number of highly educated young people who have great capabilities and talents that are not supported sufficiently by the number of jobs created in the local economy. They and their families are not being offered the real opportunities to progress that they need. Those big questions—I am sorry that they are such big questions, because big questions have complex and protracted solutions—mean that we have to be in this for the long term. There are not a million miles between the Minister and me on these issues. It is important that the United Kingdom stays in this for the long term and devises the best approach, so that we can play a positive role. I have met with members of the ambassadorial teams, who have an ambitious role, but the report is right to highlight that the reality does not match the rhetoric.
Another point that the report picks up on is the ministerial organisation within the Foreign and Commonwealth Office. I am shadow Minister with responsibility for Africa and the middle east. The Minister’s remit is the middle east and north Africa, and there is a separate Minister with the remit of Africa. The FCO splits the remit of Africa between two different teams because of the Sahara. The report states:
“A common thread in UK policy appears to be a weakness of analysis in relation to crises straddling North Africa and West Africa: the Sahara may form a departmental barrier within the Foreign Office, but it is not one for terrorists.”
That is a sharp observation. I find it helpful that I have to cover the whole of Africa, because so many of the issues relating to Africa extend from north Africa down to Nigeria and the band right across the continent from Somalia in the east to Mauritania and Morocco in the west. In the Foreign Office, thought should at least be given to that, and whether the current organisation of areas reflects the massive challenges. I have thought about that point, and it was picked up on by the Committee.
We heard from my hon. Friend the Member for Ayr, Carrick and Cumnock about the work that my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) has been doing. I attended the meetings and the Adjournment debate last night on the young women abducted in Nigeria. That horrific series of incidents has troubled us all in the House, and my right hon. Friend should be commended on his superb work. He put it interestingly when he referred to this being a civil rights issue for girls. I was struck by that terminology. This is not only an issue in Nigeria; there are threats to girls’ future right across the region. Many of the people I have met in Algiers and during my visits across north Africa have been women—highly educated women with massive potential, who can offer much to their countries. The idea that they should be prevented from contributing to their future, and the future of their family and country, simply because they are women is so abhorrent that we should see it as a civil rights issue. It should motivate us, right across the political spectrum and the world, to confront this.
We need to look for long-term solutions, and to learn from the report, which I commend again, how to develop a better analysis. Our connection with the region is perhaps lesser, historically, than our connections with many other parts of Africa. There is more of a French connection, historically. I have been struck by Morocco and Algeria wishing to have closer relations with the United Kingdom, and we need to build on that. Our education system provides the key to the door. We need to be passionate in our advocacy of women as part of the future of the region. Tunisia is a potential beacon of open democracy in the region, so can we please ensure that is has support? It was able to create a constitution and can work with partners across north Africa to secure a more stable situation in the years ahead.
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
It is a pleasure to serve under your chairmanship, Mr Amess. I start by thanking the Select Committee on Foreign Affairs for its report and hon. Members for their contributions, and by apologising for not being the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Boston and Skegness (Mark Simmonds)—the Minister with responsibility for Africa—who has been responding to the debate in the Chamber. I will try my best to answer the questions that have been put to me, but if I cannot, I hope that hon. Members will accept a response in writing after the debate.
The hon. Member for Wrexham (Ian Lucas), the Opposition spokesman, said that there was not a million miles—was it a million or 100 million?—between us. The honest truth is that there is not even 1 mile between us on this matter. The danger, as pointed out by my right hon. Friend the Member for Croydon South (Sir Richard Ottaway), the Chairman of the Foreign Affairs Committee, is that we tend to examine threats and then the focus moves on. Since the Committee produced its report, the focus moved to Syria and is now on Iraq. The spotlight moves on and we tend to follow it. As many hon. Members said, the underlying problems are long term and systemic, and only by committing ourselves to the region multilaterally will they be addressed.
Before addressing the points raised in the debate, I was asked to put on the record the apologies of the Prime Minister’s representative for the Sahel, my right hon. Friend the Member for Eddisbury (Mr O’Brien), for not being here. He is in Niger, where, I am glad to say, he is overseeing the first contract signed by that country with a UK company, so there is progress of a sort.
The best way for me to respond might be to go through the various contributions to pick up the questions asked—[Interruption.] I have just been told that that is probably not the way to do it, but there we go. Let me start with the speech of my right hon. Friend the Member for Croydon South, the Chairman of the Committee. He and others are right that Morocco and Algeria are natural allies of ours. They are two countries for which I am responsible and I have visited both this year. In the past, we might have suffered from the misapprehension that, being Francophone countries, they look to Paris, but they are keen to broaden their approach and to do more business with this part of the world, and, as the hon. Member for Wrexham said, the English language is key to that. Younger people in both countries are keen to learn English—the language of the internet. The idea that the quid pro quo for that should be a much more proactive involvement in the international affairs of north and west Africa is absolutely something that they understand and agree with.
Western Sahara is the sticky issue that prevents that, however. Relations between the two countries are not good. Nevertheless, it is encouraging that both recognise that relations are not good and that that is a barrier to further progress. I hope that a slight change in how this country deals with Morocco—to set parameters regarding Western Sahara and then to encourage it to meet them, which is a more proactive involvement, spearheaded by our excellent ambassador in Rabat—is starting to make a difference.
I agree with my right hon. Friend, the Chairman of the Committee, that the definition of development assistance must be enhanced and he is right that security and other areas can play a role; it cannot simply be the traditional definition. The same is true for the work of the Foreign and Commonwealth Office. There was a time, some 20 years ago perhaps, when the Foreign Office saw its role in terms of pure diplomacy. These days, our relationships with countries are also about defence, security, health and education and, in some places, even culture and sport. We must learn to engage across a much wider waterfront.
Mentioning a wider waterfront brings me on to the question about the boat. The best answer is that I will write to my right hon. Friend, but I will have a go. Task Force Mediterranean is focused on prevention rather than stopping people leaving in the first place. I suspect that the answer to his question is that once a boat of migrants is intercepted, they would be returned to the nearest safe port or their home country, whichever is closer. That is the common-sense answer, but I will check and write to him.
The hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) talked mainly about Nigeria, which I have not visited, but I was struck by the impression that it had made on her. She is right to say that the UK Government should give as much support as possible. I presume that she is aware of the package of support announced by the Secretary of State for Foreign and Commonwealth Affairs on 12 June, following the London ministerial meeting, which includes direct tactical training and advice for Nigerian forces about the fight against terrorism. We are also involved in a regional intelligence-sharing partnership with France, the US, Nigeria and its neighbours. The Department for International Development and the United States Agency for International Development partnership will hopefully draw a million more children into education by 2020, which is in addition to the million that this country committed to in May under the UN safe schools initiative, and DFID will commit to 60% of its spend in northern Nigeria over coming years. Before coming here, I asked about last night’s debate introduced by the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), and was delighted to hear that it went well. Indeed, I believe that he welcomed the UK’s support for Nigeria.
The hon. Member for Ilford South (Mike Gapes), the former Chairman of the Foreign Affairs Committee, made a thought-provoking speech, and I absolutely agree with him. He will be amused to know that when I first met the Foreign Minister of the Kurdish autonomous region, as we were walking out at the end of a half-hour meeting, he said, “I forgot to do the thing that I should have done, which is to thank you for saving us all in 1991.” He then laughed and said, “And blame you for causing the problem in the first place.” The lines that we—Sykes and Picot in that case—drew across maps have caused many repercussions, and the hon. Gentleman is right to point to their illogicality.
The hon. Gentleman is also right that engagement with a country—this has really struck me during my 10 months in the Foreign Office—is always much more powerful than standing off and criticising. It is all too easy to think that because we are uncomfortable with some things that a country does it is better to disengage and criticise. It is almost always right to get involved and then make comments from the position of critical friend. There is a balance, but he is correct to say that non-intervention also has consequences. When we do not intervene, the problem often arrives in due course anyway.
The hon. Gentleman asked in particular about arms and ammunition in Libya. The Government have committed £20 million to address that problem. I am not sure whether this came out in the inquiry, but it was suggested to me that more than 400 arms dumps were left across Libya when Gaddafi fell, and that more arms and ammunition were floating around than when the eastern bloc fell in the late 1980s, which is a worrying statistic.
In another excellent speech, the hon. Member for Preston (Mark Hendrick) made some good points about Mali, Nigeria, Libya and others. On Libya, the Prime Minister has just appointed Jonathan Powell, who used to work for Tony Blair, as special envoy. He will work closely with his US counterpart to try to support and bring together reconciliation efforts in the country. Every country must take its share of responsibility. Looking across the whole area, the key to solving the issues and to long-term, sustained engagement will be a multilateral approach, involving us, the French, the United Nations, African forces and the rest coming together to achieve a common agenda. It is fair to say that that has not been the case up to now, and we are in the early stages of doing it, but that is clearly the way forward.
The hon. Member for Wrexham also made that point—the multilateral approach using stable countries will be the key to progress in the region—and he is absolutely right to talk about the phenomenal potential of countries such as Algeria and Morocco. We have both visited Algeria, a country that is changing extraordinarily quickly. The Algerians said to me, “The west has only just woken up to what we went through in the 1990s,” and, having come out of that, slowly but surely, they are keen not only to forge closer links with us in the west, and probably to shake off that Paris focus in policy, but to see what they can do in the region. When I was last in Algeria, on my second visit, the Algerians were in the process of hosting peace talks for the Malian Government. That was the first time, I think, that the Algerian Government had reached out beyond their own borders. We applaud such encouraging signs there.
The hon. Gentleman is absolutely right to talk about the key role of the English language. In a sense, the British Council can never do enough in such areas, although we have been helped enormously by the fact that English has become the language of the internet and the preferred language for many young people. It gives us a real opportunity, which we should not miss.
We have spoken about reconciliation between Morocco and Algeria, but the hon. Gentleman also made a good point about Tunisia, the home of the Arab spring and in many ways its most successful graduate. There has been progress, although things seem to get there just before the critical moment. As he said, however, it is good to see that elections are scheduled for the autumn. It is vital that this country continues to support the Tunisians.
I will deal with the easy points made by the hon. Gentleman. He is absolutely right about civil rights and Nigeria—he is on the money there. On the question of ministerial responsibilities, the situation predates me, and I took over from someone with the same brief as mine. On the question of how things are divided up, the danger of grouping the middle east and all of Africa is that together they are a large part of the cake, which raises the issue of whether someone could give the region all the attention it deserves. I suspect we follow the Arab League arrangements, which take in the countries of north Africa, but not much further beyond.
When I arrived in the Foreign Office, however, the Foreign Secretary said that he was always open to moving responsibilities around as situations changed. The hon. Gentleman makes a good point, and that is something we should definitely keep under review. If there is a more sensible way to arrange responsibilities, there is no political reason for not doing so.
I finish where I started, and thank the Select Committee and its Chairman for a thoughtful piece of work, which we in the Foreign Office have read carefully. Many of the points made are good ones, which we agree with, and the report has given us a firm platform for progress in the years ahead.
Local Government Procurement
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Mr Clive Betts (Sheffield South East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Amess, and to introduce the debate on the sixth report of the Select Committee on Communities and Local Government in the 2013-14 Session.
The main theme of what I have to say is that there is an awful lot of agreement on local government procurement, which is probably unusual, given some of the subjects that we discuss in debates on communities and local government. Many of our recommendations—a little unusually for our reports—are aimed at local authorities and at the Local Government Association, rather than at central Government. That is consistent with the Committee’s intention to take a localist approach to such matters. Indeed, if I may tease the Minister, the extent to which the Government agree with the Committee’s recommendations is partly because most of the recommendations are not aimed at them, but at local government. That might be a little unkind, because generally we are on the same page.
Talking of the LGA and its supportive response to our report, I am pleased to be going to the LGA conference next week, and to the launch of its national procurement strategy, which is an important part of delivering the Committee’s recommendations. I look forward to giving a presentation, and to hearing what the LGA has to say.
Local government procurement might not be the most exciting of subjects, but it is an important one, because local authorities spend £45 billion a year, which is not an inconsiderable sum of public money. Indeed, 25% of local authority expenditure is involved in procuring goods and services from outside local government. In our inquiry, we found some really good examples of councils moving ahead and developing good or excellent practice, which in some instances central Government might learn from.
We clearly identified that many councils are doing the right thing and getting better all the time at procurement, although some councils have not moved forward at all. Patchy performance was highlighted by our inquiry, and the obvious requirement is for those councils that have not addressed the issue seriously, or are not performing well, to get up to the standard of the authorities where there is first-class procurement. In that way, an awful lot could be achieved, an awful lot of money saved and better value delivered.
Returning to the localist theme, we were strongly of the view that the problem would not be solved by the imposition of centralised purchasing, or by the Department for Communities and Local Government coming up with new regulations to compel local authorities to behave in a certain way. This is about encouraging the local authority sector, with the LGA in a key role, to look at best performance and to replicate it in many more circumstances.
Three overarching messages come out of the report. First, we welcome the LGA and local government in general taking a lead on procurement. It is for local government to sort out, but of course in partnership with central Government. The Cabinet Office, the DCLG, the LGA and local government can work together on this, as well as with business, listening to what it has to say about procurement and the ease with which it can engage with the process. There is also the third sector; we must not forget that a good percentage of local authority services are delivered not only by private businesses, but by the third sector.
The second overarching message is that procurement is not only a job for specialists. There is the idea that some expert procurement officer in a local authority can be given a problem, if there is one, to sort out. First, however, we have to ensure that what we are procuring will result in the service that we want to see delivered. Procurement is simply another way of delivering a service to the residents of an area. Getting what we want delivered, how we want it delivered, right from the start is important. In councils, that involves councillors who are responsible for service delivery, as well as experts in procurement.
Procurement is not just about cost. Cost is vital, particularly at the moment, but other issues must be looked at as well: the effect on local businesses, environmental issues, the possibility of getting training for apprentices as part of any procurement arrangements —they are all important, and need to be thought about by councils when procuring. There is no point complaining afterwards that no local businesses got any tenders, if the response is that perhaps the way that councils designed the contracts excluded those businesses. The delivery of services must be monitored. Procurement is not only about getting tenders in and selecting the lowest price, the one with the best quality or a mixture of the two, but about seeing whether what is promised is delivered. That is crucial and involves not only procurement officers, but other council officials, councillors and members of the public.
The third overarching message is political leadership. We welcome the fact that some authorities have appointed a cabinet member to be responsible for procurement, and that some involved front-line councillors in monitoring what happens when a contract is let. A simple proposal that we made—I do not think it has been made elsewhere—which the LGA endorsed, is that every year the whole council should provide an annual report on its procurement strategy, setting out what it is trying to achieve, rather than thinking of things after contracts have been let.
[Hugh Bayley in the Chair]
Turning to the specific proposals, we argued strongly that a centralised approach should not be imposed, but we estimated that willing and voluntary collaboration by councils could deliver about £1.8 billion. I do not want to be held to every £100,000 of that, but it is a reasonable ballpark estimate of what might be achieved. We recognise that collaboration will sometimes not be appropriate, and that councils sometimes have specific local issues and intentions when making purchases. Sometimes, forcing collaboration could lead to extra bureaucracy and delay, but with a simple purchase of a fairly standardised product, such as energy, councils can gain a lot by collaborating and ensuring that they have market power and influence. Provided it is done in a considered way, collaboration can certainly produce benefits.
Cost is important, but there are other issues to be considered, such as the impact on local companies, whether small and medium-sized enterprises really have access to the tenders, and whether tenders can be split up to allow more access by smaller companies. That is important for small businesses and for apprentices. It is not simply the council that should employ apprentices; the private sector can also do that, and it could be encouraged or be required to do so as part of a tender. The Government’s aspiration is to have 25% of their contracts with SMEs. Local government already has 47% of its contracts with SMEs. Central Government will probably never get anywhere near that, so full marks to local government, which is ahead of the game again. We should congratulate it on that.
On the cost of procurement, there were quite a lot of complaints about EU rules and regulations, and suggestions that we sometimes over-apply them. We thought it was desirable to have a proportionate approach to the application of EU rules. We would like a clearer definition from the Minister of what the Government believe a proportionate approach might be. If he cannot give that today, it would be helpful if he would write to the Committee.
We received a lot of evidence about pre-qualification questionnaires, and we heard that for every tender, different authorities, or parts of the public sector, seem to devise different questionnaires. Businesses, particularly small businesses, are upset about that and about the cost. The Committee’s view was slightly different from that of the Government, and the LGA sided with us on this. We still think that pre-qualification questionnaires are useful in virtually every respect, because without them, even for fairly small contracts, it is open to anyone to put in a bid, and far too many firms end up wasting time and effort trying to bid for a contract. There may be dozens of firms tendering. If there is a questionnaire, at least the number can be thinned out and a reasonable number of tenders made, giving firms a reasonable chance. In addition, the local authority does not have to do quite as much work analysing lots of tenders that will not be successful. We welcome the LGA’s response, and thought the Government were perhaps not quite up to the game on that and should think about it again.
There was a lot of agreement on the requirement to pay subcontractors on time. There has been a lot of pressure on local authorities to pay their contracts on time, and the evidence shows that they are generally pretty good at that. The problem is further down the chain. Small companies are probably most affected by cash-flow issues, and may be put out of business if a contractor does not pay them. We welcome the Government’s proposals to legislate in this area, which are positive; the Committee may return to scrutinise the legislation when we see it. There is general agreement on that.
The Committee made it clear that outsourcing—changing the organisation that delivers a service—does not absolve the council of responsibility for delivering that service. As far as the public are concerned, it is a council service being provided by a different organisation, and they expect their councillors, whom they elect, to be accountable and responsible. Sometimes, it is not always clear in the contract and when the service is delivered how that accountability goes back to the council. That calls into question the front-line councillors who represent their constituents. If something goes wrong, how is that dealt with? Does the council simply say, “Well, that’s the contractor’s responsibility; it’s nothing to do with us any more”? That is not so, and contracts should recognise that as far as the public are concerned, the service is a council one delivered in a different way. There must be a clear line of accountability when things go wrong, and the public must be clear about whom they complain to when that happens, and how their complaints will be dealt with.
The same applies to employment. When services are outsourced, the council does not directly employ the workers, but it nevertheless has a responsibility. It puts the contract out and decides which contractor does the job. TUPE arrangements are in place when staff are transferred as part of the outsourcing, but we felt in general terms that there is a responsibility on councils. We did not come to the view that they had to do one thing or another, but they should at least consider issues such as the operation of zero-hours contracts. The Government have promised proposals, and we welcome that and look forward to seeing what they suggest.
We discussed the living wage. Some councils insist not merely on paying the living wage, but that their contractors do so. When the Committee went to Sheffield, we saw some excellent procurement practices. The council was very honest with us, and said that it writes into contracts for construction and many other council services a requirement for contractors to pay the living wage. The one area where they are unable to do that is social care. There is concern that social care contracts are outsourced not to improve the quality of service, but because the cost of paying the workers will be reduced.
There are real issues about the future cost of social care. The Committee did not go into that, but raised it as an issue of concern. It is a challenge across the party spectrum to look into the future, when more people will require care, the population will get older, and we will encourage and help people to remain in their homes, instead of spending nights in hospital when they need not be there. There are challenges in how that social care is delivered, in paying the people who provide that care, in training and in other costs.
We did not find much evidence of fraud in local government. We asked for information and evidence. Clearly, there are examples, but nothing like those the Government have been grappling with in the Ministry of Justice recently involving contracts for monitoring prisoners and so on. We found very little fraud, but that does not mean that the Government should be complacent. We believe that there should be a proactive approach, particularly on transparency. Making information available to the public and councils is one of the best ways of ensuring that fraud does not happen.
We welcome the fact that the LGA will produce guidance to councils, so that when they write contracts, they ensure that they have a right to data created under those contracts. It is a bit of a worry that private companies sometimes hide behind commercial confidentiality, saying, “We can’t let you know what’s going on because this is our information, not yours.” If they are being paid public money for delivering a service or providing goods, there is a public interest. Some councils are looking at extending the freedom of information provisions to contracts that they let. We concluded that that was for councils to decide on, but transparency is important.
If there is corruption, it is likely that it will not be revealed by highly paid auditors searching through books. They will sometimes find evidence of fraud, but it is more likely to be found as a result of whistleblowing by people who see at first hand what is going on, and who say, “This is not right. I’m going to tell.” It is therefore important to have methods of enabling anonymous reporting.
We said that councils should insist on a requirement in contracts that where whistleblowing is identified and information is made available to the contractor, the contractor must pass that information on to the council. In that way, the information will be available to the council, not just the contractor, who may cover it up because something is going wrong in their organisation. We await the Government’s proposals on strengthening the whistleblowing framework, but we welcome their approach; again, we are moving in the same direction.
To summarise, Mr Amess—sorry, Mr Bayley; welcome to you—there is general agreement on the way forward. I have highlighted one or two areas where we have a slight difference of emphasis from the Government, and where we need a bit more clarification, as on the policy on EU directives. Essentially, procurement is a matter for a localist approach; it is about identifying best practice in local government and getting all local authorities to implement it, following the example of others.
I very much look forward to going to the LGA conference next week and hearing from its members at the national procurement strategy launch, where I will be speaking. I also look forward to working with the LGA on developing many of the ideas the Committee recommended in its report.
Roberta Blackman-Woods (City of Durham) (Lab)
May I say what a pleasure it is to serve under your chairmanship again, Mr Bayley?
I find myself here again on a Thursday afternoon congratulating my hon. Friend the Member for Sheffield South East (Mr Betts) and his Select Committee on an excellent report. I want to take a few moments to explain why it is an excellent report, before going on to look at some of the issues it raised. As we can see from looking around the Chamber, few of our parliamentary colleagues think local government procurement is a really exciting issue or one they want to spend their Thursday debating, so I might be one of the few who are interested in it.
Given the cuts facing local councils, particularly those serving poor areas, and given the jobs that will be lost as a result, I decided, as the shadow Minister with responsibility for the issue, to see whether councils were using procurement to support local employment where possible. I sent out two rounds of freedom of information requests to 400 councils and got 367 responses, which is pretty good. The responses highlighted a number of the issues raised in the Committee’s report.
The responses to my first request demonstrated that a significant number of councils want to take on a more proactive role in deciding who to award contracts to. Everything else being equal, they want, where possible, to prioritise local service delivery, but many felt unable to do so because of EU legislation, and the issue was raised again and again. Some 67% of the responding councils said they did not prioritise local goods and services and that the main reason for that was the perceived restrictions in European legislation. I should say that that was before we saw the new directive on procurement.
Armed with that information, I did a second round of freedom of information requests, seeking more detail on what councils were doing locally, and it showed that there were differences, depending on the councils’ political make-up. On average, a Labour council will procure about 40% of its goods and services from the local authority area, while the average Conservative council procures about 31%, although that might have improved. What was striking, however, was the range of local procurement. The highest proportion of goods procured locally was 80%, while the lowest was 2.5%, so there is great variation in practice.
The second set of questions also asked about the use of social value clauses in contracts, and I discovered that about 56% of councils used them in their procurement strategy. Indeed, most councils—about 90%—had a written procurement strategy, which was also pretty good. I also asked councils whether they took into account whether suppliers gave employees non-statutory benefits such as the living wage, and about 40% said they did.
That was all very interesting, and as we have a few moments, I thought I would outline some of the good practice I discovered, because it reflects some of the issues in the report.
Newcastle city council supports a living wage and promotes it not only in the direct delivery of council services, but in its supply chain. The council also said that 53% of its spend was with local—north-east—suppliers, compared with a national average of 35.8%. In addition, the corporate procurement team seeks to obtain at least one north-east quote for all contracts not requiring a formal tender process.
The council also ensures that the lots within larger contracts are a proper size to encourage bids and competition, and it works with north-east procurement organisations to streamline procurement documentation, making procurement processes consistent across the region and easier to understand.
The council has participated in a regional supplier development pilot to educate, and improve competitiveness of, the region’s small and medium-sized enterprises. It has also ensured that SMEs have received training on procurement. The council’s “Quick Quotes” initiative was launched to streamline and speed up the process for small bids. The council is also committed to e-procurement and to making communication on all aspects of procurement much easier to understand.
Finally, through its targeted recruitment and training programme, the council focuses on job creation by including clauses on it in the procurement process, bringing new jobs to the area. Through their procurement strategies, a number of other councils have also tried to deliver jobs where possible.
There were equally good examples at Sheffield city council, which has adopted the national procurement concordat for SMEs to encourage trade between SMEs and the council. It looks at how to get more local businesses, particularly small businesses, competing for council contracts. It also monitors closely the proportion of the council spend that goes to local businesses, which is about 72%. There were similar processes in Birmingham, although there was much stronger focus there on delivering local jobs and local training opportunities.
That is all by way of preamble. Like my hon. Friend and his Committee, I thought there was really good practice out there in opening up procurement processes and ensuring, where possible, that SMEs got a chance to bid for contracts and that procurement could deliver for the local community. There were issues, but it was comforting—this is why I wanted to go through the preamble—to know that the Committee and I had discovered similar issues and concerns. Indeed, I was reflecting this morning on the fact that I could probably have sat back and let my hon. Friend’s Committee do the work I did through my freedom of information requests.
We need to ask a fundamental question: why are we here discussing procurement? The public sector spends about £220 billion a year on procurement, of which about £50 billion a year is for local government procurement. That is a huge amount of money, and we are asking whether it is being spent wisely. About 47% of what local government spends on procurement goes to small and medium-sized enterprises. The Federation of Small Businesses has shown that for every £1 spent in the local economy 83p goes back into it. Obviously, it makes a lot of sense for local governments that want to build their local economies to try to get as much local procurement as possible.
The way local authorities choose to spend their money can have significant impact on businesses and jobs, and on wider social value. What they do could include using more SMEs; ensuring that suppliers give staff non-statutory benefits, such as the living wage or extra training; and asking suppliers to provide apprenticeships or jobs for those who struggle to find work and to use local businesses if possible. There is growing evidence to suggest that SMEs provide better quality and more flexible services, and that they are more responsive when the procurer’s demands change, or there is a need to change a contract.
I was therefore interested in the excellent report that has been produced, and in the evidence that the Select Committee took on the need for local authorities to get better at procurement. Interestingly, the report reached the same conclusion as the shadow team. It is always tempting for people involved in central Government to think that centralising everything will get things done better, because of economies of scale and because there can be, for example, one pre-application questionnaire, simplifying the whole process, but I wonder about that. Many councils told us they could not do certain things because of EU legislation, which we were not sure was really the case. Some local authorities seemed to manage to do what others could not. However, I agree with my hon. Friend’s conclusion that it would be wrong to centralise the procurement system for local government, because that could mean services being unresponsive or inappropriate, which would be a major disbenefit. It could, indeed, lead ultimately to higher service delivery costs in the long term, particularly if contracts broke down and had to be retendered.
We thought that there was much good practice in local government. We saw that local authorities would come together voluntarily in an area that made sense to them, to deal with procurement. Often they would procure back office functions between several authorities, or they would look at working more effectively to improve value for money. Large contracts were another reason for them to come together. We hope that the Government will support local authorities in working together voluntarily, and perhaps in setting up, at regional, sub-regional or combined authority level, ways to make procurement easier, more consistent and easier to understand.
I also agree with the Select Committee’s conclusion that the difficult balancing act for local authorities is to get best value while supporting local businesses. In many cases, simply going by cost may not necessarily mean the best service, or the one that local people want, and it can mean employees from another area providing the service: local authorities thus cannot use procurement to benefit the people they represent. That is a difficult balancing act, but the people who are best able to chart a course through the difficulty are the local authorities, either alone or in co-operation.
I was pleased that the report showed that smart procurement can bring other benefits, such as a living wage, training and upskilling opportunities, and apprenticeships. It is right to suggest that the Local Government Association could and should do more to promote sharing good practice of that kind. We came across good examples, and felt that all local authorities need to understand how to use procurement more effectively.
In the responses we received, European rules that were never really outlined in detail were often used to justify a lack of imagination in the way councils procure services. Things were often very bureaucratic, and the reason we were given was, “We have to do this because of Europe.” However, some councils managed to avoid that. I was therefore pleased that the Select Committee paid attention to the issue, informing us that procurement takes longer and is more expensive in the UK than in other EU countries. I hope that that worries the Minister; it worries me. I thought that it showed that the Select Committee report is timely, and that its recommendations should be acted on.
The report states:
“Some 75% of all contracts tendered in the UK have a value below the thresholds at which the full EU requirements apply, but witnesses contended that councils applied the full rules to many of these lower value contracts”.
We came across that, and clearly it must cease. It is imperative that the Department for Communities and Local Government and the Local Government Association act on the relevant recommendation, at paragraph 59 of the report. Local authorities need to become more competent in applying EU rules. The first step is surely for the Government and sector leaders, including the LGA, to spell out what constitutes a sensible approach that complies with the regulations proportionately. The LGA should produce guidance on that aspect of the new EU directive on public procurement, and work with local authorities to disseminate best practice.
The report is right to highlight the need for a consistent, measured approach to the management of the procurement process. We, like the Select Committee, found huge variation in practice for pre-qualification questionnaires. We interviewed small businesses, and for some of them—with some councils—the PQQ experience was truly frightening. Often there is a lack of consistency between councils in dealing with PQQs, but sometimes the lack of consistency is between departments within a council. Our plea would be that if there is to be support to enable councils to get more streamlined systems, attention should be paid to PQQs. Indeed, there should be assistance from central Government or the LGA in developing a better system.
There was much good practice. We found, as did the Select Committee, good examples of streamlining to make the procurement and tendering process more straightforward, but there is a big role for the LGA to play in ensuring that all local authorities follow best practice. That is what the Select Committee report says, I think.
I was pleased that the Select Committee considered the quality of employment that is provided, through outsourcing in particular, and that it pressed the Government to monitor the quality of employment. As my hon. Friend said, that is particularly an issue for the care sector. I note that his Committee was not able to pay a huge amount of attention to that, but I hope that it will examine it in more detail later, because, again, we found real issues there.
The Minister can tell us later whether he is in favour of zero-hours contracts. We are not against them, but we want to see them only where they are appropriate and welcomed by staff. I feel strongly that they should not be imposed on people, as they often are, but there is a wider issue of outsourcing that can happen as a result of the local authority procurement process. We also want to reflect on the issues of accountability that the report produced by my hon. Friend’s Committee went into in some detail. It is all too easy for councils, once they have outsourced a particular service, to think that they no longer have any responsibility for the quality or delivery of that service, which would be quite wrong.
Elsewhere, the report talks about the need for councils to demonstrate probity, have good monitoring and complaints systems in place, and, critically, have a whistleblowing system, so that if there is fraud or bad practice, it is easy for people to highlight that, bring it into the open and make it transparent. We thought that there was some very good practice, which the report highlighted, but again, this is about the LGA and the Department encouraging the sharing of good practice.
The report was excellent, so I looked forward to reading the Government’s response, which I thought started well. It is good that, over the coming year, the Government will take a range of further actions to promote the Public Services (Social Value) Act 2012, and that they will review progress throughout the year and consider what actions to take as a result of that review. There is also a commitment to continue reviewing the impact of the community right to challenge. Will the Minister tell us when those reviews are likely to be completed and how they will be published and put into the public domain?
Roberta Blackman-Woods
That is wonderful. I am interested and pleased to hear that, and look forward to seeing the report.
I am not exactly sure what action the Government will take to enable local authorities to understand better the new EU procurement framework, which is a result of the new directive published on 28 March. I would like to hear what the Minister’s Department is doing to communicate that to councils. If the Minister and the Department intend that the LGA should take that role on board, he should make that clear today and assure us that the LGA has the resources to undertake the task, because it is critical in improving procurement. Local authorities have to get away from the belief that the EU directive stops them doing all sorts of interesting things locally. I also look forward to seeing the Government’s response to the consultation on zero-hours contracts and the implications for the care sector in particular.
I was perhaps a bit disappointed that the Government’s response did not seem to show any real determination, or vigour, to assist local government in transforming procurement, so that it would not only deliver value for money, but take on all the social value issues and deliver jobs and improvements for their local communities, although perhaps I am being unduly unfair to the Minister, and perhaps he will convince me that he finds this a really interesting area, and that the Government need to put their weight behind it to get real changes in local government procurement. I look forward to hearing what he has to say.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
It is a pleasure to serve under your chairmanship today, Mr Bayley. I thank the hon. Member for Sheffield South East (Mr Betts) and congratulate him on securing the debate. He is quite right: we absolutely welcome the Select Committee’s report and endorse its view on the need for councils to improve the way in which they procure goods and services. The hon. Member for City of Durham (Roberta Blackman-Woods) made a good point about the number of Members who have joined us for this debate this afternoon. I appreciate that there is also an important debate in the Chamber, but this is an important matter, and it is good to have the chance to air some issues, discuss good practice, which I will touch on, and highlight how important procurement is and what local government should be doing to focus on it.
I will resist the urge to go too far down the road that the hon. Lady tempted me down at the end of her speech, when she mentioned social values and jobs. As meritorious as those issues are, and as important as it is that councils are aware of them, going in that direction would tempt us towards having some sort of central governance over what those values should be, which is the very opposite of the localism that I believe in. It has to be for local authorities to decide what the right values are for them.
We agree with the Communities and Local Government Committee that councils, with the support of the Local Government Association, should absolutely take the lead and have the responsibility for delivering on the procurement agenda. Councils are uniquely placed—geographically as well as structurally—to understand the needs of their residents and communities and to be locally accountable to them for their actions and decisions.
The hon. Lady gave some figures, and just to put things in context, this is a hugely important area, not least because last year the local government sector spent £57 billion on procuring goods and services. As she said, that accounts for roughly a quarter of all public sector procurement. Councils are often one of the largest spenders and one of the largest employers in their local economy. By being more astute and imaginative in how they use that spending power, they can do much more to ensure that they achieve greater value for money and help their local economies to grow. When we talk about savings, most sensible business people, hearing that local government spending is £57 billion, would come to the conclusion straight away that just a little improvement in procurement could bring a small percentage saving, which would be a very large amount of money.
I accept that the Government have an important role to play, at least in incentivising service transformation and encouraging innovation. As set out in our evidence and response, we have already introduced a range of key public sector procurement reforms that will open up procurement opportunities to both small and medium-sized enterprises. As the hon. Member for Sheffield South East said, the FSB has targeted those opportunities. Sometime last year, I was on a platform with the LGA and the FSB talking about the added local benefit that can be brought particularly by small businesses but also, as he rightly says, by voluntary and community organisations—the third sector as a whole.
The Small Business, Enterprise and Employment Bill was introduced into the House on 25 June. It will help to deliver our commitment to build a stronger economy by supporting small businesses. The Bill contains a number of measures intended to improve public sector procurement, which will, subject to consultation, ensure that procurers run an efficient process, accept electronic invoices, do not charge for bid information and do proper pre-market engagement.
The Bill will also make it easier for small businesses to raise concerns about public procurement practices and cut down on red tape by ensuring that regulations affecting businesses are reviewed frequently and remain effective. It will deter employers from breaking the national minimum wage legislation by creating a power to allow the penalty for underpayment to be imposed on employers on a per-worker basis, and it will stop the abuse of zero-hours contracts—the hon. Member for City of Durham mentioned them, and I shall come back to this point in a moment—by preventing the inclusion of exclusivity clauses, which are used to prevent individuals from working for other employers, even if the current employer is offering no work.
Other key reforms, which will be introduced later this year, include the abolition of the pre-qualification questionnaires for contracts below the EU threshold—I note the comment by the hon. Member for Sheffield South East, and I will come back to that in a moment—and the requirement for public bodies, including local authorities, to use Contracts Finder, which is a national procurement portal.
We are developing a standard pre-qualification questionnaire—for contracts that are above the EU threshold, I stress—and councils will be encouraged to use that. The aim is to ensure that businesses no longer have to complete the countless different versions that currently exist. That will make it easier for small businesses and voluntary organisations to bid for contracts and increase collaboration across authorities.
I noted the hon. Gentleman’s comments and the Select Committee’s points on pre-qualification questionnaires. I can understand why local authorities like them, but if we want to get more small businesses involved, I think the risk of having more tendering is a good risk and one that could actually be to the benefit of local authorities. If they want to reduce that risk, they can do that by getting their tender documentation right in the first place.
Mr Betts
Clearly, this is one of the few areas of specific disagreement. We picked up from small businesses that if suddenly they found that they were putting a tender in along with 20 other organisations, 19 of them would be wasting their time. As long as it is a standardised and simple pre-qualification questionnaire to thin out the number that will tender, it could be greatly to the advantage of small businesses in particular and reduce their costs overall.
Brandon Lewis
Of course, if councils are giving an up-front line on their procurement process, that gives companies more time to plan and, particularly for small businesses, allows them to decide whether it is right for them to tender and whether they want to do so. However, most small businesses also tender for business in the private sector, where they will be used to being involved in competitive tendering for work that they want and going up against anything from one to a countless number of competitors. That is how the market works. From my experience of working in and talking to businesses—small, medium and large, but small businesses in particular—I know that another piece of paper from an authority that they have to fill in before they even start to tender is just another layer of bureaucracy, red tape and paper that they do not want.
We have been providing support for councils by encouraging them to use Contracts Finder now rather than waiting for its use to become mandatory. We have pointed out the benefits that it can bring for both procurers and suppliers, because it opens up procurement opportunities and makes them transparent. We have been encouraging councils to start using the current simplified pre-qualification questionnaire for contracts that are, I stress again, over the EU threshold. The hon. Member for City of Durham made a good point about the myths that exist about what can be done in a whole range of areas that local authorities deal with. I will come back to that.
We have been encouraging the improvement of commissioning skills among local authority employees—a very important issue—by offering access to the commissioning academy. We have been sharing expertise by offering access to courses and learning tools provided by the Crown Commercial Service. We are providing £16.5 million of funding over two years to change behaviour and perception in respect of tackling fraud in local authorities, including in local government procurement, regardless of how small it may be. We should bear in mind the fact that overall fraud and error in local government costs more than £2 billion, but that does not necessarily involve procurement. However, it is still an important matter, and we need to ensure that we are on top of it. We are providing guidance on social value considerations and the pre-procurement market engagement process.
Following the success of last year’s transformation challenge award, which was hugely oversubscribed, we have launched another one for 2014 to 2016, and £320 million will be available over that period. The aim of the award is to encourage and reward local authorities that are able significantly to improve their services so that they better meet the needs of local residents. That can include making improvements to and transforming how services are commissioned and procured through greater sharing and efficiency, such as integrated commissioning in shared financial planning, testing new tools and pooling budgets. There can also be joint procurement of things such as ICT, and services can be extended to nearby local authorities. In addition, we have been working with the Local Government Association on its draft national procurement strategy and supporting the Chief Fire Officers Association’s national procurement group in developing a national procurement strategy.
However, the central Government cannot deliver better local procurement ourselves, nor should we try to. That can only lead to more red tape, bureaucracy and top-down control, which no one in local government or the small business sector wants. What we can do and should aim to do is to create the right conditions for it by eliminating unnecessary red tape and removing barriers to local innovation. As the Select Committee recognised, it is then for local authorities themselves to take the initiative.
We do see examples of good practice throughout the country. We have time, so I will place on record some good examples that we know exist. Halton borough council has abolished pre-qualification questionnaires for all its contracts below the EU threshold. In Norfolk, my home county, the county council no longer uses them for contracts under £100,000, and a number of other local councils do not use them for low-value contracts. Oxford city council had the idea of running a programme of workshops specifically targeted at small and medium-sized enterprises. That is about helping them on how to tender for business. Herefordshire council has a programme of opportunities and events for current and potential suppliers, which it developed as a way of informing, and maintaining strong relationships with the local supply market.
A number of local authorities have developed local procurement hubs, such as Supply Hertfordshire, Procurement Lincolnshire and the East Sussex procurement hub. Those hubs cover large areas. There are also hubs that cover even larger areas, such as The Chest, which covers much of the north-west. Across the country, there are also a number of multi-authority purchasing and public buying organisations, such as the Yorkshire Purchasing Organisation, which has already helped North Yorkshire county council make savings of about a third of a million pounds by buying social care equipment to help people with daily living. That was done through the organisation’s assistive technology contract. The Central Buying Consortium can also help councils deliver savings. For example, the royal borough of Kingston upon Thames, which I visited today, achieved 26% total cost savings on a £32 million project to expand its primary schools by using a public buying organisation. That was a substantial saving for that community.
However, despite the examples of good practice, too many local authorities still have a long way to go. They need to go further in saving money and doing more for less through better procurement. Councils need to adopt a strategic approach to their procurement and use their collective buying power to best effect. They need to ensure that their procurement officers have the necessary skills and that they take advantage of the learning opportunities and tools that are available to them. They also need to find ways of sharing best practice around local government. That is a role not just for councils, working with their partners, but for the Local Government Association.
All too often small firms are locked out of local government contracts, or at least perceive and believe that they are, by councils adopting over-complicated procurement processes. Councils need to be sure that they are doing everything they can to remove those barriers. I always say to councillors, and I will say it again on the record today, that if officers are quoting to them regulations, guidance or EU bureaucracy that is getting in the way, they need to ensure that that is correct. Let us bust those myths. Let us ensure that councillors are challenging the officers and getting to see what is in the way to make sure that it is real rather than perceived. That will mean that we can start to open things up even more.
There are many simple things that councils can do to improve their procurement practices. For example, in addition to abolishing unnecessary requirements to complete a pre-qualification questionnaire for contracts below the EU threshold and publishing all their tenders and contracts online, they should build up a supplier network and engage with suppliers.
That is related to one of the myths that I would like to bust and be clear about. EU procurement rules apply only once a council has made a decision to procure goods and services. Early engagement with suppliers can mean that innovation and co-design are built in from the outset, leading to better services. Creating and publishing a future pipeline of commercial activity so that suppliers can plan ahead is another positive step that councils can take. They can publish details of contracts that have been awarded so that contractors can not only see what has happened before, in order to get an idea of what will be expected of them in the future, but view subcontracting opportunities.
Councils can ensure that they have robust procedures in place to tackle fraud. We need to ensure that we keep fraud low and aim to drive it to zero. An important point, which relates to one that the hon. Member for City of Durham made, is that they can stop gold-plating on equalities. Equalities impact assessments are not, and never have been, a legal requirement. Officers can use their judgment to pay due regard to equality without resorting to time-consuming, often bureaucratic tick-box exercises at the end of a decision-making process—the very thing that can put people off. Councils can break contracts up into smaller lots to open up procurement by bringing in more competition on price and attracting some of the smaller firms that prefer to go for smaller contracts.
Better procurement, the sharing of senior management teams, service transformation, asset rationalisation and the driving of local economic growth all contribute to the overall improvement in local government productivity. Some councils—I have given just a few examples, but there are many more—have already made considerable progress in improving their procurement processes, making it much easier for businesses to bid effectively for contracts. However, I am not yet convinced that all local authorities have made the necessary changes, although I am confident, based on its approach to the Select Committee report, that the Local Government Association and its national procurement strategy can play an important part in helping driving forward the changes. Nationally, we need to keep talking about it in order to motivate and encourage local authorities, but it is vital to remember that it is for local authorities to deliver.
Mr Betts
I will take a couple of minutes to summarise this constructive, well-informed debate, in which agreement has generally been found across the parties and between the Select Committee and both Front Benches. That should be welcomed. I think that we have all ultimately agreed that this is a matter for local councils, and that it is for local government in general, and the Local Government Association in particular, to help councils that are not up to the same level of procurement practice as their counterparts that are delivering a first-class service to learn from that best practice and emulate it. I am sure the Select Committee will want to return to the issue in future to monitor and assess whether the improvements that we think can be made have been made.
I have one slight worry about a disagreement that I had not expected. On behalf of the Select Committee, I identified £45 billion in local government procurement. To show that I was paying close attention to what the two Front-Bench spokespeople said, I think my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) put the figure at £50 billion, while the Minister set it at £57 billion. If we had had more speakers, we might have seen an exponential growth in local authority procurement. Clearly, there is a difference in how we evaluate it. We may want to clear that up at some point in future.
Finally, I am sure that it is appropriate for me, on behalf of the whole Committee, to thank Sarah Coe, our second Clerk, who was the lead officer in helping us produce this report. We very much appreciated her excellent support, which was instrumental in helping us get to the end result. I also thank Colin Cram, our specialist adviser, who was extremely helpful as well.
Hugh Bayley (in the Chair)
Thank you all for an interesting debate.
Question put and agreed to.
Written Statements
(10 years, 5 months ago)
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Plutonium Management
(10 years, 5 months ago)
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The Minister of State, Department of Energy and Climate Change (Michael Fallon)
In December 2011 the Department of Energy and Climate Change (DECC) published its response to the consultation on plutonium management.
The consultation response indicated that Government’s preferred option was to reuse the plutonium as MOX fuel, but that we would be open to consider alternative options that offered better value to the UK taxpayer.
In addition Government said that overseas owners of plutonium stored in the UK could have that plutonium managed in line with UK plutonium, subject to commercial terms that are acceptable to the UK Government. In addition, subject to compliance with intergovernmental agreements and acceptable commercial arrangements, the UK is prepared to take ownership of overseas plutonium stored in the UK as a result of which it would be treated in the same way as UK-owned plutonium. The Government consider that there are advantages to having national control over more of the civil plutonium in the UK, as this gives us greater influence over how we ultimately manage it.
The Department of Energy and Climate Change has agreed to the Nuclear Decommissioning Authority (NDA):
Taking ownership of about 800 kg of material previously owned by a Swedish utility.
Taking ownership of about 140 kg of material previously owned by a German research organisation.
These transactions, which have been agreed by the Euratom supply agency, will not result in any new plutonium being brought into the UK and will not therefore increase the overall amount of plutonium in the UK.
We have agreed to these transactions as they offer a cost-effective and beneficial arrangement, which removes the need to transport separated plutonium, allows the UK to gain national control over more of the civil plutonium in the UK and enables an outstanding contract with a Swedish utility to be concluded.
In line with the DECC policy statement, the NDA continues to engage with other third parties regarding taking ownership of further overseas plutonium in the UK arising from overseas reprocessing contracts. As well as UK Government approval, these transactions will require consent from the relevant overseas Governments and regulatory bodies, and thereafter Euratom supply agency agreement, before any contracts are enacted.
The UK has committed to publish annual figures for national holdings of civil plutonium at the end of each calendar year to improve transparency and public confidence. The most recent data can be found at: http://www.onr.org.uk/safeguards/civilplut13.htm
This data will be updated in due course to reflect the changes described above.
Daniel Morgan
(10 years, 5 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
Daniel Morgan, a private investigator, was found murdered in a pub car park in south-east London on 10 March 1987. It is one of the country’s most notorious unsolved murder cases. After numerous separate police investigations into the case between 1987 and 2002, the Crown Prosecution Service discontinued the attempted prosecution against five suspects in 2011. The Metropolitan Police admitted that police corruption was a “debilitating factor” in the original investigation.
Last May I announced the creation of the Daniel Morgan independent panel and the appointment of Sir Stanley Burnton as chair of the panel. On 19 November 2013, I reported to the House the decision of Sir Stanley Burnton to resign from this role for personal reasons.
I am now able to announce the appointment of Baroness Nuala O’Loan of Kirkinriola, DBE, MRIA, as chair of the independent panel. Baroness O’Loan was Northern Ireland’s first Police Ombudsman from 2000 to 2007, during which time she investigated thousands of cases, including the police handling of the Omagh bombing in 1998 and police collusion with loyalist paramilitaries engaged in the most serious crime between 1990 and 2002.
The remit of the panel is to shine a light on the circumstances of Daniel Morgan’s murder, its background and the handling of the case over the period since 1987. I am very grateful to Baroness O’Loan for accepting this important role and look forward to the panel completing its work.
Tackling Violence against Women and Girls Overseas
(10 years, 5 months ago)
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The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone)
I would like to update the House on my work championing the issue of tackling violence against women and girls internationally, building policy coherence across Whitehall and pushing for as much progress as possible towards our goal of ending all forms of violence.
The concerning abduction of over 200 school girls in Nigeria in April and the recent gang rape and murder of girls in India are a sharp reminder of the low status of women and girls globally and the terrible injustice and violence faced by so many.
The UNMISS human rights report on the conflict in South Sudan, published on 8 May 2014, presents grim evidence of how the conflict has exacerbated the vulnerability of women and children. All parties to the conflict have committed acts of rape and other forms of sexual violence against women with impunity. The ability of survivors of sexual violence to receive services in this environment has diminished, leaving most incidents unreported.
I am proud to say that the UK is supporting the International Rescue Committee in South Sudan to conduct outreach and support services to survivors of gender-based violence.
Since my last statement the UK has refreshed our cross-government action plan, “A call to end violence against women and girls”, which sets out an ambitious agenda for the year ahead, including how we will continue to bring international and domestic work on violence against women and girls closer together.
The International Development (Gender Equality) Act came into force on 13 May. This Act, strongly supported by the Secretary of State for International Development, makes it law for the UK to consider gender equality before it provides development assistance, and the differences in gender-related needs for its humanitarian support. This puts our existing commitment to delivering important outcomes for girls and women—including a reduction in violence—on a statutory footing.
In May I had the great privilege of speaking at DFID Mozambique’s summit on ending child, early and forced marriage (CEFM). This is a huge issue in Mozambique, where one in two girls is married before her 18th birthday. CEFM is a global issue that has a significant negative impact on girls, their families, communities and countries.
On 10 to 13 June over 120 country delegations, over 80 Ministers, and around 1,700 delegates including eight UN agency heads, presidents and prosecutors from the ICC and international tribunals, civil society, and over 300 sponsored delegates, including from conflict-affected countries, among them a number of survivors, came together at the global summit to end sexual violence in conflict hosted by the Foreign Secretary and UN special envoy, Angelina Jolie.
I was proud to be part of the summit and to formally launch “What works to prevent violence” DFID’s new research and innovation fund. I spoke on the panel with leading experts to highlight the need to invest in work to understand and address the root causes and social norms which underpin many forms of violence—both in times of peace and in conflict. I also participated in the ministerial round table on hidden victims to highlight the issues of domestic violence, female genital mutilation (FGM/C) and CEFM which are often exacerbated in conflict. The Secretary of State for International Development chaired a ministerial round table on the call to action to protect women and girls in humanitarian emergencies and jointly launched the UK’s new national action plan on women, peace and security with the Foreign Secretary and Defence Secretary.
The momentum will continue over the summer. In July, the UK Prime Minister and UNICEF will co-host a Girl summit on female genital mutilation and child, early and forced marriage. The summit aims to support southern leadership on these issues and to further rally a global movement to end the practices for all girls, within a generation. I know that many in the House will have an interest in these issues, given the impact they have in the UK as well as internationally.
A youth event will be held at DFID on 19 July with 170 attendees, made up of young people, including several nominated by Members of Parliament, several from developing countries, a youth panel and other attendees nominated by partners.
A social media campaign has also been launched this week. The campaign aims to receive pledges of support from people across the UK, reaching beyond the usual network of development organisations and civil society supporters. The action focuses around “play your part”—we are asking people to play their part in ending these harmful practices through pledging support and spreading the word.
In the coming months, I will visit more of our programmes overseas so that I can see in practice how our commitments to this agenda are being implemented.
Northern Ireland Economic Pact
(10 years, 5 months ago)
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The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
My right hon. Friend the Prime Minister and I met yesterday with the First Minister and Deputy First Minister of Northern Ireland to discuss the economic pact, “Building a prosperous and united community”.
We considered the progress that has been made by the Government and Northern Ireland Executive against our respective commitments made last June. We also agreed to publish a joint report, “Building a Prosperous and United Community—One Year On”, that highlights our successes as well considering the challenges ahead. I have placed a copy of this report in the Libraries of both Houses.
The Government’s long-term economic plan is working for Northern Ireland. Figures published for the first time yesterday show that credit conditions are easing and many more businesses are accessing the funds they need to grow. The Green Investment Bank is also making investments in Northern Ireland providing a total of £3.2 million of funding.
The Government and the Executive working together have helped deliver a record year for investment advancing our shared aims to strengthen the private sector and rebalance the Northern Ireland economy. The international investment conference last October was hugely successful, contributing to the 11,000 jobs that Invest NI has promoted over the last year.
There has also been some progress in supporting initiatives designed to build a shared society. The Government made available an additional £100 million of borrowing and have now agreed to the Executive’s proposals to use this for improved facilities at integrated primary schools, a new further education college, and increased provision of shared housing. The Government have also identified 106 surplus Ministry of Defence homes that could be gifted to the Executive for use as additional shared housing if the Executive bring forward appropriate proposals. The update also sets out the latest position on the support the Government are giving to the Executive on further improving broadband infrastructure and mobile coverage in Northern Ireland.
This report confirms that the Government remain on track to make a final decision on the devolution of corporation tax no later than the 2014 autumn statement. Work has taken place to look at how the international tax regime might apply in an intra-country situation as well as how a regime might work for both smaller and larger companies.
There remain areas that require further work from both the Government and the Executive. The British-Irish visa scheme is due to begin in the autumn, encouraging tourism by allowing Indian and Chinese nationals to visit Northern Ireland using an Irish visit visa. This is part of the continuing programme of engagement set out at the annual UK-Ireland summits to boost trade and strengthen economic co-operation between the UK and Ireland.
There will also be further progress on the Executive’s red tape review, ambassador-led trade missions to Northern Ireland and continued efforts to improve access to finance.
The economic pact set out a new approach for the Government and the Executive to work more closely on our joint objectives. The report shows this approach can deliver better results for the people of Northern Ireland and we will continue to build on the good progress already made.
Crossrail
(10 years, 5 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
In January the Prime Minister joined me at Tottenham Court Road to mark 50% completion of the Crossrail project. The Crossrail project has now moved into the peak of its construction phase. There are over 11,000 people working at over 40 sites across London. Four of the tunnel boring machines have completed their journeys and the new rail tunnels are over 80% complete including the Thames tunnel. The final tunnel drives are now under way and tunnelling should be completed by next spring. Construction is also progressing on the 10 new Crossrail stations and on works above ground west of Paddington and east of Stratford.
In the past year we have made great progress in many different areas of the project. Last July we announced that there would be a Crossrail station in Woolwich which is now the catalyst for the regeneration of the surrounding area, attracting investment from businesses and developers and supporting our plans for long-term economic growth.
In February the joint sponsors announced the contract to provide the rolling stock and depot was awarded to Bombardier UK plc. The contract covers the supply, delivery and maintenance of 66 new trains and a depot at Old Oak Common. This will support 760 UK manufacturing jobs plus 80 apprenticeships building the trains in Derby. The construction of the maintenance depot at Old Oak Common will see 244 jobs plus 16 apprenticeships supported when fully operational.
This is just one part of the contribution Crossrail is making to economic growth across the United Kingdom. It is estimated that during the construction phase the project will generate at least 75,000 business opportunities and support the equivalent of 55,000 full-time jobs around the UK. Firms from across the United Kingdom are winning business from the project. Sixty-two per cent of the suppliers winning work are outside London and over half (58%) are small and medium-sized enterprises. Ninety-seven per cent of Crossrail’s contracts are based in the United Kingdom.
We have also announced that Crossrail will now be extended to Reading. The extension of Crossrail services to Reading will achieve the best use of capacity on the Great Western line while also offering greater flexibility for future timetabled services.
The National Audit Office published their report on the project in February and this found that taxpayers’ interest in the Crossrail programme has so far been well protected. A Public Accounts Committee hearing held on 9 April supported those findings.
As we move towards the operational phase of the project, work is progressing on the appointment of the operator of the Crossrail services. Transport for London expect to announce the award of the Crossrail train operating concession later this year.
The Crossrail board continues to forecast that the costs of constructing Crossrail will be within the agreed funding limits. We expect Crossrail to cost no more than £14.5 billion (excluding rolling stock costs).
During the passage of the Crossrail Bill through Parliament, a commitment was given that a statement would be published at least every 12 months until the completion of the construction of Crossrail, setting out information about the project’s funding and finances.
In line with this commitment, this statement comes within 12 months of my last one which was published on 9 July 2013. The relevant information is as follows:
Total funding amounts provided to Crossrail Ltd by the Department for Transport and Transport for London in relation to the construction of Crossrail to the end of the period—22 July 2008 to 29 May 2014. | £5,981,006,3091 |
Expenditure incurred (including committed land and property spend not yet paid out) by Crossrail Ltd in relation to the construction of Crossrail in the period—30 May 2013 to 29 May 2014 (excluding recoverable VAT on land and property purchases. | £1,576,835,000 |
Total expenditure incurred (including committed land and property spend not yet paid out) by Crossrail Ltd in relation to the construction of Crossrail to the end of the period—22 July 2008 to 29 May 2014 (excluding recoverable VAT on land and property puchases). | £6,011,730,000 |
The amounts realised by the disposal of any land or property for the purposes of the construction of Crossrail by the Secretary of State, TFL or Crossrail Ltd in the period covered by this statement. | Nil |
The total funding amounts provided to CRL by the Department for Transport and Transport for London refer to the expenditure drawn down from the Sponsor Funding Account in the period 22 July 2008 and 29 May 2014. Included within the amount of £5,981,006, 309 that was drawn down from the Sponsor Funding Account is £498,780, 936 of interim funding that has been provided to Network Rail to finance their delivery of the On-Network Works between 1 April 2009 and 29 May 2014. |
The numbers above are drawn from Crossrail Ltd’s books of account and have been prepared on a consistent basis with the update provided last year. The figure for expenditure incurred includes moneys already paid out in relevant periods, including committed land and property expenditure where this has not yet been paid. It does not include future expenditure on construction contracts that have been awarded.
Grand Committee
Infrastructure Bill [HL]
(10 years, 5 months ago)
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The Deputy Chairman of Committees (Lord Bichard) (CB)
My Lords, welcome to the Grand Committee on the Infrastructure Bill.
Clause 1: Appointment of strategic highways companies
Amendment 1
Lord Davies of Oldham
Lord Davies of Oldham (Lab)
My Lords, we start on quite a fundamental point, on which even the Minister on occasions has not been too secure in the position that she has adopted. When I was asked last night to prepare a short summation of this part of the Bill for wider circulation, I wanted to get things as accurate as I conceivably could, but I found myself wrestling with whether I was referring to one company or companies. Every time that I used the word “companies”, it looked singularly ill placed with the surrounding arguments as far as the Bill is concerned. Therefore, Amendment 1 asks the Minister to clarify what is, after all, a pretty fundamental point, and we would not want to continue our deliberations without having cleared it up.
At Second Reading, the Minister certainly said:
“Yes, it is the Government’s intention to set up just one company. It is standard template language in legislation, I understand, to create the option of further entities. It has no sinister meaning at all behind it. The intention is for a single company, but of course the lawyers always think about what-ifs in the most extraordinary way”—
she did not sound too convinced by the argument herself. However, she went on:
“I guess we did not really kick back against that but, yes, it is one company”.—[Official Report, 18/6/14; col. 896.]
I congratulate her on putting up a pretty stout defence of her position, but even in that stout defence there is a certain ambivalence, as there is in the Bill. That is why Amendment 5 in my name would remove a provision from Schedule 1 that makes rules for when two different strategic highways companies interact, which certainly suggests that the Government are planning for more than one strategic highways company.
It looks a fairly limited argument to say, “The lawyers guard against every development and therefore we may need more than one”. The debate about the Bill will be coloured very significantly indeed if we must take on board the fact that there may be two strategic highways companies. To make the most obvious point, we will want to know how they will interact, and we have amendments down that relate to that. If the Minister is able to clarify the issue and state that, as it is the Government’s intention to establish just one company, she will look at the Bill again to ensure that it is framed in that way, I am quite sure that that would set a lot of minds at rest and make for a much more straightforward discussion.
I assure the Minister that whether there is one or more than one strategic highways company has quite a conditional effect upon the legislation. Our concern is not just about one passing fancy of the lawyers but about something that may be of real substance. Some of my more prophetic colleagues say, “Why don’t you come to terms with the fact that this is all about setting up the strategic highways authority for privatisation? Of course, you will want more than one, and this will neatly fit in with privatisation plans in the not-so-distant future”. Well, I am not a cynical person and I accept what the Government put in the Bill at face value.
It is on that basis that I move this amendment, which would delete “one or more companies” and insert “a company”. In addition, as I said, Amendment 5 would delete sub-paragraph (3) in Schedule 1, which suggests that the existence of more than one potential strategic highways company is not a legal oddity caused by standard drafting—lawyers always make life so much more interesting for us all when they turn to drafting—but a scenario actively envisaged by the drafters of the Bill. It clearly makes provision for what should happen in the event that one strategic highways company should wish to build a bridge connecting to another. One and one still make two and therefore this problem could arise only if there is more than one strategic highways company.
There is understandable concern that the Government are considering a model where the SHC might be franchised out in some not-too-distant future. If that is the intention, it reinforces our many concerns about this measure, but I venture to suggest that this concern is as great as any. Therefore, I ask for reassurance from the Minister that, when I next write about the Bill and try to communicate intelligently with a wider audience, I am able to refer to one company in the singular the whole time and make some coherent sense out of this measure. I beg to move.
Lord Berkeley (Lab)
My Lords, I support my noble friend’s amendment because there are already precedents for having a multiple infrastructure. One is the M6 toll road. I believe that the company running it was given a 90-year lease to maintain and operate it and charge whatever it liked as tolls for the next 90 years, or whatever it was. If, in the future, there is a plan for road tolling, as appears more likely with this Bill—I certainly welcome that and will be talking about it in later amendments—whatever tolling the Government of the day propose, the M6 toll road will not be part of it. Whether that will increase or decrease its traffic, I do not have a clue; it depends on what the charges are. It is a particularly bad example because most of the freight goes on the existing road and damages it quite dramatically—the noble Lord, Lord Bradshaw, has an amendment down on road damage—but this is just one example of what can happen if there is no co-ordination over the whole country.
A second example is that, just after the last election, there were various plans and threats from the then Secretary of State that Network Rail would be broken up into other regions or zones because it was not performing properly. The idea presumably was that there would be competition between those zones for quality, capacity and charging, and for anything else that you come across. Luckily, that did not go ahead. I declare an interest as chairman of the Rail Freight Group. The idea of having a different charge for whichever way you go between A and B would be just ridiculous; the business would not work.
The problem here is that, as the Bill stands, you could have more than one infrastructure company. Wales might well choose to be different. I do not think Scotland is part of this legislation, so the charges will be different there. Then there will be all the arguments about doing one thing one way and then leaving the rest of it and coming along and doing something else that is slightly different. There would also be the interfaces and the knock-on and consequential effects, which might be quite serious. I think that my noble friend is quite right in tabling this amendment and speaking so eloquently in favour of it. I do not know why we need more than one infrastructure company to run the trunk roads—there are not that many of them, actually—and why we cannot leave it as a singular company.
The Minister of State, Department for Transport (Baroness Kramer) (LD)
My Lords, as the noble Lord, Lord Davies of Oldham, said, I have emphasised before that we have no current plans for multiple strategic highways companies. This is not a sinister issue. We recognise that at some point there may be further companies, but the purpose of that might be, to give a good example, if one wanted a more regional structure for the equivalent of the strategic highways company. As noble Lords know, this Government are committed to devolution, so that is not something beyond the bounds of the imagination, but it is not anything currently contemplated. Our focus at the moment is a single highways company; there is nothing more sinister.
I also point out that one reason why I referred to the lawyers is that in this Bill we have sought clarity. The noble Lord will know from the number of Bills with which he has been associated over the years that it is quite common that a single phrase covers the plural. In fact, from the lawyers, I have this:
“Words in the singular include the plural, and words in the plural include the singular”.
It has been common practice in many Bills to allow for the fact that there may be more than one; it has simply been less explicit than we have been in this document. We thought that for the purposes of plain English this approach would be wise. There is no sinister context to any of this. We simply want to ensure sufficient flexibility for a future Government, so that if they decided that more than one company would be beneficial they would not have to go back and start legislation from scratch. In saying that, I am effectively responding to Amendments 1, 2 and 8, as well as Amendment 5, which as the noble Lord, Lord Davies of Oldham, said, is consequential to the other amendments.
I want to pick up on some of the issues mentioned by the noble Lords, Lord Davies and Lord Berkeley—that this is somehow some sinister mechanism for achieving privatisation. Nothing could be further from the reality of this Bill. The SHA is owned solely by the Secretary of State; if he were to cease to own it, it would lose all of its powers. There can be no way in which this company can be privatised. If the Secretary of State were to cease to be its owner, effectively it would cease to have any functions, powers or anything else. It would take a separate Act of Parliament to create a privatised entity. Everyone should be clear on that point.
The noble Lord, Lord Berkeley, raised the possibility that this could be some mechanism that in some way affected tolling, or future tolling. I point out to him that specifically under this legislation, where we have existing toll trunk roads, such as at Dartford, the Severn crossing and the M6 toll, these concessions remain in the same relationship to the Secretary of State as they currently have. They do not develop a new relationship under the auspices of the strategic highways company. We expect the concessionaires will continue to exercise their existing rights and discharge their current obligations. Tolls and congestion charges would therefore be set by a combination of public authorities such as the UK Government, devolved Administrations and local authorities, as is the case today under existing contractual mechanisms. I hope that with those assurances the noble Lord will feel able to withdraw the amendment.
Lord Davies of Oldham
My Lords, I cannot pretend that the second version is any better than the first as regards convincing us on this matter. The Minister will know that there is a great deal in the Bill about the relationship between this strategic authority and the national rail network. We will emphasise that later on, because we think that there is great merit in ensuring that plans are put before the travelling public that show some co-ordination of thought between the railway and the major road network. I therefore find it a little difficult to think of the road network being regionalised. We are talking about trunk roads and motorways; at this stage we are not talking about local roads, although we all recognise that they comprise by far the greatest carriers of traffic. We are talking about the strategic network and we will seek to emphasise the virtues, which we hope the Government will see, of close co-ordination between two major bodies of the nation: rail and road.
The noble Baroness dangles before us the prospect of fragmentation of this company, challenging though it is to set up and significant as it is bound to be as regards road development. We are at one with the Government on the necessity of continuity of policy on infrastructure and in the belief that we should therefore create the mechanisms that offer that continuity, so we applaud the part of the Bill that does that. It is not usual for the Opposition to put down congratulatory amendments, but the noble Baroness will be well aware that in Second Reading speeches we all had many positive things to say about the ambition of improving our infrastructure planning. However, the insertion into the Bill of this doubt and this possibility complicates matters significantly. I must say to the noble Baroness that I hear what she says; she has obviously thought about it a great deal and has convinced herself. She has not as yet convinced me, but I beg leave to withdraw the amendment.
Lord Whitty
“(3) The company designated under this section is called the Strategic Highways Company.
(4) The designated Strategic Highways Company shall not cease to be wholly owned by the Secretary of State unless by Act of Parliament.”
Lord Whitty (Lab)
My Lords, I apologise to the Minister and the Committee that I was not here for the previous bit; I am afraid that I am boxing and coxing with the Chamber at the moment, and have probably already offended the rules of the House by nipping out during the Minister’s reply to move this amendment. Some of this amendment is relevant to what noble Lords have just been discussing on the previous amendment. Indeed, the first part of my amendment is a consequence of trying to clarify that we are talking about only one company and not several. That confuses people, particularly in local Government, who anticipate a degree of regional structures down the line. I know that the Minister will have cleared up some of that.
My second point relates to the issue of privatisation, of which the Minister was speaking when I came into the Room. Clause 1(3) of the Bill as it stands is branded as the way in which privatisation is prevented by the Bill; namely, that the designation would terminate if the company were sold or otherwise disposed of. To me, that seems a funny way of doing it. You will have a company which employs all the people who are at the moment employed by the Highways Agency. If it were somehow to be bought, all its duties would be removed. Surely it is far easier to give some parliamentary control over this process. If we are moving to a hived-off company, structured under the Companies Act but owned wholly by the state, and if it is the intention of the Government to keep it that way, why do we not state baldly in the Bill that it cannot be privatised except by primary legislation? That is what is proposed in the second part of my amendment. It may not be ideal, but it is a good deal better and clearer than what is in the Bill.
There are clearly worries. The first thought of most people when they heard that the Government were going down the road of hiving off the Highways Agency was, “This is the first step to privatisation”. There was alarm at that. There might have been in some quarters—but not ones that I have come across—some joy at the prospect, particularly were it to be related to road pricing, which in principle I do not oppose but is politically rather difficult for any of us to support, particularly a few months off an election. It is easier to assert the will of Parliament and say, “This is not privatisation. If there is any prospect of that changing, you will need a new Act of Parliament”. That is what my amendment proposes. I beg to move.
Lord Berkeley
I support my noble friend’s amendment. I am glad that he is here, because I am not sure that any other of us could have moved it. He did it very well. I want to compare this situation with what is happening to Network Rail, of which I declare an interest as being a member.
I have just come from a meeting with Network Rail where we have been told what is going to happen by 1 September, when it comes under government ownership. That sounds as if it is going to be quite easy, apart from changing all the memoranda and articles and allowing the Secretary of State or the accounting officer in a department to make certain appointments and control things. However, that is being done without much, if any, parliamentary scrutiny, because I do not think that anybody is particularly worried about it. Network Rail has been in the private sector up to now, but it has had £4 billion or so a year from public funds. It has managed to work and not cause trouble; otherwise, this would probably have happened sooner. However, there still have to be changes. I worry about it going in the other direction. As my noble friend Lord Whitty said, the consequences need some public debate, because there might be many more people who are worried about it, not least the people who work for the new company while it is government owned. It is reasonable to have some parliamentary scrutiny of a change. Therefore, I support the amendment in his name.
Lord Davies of Oldham
My Lords, I imagine that the Minister will have little difficulty in responding to this amendment. She is obviously going to continue to deny that privatisation is anywhere on the horizon as far as the Government are concerned—so that is one defence. Secondly, I hope that she recognises that there would need to be significant parliamentary action if privatisation of a significant company such as this were carried out. I am therefore anticipating the Minister quite enjoying responding to this amendment, which I am glad my noble friend has aired.
Baroness Kramer
My Lords, I will indeed enjoy responding to this amendment. It would seem from the speeches I have heard that our purposes are the same. The question is: whose language does it better? In this case, I go with the language in the Bill, which is rather more efficient in that it does not require an Act of Parliament to, as it were, “gut” the highways authority should it cease to be owned by the Secretary of State; it just does it. Obviously, if such a thing were to happen, we would put in place a transitional process to bring the staff back over; those kinds of things would only be sensible. The language in the Bill achieves what the noble Lord, Lord Whitty, intends but does it rather more effectively than the subsections he has designed. Let us go for quick action and ensure that we have the maximum strength, which we have in the Bill. I therefore ask that the amendment be withdrawn.
Lord Whitty
Well, my Lords, I am not totally convinced by the Minister and I suspect that casual readers of the Bill would also be a bit puzzled by the way that this is put. I fully accept the assurances on the Government’s intentions but the wording could be clearer—it probably could be clearer than mine. We need to understand that were there ever to be any change of ownership, Parliament would have a say, which is the key point of my amendment. However, I take what the Minister says as being the Government’s position. The substance of the matter is not in dispute. Perhaps her officials could look at the wording again at some point so that Parliament is written into that process somewhere.
Lord Davies of Oldham
My Lords, at Second Reading the Government failed to provide a convincing case for why the strategic highways company needed to be created to achieve the stated aims. As we indicated to the Minister at Second Reading, there is agreement pretty well across the House on the objective of a more coherent planning structure for the crucial part of the infrastructure represented by trunk roads and motorways. But the Minister indicated that because the Highways Agency would be turned into a government-owned company, it would have,
“the stable, long-term funding needed to plan ahead effectively”,
and that the Government were,
“also introducing in the Bill the framework for a roads investment strategy”,
which, of course, we applaud. The Minister went on to say:
“The strategy will be agreed by the Government and the new company. It will set out the Government’s longer-term strategic vision for the strategic road network, investment plans and performance criteria, along with the necessary funding, just as happens for the railways. The new delivery model will allow the company to better prioritise its spending in terms of both maintenance requirements and capital demands. This is bound to lead to better asset management than we have now”.—[Official Report, 18/6/14; col. 838.]
Where is the beef in that statement? What is it about the new delivery model that is superior to what we could achieve with the Highways Agency? What in the structure of the Highways Agency makes it impossible for it to deliver longer-term planning? It may be that it has not done so because of the vicissitudes of funding, for which the Government must take responsibility, but the Minister surely recognises that nothing gets done without Treasury approval. What the present structure of the Highways Agency seems to need is more operational independence from the Treasury. The Treasury needs to be on board with the necessity for longer-term thinking about roads. But why we need the creation of a government-owned company to plan spending, I do not know. This is spending that is not in yearly cycles. It does not peak towards one part of the year rather than another. It is not clear that the Bill actually delivers what the Secretary of State has claimed to be among the key benefits. I cannot see why, with serious intent and commitment to long-term planning of infrastructure on the Government’s part, the existing structure cannot be made to work towards those objectives.
Baroness Neville-Rolfe (Con)
My Lords, I regret that I was not able to speak at Second Reading, owing to other commitments. I associate myself with the noble Lord’s question about costs in relation to the new company.
I also have another question: will this new company be able to raise money in a way that the Highways Agency is not currently able to do? That would of course potentially enable important infrastructure investments to go ahead even in times of stringency. I also associate myself with the comments about the A303, having lived off the A303 all my life and having seen probably 50 years’ worth of proposals for Stonehenge—none of which has so far come to fruition.
Lord Whitty
My Lords, I support the proposal that Clause 1 should not stand part of the Bill, as it queries whether the clause—which is the whole proposition here—is sufficiently coherent and clear as to what it intends to do. As a Roads Minister, I was responsible for at least one of the proposals for the A303 and remember that we talked to everybody in the community, including several different sets of druids, and told them that the Stonehenge tunnel would be built. However, as I said at Second Reading, no sod has yet been turned and all they have done is close one road.
I understand the Government’s intention to create a steadier position through having a slightly more arm’s-length relationship, but this is half-baked. It is neither fish nor fowl. This will be a company that is wholly owned by the Government and which—to address the point that has just been made—cannot raise its own money. The Minister has made that clear to me, both in writing and in person. I thought the main advantage of having the hive-off would be that the body could raise its own funds, even if subject to broader controls from the Treasury, but the Minister makes it clear in her letter that its situation will be no different to the current one of the Highways Agency. That seems to undermine the main advantage of establishing an arm’s-length body. The Government’s proposal incurs all the costs, all the confusion and all this great legislation in the Bill and all the schedules attached to it, but it does not, of itself, provide the funding, the strategic intent or the independence from Government and, crucially, from the Treasury. It will not avoid what has been a stop-go process for the past 30 years.
If the Government were proposing a new corporation that was properly set up and run and which, although still owned by the Government, had its own structural basis and accountability, as well as the ability to finance its activities in various different ways, I could see that there would be a significant advantage. With this halfway house, which is not even a halfway house, I see very few advantages. Therefore, I think that the Government would be more sensible to leave the Highways Agency where it is, give the agency more money and give that over a longer period of time—if that is the Government’s priority—and, if necessary, think up a fuller, clearer, more comprehensive proposition for what kind of highways organisation we need in this land. The answer to that might well be in the territory that my noble friend Lord Davies referred to, because what we perhaps actually need is a transport infrastructure company rather than one that deals with simply 2% of our roads.
If we were to do that, we could start to deliver the investment required for a genuinely integrated transport policy, whereas the Bill, as I am afraid I have said before, seems to be about changing the names on the doors without changing much else.
Lord Berkeley
My Lords, I would just like to ask the Minister where this figure of a £2.6 billion saving comes from. The two organisations Network Rail and the new strategic highways company will be quite similar, but one difference between them, which we will come on to in later amendments, relates to the role of the Office of Rail Regulation. Over the past 10 years, the Office of Rail Regulation has required Network Rail to make savings of about 60% of its turnover. That is quite a big saving, which has been achieved, while keeping the service going and the quality improving, because the regulator has very strong powers. If the savings are not made, or if the resulting performance of the network is bad, the regulator can fine Network Rail, as I believe it is planning to do next week.
The problem here is that the rail regulator will not have such powers over the highways authority but will simply monitor. You can sit monitoring things all your life, but you cannot incentivise or require an organisation to make the changes that it should. I am sure that there are changes to be made. I am sure that significant percentage savings could be made over quite short periods. On whether those would be the same as in the case of Network Rail, they probably could be, because Network Rail started off as a nationalised industry, which was probably pretty inefficient to some people. Although the Highways Agency has improved over the years, there is probably a long way further to go. However, unless we can get the ORR to have the same powers not just to monitor but to control and enforce cost reductions, I am not quite sure where we are with this.
Listening to other noble Lords, I am beginning to think that the only benefit from this that I have heard is the idea—which the Minister has, of course, denied—that the Bill is about getting the Highways Agency ready for privatisation.
Lord Teverson (LD)
My Lords, perhaps I should declare an interest in that I, too, am a regular user of the A303. When driving down there, one of the greatest moments for me is being able to see Stonehenge, but I know that the fact that I can do so is not necessarily good for the millions of people who go to visit it. More seriously, perhaps I could also declare my interests for the rest of the Committee stage of this Bill. I am a director of Wessex Investors, which would have an interest in the outcome of some of the planning implications of the Bill, although I do not intend to speak on those particularly. Wessex Investors could also potentially have an interest in some of the energy provisions, as it is starting to negotiate with an organisation on an energy project in the south-west. However, I do not think that any of those affect what I am going to talk about.
I, too, shall be interested in hearing answers to the questions on this asked by the noble Lords, Lord Whitty and Lord Davies, but I want to make the point that it is important politically that the Government are saying in the Bill that we have had enough of the stop-start, ad hoc investment plans for roads, and we need to move on to a much more mature and grown-up way of looking at infrastructure in the highways sector. Whether that is absolutely dependent on changing the name and function or legal entity of the Highways Agency, I am not absolutely sure, but I know that the Minister will come back on that when she answers the debate.
However, the good thing is that there is a real intention to start to mirror the situation that applies to rail. My understanding of this is imperfect and the noble Lord, Lord Berkeley, will know far more about it than me, but, as I see it, we have a good example from Network Rail, for which we now have a £38 billion programme over the next five years providing the investment needed to keep this country moving and to move things forward and modernise that network. That seems to be incredibly successful as regards usage and how that has worked over the past decade and into the future. If we can start to replicate that in the way we treat roads in this country, that would be positive.
I am not a great person for advocating huge investment in the strategic road network—apart from for the A303—but that clearly needs to be done in some areas, and on a programmed and predictable basis so that the Government, users and contractors know that it will be rolled out and actually happen rather than be subject to the next budget cut. I therefore welcome that, and hope that the Minister will be able to reply in such a way as to show that this change of the legal status of the Highways Agency will enable that to happen. Clearly, we need to do that.
Lord Berkeley
If I may just respond to the noble Lord, Lord Teverson, let me say that I, too, congratulate the Minister on what has been announced today about the things happening in Cornwall. To go back to the noble Lord’s comment about the long-term finance, I certainly agree with him that if this change enables the longer-term finance that Network Rail has at the moment, it will be a major step forward. I worry that I do not see that in the Bill—maybe I cannot find it, and perhaps the Minister will be able to put me right. However, I worry further, that although Network Rail has it for the next five years, where is the commitment beyond that for the railways? If that does not happen for the railways, it probably will not happen for the roads. I was going to raise this later, but since the noble Lord raised it, let me ask: is there the opportunity to have a discussion before Report committing the financing of this new agency—the Highways Agency and maybe Network Rail—to a five-year programme? If that does not happen, it would need primary legislation to change it. That is probably a bit of a tall order, but it would be interesting to explore.
Baroness Maddock (LD)
My Lords, I declare my interests as in the register, although I do not think that any of them have any particular relevance to what we are talking about today.
Following my noble friend Lord Teverson, of course we all have our favourite roads. Many people will be familiar with the A1 north of Newcastle and the issue of dualling it. Therefore, as I have lived with that, having now been married to the MP there for 13 years, I would be grateful to know how the Bill might help or hinder what has been a rather sorry tale of getting quite advanced on the dualling of that road, and then it all going backwards. It is now going forwards again, but I would be grateful for any information my noble friend can give me on that.
Baroness Kramer
My Lords, I will start by referring to two roads. First, the A303 is part of a feasibility study, the details of which should be announced later this year. Secondly, on the issue that was raised about the A1, the noble Baroness is quite right to say that that is advancing. That illustrates exactly some of the problems which we are trying to counter with the work that is going on here. Your Lordships will understand that this clause allows the Secretary of State to appoint a strategic highways company, conferring duties and functions for it to operate as a highways authority. Our aim—I think this is now well understood—is to create a different model to deliver road infrastructure from that which we have now, with a separate legal body from government responsible for our strategic road network, advising government on how it can best achieve its vision for our national network and being responsible for delivering that vision in the most cost effective way. These parts of the Bill are an implementation measure.
We consider the most effective model to be one where a company is created under the Companies Act 2006. I understand that there are questions about why a separate company is needed, so I will take a moment to set out some of the rationale. We have decades of experience across Administrations of different political complexions showing that the current arrangements have not encouraged a long-term approach to planning infrastructure or to securing funding. The noble Lords, Lord Davies of Oldham and Lord Whitty, asked why we do not do it under the existing structure. I say to them that we have lived with the existing set of arrangements for a very long time and it has not worked in terms of delivering the element of long-term certainty that is needed. Funding has been changed arbitrarily—sometimes at very short notice. I think we all recognise this and we recognise that it comes with high costs in efficiency and the quality of our infrastructure. The noble Lord, Lord Berkeley, underscored how Network Rail, with its more arm’s-length relationship—it calls its funding periods “Control Periods”—has delivered significant increases in the efficiency with which it implements new rail infrastructure, and we want to capture the same for roads.
Some noble Lords have asked what our sources were for the numbers. I refer them to Alan Cook’s A Fresh Start for the Strategic Road Network, published in 2011. There are further, more detailed calculations set out in the impact assessment, which is published on the DfT website. That might be a very good source for people who want to understand more of the nitty-gritty around those numbers. However, I do not think that most people looking closely at this will challenge the underlying reality that, once there is a longer-term framework in which to operate, efficiency is far easier to achieve.
Many have raised—not today but in various contexts—the importance of maintenance and balancing new-build and maintenance; looking at the whole life of a road; looking at the longer-term life of the asset; and approaching asset management in that way. It is far more possible to do that with a greater certainty of funding. I will just underscore the problems that we face today. Our road infrastructure, to which the noble Lord, Lord Davies, referred, is now rated only 28th in the world by the World Economic Forum—we all know that hinders our competitiveness. I suspect that arguing for the status quo will not allow us to make the changes needed to get the improvements that our economy requires.
We feel that for long-term funding certainty and planning, it is crucial for the Department for Transport to be able to have a transparent and binding relationship with a separate legal entity that will be set out in the road investment strategy. The RIS—if I can use that short term—sets out the Government’s requirements and investment plans and sets the funding to deliver them. If the Highways Agency remained part of the DfT, then in practice it would be much easier to change. Setting up a strategic highways company as a new company, operating under company law with a well established governance and financial framework, will reinforce the clarity and robustness of the relationship.
The company structures and disciplines will also help support a more commercial approach. We have seen international examples, which are enormously varied, and I have written about them in quite a detailed letter to some Members of your Lordships’ House. For example, in the Netherlands and Sweden, where roads delivery bodies have been given long-term funding certainty and a more independent relationship with transparent requirements, large efficiency savings have been possible. We have all acknowledged that this is not about privatising the roads. This will be a company that has one shareholder, the Secretary of State, and if he ceases to be the shareholder, in effect the company is terminated.
I will try to pick up a couple of the other issues that were raised. We will discuss some of them in more detail as we come to the various amendments targeted on them. My noble friend Lord Teverson talked about echoing the advantages that have come through the Network Rail structure, and that is exactly what I have been describing. I do not think it has to be identical to the Network Rail arrangements. Network Rail came to its current arrangements through the rather strange route of nationalisation, privatisation and part-privatisation. But we can pick up the essentials that seem to be the important levers, and that is what we have been doing.
The noble Lord, Lord Davies of Oldham, seemed to suggest that if we had a national infrastructure commission we would not need any of this. This is really practical, coalface implementation of infrastructure building and maintenance, and it is absolutely crucial. It is not a big strategic sweep—obviously, strategy will be deeply embedded in the road investment strategy—but it is creating the delivery mechanism to make that a reality on the ground.
The noble Lord, Lord Berkeley, asked whether we would have five-year certainty. We will talk in some later amendments about the timeframe for the RIS. At this point I would just say that we have to give a bit of flexibility because we will have a road investment strategy before the company is in place. We can talk about timeframes a bit later.
The noble Lord, Lord Whitty, and the noble Baroness, Lady Neville-Rolfe, raised an issue that, again, I think we will cover in some later amendments, about whether the company could go directly to the financial markets. To do so, it would have to have the permission of the Secretary of State. We have been quite clear that cheaper borrowing is available through the Government. We are therefore not minded to use those mechanisms. We are going to go for the cheapest borrowing. Frankly, in an era when one is trying to bring down government spending on all fronts and watching every penny, that is an entirely appropriate strategy to focus on. It might be possible, with the Secretary of State’s permission, to finance individual road projects directly in the markets but we will be making all those decisions based on the implications for the cost of financing.
The noble Lord, Lord Berkeley, raised the interesting issue of the role that the Office of the Rail Regulator has played, through its enforcement powers, in driving efficiency in the Network Rail system. That is an interesting question which we will want to think about and explore. We are determined that efficiency is going to be one of the major outcomes of this project.
Having covered that range of issues, I hope I have provided the reasons why this clause should stand part of the Bill. I hope very much that your Lordships will support its inclusion.
Lord Bradshaw (LD)
The Minister made reference to the Swedish experience of financing roads. I have been involved with it. I was involved with the Øresund Bridge between Copenhagen and Malmö, but it was an estuarial crossing and it cut huge distances off both the road and rail networks. There were huge strategic reasons but the money was raised in the market and people pay tolls through quite advanced technology for the use of it. Are there other examples? Some of the Dutch things are going over water. Are there other real roads that have been invested in in that way?
Baroness Kramer
If I may, I will provide my noble friend with more detail in writing. We have provided one letter already, which has been available to a number of your Lordships, that we can happily put in the Library. But if we are not very careful we could get entangled in every road across continental Europe and the different ways in which they have been financed.
It is interesting is that every country you look at does it somewhat differently, sometimes in different political and financial contexts. But what we see as a general current theme is if you can get that transparency and some of that arm’s-length character, and provide certainty of funding, those are the key mechanisms that help drive efficiency, and those are the lessons that we want to learn.
Lord Whitty
“( ) The Strategic Highways Company shall be responsible for the construction, improvement and maintenance of the strategic highways network for which it is the authority; and for the management of safety of that network, the development of traffic management and speed control systems on that network and for meeting objectives for reduction of emissions of greenhouse gases, pollution of water run-off, air quality and other environmental objectives and for engagement with private and commercial road users and with local communities.
( ) The Strategic Highways Company shall have responsibility for research and development in the fields of road construction and maintenance, traffic and safety controls and telemetric information on its network, and in so doing, the strategic highways company may contract to or enter partnership with other organisations.”
Lord Whitty
My Lords, Schedule 1 is 26 pages long. It is devoted almost entirely to inserting in the Highways Act the name of the company rather than the Secretary of State, or vice versa, and a lot of other administrative matters relating to assets, contracts and so forth. What it does not do—and I think it should—is to describe the responsibilities of the company and the scope of its activities, to which my next amendment relates.
This amendment is a shot at describing what I think will be the responsibilities of the company. This is Committee stage and, therefore, I hope that the department might accept the principle and draft a better description. However, essentially, somewhere in the Bill—I would prefer it to be in the body of the Bill rather than in a schedule, but the schedule is where the detail on the new company is spelt out at the moment—it should state what the functions and responsibilities of the company are.
The amendment refers to the obvious things: the construction, the maintenance and the improvement of the road system; traffic management for that system; and safety for that network. When I mention safety, on which I have amendments later on, I should inform the Committee that, since Second Reading, I have acquired an interest in this area in that I am now the chair, taking over from my noble friend Lord Dubs, of the Road Safety Foundation. Some noble Lords may recall that safety was a significant element when I was Roads Minister. Certainly, it is underplayed in this Bill and should be an important part of it, as are traffic management, speed controls, and so forth.
There is also the environmental dimension. There are problems about the construction and operation of roads. Somewhere in this Bill we need to say more clearly that the company, and not the Secretary of State any more, is now responsible for the environmental impact of the roads which are run by the Highways Agency. That includes the level of emissions which traffic management creates and whether that is going down and making a contribution to our carbon saving. It includes also the level of air pollution, which is largely proportionate to congestion and which, again, the Highways Agency network should be making a contribution to, as well as other things which are not perhaps so obvious, such as the run-off of water from highways, which has a significant effect on water systems—we have just passed a Water Act in which the quality of water is an important issue, including that of groundwater. Although most new schemes provide some better storage and diversion of water, from a lot of the old roads it still goes back into the ground or into the water system.
The amendment also refers to another responsibility, which is for research and development. I think that I am right in saying that the Highways Agency has its own R&D budget, but the Department for Transport also has a roads research budget. Is the whole of R&D on roads now to be the responsibility of this new company, which would probably be quite sensible? The Bill needs to be clear that the R&D on roads, traffic and the impact of roads is one of its responsibilities. A final dimension of the responsibilities that I am suggesting is the necessity to engage with road users and local communities, and the ability to enter into contracts with other providers. We will come later on to issues of co-operation with local authorities, and so forth. A key responsibility will be relations with road users themselves.
This amendment is my shot at this issue. I suspect that there could be a better one—but it is rather odd that a whole new nationalised infrastructure corporation should be established without the primary legislation saying anywhere what its responsibilities are. Therefore, I beg to move.
Lord Berkeley
My Lords, I support my noble friend in his Amendment 4, and I shall speak to the other amendments in this group. On Amendment 4, he is absolutely right. The strategic highways company needs to have responsibility for all the things that he has put in the amendment. I remind the Committee that there is very strong evidence that a month or two before the Olympics, when the air pollution on one or two of the trunk roads in London was reaching Chinese levels, the solution by the Mayor was to cover the monitoring points with plastic bags, which of course reduced the level of pollution inside the plastic bags but did not much help anybody else. But this needs to be done by the strategic highways company, and I would suggest that it needs to be supervised by somebody. That may be a role for the Office of Rail Regulation, or whatever it is to be called in future, because these are very important points.
My noble friend is right in his comment about research, but there needs to be some research into non-trunk roads, which are a very large part of the road network. I hope that that can be taken into account as well.
Amendments 6 and 7 relate to the 20 pages of consequential amendments to which my noble friend referred. It relates to something that may have got lost in the search for consequential amendments—the Environmental Protection Act 1990 and the question of which body is responsible for collecting litter on different roads. These two amendments are designed to make sure that the strategic highways do not get left out of the wrapping up; otherwise, we will see them covered in litter from head to foot.
I shall not read out all the parts of my amendment, because everybody can read them, and it probably would not make much sense anyway—unless you put a wet towel on your head.
Finally, my noble friend did not mention Amendment 61, which follows on from Amendment 4 and is to do with the transfer of additional functions to the strategic highways company in Clause 13(2). It covers highways and planning, but I agree that it should cover road safety as well, because that is a terribly important part of it. We will talk about safety comparisons later, but it would be good to see road safety in there, or something like it.
Lord Bradshaw
The amendment moved by the noble Lord, Lord Whitty, with which I agree, mentions “speed control systems”. We are considering the Deregulation Bill on Monday, which makes specific provision for a lot of the enforcement of speed and other offences to be undertaken by people who go round with pads rather than the modern method of using cameras. Will the Minister cover that, or at least take it away and get sorted out the apparent contradictions between those two pieces of legislation?
Lord Davies of Oldham
Well, my Lords, that is a bumper that whistled past the Minster’s ears. It is an interesting little challenge. I have no views on what the noble Lord, Lord Bradshaw, has said, except that I usually consider what he says to have a modicum of very good sense.
I support my noble friends’ amendments. My noble friend Lord Whitty made a persuasive case for the opening amendment. My own amendment would merely establish a consistent theme for us in this legislation: we want to see the Office of Rail Regulation playing a significant role in the road network. It should publish guidance and have powers to require efficient use of the road network. That is what it does for rail. As the noble Baroness will have noted a few moments ago, I was seeking to extol the virtues of a degree of integration between these two critical features of our transport infrastructure. This is one modest step towards that. The Office of Rail Regulation should promote not just efficient spending but efficient management of the road network. It has earned the approval of many of us through its work on the rail system. There is surely merit in it doing so for the road while furthering the prospects of integration between two main features of our transport infrastructure, which will be an abiding theme of the Opposition’s position on the Bill.
Baroness Kramer
My Lords, your Lordships have raised a number of important issues around the powers that are transferred to the new company. The purpose of Schedule 1 is to transfer to a strategic highways company appointed under Clause 1 the statutory duties imposed on, and the powers exercised by, the Secretary of State in his capacity as highway authority. The functions and responsibilities are already expressed in legislation, but they are transferred to the new company on its appointment. These are all the functions that it needs to operate. That may help in understanding why I regard Amendment 4 as an unnecessary addition to the Bill.
Amendment 4 takes us to Clause 13, under which the Secretary of State may transfer additional functions other than an excluded function to a strategic highways company. I think the noble Lord’s purpose was to make road safety functions capable of transfer to the company. We absolutely appreciate the importance of road safety, but we do not require the amendment because, in our view, the only road safety functions which would ever be appropriate to transfer to a strategic highways company would be those which relate to highways. For example, the Secretary of State is responsible for issues which relate to drink driving and the standards that are required of vehicles. In other words, many aspects of road safety are not to do with the highway itself. It would not be appropriate to transfer that range of responsibilities over to the SHC, but only those parts which relate to the highway itself. This is already enabled within the legislation before us.
On a wide range of these issues, I draw your Lordships’ attention to the licence, a draft of which was issued on 23 June and which covers in great detail many of the issues which have been raised here. There is always a question of whether you put things in the Bill or in the licence. We are constantly adding to and refining the kinds of actions and responsibilities that we want an entity like the new SHC to carry out. We would lose a lot of our flexibility were we to put this in the Bill rather than use the licence mechanism. With the combination of the transfer of duties already provided and the licence, a wide range of these powers are already covered.
Lord Jenkin of Roding (Con)
My Lords, I am afraid that I was engaged on the Floor of the House for the first part of the Committee’s sitting, taking part in the debate on—
Lord Jenkin of Roding
Yes, manufacturing, so I may have missed this. The trouble as one gets older is that one forgets things, the most recent things in particular. As I confessed at Second Reading, I am not an expert on road legislation. I make that absolutely clear. I am a fairly regular road user, but that is about as far as it goes. None the less, I have tried to understand the structure of what is going to be set up here. I made my view clear at Second Reading that I thought this arm’s-length body would be an improvement on the Highways Agency, for reasons which I briefly mentioned and which my noble friend, the Minister, has spelt out on several occasions.
However, I am not entirely clear about the relationship between the Secretary of State and the highways company. I am told that there has been no mention, during any of the debates, of what is described in the document published last month by the department, Transforming our Strategic Roads—A Summary. On page 9, there is a very interesting chart which sets out the pattern of what is intended. It refers to a framework document which:
“Defines agreed roles, responsibilities, governance and working arrangements between the SHC and government”.
I listened very carefully to what my noble friend the Minister said in her reply to the noble Lord, Lord Whitty, and I do not think that she mentioned the framework document. Is this something that has been published, or will be published? What form will it take? What statutory authority will it have? I understand completely the articles of association. Indeed, every limited liability company has articles of association; it also has a memorandum of association, which is normally the document where you set out the objectives of what the company is being set up for.
I quite understand that in this case the objectives are going to be transferred by the Secretary of State to the company by various transfer instruments and, probably, secondary legislation. But what is the framework document? It plays quite an important part in the chart here, and I am not entirely clear how it is going to be produced, what status it will have and what parliamentary accountability there will be for it. I would be most grateful if my noble friend could enlighten me. I hope she will forgive me if it is pure ignorance and everybody else knows but I do not, but if she would be kind enough to explain it to the Committee, I would be extremely grateful.
Baroness Kramer
I thank the noble Lord, Lord Jenkin, for that addition to the discussion. What was published last month is the outline for the framework document. The document itself is not yet a finished article but the framework is here, which gives some clarity on exactly how it will function. Looking at it, I think it will be impossible to have a final framework document until we have a final Bill, since what it does is capture the relationship that the Bill will establish once it is an Act.
The outline goes a long way to making that clear. It says that the framework document will state in broad terms the aims and objectives that the Secretary of State will expect the SHC to achieve. It will set out the SHC’s legal status and administrative classification. It will list its responsibilities and accountabilities, such as,
“enshrining Managing Public Money and other relevant government guidance”.
It will list the responsibilities for senior roles in the company. It will provide for business planning, performance and monitoring, budgeting procedures, annual reports, and accounts. I could go on but it might be easier to provide any of your Lordships who did not pick this up at one of the earlier gatherings with a copy of the document itself. It will go a long way to clarifying exactly how all the pieces fall together. The document that the noble Lord, Lord Jenkin, has in his hand is meant to try to show how the different pieces and documents all relate to each other. I fully accept that it takes more than a moment to sit down and work out how the various interrelationships work.
However, given that it is only the noble Lord who has raised this issue now, I would say that there is some comfort that the bits do actually fit together, which of course is essential for the successful functioning of the company.
Lord Jenkin of Roding
I am grateful to my noble friend for that reply. I will read very carefully what she has said in Hansard and perhaps try to get hold of the other documents she has mentioned, but it certainly would be very helpful if that document could be circulated. I do not know whether other Members of the Committee have seen it. I see heads being shaken so I am not sure that my noble friend is right when she says that, because nobody else has raised the point, everybody else is completely happy. If that is so, it would be a remarkable example of unanimity but, honestly, I do not think that is so. I think we will need to follow this up.
My noble friend says that this will be implemented after the Bill becomes law; that is, after it has been given Royal Assent and is an Act, in which case, of course, we cannot amend it, except by new legislation. What I need to get clear in my mind is the relationship of these various documents, which are obviously absolutely key to the working of the highways company.
Baroness Kramer
If your Lordships want to look at the document more immediately, it is attached to the Bill on the DfT website. That would be an immediate way to get hold of the document, if we cannot get a printed version of it into your hands at the moment.
Lord Jenkin of Roding
My Lords, I have just retired as president of the Parliamentary and Scientific Committee. At an annual general meeting about three years ago, when we dealt with substantial amendments to our rules, I have to tell you that the officer of the committee who was responsible for preparing the documents got into the most terrible trouble when it was said, “Oh, yes, they are all on the web, and everyone must look at it there”.
The fact of the matter is that one does not look for things there. When the Bill is going through the House, one expects to have the documents available in the Printed Paper Office. There was a reference to a document in the letter that my noble friend wrote to me following Second Reading, and I asked the Library to look it up and print it out. I now have that, which is perfectly acceptable—I get very good service from the Library. However, if I may say so with the greatest respect to my noble friend, for the Minister to say that we all ought to have it because it is on the website is not an answer. I regularly use my computer for many hours each day and use the internet and so on, but I really cannot be expected to search through the Department for Transport’s website in case there is another document that I have not come across.
Baroness Kramer
Let me just make a final response to that. There was a WMS when the documents were published, so I hope that some people have had the opportunity to find it.
Baroness Kramer
There was a Written Ministerial Statement when the documents were published, so I hope that some people have found them through that route.
Let me just provide slightly more detail. We intend to share draft documents such as the framework document later in the autumn, so as the Bill progresses we will be publishing them in draft form. The point that I was making is that you cannot go to final form until you know absolutely everything. It would be presumptuous for us to go to final form before the Bill had been concluded.
Lord Whitty
My Lords, many of us probably share some of the frustrations of the noble Lord, Lord Jenkin, as there were a whole batch of documents there before Second Reading. Basically, those were the White Papers or quasi-White Papers from the past year or so—they were about an inch thick. I have seen the documents, but the document to which the noble Lord, Lord Jenkin, referred was not one of those. Although I have seen that document, I am not sure how I got it. More importantly for the Minister’s answer, I have not seen the draft licence. I do not know whether other noble Lords on the Committee have seen the draft licence. If she is relying on that to explain why we do not need my amendment and the amendments of other noble Lords in this group, I am afraid that I am in the dark on that.
There is a point of principle relating to the licence. In other regulated structures, the licence is issued by the regulator. In some cases, what the licence should cover is specified in primary legislation, while in other cases it is not. In this case, the Secretary of State will issue the licence because, as my noble friend Lord Berkeley said earlier, the ORR’s role is as monitor not as regulator. We will come back to that. It is a responsibility of the Secretary of State, and therefore it ought to be clear in the legislation what should be covered in that licence. If the licence is the means for achieving the aims, that is fair enough, but we need to know what the scope of the licence will be, at least in broad terms. Preferably, that should be in the Bill.
Indeed, even more basically—without wanting to repeat myself, and although this is probably a criticism of legislation more broadly—we are setting up a new organisation here in legislation which has references to pre-existing powers and pre-existing responsibilities. If, in a year or two’s time, anyone wants to know what the basis is of the strategic highways company, there will be no point in their looking at this Bill, or Act as it will then be. Surely, the function of legislation is to make clear, first to Parliament and then to the cognoscenti afterwards, what the role of any new institution that Parliament sets up really is. In my mind, that means that it should specify at least in broad terms the responsibilities and scope of the new publicly owned organisation set up by Parliament. All my amendment suggests is that we should put something in the Bill.
Lord Whitty
Lord Whitty
My Lords, I am sorry, but this is something else that I think should be in the Bill. It does sort of follow from the clear statement by the Government that we will have only one strategic highways company, in which case it should surely be made clear that the scope of its activities covers what are currently Highways Agency roads in England. At the moment, that is not clear—and I think that I am right in saying that it is also not necessarily the case. Tolled roads will remain the responsibility of the Secretary of State, and some of those tolled roads, such as the road that I still call the Birmingham North Relief Road—the tolled M6—come under the general jurisdiction of the Highways Agency, although the company that runs the tolled M6 operates it and, of course, collects the tolls for it. So the exact jurisdiction of the company needs to be made clear. That is not to say that all the roads that are currently under the remit of the Highways Agency should always remain so. One can alter that later.
There may be some local roads that should be transferred into the company and there may be some roads in the margins of the Highways Agency’s slightly odd portfolio that should really be local roads, in the general demarcation between the two. Ministers and the Secretary of State would still have the possibility of changing those roads but it should be clear that this Act is shifting what are currently Highways Agency roads into the new company—full stop. That is what my amendments in this group provide for, with Amendment 9 saying that it is “the whole of England” and Amendment 10 saying that, in the first instance, they will be Highways Agency roads. I beg to move.
Lord Davies of Oldham
My Lords, I support my noble friend’s amendments, and shall speak to the two amendments in my name. Amendment 11 is a probing amendment; I want to know where Wales fits in. It is the only reference to Wales that I have seen in the Bill and I would be grateful if the Minister could make it clear where Wales fits into any possible consultation process with regard to the authority.
Amendment 12 is pretty self-explanatory on the necessity of consulting with local highways authorities in the areas that they cover on the structure of the organisation, the appointment of a representative of local highways authorities as a non-executive director of the board, and other matters decided by the Secretary of State. It is clear that for consultation to be remotely effective there has to be some representation of the local highways authorities.
As the Minister is all too well aware—the Committee need not dwell on this point for any length of time—important though the motorways and trunk roads of England are, local authorities still carry most of the traffic and, of course, are responsible for the majority of the roads. It is not conceivable for a scheme for a road of such significance to be developed and work to be done on it without the local highways authorities being involved. We are all well aware that if there is the most minor interruption on some of our motorways and other major roads, cascades of traffic fall upon the local roads. Those local roads bear the brunt not just of the difficulties of that day but of the ongoing costs as a consequence of excessive use of them; they are often not designed for the volume of traffic that is diverted on to them.
I am sure that the Minister will be at pains to emphasise that nothing will be done without consultation with the local highways authorities. My amendments seek to make that explicit in the Bill.
Baroness Kramer
My Lords, before I begin, I have now had confirmation that the documents that we have been discussing were deposited in the Library, so we hope that they will be available in that form for those who prefer not to have to wade their way through the websites. I understand how frustrating websites can be, and the Library is always such an excellent source.
Amendments 9, 10, 11 and 12 cover a range of issues. We have always been clear that there can be one company or more than one company, and we discussed that issue extensively earlier, so I will instead focus on the other issues raised in this grouping. The appointment of the SHC will make it clear which roads will transfer to the new company. As we previously stated when we consulted, and in response to that consultation, there will be no change in arrangements for those roads that currently fall under a concession agreement.
In answer to the noble Lord, Lord Davies of Oldham, the Secretary of State currently has residual responsibility for some roads on Welsh territory—not all were devolved—but these are in relation only to the Severn crossing. The current policy intention is that these roads should legally remain the Secretary of State’s responsibility, and we do not anticipate including these highways in the first appointment of a strategic highways company. However, the clause allows highways within Wales to be included in a company’s appointment if its area of responsibility is adjacent to Wales. Given that these are current responsibilities of the Secretary of State, it is easy to see that in future it might be considered appropriate to provide that a strategic highways company should be entrusted with all the Secretary of State’s highways authority functions, so we are providing for the flexibility to do that in this Bill. To do otherwise would risk the possibility that the Secretary of State would need to retain a small amount of executive competence to act as a highways authority for a few roads in Wales, which, frankly, would be both disproportionate and inefficient. To be clear, the power to appoint the company as a highway authority can be exercised only in respect of roads for which the Secretary of State is the highways authority immediately beforehand. This power could therefore not be used to give the company a wider role in respect of highways in Wales.
The strategic highways company will be a highways authority and it will be required to co-operate with other traffic authorities under the Traffic Management Act 2004, keeping traffic moving under the provisions of the network management duty. There will also be a duty in the licence—again, I recommend that draft document, which will, I hope, be more easily available—to co-operate and consult with local authorities in the planning and management of their networks. There are important, ongoing obligations on the company that will help ensure that, in the years ahead, co-ordination and co-operation between highways authorities increases the benefit to road users generally.
The Department for Transport has already consulted on these proposals, and local highways authorities gave their views during that process, as did other interested parties. At this point, further consultation would simply delay the implementation of measures on which there has already been extensive consultation. In the light of that, these amendments are unnecessary. Under those circumstances, I ask the noble Lord to withdraw his amendment.
Lord Whitty
My Lords, I apologise for missing my cue. The department needs to think a little about how this is presented. The points raised in these amendments need to be addressed somewhere in the Bill. There is currently no core to what this organisation is about, in terms of its range of assets, function and responsibilities. That may be in the document to which the noble Lord, Lord Jenkin, referred, and of which we may see a draft before we complete proceedings on the Bill, but it needs to be in the Bill. The department needs to rethink this a bit. We are not talking about several pages; we are probably talking about two clauses. Will the Minister at least ask the department to look again at that and the related points raised in the debate on the earlier amendments? I withdraw my amendment.
Lord Jenkin of Roding
My Lords, I did not give notice of my intention to oppose the question that Clause 2 stand part of the Bill because I had not heard all this debate before.
The Deputy Chairman of Committees (Viscount Simon) (Lab)
I am putting the question.
Lord Jenkin of Roding
I am sorry if I was out of order. The point has been made that the Bill incorporates, amends and transfers a great deal of earlier statutes. At some stage, this legislation might be consolidated. I made a study a year or two ago of how this could be done. I had a long—not frustrating, because I learnt a lot—meeting with the chairman of the consolidation committee, a High Court judge. It all depends on whether the department concerned is prepared to put up the cost.
We have occasional consolidation Bills. I was particularly concerned about the consolidation of the Gas and Electricity Acts, which have now become hideously complicated because of the constant amendment of earlier legislation. It was simply said: “Well, if the department in charge of those Acts is prepared to pay for it, the consolidation committee can make sure that the consolidated document is produced”. Is there any chance that the Department for Transport would contemplate this on a matter that obviously affects very large numbers of people over the whole of the administration of this Act? Might it in future contemplate agreeing to pay for consolidation?
Lord Bates (Con)
Normally the convention is that when a noble Lord wants to speak to a particular clause stand part, that should be tabled and on the Order Paper in advance, so that the department can prepare and others can speak if they wish. That was the reason for the confusion at that point.
Baroness Kramer
I am very happy to attempt to respond to the noble Lord, Lord Jenkin, on this point. To try to work out whether we could do a consolidation Act is above my pay grade. However, what he says brings to mind two issues. First, there is the importance of putting the detail in the licence. Having spent part of my life in business, I know that having a clear operating document with all the essentials in it is a terribly effective way to ensure that you are doing what you need to do. When I look at the level of detail in the draft licence—for example, on the relationship between local authorities and devolved Administrations and the need to take account of local needs, priorities and plans in planning operations and maintenance, et cetera—the licence is a very important document in that whole process. The comments of the noble Lord, Lord Jenkin, underscore the importance of using that document rather than necessarily finding every opportunity to put items in the Bill.
In this case it is essential that we get on with this. It is important that we start to get certainty around the future of investment in infrastructure so that project after project can begin to take place without the stop-start pattern that we have all described. Therefore, while there may be goals for overarching legislation such as consolidation, I hope very much that we will not attempt to interrupt the progress of the Bill and the benefits that it offers. There may be opportunities for such efficiencies in the future, but this is something that can begin to impact what happens on the ground early next year, if we carry it through to its completion.
Lord Jenkin of Roding
My Lords, I entirely accept my noble friend’s explanation on this. It obviously very much depends on the licence, and we shall have to see how it comes out in the end. On that basis, I am most grateful for what she has said.
Lord Berkeley
“Duties of Strategic Highways Company
(1) A strategic highways company has, in relation to areas for which it is appointed, duties to—
(a) plan, monitor and manage highways for which it is the highway authority in order to secure economic, social and environmental gains jointly and severally,(b) secure the fullest possible use of sustainable modes of transport, including by—(i) widening travel choices;(ii) unlocking development in locations that are sustainable or assisting in making them sustainable;(iii) encouraging highway users to make more efficient use of vehicles by increasing average occupancy and loading rates; and(iv) working in partnership with operators of passenger transport and freight services, as well as local authorities and those responsible for major trip generators.”
Lord Berkeley
My Lords, to some extent Amendment 13 follows on from my noble friend Lord Whitty’s Amendment 4 on responsibilities and scope. There is a strong, if not stronger, argument for having in the Bill a clause which sets out the duties of the strategic highways company, because there is already legislation which puts duties on the Secretary of State or the regulator as regards railways. Some noble Lords will recall the Railways Act 2005 and the Railways Act 1993, which was the basis of privatisation. The duties there included promoting,
“improvements in railway service performance … to protect the interests of users of railway services … to promote the use of the railway network in Great Britain for the carriage of passengers and goods”.
I was very pleased to see that goods got in there. The list of duties continues:
“to contribute to the development of an integrated system of transport … contribute to the achievement of sustainable development”.
I could go on reading out Section 4 of that Act. It very much mirrors what has been achieved by successive Governments and rail regulators such as the Office of Rail Regulation in succeeding years through putting those basic principles into effect. This is quite important, and we have the opportunity to put a similar range of duties on the strategic highways company—or companies, however many there are.
Looking at this amendment, it is important that we start to include the cross-modal issues that I and several other noble Lords spoke about at Second Reading. We should look at modes of transport such as highways and railways—probably cycling and walking as well, and maybe other things in the future—on a cross-modal basis, with the duties to secure something like, as I put in the amendment,
“the economic, social and environmental gains jointly and severally”.
I am sure Ministers could come back with a better version, but I hope this is a useful basis for suggesting what the duties of this strategic highways company should be. Unlocking development is important, as is encouraging occupancy and loading rates for passengers and freight and looking at the need to drive, the need to move around and, of course, its sustainability.
We shall be talking about some of these things in later amendments, but it is important for an organisation such as this one to have duties, which should be in the Bill just as they are for the railways. I have tried to mirror what is in the original Railways Act. It has changed over the years and is in a different format now, but the duties are still there, and if we had something like this for the strategic highways company, alongside the responsibilities that my noble friend Lord Whitty talked about, it would make us all feel a lot more comfortable. I beg to move.
Lord Bradshaw
I agree with what the noble Lord, Lord Berkeley, has said, but will add something. You can argue for or against it, but having chosen to go down the route of rail regulation, there is one thing I really would like to be assured about. We know that the motorist—maybe “road user” is the right term—is to be represented by Passenger Focus. That of course covers the railway, bus and tram industries; it has seen incremental growth, and I think the noble Lord, Lord Whitty, had a good deal to do with its genesis. With railways, buses, trams and the other things for which it is responsible, it has a right to get information from the regulated party or from the party for which it is responsible. A train or bus company cannot refuse such a request. I would like to be assured that the strategic highways company, too, will not be able to refuse a request for information from Passenger Focus acting in pursuance of its duties to represent road users. I am quite happy that it should represent them, but I do want it not to be treated any differently from the way it is treated in other industries.
Baroness Neville-Rolfe
My Lords, I agree with the point made by the noble Lord, Lord Berkeley, about cross-modal being an important issue. There is a later amendment on the need for co-operation, on which I am sure we will agree. I have some concerns about the notion of duty in that context, because duties impose rights and that can lead to problems. I am also not sure that rail is necessarily the model for road. I always think that when you are looking at a regulatory framework, judgments need to be made in respect of the sector that you are looking at. You need to be careful that they work for that sector, and circumstances are different.
That leads me to my main point. I am always concerned about perverse effects. The clause that is the subject of Amendment 13 could have some quite perverse effects, particularly if it were introduced in this form. Duties, effectively, are like legislation and will give rights, and rights can then generate judicial review, and you could have arguments about whether particular things are sustainable or not. You could then make this process a lot more complicated and expensive, and it would not produce the better agency that is the purpose of the Bill. Will my noble friend comment on this aspect of the proposed amendment?
Lord Whitty
My Lords, I have tabled Amendment 40 in this group on precisely the subject of the duty to co-operate. This very much builds on the Localism Act, under which local authorities have a duty to co-operate with each other. I understand that part of the department’s argument on this will be that the new company—the present Highways Agency—is already a traffic authority and a highway authority and is therefore covered by the Localism Act’s provisions. I am not sure whether that is entirely clear. If it is, then some of the objections that the noble Baroness, Lady Neville-Rolfe, referred to would have to apply to the Localism Act as well. If that is the case, can we somehow cross-refer to it?
The Highways Agency has only 2.4% of the road mileage of the country. All of its roads create traffic for the local network and all of the local network piles out on to the motorway at various points. Sometimes the most congested areas of the motorway are congested largely because it is being used as a local road by people for just two exits. There is an important need for the Highways Agency and the traffic authorities to co-operate and that needs to be reflected in the Bill.
However, in view of the environmental and safety aspects, there is also a need to co-operate with the safety authorities and with the Environment Agency, which is concerned with emissions, air pollution, water run-off and so forth. The HSE’s duties on the roads will relate only to employee drivers, but it does have some, and there must therefore be a cross-over.
We have briefly mentioned the interface with Wales. Obviously, at the far end of the network there is interface with Scotland as well, and there needs to be some co-operation with the devolved Administrations. I also referred to the police and traffic commissioners because, in practice, a lot of the traffic management of the Highways Agency is conducted by the police. Therefore, the police should have at least some mention here, although I am not entirely clear whether the duty to co-operate under the Localism Act actually covers police authorities as well. In one sense, even if it does, we should cross-refer to it.
Lord Davies of Oldham
My Lords, I want to reinforce the points that have already been made in terms of some definitions of obligations and duties as far as the company is concerned. Amendment 15 would ensure that the road investment strategy outlines its social, economic and environmental objectives. The Government’s draft national policy statement, published recently, sets out the policy against which the Secretary of State will make decisions on applications for development consent for nationally significant infrastructure projects. The application should include guidance on mitigating environmental and social impacts and plans to enhance environmental benefits—objectives to which I am sure we would all subscribe.
However, the Bill references merely the strategic highways company’s “objectives”, without giving the new company a clear direction on how the road investment strategy will aim to ensure that its activities are carried out with the intention to provide benefits to society, the economy and the environment. For example, the strategy should incorporate an estimate of the impact on UK carbon emissions of building more roads infrastructure. It is inconceivable that we would have a perspective on such construction without having some assessment of the issue of emissions. It surrounds all aspects of aviation at present and it cannot be anything but an important issue, as far as the public are concerned, for roads.
Baroness Whitaker (Lab)
My Lords, in supporting Amendment 15, first, I apologise for not being able to speak at Second Reading. In the mean time, the Minister was kind enough to answer a Written Question from me on the design criteria to be employed by the successor to the Highways Agency. I declare an interest as an honorary fellow of the RIBA and as president of the South Downs Society—that comes in later.
My noble friends have quite rightly stipulated in Amendment 15 that social, economic and environmental objectives must be explicit. Of course, these cannot be achieved without proper design, but not all highway engineers seem to know that. I ask the Minister to answer on how the crucial role of design can be made explicit. A Written Answer to me, although very helpful, did not go quite as far as that. I should add that, if she cannot give me a good guarantee, I think I ought to pursue the subject on Report.
Why does it matter? The past is one reason. Successive highways schemes have made roads fit for motor vehicles and little else. Highways can improve growth and well-being, if well designed, or they can destroy it through environmental impact, isolating communities from amenities and creating pollution and noise; in short, by not paying proper attention to the total place through which they go.
I would like to draw attention to the latest report, published last month, by the Royal Town Planning Institute, titled Planning Horizons: Thinking Spatially. It states that,
“transport policy is an area where spatiality and the interrelationships with these other issues have often been neglected”.
Those other issues are access to goods, jobs, education, health and other services. I looked at the impact assessment, anticipating that I would see some really interesting quantifications of these admittedly hard to define elements. However, the impact assessment is really quite narrow, and I would urge the Minister to provide a more developed assessment of what impact on national well-being highways can have and how the successor to the Highways Agency is going to achieve this through the use of design, which, as I have said, is really the only way it can be achieved.
Finally, I just want to add that the proposal of my noble friend Lord Whitty for Clause 1(4) to have a completely different agency would enable this kind of approach much more easily. It would not be so much an RIS as a TIS; that is, a transport integrated strategy.
Baroness Kramer
My Lords, again we have a wide range of amendments. It is fair to say that it is vital that the strategic highways company effectively balances economic, social and environmental factors and outcomes, so I take the point of many of the amendments that have been proposed here. We fully intend to set clear and robust requirements through the company’s licence, and again there is substantial language within the licence document which I hope noble Lords will take the opportunity to look at.
The draft version that was published on 23 June includes a key objective and further conditions for the company to this effect:
“Protect, manage and enhance the environment, including minimising and mitigating the impacts of its network and activities on the environment”.
That is in the context of balancing short-term and long-term needs, along with a list of other objectives under the heading of “Sustainable development”. A lot of the discussion today makes it clear that the living, breathing document of the licence is, quite frankly, a better place for these kinds of factors than the Bill. However, I am always willing to think about these issues.
It is important to stress that the requirements will be supported through specific requirements set out in the road investment strategy process; for example, it will reflect our desire to drive stronger environmental outcomes and sustainable development. Those will be important ways in which the company will be held accountable for its performance. The Government are committed to sustainable travel and are investing heavily in modal balance.
Some parts of the relevant amendments, such as those concerning widening travel choice, relate to matters of national policy which really need to be with the Secretary of State, but a key benefit of the reforms will be to allow the company greater flexibility and autonomy to determine the most efficient and effective ways to deliver the outcomes and other requirements identified by the Government. Those include freedoms on a wide range of issues, including the use of innovative technologies.
The noble Baroness, Lady Whitaker, raised the issue of design, and I think that it is for the strategic highways company, with its longer certainty of funding and an ability to think over a broader period, to carry this out. I do not think that this is something for the Government to mandate in a piece of legislation. It is a level of detail that I do not think the Government can mandate effectively.
We had questions about the impact assessment, which focuses on the change from one model to another and not on a broad impact assessment of highways across the nation. We would expect to see that type of assessment in the road investment strategy, which will be an important document as it comes forward to this House. When we talk about sustainability and carbon emissions, it is essential that the Government are fully committed to meeting their obligations under the Climate Change Act. The transport sector has to play its full part in delivering emissions reductions. The Government have set stretching, legally binding carbon targets which will see a 50% reduction in emissions in 2025 compared to 1990 levels. That will be on the path to an 80% reduction by 2050.
Essential environmental protections relating to the management and mitigation of the environmental impacts of existing roads, including on biodiversity and landscape, are covered by existing legislation, and will all apply to the new company as they currently do to the Highways Agency. In the same way, air quality impacts of individual schemes will have to be considered carefully. Already, all major road improvement schemes go through environmental assessment, including a detailed consideration of their air quality impacts. A robust decision-making process exists under either the Highways Act 1980 or the Planning Act 2008. These kinds of factors, which already bear on the Highways Agency, carry over into the life of the strategic highways company. I thought it was be important to stress that point under the headings of the today’s amendments.
Close co-operation with operational partners is not just about adjacent authorities. The noble Lord, Lord Whitty, talked about emergency services, road safety bodies, the Environment Agency and others. Every time a Member of this House stands up to discuss this issue, rightly they add another proposed relationship. That is because there are so many people with whom to co-operate. Under those circumstances, I beg that we try not to put lists in the Bill but that we look very much to the licence as the mechanism with which to achieve that. Again, I refer your Lordships to the licence, which tries to establish the broad range of entities with which the SHC must co-operate under a rubric of operational partners. It would include, but would not be limited to, the emergency services and other transport operators. The list includes local authorities, devolved Administrations, road users and local communities. We are in a constantly changing environment; for example, LEPs were not conceived of five years ago but now play an important role. If we limit ourselves to lists in the Bill we will find ourselves struggling to adapt to the real world that the SHC must and should work with.
I believe I spoke earlier about the changes or the work that is already done under Schedule 1 in establishing, for example, a network management duty, which currently applies to local highways authorities, to be extended to the SHC. I will not try to elaborate on the points that I have made already but I think that people are following the thrust of all this.
My noble friend Lord Bradshaw raised issues about the watchdog, which we will discuss more extensively under Clause 8. Perhaps I may hold back my remarks to when we discuss this more comprehensively. I hope very much that your Lordships will feel that their queries and concerns are satisfied by the family of documents that will be involved in the creation of the SHC and that the noble Lord will feel confident in withdrawing his amendment now that the key points have been addressed.
Lord Berkeley
I am grateful to all noble Lords who have taken part in this debate and to the Minister for her response. I get the feeling that we are being directed towards this lovely, short licence document, or the longer one, as being the answer to everything. It is not clear to me—maybe because I do not understand it—when we will see the longer version, which will have as much detail in it as possible before Royal Assent, and whether we will be able to debate it. If we are not, it is pretty important that there is some reference to a strategy, such as a road investment strategy or, if the Minister prefers, a transport investment strategy, because there is none at the moment.
We do rail one way and roads another—we have debated that very often in the House. They have different criteria; they do not seem to talk to each other, and they have different forecasting methodologies. Is there to be some read-across between how the railways are operated and how it is intended that the strategic roads are operated? It may be that things have moved on since the Railways Act 1993, with the Railways Act 2005 and the high-level output specification used to specify what the railways should do, but there needs to be something in the Bill to set the strategy and perhaps the duties. We can debate whether it is to be the Secretary of State or the regulator, but to just dump all this into a licence that we may or may not see will lose us a big opportunity to consider before we get into the detail not just how roads are built and operated but how they fit into the environment, including the issue of emissions, along with local roads and all the other people that my noble friend Lord Whitty mentioned. I shall reflect on that and come back to it on Report. Perhaps we can have a meeting with the Minister before then, but in the mean time, I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty
We now come on to the strategy and, by implication, the money. The Government have commendably said that they want a steady strategy that is going to last some time, with an allocation of resources against it. That in itself is highly desirable, but it is not so dramatically different from the various road programmes that have existed in the past and have been subject to sudden change, as the Minister said, mainly because of changes to financial arrangements but also because of planning delays and technical problems with the projects when they go beyond the initial feasibility study.
The national infrastructure plan, which has a lot of roads in it, broken down on a regional basis, is presumably going to be built on and represented as the strategic highways plan, and there will be a five-year programme of money attached to it. My Amendment 14 attempts to ensure that that five-year view is reflected in the Bill. The Government have made quite a lot of the five-year thing, but although I have not read every word of Schedule 3, I do not see it in the Bill. There are arguments as to whether five years is enough, given that it takes that long even to get anywhere near starting, but the five-year funding has been an important plank of the Government’s selling of this project, and I think that it should appear somewhere in the Bill.
My wording may not be quite right, but I think that it should be a rolling five-year programme, so that in year 3 you are still looking five years ahead. You would add to it, and you would add the financial commitment related to it at that point. My wording does not exactly say that, but that is what I am after. If the department can find better wording, that is so much the better. However, we should at least write into the Bill the embedding of a minimum five-year view and that it should be on a rolling basis and have money attached. Otherwise, a lot of the rationale for this whole exercise disappears. That is what Amendment 14 is about. The Government have made a start with the designation of projects within the national infrastructure programme and can turn that into a highways strategy, and the Chancellor has made the commitment for these five years.
The Government seem slightly naive in their confidence that the Treasury will never revisit this because it is now an arm’s-length company. The past 50 years have seen cuts to the money that has gone to private companies, to nationalised corporations and to local authorities. The fact that they are arm’s length from government has not stopped the Treasury deciding at particular points to change what it had previously—in effect—promised. So far nobody has managed to sue the Chancellor for that; I doubt whether it will be any different under this new arrangement. That may be a bit cynical. As the Minister said, it would be more embarrassing to do that, but my experience of Treasury Ministers and Treasury officials over the past few decades does not indicate that they are easily embarrassed. Indeed, interfering with other departments’ clear priorities is the way that the Treasury works, rightly or wrongly. Therefore, the benefits of having an allocation for five years can be exaggerated. Nevertheless, it is a desirable aim, and it is desirable that we know for those five years what projects are there and what stage they are at. Since it is a rolling programme, moving from feasibility study to planning, to precise engineering design, to the start of digging and through to actual completion of the road, it is desirable that it should appear in a five-year perspective. Before we finish the Bill, I hope that a form of words can be adopted that makes sure that that is reflected in the Act. If it provides a bit of embarrassment to future Treasury Ministers, so much the better, and so much easier will future Transport Ministers find their relations with the Treasury.
My Amendment 16 raises the broader issue of strategy. We have an infrastructure strategy but not a specific transport strategy. It needs to be made clear how the roads strategy, or highways strategy, fits in with the broader transport strategy—rail, ports and airports in particular. The whole logistical structure and the balance within it in terms of our economy, what pressure is put on the transport system and what the regional balance and stress points are, need to be reflected in all modes and, indeed, different corridors need to be judged on a multimodal basis. If they are not, simply having a sacrosanct—or near-sacrosanct—roads strategy will deal only with part of the problem. My Amendment 16 relates to putting the roads strategy into that broader context. I beg to move.
Lord Jenkin of Roding (Con)
My Lords, it is my impression that this road investment strategy, and the commitments made to it by the Government, is perhaps the aspect of this Bill that has been most welcomed by industry, commerce and, indeed, all those who depend on transport for their operation. I have just been rereading what the CBI said about this, and it attaches enormous importance to the stability that the roads investment strategy is intended to bring.
It will be a long time before those of us who lived through it forget what happened in 1997 when the Deputy Prime Minister at the time, the noble Lord, Lord Prescott, decided that roads were much less important than a lot of other things and there was a massive stop to almost the entire road investment at the time. That is the memory that I have and the impression that the noble Lord gave at the time, and that memory will take a long time to disperse. The Bill, particularly this clause and the policy that lies behind it, has been greeted with huge enthusiasm.
The Treasury has ultimate responsibility for managing the economy as a whole. I can speak as perhaps the only former Treasury Minister in the Room, having spent four years as Financial Secretary and then Chief Secretary to the Treasury in the 1970s. One is always aware that at the back of any policy there has to be Treasury approval. In the interests of the economy as a whole the Treasury has to be able to say to a department, “I’m very sorry, we can’t afford that”. Here, though, the combination of the strategic highways company, the roads investment strategy and the commitments that the coalition Government have given on this must to some extent make a Treasury Minister think extremely carefully about how far it would be right to interfere with this—that would be a major decision.
Of course, these things often happen when there is a change of Government. What industry is looking for here, as we heard in the debate in the Chamber today from a number of speakers, is common ground between the major parties so that there are not massive changes of policy on matters of this sort, which have such a devastating effect on manufacturing industry—which is what we were discussing then.
Whether one needs to have what the amendment suggests at least every five years I would regard as questionable; it seems to add an element of uncertainty that the Bill does not have. There is a five-year review but I am not quite sure why this particular condition would need to be put in. I listened carefully to the noble Lord, Lord Whitty, and I have enormous respect for his expertise in this field because he was a Minister in the Department for Transport, or whatever it was called at the time, but the advantage that has been gained by publishing this policy in this clause of the Bill is that it assures the commercial side of this country that there is now going to be far greater stability in the long term. I am delighted that there is such emphasis on the long-term strategy for infrastructure building so that we can get away from these five-year single-Parliament policy decisions, which might put it risk.
I want to see this aspect of the Bill going through as effectively and swiftly as possible because it is what the country, particularly its commercial elements, have been looking for for a long time. I am going to look at not just this amendment but a number of the others that have been tabled—I was going through them earlier today—to see whether they would interfere with that aspect by raising doubts or putting additional bureaucracy or obstacles in the way of getting the strategy fulfilled. That is what one will need to look at very carefully. At the moment, as far as I can see, most of the Bill achieves what is wanted. I express my doubt about whether Amendment 14 from the noble Lord, Lord Whitty, would improve that; I suspect that it would add an additional obstacle and raise doubts that ought not to be there.
Lord Berkeley
My Lords, in discussing the strategies and the length of time, my Amendments 23 and 24 go into more detail but I think they are trying to say the same thing. It is an interesting issue as to whether there should be a five-year period. It is a great deal better than having one year, which is what we used to have, but it may be better still to have a rolling one, if that were possible.
I heard some results from Network Rail this morning. It has a fixed five-year term, as noble Lords will know. I have been given the capital expenditure year by year over the past five-year period. In the first and final years, the expenditure was 50% higher than in the three middle years, which is very difficult to resource up and resource down for the contractors and suppliers dealing with it. I asked the people at Network Rail why, and they said, “Well, the first year we are catching up with what we should have done in the previous control period and did not get round to it, and the last one was because we had a lot more expenditure that we had to finish before the end of the control period”. That is quite normal. That will happen on roads as well as railways; it is much the same. But I know that the feeling at Network Rail is that, if it was possible to have a rolling capital expenditure programme, life would be much easier. I wonder which, if either, would get through the Treasury better and whether it would be possible to have a rolling one rather than a fixed one. That is just an example from Network Rail.
I have one other question for the Minister arising out of these amendments. I hope that the strategies and all the duties and everything else will include the interests of cyclists and pedestrians. People may say that pedestrians should not be on trunk roads and they should use footpaths if the road is high-speed, but it is terribly important that pedestrians and cyclists feel safe and use the roads, which is part of the environmental objectives that I put in my amendment. It would be good to have some confirmation from the Minister that this is all part of the strategic investment plan.
Baroness Kramer
I thank your Lordships. These amendments are fairly well honed around a question to the Government about whether or not they should produce a national strategy to deliver a sustainable transport system and, in doing so, align plans for the rail and strategic road networks. I ask your Lordships to hold back from that, and I will try to explain why. The Government genuinely care about ensuring that different parts of the transport network work together. We think that our overarching transport strategy reflects that. However, we are concerned about trying to get a single document that would articulate all that and yet allow the impact that we want from the kinds of changes that we are introducing today.
The noble Lord, Lord Berkeley, described some of the issues that come from having a fixed term of five years, as rail has. When the road investment strategy comes forward, I expect it to have a term in it. I would not be surprised if that was five years. But it would also be quite reasonable to expect that it might look at funding commitments beyond the end of that period in order to prevent the kind of hiatus problem that we have seen before when projects and programmes come forward.
We are looking for some flexibility around how we handle all this. However, it is far too early days to think about aligning road and rail strategies. They are both complex, and incredibly detailed. We are looking at a new company, which will have to work its way into the actual programmes it has. There may be a point later where we want to draw those two closer together. However, frankly, it would not be appropriate to try to make that part of the framework we have today. Therefore, the documents leave this very flexible, so that one could move in that direction if that seemed to make sense as we get practical experience on the ground of how the strategic highways company works and how it is delivering.
One can see certain problems. The noble Lord, Lord Berkeley, just pointed out to us that sometimes there is a pattern of investment within Network Rail’s five-year period. I would hate to have two aligned periods, one for road and one for rail, which exaggerated that pattern. Therefore, there are a lot of issues about how we would align and bring those programmes together. We need to allow that to arise out of experience rather than to be dictated in these documents at this point in time.
It is absolutely crucial that we achieve certainty of funding, which is the issue that the noble Lord, Lord Whitty, addressed. The noble Lord, Lord Jenkin, had an excellent set of responses to that. Would any Chancellor resist revisiting the issue? Well, it certainly becomes a sight more difficult. The legislation as constructed commits the Secretary of State to comply with the RIS, which includes the financial resources commitments which will be embedded in the RIS. As noble Lords look at the details of the legislation that sets up the RIS, they will see that an attempt to vary it triggers quite a process, including consultation. That is something that forces this to be a transparent and very determined and detailed decision. That is the appropriate way to go about putting on sufficient constraint without undermining what is in the end a democratic process. We cannot completely bind the hands and feet of all future Governments—that would be entirely inappropriate. However, we can drive in this direction where the institutional arrangements underpin and reinforce the idea of consistency and certainty. Frankly, that is what this document achieves rather well.
I therefore ask that we do not at this point try to narrow the scope to specific terms and fixed periods or try to get immediate alignment between road and rail. That is not where we need to be at this point in the process. The experience, as we bring into being the strategic highways company, will help either us or future Governments begin to determine whether there are benefits to be gained by greater alignment in the future.
The noble Lord, Lord Berkeley, asked whether this covers cyclists and walkers. It is absolutely clear in all this that the responsibility of the strategic highways authority is to road users. Again, I hesitate, and ask that we do not put in lists. When I had this discussion, someone chimed up and said, “You’ve got to say motorcycles, electric bikes need to have a separate category, and what about horses?”. We all recognise that “road users” captures everyone who makes use of the road, and frankly, that is a far safer definition than trying to make a list—someone also asked me, “What about Segways?”. I will say only, can we please stay away from the list on this? However, it is clear in my mind, and in the minds of everybody who has ever been connected with the Bill in any way, that cyclists, walkers and pedestrians are absolutely a significant part of the road-user community. I hope that with those assurances the noble Lord will feel able to support the relevant clauses of the Bill and to withdraw his amendment.
Lord Whitty
My Lords, I thank the Minister for that, and I thank other contributors. It is clear that the wording I have in Amendment 14 is not appropriate even for what I was trying to achieve, so obviously I will not be able to press that particular amendment.
However, I am a bit surprised by what the Minister says because the noble Lord, Lord Jenkin, is absolutely right that many in industry, plus companies involved in road construction, have hugely welcomed the announcement that there was to be some stability in funding. What they and I think we heard from Ministers was that there would be a strategy with projects listed in it and a near-guaranteed amount of money, probably for five years and possibly for as long as 10. That would obviously be of great comfort to industry as a whole, in using and depending on the roads, and to those who see their profit in having rather more road building which they could rely on, rather than a stop-start system. I do not think that the Bill reflects what they think they heard.
Clause 3 actually says:
“The Secretary of State may at any time … set a Road Investment Strategy … or … vary a Strategy which has already been set”.
That is not exactly a comfort of certainty and consistency. In fact, it gives carte blanche for the Secretary of State to change it every five minutes. Admittedly, that would be subject to the consultation arrangements to which the Minister referred, which come later on. However, it is not the degree of firmness that people in industry were looking for and thought they had on that. I referred to five years because I thought that is what the Government were saying, but I actually think that the rolling programme is better. It could be for seven years, or whatever, as even in the best of years the average time between deciding to build a road and finishing it is seven years. It is probably a little longer.
Baroness Kramer
I do not want this point to go unchallenged. I say to the noble Lord that I think the industry has heard absolutely correctly, but nobody I know in the industry believes that a Parliament can bind every future Parliament from thereon out and totally remove its democratic right. It would be inappropriate to attempt to do that and, frankly, I do not think it could be done, so it is absolutely crucial that we recognise that the Secretary of State can make a variance. It is not the intention of this Government that they will vary the RIS that they put forward, but I do not see that they can completely bind a future Parliament 100%. That is why the mechanism in place is to set a very transparent course—one could say an obstacle course—for any change or variance, so that it in no way would be done lightly. Perhaps no Government would do it lightly but it would be done with consultation and engagement, and with various steps in place. Industry has widely recognised that that provides it with a very substantial degree of certainty—enough to have the kind of positive responses to which the noble Lord, Lord Jenkin, referred.
Lord Jenkin of Roding
Perhaps I might add to that before the noble Lord, Lord Whitty, resumes. I have in front of me the British Chambers of Commerce brief. I want to read only one sentence from it. It says that,
“the transformation of the Highways Agency into a more flexible body, with five-year investment programmes”,
should offer,
“more certainty to business on key road projects”.
It is not expecting to have complete certainty and for this to be totally fixed over a period because it recognises the reality, as my noble friend has just said, that to some extent it has to reflect what is happening in the rest of the economy. What it welcomes is what it sees as the opportunity of much more certainty than we have had in the past.
Lord Whitty
My Lords, that is very realistic; nevertheless, the way that it has described the situation is more than is actually in the Bill. Some other form of words would give more certainty than the Bill does currently, as past changes show that there is a need for some protection. It may be that the obstacles—if that is how the Minister wants to describe the consultation—are one way of ensuring that it does not get easily changed. The other way is to put the strategy to Parliament and have to report to Parliament if you are going to change it. In some industries or sectors, that is done in certain respects. You have to provide a strategy and, if you change it, there is at least an argument in Parliament. These things change from time to time.
I am sorry to take up the Committee’s time, but I shook my head at the noble Lord, Lord Jenkin, earlier and I need to explain. I became the Roads Minister in 1998. In 1997, the Government inherited a roads programme from quite a good 1996 White Paper of the previous Government, which listed projects but did not list money attached to them. Projects got added in as we approached the 1997 election, by both parties, for reasons I will not go into. We therefore had a programme with far too much in it at the tail-end, and which did not have the right amount of money attached to it. The noble Lord, Lord Prescott, announced that he thought his aim as Transport Secretary was to reduce the number of cars on the road, and he was therefore not going to build roads which simply increased traffic. I know this well because we announced the roads programme in 1998, about four days after I became the Minister, so I take no responsibility for the decisions but I do take responsibility for the presentation. The majority of things which had been in the previous paper were back in, and then there were one or two more and one or two fewer—but they were all costed. A lot of those costings proved to be utterly inaccurate, most of the timings proved to be most inaccurate and one of the projects was indeed the A303 past Stonehenge, and we know what happened to that. Certainty is not easy in this area. We need a bit more certainty than we have here.
Lord Davies of Oldham
“( ) the anticipated impact of the Roads Investment Strategy upon the condition, development and funding of the local roads network and local transport provision,
( ) the anticipated impact of the Roads Investment Strategy on links with other nationally and regionally significant infrastructure projects, including ports and airports, and the impact of projected vehicle emissions on local air quality.”
Lord Davies of Oldham
My Lords, I am in great danger of running into the same brick wall of a government response as my noble friend Lord Whitty. It was an interesting response: “We are creating a new company; we are setting out a new strategy for roads; we have a five-year programme; and we are talking seriously about infrastructure. Please do not come to us with any suggestions of what considerations such infrastructure developments should take into account”.
My noble friend Lord Whitty tried to analyse the road investment strategy and what that might involve in terms of wider consideration. I will deal with the national networks policy statement, with exactly the same objective. I see no point in the Government arguing that they have got improved machinery but reined-in objectives. In circumstances where wider society is clear that what it wants from our infrastructure is greater integration and greater realisation of the relative impact of public expenditure in one area upon another, I do not see how the Minister can maintain that these things are too burdensome. It is not too burdensome to include in the Bill the possibility, some period further on, that there may be more than one company. It is not too burdensome to have a decade-forward look at certain aspects of the legislation.
With these amendments, we suggest the road investment strategy will need to take account of its impact on local road systems and will need to consider the links between other significant parts of the transport infrastructure, such as ports and airports. If we had not had the built-in five-year delay on the decision regarding an additional runway in the south-east, we would currently be discussing infrastructure in relation to aviation as well as roads. The Minister maintains that there cannot be a case for pressing additional obligations on the strategy. I do not accept that. I do not see why we should not ask, as Amendment 29 does, the Secretary of State to provide the strategic highways company with a survey on the condition of the local and strategic road networks. I do not see why we cannot envisage increased co-operation with Network Rail. I know we cannot flick a switch overnight and deal with such complex issues as if they are givens to immediately act on, but unless we have the objectives then the whole concept of the integration and improvement of infrastructure over a period of time disappears.
I listened very carefully to the Minister’s reply to my noble friend Lord Whitty. I understand what she is driving at, in that we cannot take everything on board at the same time. However, we are not suggesting an enormous increased cost as far as the road investment strategy is concerned; we are suggesting that it should have the perspective to understand what integration and development of the infrastructure is all about. That means that the Government should give serious consideration to this group of amendments, as well as to the previous group, introduced by my noble friend Lord Whitty, which seek to guarantee that our improved investment strategy for infrastructure will take in all the factors that wider society regards as being germane to transport improvement. I beg to move.
Lord Jenkin of Roding
I would like to put a question to the noble Lord, Lord Davies of Oldham, about his amendment. I believe I am right in saying that local authorities already have a very effective system for regularly analysing the state of local roads, the investment that needs to be made to bring them up to standard and what it will cost, called the ALARM system. What is wrong with that? If they have that already, why write something more into the Bill? I merely ask the question. Maybe the noble Lord can answer when he winds up at the end of the debate, and perhaps my noble friend might like to comment on that in the course of her reply.
I understand, of course, that different parts of the road structure will have an impact on each other. I would have thought that would be covered by the duties of consulting that my noble friend referred to in relation to earlier amendments. This will be an integral part of the operation of the strategic highways company. There is already a very good system, as I understand it. One sees headlines in the newspapers every year about the state of local roads and what needs to be spent to bring them up to standard. If there is a headline word that has entered into the public consciousness, it is “potholes”.
Baroness Kramer
My Lords, through these amendments, the noble Lord, Lord Davies, and others seek to ensure that the impact of the road investment strategy on the various local road networks and other transport infrastructure is considered. This is an important argument, and I need to be clear that, through the licence, we are requiring the strategic highways company to have an asset management strategy. Understanding the condition of its assets is absolutely key to this.
The condition and performance of the local road network are, as the noble Lord, Lord Jenkin, clearly outlined, matters for the local highway authority. Frankly, we would not wish to include in the Bill a requirement to survey the condition of local roads, because its focus is the strategic road network. We are not anxious to usurp authorities’ powers. I share the assessment of the noble Lord, Lord Jenkin, that the tasks are currently well carried out by local authorities, which, I suspect, would not want to surrender a lot of resources and have the task taken over by a centralised body.
That said, we want this new company to co-operate with its partner road networks. The route strategies, with which I think many of your Lordships will be familiar, are a key source of information in developing the road investment strategy. They provide local authorities and, by extension, local highway authorities with a mechanism to work with the new company and thus ensure that the impact on the local road networks of interventions on the strategic road network is considered. We think that that will be an extremely effective mechanism and it is well provided for in the legislation as it stands.
In addition, as part of the changes elsewhere in the Bill, the company will, as I have said before, become a traffic authority. That is new and means that it will be subject to the network management duty—a legal obligation on all local traffic authorities to ensure, among other things, that traffic flows smoothly from one jurisdiction to another. At present, the Highways Agency is not subject to this requirement, so this will be a new guarantee of co-operation.
I could start to list the kind of support that we are offering for local roads but, setting aside our significant financial contribution, I also want to make it clear that we are supporting efforts by local authorities to share knowledge and best practice under the highways maintenance efficiency programme, as well as encouraging co-operation and common procurement. There is therefore a gathering momentum to achieve much more co-operation and partnership working, which will continue under the new arrangements.
I talked earlier about aligning road and rail investment strategies, so I will not repeat that. Instead, I shall use this occasion to underscore how much we recognise that there is significant value in Network Rail and the new strategic highways company working together on the kinds of issues that your Lordships have listed. However, we do not think that you need a legislative mechanism to try to prescribe how those two companies should work together. We would find it extraordinary if they chose not to, and I doubt that the Secretary of State would permit them to ignore each other in that way.
It is entirely appropriate that the road investment strategy and the new company’s response to it will have due regard to the national network’s national policy statement—that is a mouthful. However, it would not be appropriate to create a formal link between what is a planning document and what is, in effect, a funding and investment plan. The two documents align but there is not a hierarchy between them.
On that basis, looking through the details of the amendments, we think that the underlying issues that are of concern to your Lordships are already addressed. Therefore, we feel that the amendments are not needed and we hope very much that the noble Lord will feel comfortable in withdrawing the one he has moved.
Lord Davies of Oldham
My Lords, I will back off from my amendment in relation to local authorities out of deference to the representation from the noble Lord, Lord Jenkin, although I should say that I back off for today, because that is not the perspective that we have of certain aspects of the work of local authorities. However, I shall back off if the Minister will take on board the obvious thrust of these amendments: both those in the group we are considering at the moment and those in the previous group, which the noble Lord, Lord Whitty, introduced, are concerned with the fact that the strategy has to take into account broader issues than road provision has done in the past and that it will need to have that written down and enforced. It is all very well for the noble Baroness to say, “Yes, as a matter of course those who are planning the roads will take into account these other factors”. No, they will not. In the past, we have seen that such factors have clearly not been taken into account.
Not the least significant of all those factors, especially for many British people, is the question of increased emissions. We have seen precious little activity, as far as roads are concerned, on emissions. An attempt in the previous group of amendments to introduce that into the categorisation of the work which the new system must take into account was rather brushed aside.
Lord Whitty
“( ) The activities, results and standards in subsection (4) shall include improvement of performance in network safety, reductions in carbon emissions, and improvements in environmental objectives as well as issues of traffic volumes, journey times and new and improved roads.
( ) A reduction in the number of accidents and the number killed or seriously injured on the highways network shall be a central objective of the Road Investment Strategy and shall be embedded at the level of design of the system, at the operational level of network management and in assessment of individual capital projects.”
Lord Whitty
All the amendments in this group are mine. This relates to exactly the sort of thing that my noble friend Lord Davies was just referring to. The Highways Agency consists mainly of engineers—quite rightly, and very good engineers many of them are. In the fringes, there are traffic engineers, as well as highways engineers. When you ask them to build into their projects objectives other than those which relate to providing more, quicker or wider roads, there is a bit of barrier, on occasion. Between them, the amendments are an attempt to ensure that when we take decisions on road improvements or new roads, issues of safety and the environment are built into those decisions on the same basis as any improvement in travel time, the number of miles of road which are tarmacked, or whatever.
The Highways Agency contains within it people who take those things seriously, but the natural tendency, particularly when we put the foot on the accelerator of spending on roads, is to get as many roads built as fast as possible and not worry too much about the complications. One big complication has wider implications for the rest of the project: safety. Earlier, I declared my interest as the new chair of the Road Safety Foundation. Every year it produces a map of European standards and the state of Britain’s roads. I have the map here if anyone wants to look at it. Those are standards which have been worked up by various equivalent bodies across Europe. It is right to say that our motorway system, in particular, is one of the safest in the world and is the safest part of the British— English, in this case—road system. That, of course, is calculated on the basis of vehicle miles and comparing them. It is also true to say that 250 people a year are killed on Highways Agency roads every year, and 2,000-plus are killed or seriously injured on those roads. That is a significant safety issue. Just to put it in perspective, more people are killed on Highways Agency roads, which are only 2% of our network—a third of the casualties because of the density of traffic—than the number of people who are killed at work. There are health and safety issues at work, for which we have a whole organisation, the HSE, to ensure that such accidents do not happen or are minimised.
The Government need to have an answer to the question of who is liable for those accidents. There have been big improvements in road safety in the past 20 years. When I was Road Safety Minister we had a 10-year strategy and, by and large, that reduced deaths and serious injuries by about 30% over that period. That improvement has slowed down a bit since 2010, but we are nevertheless one of the best and safest in Europe and the world. However, there are still a significant number of deaths and injuries.
If you try to establish the causes of those accidents, there is an assumption that it is mainly driver error or driver behaviour—and there is some truth in that. Much of the improvement over the past 20 years has been in improved vehicle safety. The Euro NCAP programme has raised certainly new car safety features from what it regarded as 2-star to roughly 4-star—air bags and other aspects of car design—which has had a major impact.
It is also true to say that at least for most groups there has been some improvement in driver behaviour, but there has not necessarily been the same improvement in safety features in the physical design of roads, nor has the improvement been reflected in the objectives of road-building organisations—principally the Highways Agency, but also the local authorities. The reasons for this are partly because it is thought that if you build a better road, safety automatically improves. It does not necessarily do so, and certainly does not improve proportionately. It is partly because the system for appraising new projects—whether they are intersections, main road widening or whatever—includes safety elements that are but a small proportion of the total cost and benefit. Additional safety factors are therefore discouraged by the way in which the projects are appraised.
This group of amendments, which also relate to environmental issues, attempts to write safety issues into different points in the Bill. I imagine that the Minister will not accept the amendments as they stand but I advise her and her colleagues that road safety is underplayed in the Bill. At various points in the Bill, explicit reference to road safety and reducing accidents needs to be reflected, as well as in the licensing conditions and the standards and objectives that the Secretary of State accepts for the new company.
My worry about the transposition in this context is that if a road design issue causes or contributes to the cause of an accident, who is liable? We do not get many legal cases about the state of the roads, and I do not know why. Thirty years ago we did not get many legal cases about the performance of the National Health Service; now we get lots of them. We get quite a few about tripping over the pavement, which is the equivalent responsibility for the local authority. If you have an independent company, the question of liability to potential litigation needs to be taken into account as one of the risk factors. I am not saying that it is a determinant risk factor, but it is something that the Government will have to have an answer to, and at the moment I do not think they do. One way of ensuring that that happens, in terms of licence conditions and the other oversight that the Secretary of State will have to perform, is to write safety in at several points in the Bill.
With regard to the detail of the individual amendments, Amendment 18 relates to the standards that the Secretary of State can set for the company. One of those standards should be a reduction in the number of accidents and the number of people killed, and that should be,
“a central objective of the Road Investment Strategy”.
Amendment 22 makes the point that I was just referring to, that when you appraise schemes, the appraisal for safety benefits or otherwise needs to be a separate assessment and not be lost in the overall assessment, because the return you can get on safety measures is often much higher than the return you get on time-saving and other economic benefits. Amendment 22 also goes into other issues of reducing traffic and so on, which also have high returns. It is the same in the energy sector: saving energy is actually a far greater return than spending money on new power stations, although you have to do both—as you do here. But if you appraise the environmental element separately, the rate of return is significantly greater. Therefore, that should be done as a matter of course.
Likewise, in relation to the strategy in Clause 2, Amendment 33 says that the objectives should relate not just to road-building but to safety issues, and that in relation to guidance due consideration should be given to road safety and environmental outcomes. I would particularly emphasise the road safety dimension.
These amendments may not be the most appropriate place, but before the Bill leaves this House it would be sensible for the Government and the department to find the appropriate place to put, in lights, “road safety responsibilities of the new company”. If we let it leave this House without that being clear—in several different places, I suggest—there will be a tendency for the company to at least downgrade those and for the accountability of the company to be weaker because they have not been spelt out in the Bill.
These are quite important issues. Sometimes those who are keen on having new roads regard safety issues as a constraint rather than an objective of road design. We need to ensure they are an objective both at the individual project level and in the overall strategy. I beg to move.
Lord Berkeley
My Lords, I support my noble friend. He has raised some very interesting challenges. I do not think that safety gets taken into account nearly enough in the design of roads. In my earlier life, I designed quite a few of them.
It might be interesting to compare how the roads have developed and how the railways have developed. There were some horrendous accidents on the railways in Victorian times, starting off with a Member of Parliament who got crushed by one of the first trains because he was standing too close to it, or something. That led to the introduction of the Railway Inspectorate, whose job it was to ensure that the railways were safe, bringing in things such as brakes, which are quite useful. Things have moved on a bit since then. The Railway Inspectorate was originally staffed by retired Army officers, but more recently it has moved to the Office of Rail Regulation, which is the right place for it. I think that it does a very good job. We will be talking about some of the issues around that when we discuss a later amendment.
It seems to me a good idea to look at whether the ORR in its expanded role could take on some road safety issues. At present, the Highways Agency does that, and, in the absence of any other instructions, the new body will probably hold much the same views as that agency—namely, the desire to increase speeds so that people can get to their destinations faster and to increase capacity by having more roads. The strategy is designed round the concept of “a minute saved”. My noble friend is an expert on this. He may well be right that that body takes safety into account to some extent, but I am not sure that it does. It could certainly do so to a far greater extent.
The Office of Rail Regulation could be given responsibility for many of the safety issues that my noble friend raised, which cover a multitude of sins, and could be given a duty to look at the potential for modal shift. We talk about road to rail very frequently, but there is the issue of road to bicycle. As we have seen in London, road to bicycle is concerned largely with safety issues. A terrible number of cyclists have been killed in London in the past year or two. TfL talks about redesigning roundabouts but one of the key issues, which must be obvious to most people, is that if you give cyclists space, they are less likely to get run over. If the road traffic speed is set at 20 miles an hour, it is a great deal safer than 30 miles an hour, and you will get more people cycling and fewer people trying to drive. It would also reduce emissions and do all the other good things that we have been talking about. This is to do with modal shift. The journey time issue is equally important, whether you travel by bike, train, car or bus. Therefore, my noble friend’s amendments deserve careful consideration. I will discuss with him in more detail whether the Office of Rail Regulation should be involved in some of these issues. I think that body is capable of it as it has very capable people. Unlike the Highways Agency, it can stand back and take a different view and, if it does not like what is going on, it should be able to enforce and encourage change. These are important amendments and I look forward to further discussion on them.
Lord Davies of Oldham
My Lords, I can be very brief. I fully endorse the statements made by my noble friend Lord Whitty. I once had the privilege of being president of the Royal Society for the Prevention of Accidents. That was a year in which I contributed little but learnt a very great deal indeed. I do not think that the consciousness of the need for safety on our roads has increased as much as we might have expected, given the work that has been done by estimable authorities such as RoSPA. Therefore, I hope that the Minister will take these amendments very seriously.
Baroness Kramer
This set of amendments seeks to make the road investment strategy cover several specific areas, including carbon reduction, traffic volumes and environmental performance, and to place safety at its heart—the area where we have had most discussion, which has been fascinating. I reassure the Committee that the Government take all these issues very seriously. It seems to me that where we may differ is on whether or not these important values are enhanced in implementation by including them in the Bill rather than in the road investment strategy and in the licence. I am inclined to believe that the RIS and the licence are the most powerful documents to drive forward the behaviours that we are looking for, so I shall explain the role that those documents play.
We are concerned about ending up with a long list sitting in legislation and describing what the road investment strategy should look at, because, as everyone in this Room knows, there is always the problem of what happens with the item left off the list when that is significant. One can try to say that those that are not named are of equal significance and are equally elevated, and that one is not primary over the other, but that is not always an easy argument to make. I am concerned, particularly since we want this to be a long-lasting document, that there will be issues which we consider to be of equal importance to safety and the environment and that we would be in a difficult situation if we insisted on those additional significant priorities. I am therefore hesitant to go to the face of the Bill. It is helpful to have the information that we have on both the RIS and the licence, and the other documents.
Let me focus on safety, because it is a very important issue to the Government. As the noble Lord, Lord Whitty, said, our roads are pretty much the safest in the world, but we can never be complacent. The strategic highways company will have a responsibility for the safety of the road network, but, as I pointed out previously, there are key safety responsibilities—including driver licensing, training and education, the regulation of driving such as drink-driving and drug-driving policies, enforcement, dangerous and careless driving and, as the noble Lord underscored, the important issue of vehicle standards—that must stay with the Secretary of State and not transfer to the new company. That is to put the broad construct, which would not work effectively if those responsibilities were not kept with the Secretary of State.
As we go through these complex documents, it is worth noting that safety is already embedded in the strategic roads “system”. For example, the Design Manual for Roads and Bridges sets minimum standards for road safety, and safety is covered within the appraisal. The noble Lord, Lord Whitty, asked whether the appraisal formulas were exactly as they should be. That is surely not something that we are going to address in primary legislation; it is a working issue that needs to be addressed at a much more practical level. In wide areas of appraisal—I have looked more at financial and cost-benefit appraisal issues—we are constantly trying to update the way in which we look at those issues. I cannot see that it can be driven through primary legislation; it is part of being responsible. The importance of safety is already included in the draft licence and will be a key consideration in the road investment strategy. For example, the RIS will require performance specifications that embed safety issues.
The noble Lord, Lord Whitty, referred to legal liabilities. I think that it is clear that the SHC is responsible for the road but not the driver, but I do not think it would be right for me to try to speculate on legal liability.
Embedded in the amendments are important issues of environmental protection such as climate change and biodiversity. Again, they are well covered within the licence by broader existing legislation. Again, if we are looking at who is responsible for what, a lot of those issues refer to the vehicle fleet, and that must be with government rather than with the new company.
Therefore the view we take is that the issues that are raised are very important, but that they are carefully covered and encompassed by the language we have in both the primary legislation and supporting documents. Therefore once again, amendment is not necessary to achieve the goals which those sponsoring these amendments have in mind.
Lord Berkeley
The noble Baroness mentioned the performance specification. Giving something like the Highways Agency a performance specification means, “Make your road traffic go as fast as possible, make sure that the bikes are miles away, and put up lots of crash barriers so that if people do go off the road, they won’t kill anyone else”. I hope we have moved on—or will move on—from that.
Baroness Kramer
All I can say to the noble Lord, Lord Berkeley, on this, is that we have certainly moved on from that, have we not? That is one of the problems that happens when you try to put too much into primary legislation—we become more demanding as the years go by, not less demanding. It is important that we reflect that more demanding approach in the way we manage our network.
Lord Whitty
My Lords, I am exceptionally disappointed by that reply, because it did not address the issue. I will confine my remarks to safety, but there are other issues as well.
I imagine that any member of the public who wants to know what the objectives of the new company would be would expect to have it written in the Bill that road safety improvements are one of those objectives. It is no good telling us that it is in the licence or that maybe it is in the guidance—the Bill should specify what issues should be covered by the licence, and what areas the guidance is appropriate for. The issue of safety is underrated in the appraisal system. That is not to say that it is not there, but that because a safety measure costs a lot less than building a whole new road or even a rather short one, it gets lost in the total balance of benefits. If you looked at the safety expenditure you would probably get a rate of return considerably higher than the millions of pounds spent on improvement in the speed and travel time, which therefore improves or extends the road itself. I was just trying to say that we should look at those separately before we take the decision.
The other advice I would give to the Minister is that this is quite a potent issue out there. A lot of organisations and people are interested in road safety. If it were known that we were promoting a Bill without any significant reference to road safety as the basis for establishing an entirely new system of delivering our roads, they might well take that amiss. All I am saying is that, during the subsequent stages, there will be significant public interest in this area, even though there might not be that much public interest in most of the minutiae of the Bill.
Clearly, I am not saying that the Highways Agency should be responsible for anything more than the physical safety of the structure of the road and the safety provisions on the management of that road, whether that is signage, markings, telemetrics, or whatever, which contribute to safety. The agency is responsible for that; all the rest of it—vehicle design, driver behaviour, and so on—is the Secretary of State’s responsibility. However, there are areas where the builder and operator of the road must be responsible. As regards our strategies on road safety, that has been underemphasised hitherto. It is an important thing. In certain other countries, including some of the countries to which the Minister made reference as models—Denmark, Holland and Sweden—it is much clearer that they are building safety requirements in the slightly arms-length companies they have.
We will definitely return to this issue. I hope that the Minister and her officials retire and find some way of reflecting this discussion in the Bill before we come to Report. If not, I can promise the Committee that I will return to it. In the mean time, however, I beg leave to withdraw the amendment.
Lord Davies of Oldham
“( ) The Secretary of State must, within one month of publishing a Draft Road Investment Strategy, begin a consultation on its contents.
( ) The Secretary of State must publish a response to the consultation no later than a month after the conclusion of the consultation.”
Lord Davies of Oldham
My Lords, Amendments 20 and 21 in my name are designed to encourage proper scrutiny of the road investment strategy that will be set by the Government. The impact assessment makes clear the potential effect of the operation of the new organisation on the public:
“Corporatising the HA will provide it with a greater commercial focus, but there is a risk that it might take decisions that have negative consequences for the public. We would not expect a company at arm’s length to make identical decisions to a minister, who is expected to take into account a wider range of impacts and views and is then held democratically accountable for them”.
Exactly. That is why it is enormously important that this body, which is to be established with increased powers, is made fully accountable.
The road investment strategy is likely to last five years and will involve the spending of a huge amount of public money. As the Minister said at Second Reading, the Government committed more than £24 billion to upgrade Britain’s strategic road network between 2011 and 2021. The strategic road network, as the Committee knows, carries a third of all car and van traffic and 65% of heavy goods traffic. It is therefore vital that business, trade bodies and campaigning organisations can make their views known during the consultation process. It is also vital that the public can make their views known, both directly through the consultation and indirectly through their elected representatives. If it is a vital part of the Government’s plans to secure stability and enable long-term planning, then it is also essential that this process is transparent, open and accountable. Otherwise, it will never gain the public confidence that it needs to operate successfully. I beg to move.
Lord Whitty
My Lords, I have an amendment in this group. I agree entirely with my noble friend Lord Davies on how we get to the investment strategy. My amendment is at the end of this group, and it is about Parliament’s oversight of the process. We always ought to consider how Parliament both approves and monitors bodies and documents which are referred to in legislation.
I am proposing that, before the first strategy is implemented, it should be subject to a report of a Joint Committee of both Houses. I suspect that our colleagues in the House of Commons will say that it should be a DfT Select Committee. Nevertheless, some form of parliamentary accountability is necessary. It is nowhere in the Bill, and it should be. It should be a regular process; I am saying every five years because that is the period to which the money and strategy initially relate. Certainly, a regular review of the roads investment strategy ought to be built in at parliamentary level. That will complement the consultations that are required at the beginning of the process in my noble friend Lord Davies’s amendments.
Lord Berkeley
My Lords, I have two amendments in this group. Amendment 26 is more about who should be consulted. I expect the Minister will say that she does not like lists and therefore we should not have them, but as my two noble friends have said, it is very important that the Secretary of State should consult organisations that are affected, including,
“Network Rail … local transport authorities … combined authorities … statutory environmental bodies”,
and anyone else that the Secretary of State thinks is important. It is very important that this should happen. If it is going to happen, that is fine, but it is very important that it does.
With regard to Amendment 31, on Part 2 of Schedule 2—“Varying a road investment strategy”—it seems more appropriate to make use of the Planning Act 2008 provisions and apply them to the road investment strategy as if it was a national policy statement. My amendment would bring it all together in a national policy statement structure rather than the one in the Bill. I do not think I need to explain it any further. I look forward to the Minister’s comments.
Baroness Kramer
My Lords, as we explained in the RIS explanatory document, Setting the Road Investment Strategy—another one of this cluster of documents that I hope people have found but if they have not, the Library has them—a key mechanism for public and stakeholder engagement in the development of future versions of the road investment strategy will be the route strategies. That is the point at which local authorities and all kinds of interested parties can look at the specifics and contribute greatly to the process. The outputs of the route strategies will be used to develop a strategic route network initial report, which will inform the Government’s proposals. One of those complex documents—I think that it is the one that the noble Lord, Lord Jenkin of Roding, was holding—provides a graphic pattern for how those pieces can work.
Of course, the Government will engage with key stakeholders when developing our proposals, but that is different from requiring a formal consultation. Obviously, it is the goal of the Government to ensure that we come forward with a very well informed document, and that engagement is inherently part of that process. Where we have looked at providing for consultation in this document is in relation to varying the RIS. The point that we have made is that where a strategy is being varied, because it has the downside of potentially weakening the value of the strategy as a long-term funding settlement, that is the part of the process where we want to bring in consultation in a more formal sense.
We would have no certainty that those variations would have had the stakeholder engagement that is required for building the route strategies in the first place, which, as I say, are the first step in the flow-through of information that informs and helps to structure the RIS itself. That is why we have a distinction from allowing the normal pattern of extensive stakeholder engagement when forming the RIS because it will have had that input through consultation on the route strategies. So we have the route strategies leading to the RIS. If the RIS is varied, that process will not have taken place so it is for variance of the RIS itself that we require consultation.
Lord Berkeley
The first strategy is put before Parliament but presumably the Secretary of State consults all the relevant people before he does that, or is he just going to put it before Parliament without consultation? That is the impression I am getting from the Minister.
Baroness Kramer
The Secretary of State and others are very heavily engaged with stakeholders. That is the way in which they expect to develop the RIS. The first one is always a bit odd because if you look at the rules, they require a to and fro between the Secretary of State and the strategic highways company, and of course the strategic highways company does not exist yet so there is a fairly unique arrangement for the first RIS, which we expect to be published—I cannot give dates—in the future.
Lord Berkeley
I will press the Minister once more. I see nothing in part 1 of Schedule 2 that says that the Secretary of State should consult anyone else apart from the strategic highways company. Maybe I have got it wrong but that does seem a bit odd.
Baroness Kramer
The point that underpins all this is that Ministers, rather than Parliament, have traditionally made decisions on infrastructure funding, and we are not seeking to overturn that. It would be rather unprecedented for the Government to put forward a funding and investment plan for debate. If that were to become the underlying principle, it would have a sweeping impact on many different aspects of government, so we are not proposing that. We also, frankly, recognise that it would slow down what is already not a brief process. We want to get to the point of getting infrastructure out into the ground.
For example, the rail investment strategy can be issued by the Government without being laid before the House and debated. That does not prevent Parliament from holding the Government and the rail sector to account, and that is the model that we are following here. We are behaving consistently with how these issues are already handled in government—we are not overturning that, other than to the extent of putting in a requirement for consultation should there be a variance in the RIS. As I said, that is because it has that sort of exception, or potential downside, of undermining the framework of long-term funding certainty that we are trying to create. I assure noble Lords that there will be extensive stakeholder engagement around the RIS. Indeed, the RIS will typically be built from the route strategies up, and there is extensive consultation at the route-strategy level. There is a place for consultation in all this, and the arrangements as a whole are very satisfactory for that purpose.
One of the amendments in the name of the noble Lord, Lord Berkeley, lists a number of stakeholders that would have to be consulted during the preparation of the RIS. He is right about lists tending to be a problem for me. The practical reality is that the stakeholders know who they are and the Government know who the stakeholders are. There is constant engagement, and it is a fairly fluid group, so there would be no great advantage to including a list of them.
I want to make sure that I cover the full range of issues. The noble Lord, Lord Whitty, suggested that Parliament should report on this. He said that he was not sure his amendment achieved what he intended, but we read it as requiring that Parliament approve each proposal in Part 1 of the Bill before it could come into force, and that Part 1 must be reviewed every five years. We are debating the Bill now, and I am sure his specific intent was not to require it to be reviewed as soon as it was enacted. We may just have some confusion around that issue. Perhaps he was trying to suggest that the RIS should be reviewed by Parliament—that is my understanding from the comments that he made.
Lord Whitty
Just for clarification, when I wrote the amendment I meant Part 1, but I am afraid that I spoke as if I meant the strategy. I am happy not to pursue the issue at this point.
Baroness Kramer
I appreciate the noble Lord’s comments. We feel that there is a substantial mechanism for engagement in this process. I take on board the concerns that have been expressed today but I think that we have probably got it about right. On that basis, we ask that the noble Lord considers withdrawing his amendment.
Lord Davies of Oldham
My Lords, it is my duty to withdraw my amendment. However, the Minister seems to suggest that the Government should not consult when they are launching a body which they favour and expect to be successful, but should consult like fury the moment it has gone badly wrong. In my experience, Governments do things the other way around, but perhaps the Minister is setting up a new model on how consultation will be carried out. Nevertheless, I beg leave to withdraw the amendment.
Lord Davies of Oldham
“(ba) the circumstances in which the Road Investment Strategy will allow the strategic highways company to undertake commercial services or charge for services”
Lord Davies of Oldham
My Lords, there currently appears to be a gap in the Government’s draft licence for the strategic highways company. It says:
“Provisions relating to commercial activity and charging for services are still under consideration. We expect that the Licence holder will, where legislation allows, be able to continue to undertake commercial services or charge for services, on a non-discriminatory and cost-recovery basis, where this represents the continuation of current practice by the Secretary of State, in his role as highway authority for the network”.
My amendment is intended to probe this position and to ascertain in what precise circumstances the Government envisage the strategic highways company charging for services. There is some concern in many quarters that the model that is being constructed allows for the strategic highways company or companies to charge for road use. Although the company will have to be wholly owned, Clause 8 includes extensive powers for the strategic highways company to delegate functions, which could mean that many roads are contracted out in the future.
Our history on charging schemes for roads is not a particularly happy one. The toll road on the M6 was supposed to take 75,000 cars a day; in fact, it averages just over 40,000. As the embattled public who travel on it will testify, the equivalent stretch of the old M6 takes up to 180,000 vehicles a day. Therefore, road pricing and toll roads raise very real issues. There are also concerns that if the Government significantly increase the number of roads for which people have to pay, there will be increased congestion on other roads and more accidents as a result. The M6 toll road stands as a bleak beacon of warning. I beg to move.
Viscount Hanworth (Lab)
My Lords, in lending my support to my noble friend Lord Davies, I speak to my Amendment 39. It proposes that:
“The power to set a toll or a tariff on a strategic highway may not be delegated to any company or person but must remain the sole prerogative of the Secretary of State”.
We have heard from the Minister that there are no immediate plans for privatising the highways company, which is set to replace the Highways Agency. However, this does not allay our anxieties about the privatisation of our strategic highways network. Nothing that the Government have said will preclude them from asking private contractors to administer parts of the network under concessions. The contractors would derive their income from tolls.
We need only look across the Channel to see an example of a strategic highways network that is largely under the control of private profit-making agencies. The example is provided by France, where 45% of the motorway network is now operated under commercial concessions, including all the main arteries. This circumstance has been the result of a major sale to private investors of the state’s holdings in autoroute companies, which began in 2005, under the Villepin Government, during the presidency of Jacques Chirac. Initially, the tolls on the roads were set by the French Government, but the private companies have been permitted to make year-on-year increases in the tolls. There is now widespread discontent at their exorbitance and at the excessive profits of the companies, which acquired their assets at knock-down prices. Clearly, the French Government ought to have retained the sole prerogative to set the levels of the tolls.
The only example of a tolled motor road in the UK is the M6 toll road of a mere 27 miles in length, which bypasses the Birmingham conurbation. This is controlled by the Australian company Macquarie, which holds the concession until 2054. In contrast to the French toll roads, this under-used road appears to be a commercial failure. In 2012, the operator, Midland Expressway, claimed to have made a loss of £41 million. I have no way of confirming this figure, which seems to have been exaggerated; there would have been a tax advantage in exaggerating the loss. The recourse of the company was to increase the tolls. This may have increased the company’s revenue, but it would certainly have diminished the traffic on the road, thereby reducing its social utility and increasing the costs of congestion and physical depreciation that are borne by the adjacent M6 freeway.
These circumstances should serve to emphasise a fundamental principle. Road charges need to be set by a central authority with an overarching concern to maximise the utility of the roads. High tariffs should be levied to deter vehicles from travelling on congested roads. High tariffs that deter traffic from using empty roads should be lowered or abolished. It might seem to be redundant to declare such principles at a time when there appear to be no immediate plans to impose additional tolls and tariffs on our roads. However, I believe that such charges are certain to be imposed sooner rather than later.
There are two factors here. The first is the likelihood that this Government, or a future Government, will desire to raise revenue to finance additional construction and maintenance. The second is the availability of new and effective technology that will greatly facilitate road-charging. My concern is that, unless the Government think ahead and resolve to take a strategic oversight of the matter, a piecemeal and dysfunctional system of road-charging will arise that will reproduce the problems that can be clearly discerned in other countries that have already applied tolls and tariffs to their roads.
Finally, whenever private enterprise is charged with undertaking motorway projects, it has been expected to raise the finance for those purposes from the open market. That has certainly been the case for the French toll roads, and it has been the case with our only toll road company, which administers the M6 toll. By going in their own right to the market, the companies have been denied the advantage of the superior creditworthiness of the Government. In consequence, they have had to bear much higher interest rate charges. There should surely be a way of conferring the benefits of the Government’s creditworthiness on all borrowings in favour of investment in social infrastructure, whoever undertakes them.
Lord Bradshaw
I shall add some comments to those just made by the noble Viscount, Lord Hanworth. The Government have a very major problem stalking up on them—namely, the lack of tax revenue that they will get from motoring. People are buying cars that are free of revenue tax and of fuel tax—or rather they pay very much less. Therefore, the flow of revenue that the Government are expecting to receive from fuel duty or vehicle excise duty is going to decline quite rapidly.
We are talking about the future of the highways network and we will have to find some other means of financing it. We are talking about the long term, but people are quick to pick up on ways of avoiding tax legitimately. I therefore believe, despite what the noble Viscount, Lord Hanworth, said, that the technology is available to charge people to use roads. How you do it and who sets the toll will be matters for future consideration, and what the noble Viscount said about this is important.
You also have the problem of people diverting away from the tolled road on to secondary or non-Highways Agency roads. Again, the technology exists to prevent most of this, and modern logistics companies cannot afford to send lorries around circuitous routes because drivers’ hours regulations, if properly enforced, mean that most of them programme their drivers to get the maximum out of the 10 and a half hours for which they are allowed to drive. If these people take more circuitous routes to avoid paying tolls, they will therefore bust the drivers’ hours regulations in almost every case.
I am going to speak about this later, but there are a number of strategic issues—one of which is how we pay for the use of roads—which have to be faced, not by the immediate Government who have brought this legislation forward but by successive Governments of whatever colour. They will have to find a method of financing a road network with declining revenues from the present system of taxation.
Lord Whitty
My Lords, I have slipped an amendment into this group as well. In a sense, it deals with the same problem—the ability of the new company to raise money on the markets—from the other end.
The reality is that the Treasury will never provide quite enough money out of general taxation to build roads. My noble friend Lord Hanworth and the noble Lord, Lord Bradshaw, have focused on road charging as one way of getting that income. Who would be accountable for that? The Government have said that they do not currently intend for there to be any road charging. Strategically, in the long-term, they may have to revisit that. It is therefore quite important that if, down the line, they do so, the Secretary of State would be able to limit or control the charges which could be raised on those roads; I believe that was the primary purpose of my noble friend Lord Hanworth’s amendment. The French example, with which I am familiar, shows the dangers of not doing so.
That could be done by a Government-owned company as much as it could be done by the private sector, although the temptation may be a bit different. Either way, if the company cannot raise money through charging and it cannot raise money by going to the market to borrow, the pressure on allocation for the strategic investment programme and the Treasury will be acute down the line.
As I have said before, when this proposition was made I thought that one of its advantages might be that the company could raise its own money against future income of one sort or another—capital gains and so forth. Apparently, that is not to be the case. That is a severe limitation on the flexibility of the company and the degree to which it is genuinely independent. Clearly, its access may ultimately be controlled by the Secretary of State. The amendment recognises that, in that it is about the Secretary of State setting the terms on which the company could go to the market. That could include going for public loans or literally going to the market—issuing bonds and getting a return on them, which is, of course, how we built the railways. If you do not have that flexibility, the arguments down the line about how much this year and next year is in the Treasury’s gift and the question of what alternatives need to be considered will always be there, however firmly you might have set the strategy and the expenditure attached to that strategy at the beginning. This would give some flexibility, with a bit of control by the Secretary of State.
Lord Bradshaw
I shall build on what the noble Lord, Lord Whitty, has just said. Earlier in the week, noble Lords may have seen a ComRes poll in the Independent newspaper about payment for the National Health Service. The poll suggested that people are prepared to pay more money; it was quite a sizable proportion—51% to 43%, I think. But the condition that they put was that they want the money spent on the health service—and the same applies to highways. It brings up this very old problem about hypothecation, which has to be faced if the health service and the highways system is not to fall into disrepair.
Lord McFall of Alcluith (Lab)
My Lords, I support the noble Lord, Lord Whitty, in what he says. The Treasury has been rigid in its application, but there was a great initiative on innovation by the Chancellor in the last Budget, whereby he put £130 billion behind the Help to Buy scheme, which some would call the “help to vote” scheme. That was the Treasury showing real initiative. If the Chancellor can do it for the housing market and show flexibility there, why can we not do it for infrastructure at a time when borrowing is at its lowest ever? If we cannot do it now, we will never be able to do it.
Baroness Kramer
My Lords, I have to be quite quick to be sure that I finish before rising time, so these will be somewhat abbreviated responses. A strange hare may have been started running by some of the language used here. The commercial activities that the SHC engages with, such as selling salt supplies to the local authorities, is all piddly ante stuff, to be taken care of in the governance documents rather than the RIS, which I think is the relevant place for it.
As for funding road infrastructure, the power to retain decision-making over tolls or tariffs for the Secretary of State, under the amendment to Clause 6, is just not necessary, because all the powers to make decisions over tolls or road usage remain with the Secretary of State, who is not minded to enter into road pricing—although that may distress some noble Lords who have spoken here tonight.
It would be possible for the Secretary of State to permit this body to raise its own financing, but he would have to give that permission. Given the way in which the Government work, there would have to be Treasury support for that. This Government certainly are not minded to do it because, as the noble Lord, Lord Whitty, said, borrowings would go into the public sector borrowing requirement. Therefore, to pay higher pricing for financing that could be obtained by the Government themselves borrowing directly is not something that this Government are minded to do for their road infrastructure. This project commits long-term funding, which will come overwhelmingly from the Government. An exception might be possible if there were a discrete road project, which might be PFIed, although nothing in that range is being contemplated at the moment.
Looking at all those issues, while it may disappoint Members that we are not engaging in plans for road pricing or extensive borrowing by the HCA in the public markets, I still ask the noble Lords to withdraw their amendments and understand that this is really a policy issue and that the Government have made appropriate decisions in determining these issues.
Lord Davies of Oldham
My Lords, this was a probing amendment and it certainly hit its target. Let us be conscious, certainly on my side of the Committee, that this Bill is known as a Lords starter. We therefore have no guidelines from the democratic House as to whether road pricing would ever appear on the agenda; it certainly does not appear on the agenda of my party. I take at full value the points that the Minister has made today on behalf of the Government and I beg leave to withdraw the amendment.
Lord Ahmad of Wimbledon (Con)
My Lords, I think this might be a convenient moment for the Committee to adjourn.
House of Lords
Bishop of Guildford: Appointment
Lord Trefgarne
To ask Her Majesty’s Government whether the Prime Minister is yet in a position to make a recommendation to Her Majesty the Queen in respect of a new Bishop for Guildford.
Baroness Harris of Richmond (LD)
My Lords, on behalf of the noble Lord, Lord Trefgarne, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.
Lord Gardiner of Kimble (Con)
My Lords, the Crown Nominations Commission had its first meeting in early June and will have its second meeting on 21 and 22 July. The Prime Minister awaits the nomination from the Crown Nominations Commission and will then make a recommendation to Her Majesty the Queen, with the hope of an announcement in September.
Baroness Harris of Richmond
I thank my noble friend for his reply, as I am sure the noble Lord, Lord Trefgarne, will. I mention my having just completed the lengthy but very successful process of choosing a new dean for Ripon Cathedral, in a new and vast super-diocese. Will my noble friend consider sitting down with the Archbishops’ Secretary for Appointments and the Prime Minister’s Appointments Secretary, both of whom do a magnificent job with very few resources, and perhaps with others who have been through this long and involved process, to review and come back with some proposals to streamline that process? Alternatively, should the church be free to appoint its own bishops? I declare an interest as high steward of Ripon Cathedral.
Lord Gardiner of Kimble
My Lords, because of the age profile of the current House of Bishops, I understand that a number of vacancies and some retirements are coming along. I know that the most reverend Primate is conscious of this. The last time this was considered in 2008, the previous Government brought forward some changes to the appointments process. This Government do not have any proposals to change any further but I am sure that these matters ought to be borne in mind.
Lord Faulkner of Worcester (Lab)
My Lords, perhaps I may ask the Minister a slightly broader question about public appointments which have been held up. Is he aware that since last Monday, the Science Museum Group—I declare an interest as a trustee—has been without a chairman, even though the process to reappoint the excellent Dr Douglas Gurr started as long ago as last summer? Numerous other appointments are awaiting decisions from the Cabinet Office or 10 Downing Street, of which the Science Museum is perhaps the most blatant example at the moment.
Lord Gardiner of Kimble
My Lords, I very much take the noble Lord’s point. Leadership in all institutions and bodies is very important and I will take that back. Again, I am very mindful of the point that the noble Lord is making.
The Lord Bishop of Oxford
My Lords, would the Minister find it helpful if the most reverend Primate the Archbishop of Canterbury was made aware of the concern of the House about there being sufficient meetings of the Crown Nominations Commission, so that when there is a pile-up of episcopal vacancies, as it were, there are sufficient meetings to address that? Is the Minister also aware that we very much hope to have legislation by the end of this year so that women can become bishops?
The Lord Bishop of Oxford
They would therefore be eligible, and much overdue, to come into this House.
Lord Gardiner of Kimble
My Lords, what the right reverend Prelate said last is of great importance not only in this House but to the nation as a whole. I wish the deliberations of the General Synod extremely well. I know that when we had a previous exchange the most reverend Primate the Archbishop of Canterbury was going to be made aware of some of the concerns, and it would be extremely helpful if a record of our discussions today were made known to him.
Lord Howell of Guildford (Con)
I shall ask a slightly narrower question than the Question on the Order Paper. Is the Minister aware that Guildford is a lovely place and that the cathedral at the centre is superbly sited, although it is in need of funds for repairs? Does he agree that there ought to be a whole raft of people eager to serve in this great role as bishop of Guildford? I hope there is an excellent range of candidates, one of whom will soon be appointed.
Lord Gardiner of Kimble
I agree with my noble friend. I hope the appointment will be made soon. It is very important that dioceses have bishops at the helm. I am aware that Guildford is in a very beautiful county, the most wooded county in the country. It is a fine place.
Lord Hunt of Kings Heath (Lab)
My Lords, is Guildford a suitable place for fracking?
Lord Gardiner of Kimble
I am sure that when the new bishop arrives he—or perhaps, if it is some time, she—will consider these things. The important thing is that we need an energy mix in this country. Fracking could well provide that. Clearly it needs to be done carefully and sensitively, but we should not pass this opportunity.
Baroness Berridge (Con)
My Lords, I expect that the winds of change will blow through the Anglican Church later this month. Will the Minister outline whether the Government will take this opportunity to look at the selection process for appointments in slightly more detail? Previously, I lived in the north-west of England for nine years. Liverpool, Manchester, Warrington, Bolton, Blackburn, Burnley, Preston and Lancashire are not currently on the Benches of the Lords spiritual but, as of right, Winchester is. That diocese includes the Channel Islands, which are not in the United Kingdom. Is it not time that we had a system of appointment that saw our metropolitan cities represented as of right?
Lord Gardiner of Kimble
My Lords, I can safely say that much of this is a matter for the church. There is legislation going back to the 19th century on these matters. At some point perhaps that might be looked at.
Lord Morgan (Lab)
My Lords, would it not be desirable if the Prime Minister made no suggestion about appointing the Bishop of Guildford, as would be the case with the disestablished Church in Wales? Would that not greatly liberate the church as an independent body free from the trammels of state interference?
Lord Gardiner of Kimble
I am not sure that I am inclined to that view. Obviously the Church in Wales and the Church of England have taken different paths. That is a matter for the Church of England.
Lord Deben (Con)
My Lords, we should be careful because the Church of Rome appoints its own bishops and takes a great deal longer than the Church of England, which is itself very dilatory. Changes do not necessarily speed up the system.
Lord Gardiner of Kimble
I am a great believer that if one does not want too much change, one should have some change.
Lord West of Spithead (Lab)
My Lords, the House is not sitting tomorrow. There was mention of Her Majesty. Tomorrow, Her Majesty is naming the first fleet carrier to have been built since the Second World War. It is the work of 10,000 men and women around our country—a masterpiece of engineering. Would the Minister like to acknowledge and welcome this marvellous event tomorrow?
Lord Gardiner of Kimble
My Lords, the whole nation is extremely fortunate to have a head of state who works so hard on our behalf.
Economy: House Prices
(10 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wood of Anfield
To ask Her Majesty’s Government what assessment they have made of the impact of increases in house prices on the strength of the United Kingdom economy.
Lord Newby (LD)
My Lords, the housing market is recovering alongside the rest of the economy. As in previous recoveries, house prices have risen but, with the exception of London, remain below their pre-crisis peak in real terms. As a result of increased confidence in the housing market, planning approvals and housing starts are now at their highest for six years. With the creation of the Financial Policy Committee we now have the tools to guard against risks in the housing market.
Lord Wood of Anfield (Lab)
My Lords, the list of those expressing serious concern about the impact of the UK housing market now includes the IMF, the European Commission, the Royal Institution of Chartered Surveyors, the Bank of England, Vince Cable, the Deputy Prime Minister and the entire economics profession. However, in a week where new figures showed house prices in the UK rising by 10% and by nearly three times that figure in London, a leaked document from the Department for Communities and Local Government showed that the Government are, astonishingly, expecting new housing starts to fall by 4% this year. Can the Minister explain why government housing policy seems to be based on a mixture of denial, bad economics and passing of the buck? What is their plan to do something about the UK’s chronic shortage of housing?
Lord Newby
My Lords, I remind the noble Lord that in Q1 2009 there were 17,000 housing starts and in Q1 2014 there were 36,000. There has been a major crash in the housebuilding sector. This is now being corrected with housing starts and planning permissions being significantly greater—typically around 30% more—than a year ago. I also remind the noble Lord that while we have had a rapidly rising population in the UK, for decades housing starts have been 200,000 fewer than in France, for example, where the population has not been rising in the same way. There is a chronic problem in housing. We are beginning to tackle it by programmes that support people buying their own home, liberalising planning and providing support for small to medium-sized housebuilders. This is not going to be an easy fix for a Government of any colour.
Lord Lawson of Blaby (Con)
My Lords, while it is certainly very desirable that more houses are built in this country, does my noble friend not agree that the real problem is still the unmet need to streamline and speed up the planning process? Would it not be a good idea if all sides of the House would put pressure on this?
Lord Newby
My Lords, there is clearly a challenge in terms of planning. Wherever one seeks to gain significant planning permissions there tends to be very vigorous local opposition. One of the ways we are hoping and planning to tackle this is by supporting a new generation of new towns. The first one in Ebbsfleet is now under way. That is one way of getting a number of bulk areas of new housebuilding. However, all parties are going to need to be much more robust in making the case for a higher level of new housebuilding than we have seen for several decades.
Baroness Whitaker (Lab)
My Lords, can the Minister tell the House how many planning applications for housing have been approved but the houses have not been built?
Lord Newby
My Lords, there is always a lag between planning permissions and housing starts. If we take the last two quarters for which I have figures, there were planning permissions for 52,534 houses in Q4 2013 and 32,000 starts. In Q1 2014 there were 43,000 permissions and 36,000 starts.
Baroness Butler-Sloss (CB)
Does the Minister think that anything should be done about the special position of London?
Lord Newby
My Lords, clearly London is in a special position. The population of London rose, I believe, by 108,000 in the past year and this is going to require a significantly higher level of housebuilding. The mayor has plans to build 40,000 new homes a year in London—bearing in mind that in 2009 there were 14,000 new homes built in London. With the population increasing very rapidly there is clearly going to be a long period of stress in terms of housing in London.
Baroness Maddock (LD)
My Lords, the economy of the north-east is not growing at anything like the rate that it is in London. Is there not an argument for putting some of the stamp duty, much of it generated by the 26% increase in house prices in London, towards growth and infrastructure projects in the north-east?
Lord Newby
The Government have a comprehensive infrastructure plan, which includes a number of major new initiatives in the north-east of England. As the noble Baroness will know, over the years the Treasury has been very much opposed to hypothecating particular taxes for specific purposes, largely on the basis that they may be buoyant one year but may not be in another. Leaving aside stamp duty, the key point is that we have a comprehensive infrastructure programme in the north-east, and I believe that we have one for the next decade.
Lord Davies of Oldham (Lab)
Is the Minister aware of the town of Altrincham in the north-west? The Chancellor certainly is because it is close to his constituency. Altrincham is one of the most prosperous towns in the north-west. Is the Minister aware that house prices in Altringham are half those in three inner London boroughs—not Kensington and Chelsea but Hackney, Southwark and Lambeth? Does that not show how chronic the situation in London is?
The Countess of Mar (CB)
My Lords, is there a sufficiently skilled workforce in the building trade after the doldrums that it has been in for such a long time? Are there enough people who have all the skills required to build houses? Has the Minister considered the modern prefabricated buildings that I understand can be put up within a week, in order to speed up housebuilding?
Lord Newby
My Lords, there are reports just today about skills shortages and rising wages in the construction sector. With the number of housing starts having increased so rapidly, you would expect that to be the case. Incidentally, when one talks about the free movement of labour within the EU, it is worth remembering that were it not for highly skilled technicians from other parts of the EU, the position regarding employment within the construction sector and shortages would be much worse. As the noble Baroness may know, we are investing an awful lot in apprentices and apprenticeships. In the medium term, that will be crucial in order to get to a new and higher level of building, but it takes quite a time to train someone to be, for example, a highly qualified electrician.
Carers Strategy
Baroness Pitkeathley
To ask Her Majesty’s Government whether they intend to make addressing the financial hardship of carers a priority in the forthcoming update of the Carers Strategy.
Baroness Jolly (LD)
My Lords, the updated action plan will focus on the four priority areas of the Government’s 2010 strategy to demonstrate activity against those areas. In reviewing progress and setting out further actions, the plan will consider other emerging cross-cutting policy and practical issues relevant to more than one of the four priorities. This will include issues of financial hardship for carers. These will be referenced throughout the plan to show how they impact on the existing priorities.
Baroness Pitkeathley (Lab)
I thank the Minister for that response, and am very glad to hear that financial hardship will be considered. She will know from the recent Carers UK Caring & Family Finances Inquiry that a growing number of carers are finding it really difficult to make ends meet. The commitment was made in the 2008 strategy that carers would always be supported so that they would not suffer financial hardship. That pledge was removed from the 2010 refresh of the strategy. Do I understand the Minister to be saying that it will be reinstated in the current strategy?
Baroness Jolly
The current strategy is not yet released and I have not read it, so I am not able to give any indication. I can say that financial hardship is acknowledged by the Government and will be threaded through the strategy. I can give the noble Baroness a sneak preview of one action. She will know that younger carers are more likely to be not in employment, education or training, and contained in the strategy is an action to carry out a task and finish study to look at how young adult carers between 18 and 25 get into employment and/or study, and what support might be needed.
Baroness Howarth of Breckland (CB)
My Lords, in a week when we celebrated the dementia-friendly Parliament, what are the Government doing about ensuring that existing programmes work? I have been approached by a number of people who have had good social work but appalling benefits, where their papers have been lost. If the present system worked for carers, it would help, with the addition of those issues raised by the noble Baroness, Lady Pitkeathley.
Baroness Jolly
Benefits are clearly critical to carers and, indeed, to the people they care for. The Government are really aware of that. I urge the noble Baroness to tell anyone who has approached her about individual problems to get in touch with their MPs, who have hotlines to all these agencies.
Baroness Knight of Collingtree (Con)
My Lords, my noble friend indicated that this matter is under consideration. Would she please think of speeding up what is being considered, because there is a real urgency about this matter? Carers who sacrifice a great deal of their physical well-being on looking after a relative should not have to bear these very large costs that are often applied months and months before there is ever a chance of getting the money.
Baroness Jolly
The noble Baroness is right; the report is overdue for publication. I pressed my officials before coming here about when it is likely to be reported and the answer was, “Very, very soon”.
Baroness Barker (LD)
My Lords, can the Minister say what assistance is being given to local authorities to fulfil their duty under the Care Act to provide assessment and independent financial advice to carers?
Baroness Jolly
Yes. That issue came up throughout the passage of the Care Bill. There was a lot of anxiety on behalf of local authorities. The impact assessment has committed extra money for carers’ rights and an additional £69.4 million for 2015-16 through the Better Care Fund, rising to £192.6 million by 2020.
Baroness Wheeler (Lab)
My Lords, on the issue of benefits, Carers UK figures show that by 2018 the Government will have cut carers’ benefits by an estimated £1 billion through the reduction in support with council tax, housing costs, the overall numbers receiving the carer’s allowance and the benefits cap. With their carers and disabled people losing support from the benefits system in this way, what assessment have the Government made of the very serious knock-on impact on social care and families’ abilities to provide care?
Baroness Jolly
That assessment will come as a result of the work being done on the report that was referred to earlier. However, I can tell the noble Baroness that the carer’s allowance will increase faster than wages and in line with inflation this year, from £59.75 to £61.35. A household will be exempt from the benefit cap where someone is receiving carer’s allowance and also there is someone within the household in receipt of a qualifying disability benefit, such as PIP, DLA housing benefit or attendance allowance.
Baroness Gardner of Parkes (Con)
My Lords, I understood from the Queen’s Speech that at last there was going to be some justice for certain people—not those who do voluntary caring but people who are employed in that capacity. I have explained to the House before that these people and their organisations are used by most councils and that a person is only paid for the 15 minutes or half hour that they work for someone. There is no pay then for what may be an hour’s travel onwards. Those people are earning something like £2 an hour and because they are considered to be on self-employed rates of pay they simply do not get any more money. I understood that that was going to be changed. Can the Minister tell us when it is going to be changed or whether it is all just speculation in terms of this new strategy?
Baroness Jolly
Certainly there are some questionable employment practices within the care industry. I know that my right honourable friend the Secretary of State at BIS has got his eye on employment practices. I feel sure that this issue will be swept up within that.
Lord Purvis of Tweed (LD)
My Lords, I declare an interest as patron of the Borders Carers Centre. Many services for carers are devolved, with reserved benefits. Will my noble friend the Minister ensure in any forthcoming strategy that, in examining the interaction between devolved and reserved areas with regard to benefits and services for carers, particular attention is paid to young carers who do not need to know the constitutional niceties of devolution and reservation but need the support that is owed to them?
Baroness Jolly
A lot of work is being done on young carers through the provisions of the Children and Families Act. I will make sure that my noble friend’s message gets back.
Student Loans: Misleading Practices
Lord Paddick
To ask Her Majesty’s Government what action they propose to take in respect of the Student Loans Company and the reports that it has employed misleading practices to ensure that graduates keep up with their debt repayments.
Lord Ahmad of Wimbledon (Con)
My Lords, it is important that the Government recover taxpayers’ money, but they must do so in a way which is fair. They must not use misleading tactics to get people to do the right thing. The Student Loans Company has now stopped issuing letters under the Smith Lawson brand and we are speaking to it to ensure that lessons are learnt and that its procedures and correspondence are brought into line with industry best practice.
Lord Paddick (LD)
I thank my noble friend for that response. The practice of companies sending threatening letters falsely representing themselves as debt collection agencies is something that we might expect of payday loan companies, but not of a government agency. Will the Minister please reassure the House that in every case where one of these misleading letters has been sent, the Student Loans Company will now write to the individuals concerned to put the record straight?
Lord Ahmad of Wimbledon
First, I assure my noble friend and, indeed, the House that this practice has ceased. It was brought to our attention on 27 June. I believe that since then only two further letters have been issued manually, in error. I take on board the point that my noble friend makes. This afternoon, the chairman of the SLC will talk to my right honourable friends the Secretary of State for Business and the Minister for Universities and Science. They will look at what other remedial action is necessary. However I assure the House, once again, that this activity has now ceased.
Lord Stevenson of Balmacara (Lab)
My Lords, when similar practices were undertaken by Wonga we learnt that it was going to make redress to those affected by letters of this type, in significant amounts of money. Can the Minister confirm that all students who have been similarly affected in this way will also receive redress?
Lord Ahmad of Wimbledon
As the noble Lord may well know, this practice started in 2005, and since then a great number of letters have been issued. As to the differences between Wonga and Smith Lawson and Company: first, no charges were made for the letters that the latter issued; and secondly, the name Smith Lawson was set up as a trading name and, in accordance with procedures, was registered with the Intellectual Property Office. However, as I have already said, the Secretary of State and the Minister responsible for this area are looking at the situation, and I shall of course let the House know of any further action that needs to be taken.
Lord Elton (Con)
My Lords, my noble friend has just told the House the astonishing fact that this practice started nine years ago. What responsibility do departments hold for the oversight of agencies responsible for work in their area?
Lord Ahmad of Wimbledon
Ultimately, responsibility lies with the relevant Minister. The decision in 2005 was made by the board of the Student Loans Company, BIS and the Minister responsible for the area at that time. It is right that Ministers should ultimately be responsible for all government agencies in the departments in which they lie.
Lord Phillips of Sudbury (LD)
My Lords, does my noble friend not see that to have talks with the Student Loans Company is simply not enough? This is straightforward deceit. If any student were engaged in deceit of this nature he or she would be thrown out of their university or denied a job prospect. Surely we must start to set an example. At least the chair of the Student Loans Company should resign from his or her position. Without some exemplary conduct, the standards in this country, which are already declining, will, frankly, decline more and more.
Lord Ahmad of Wimbledon
I agree totally with my noble friend’s sentiments. It is right that those who are held accountable for this should take responsibility as well. The highest standards should be set, and Governments and government agencies should be setting those standards. As I said, this was brought to the attention of BIS, of the Minister, on 27 June. Subsequently, all further letters have ceased going out. We are looking at what other action needs to be taken. As I said, we shall look at what comes out of the Secretary of State’s meeting; I do not want to pre-empt anything in that regard. One thing is very clear, however: this practice was wrong. The Government agree with that sentiment and the practice has now stopped.
Lord Low of Dalston (CB)
My Lords, when the practices that Wonga was engaging in came to light, the question of possible criminal liability was canvassed. Will that be investigated in the case of the Student Loans Company as well?
Lord Ahmad of Wimbledon
On the issue of criminal liability, the loans are, first and foremost, in two formats: mortgage-based or mortgage-style loans, which are no longer available; and those which are currently issued, which do not fall within the remit of the Consumer Credit Act. That said, we are currently taking appropriate advice to see whether there are any matters that need to be looked at in this way. Again, I assure the House that if such matters need to be brought to light in the House, appropriate action will be taken either through a Statement or, I am sure, through future Questions tabled in this regard.
Lord Elystan-Morgan (CB)
Is there not one feature that Wonga and the Student Loans Company hold in common—that they hold licences under statutory regulation? The House was told a few days ago that, in respect of Wonga, there will be a careful examination of its capacity to hold properly such a licence. Will the same be done in relation to student loans? In asking this question, I declare an interest as a former president of a Welsh university.
Lord Ahmad of Wimbledon
My understanding is that, in the decision taken at the time under the previous Administration, appropriate advice was followed and decisions were taken in the light of the industry practice. I hear what the noble Lord said. As I said, however, the key difference between Wonga and the Student Loans Company is that Smith Lawson was registered as a trading name with the IPO. It is a key distinction. In the case of Wonga and some of the companies being used, as I understand it, that was not the case.
Finance Bill
Business of the House
Baroness Anelay of St Johns
That the debate on the Motion in the name of Baroness Wilcox set down for today shall be limited to 3 hours and that in the name of the Earl of Shrewsbury to 2 hours.
Baroness Anelay of St Johns (Con)
My Lords, I remind noble Lords that our two debates today are time limited in the normal manner of Thursday debates. The number of those taking part means that for Back-Benchers in both our debates today the time is limited to seven minutes. I remind all speakers that when they have reached the time allocated to them, the number on the clock means one’s time is up and at that stage one should conclude one’s remarks. I also remind noble Lords that if they are content to take interventions on their speeches, the time taken on the intervention comes out of the time allocated to the Peer who has accepted the intervention. That is indeed the nature of our proceedings. Our time-limited debates are exactly that.
Lord Campbell-Savours (Lab)
On that question, this matter was raised last week. Some of us feel very strongly that if we are to have a free debate in this Parliament, then interventions should not be taken out of the contribution of the Member. We are destroying debate in the way that the House is now conducting its debates.
Baroness Anelay of St Johns
My Lords, I can hear some assent, but the fact is that if interventions are allowed as freewheeling additions—I entirely understand the argument of the noble Lord that interventions assist a proper debate—then one simply does not have time-limited debates, unless of course the House would be content with the fact that time would run out and Peers who had contributed to debates had no response from a Minister. I know that that is not the wish of this House. If Peers wish to abandon the idea of time-limited debates, that is a wide matter for debate, not a matter for debate today.
Lord Campbell-Savours
I am sorry to come back again but the facts are that this is not the Commons, where interventions take up a lot of time during the course of a debate. Interventions in this House are rare, and I cannot see why we cannot allow a little time for interventions on the rare occasions that they take place.
Baroness Anelay of St Johns
My Lords, I am delighted to hear the affirmation from the noble Lord that this is not just an echo of another place. Here every Peer can have a voice. When we have time-limited debates, every Peer is allowed to sign up. The other side of that is that in a time-limited debate every Peer should be allowed their voice, and if there are lengthy interventions at the beginning of a debate, it will mean simply that those who are to speak later are denied their voice. This is a House that respects the conventions of the way in which we work, and I know that we will have two very effective debates today.
Lord Higgins (Con)
My Lords, is it not the case that the time limits are now becoming so short that it is not only virtually impossible to take an intervention but very difficult to make a speech that covers the subject adequately? Should we not consider carefully whether we should have a minimum time limit—if necessary regulated by a ballot or some other means? We ought not to go on having limits as short as some that there have been recently.
Baroness Anelay of St Johns
My Lords, I know that these matters have been considered on previous occasions in the Procedure Committee and there are valid arguments on both sides regarding the proposal made by my noble friend. All I can say is that today the time limit is seven minutes, which is considered to be ample time to set out one’s arguments. Perhaps I may quote my noble friend Lord Patten who remarked on one occasion, in a Question for Short Debate, that after speaking for five minutes in another place he had barely cleared his throat. Here we are perhaps capable of putting our arguments succinctly and forcefully in a remarkably compact amount of time.
Lord Davies of Stamford (Lab)
My Lords, the constant refrain that the House does not have enough time for interventions and that the House does not have enough time to give people a decent number of minutes to express their views in a debate comes ill from a Government who keep on telling us that we are not needed and that we ought to have more holidays and more time off.
Baroness Anelay of St Johns
My Lords, the noble Lord often intervenes with some amusing remarks. That was amusing but not accurate.
Motion agreed.
Economy: Manufacturing
Baroness Wilcox
That this House takes note of the case for strengthening the United Kingdom’s manufacturing sector, stimulating investment and innovation in new technologies, and encouraging young people to seek a career in manufacturing.
Baroness Wilcox (Con)
My Lords, I shall try to stick to time. I am glad to have this chance to offer some thoughts on UK manufacturing. I have spent much of my life in manufacturing and the food industry. I ran my family business in the West Country. I sold fish to the Japanese, which took quite a long time—longer than I would have thought—but was well worth doing in the end. I became a director of Cadbury Schweppes for 10 years and learnt the difference between selling fish and manufacturing chocolate. It all came down to flow systems in the end.
The assumption, still alive in too many parts of the world and, indeed, within this country, that the UK no longer makes anything has always frustrated me. For, despite the grim commercial environment ushered in by the recent financial crisis, UK manufacturing remains a vital element of our economy and is responsible for more than half our exports. It is vital in another sense too. Manufacturers, large and small, are very much in the vanguard of recovery. The Office for National Statistics released the index of production figures last month, revealing the biggest quarterly growth since 2010, with manufacturing output up a full 2%. This Tuesday, the survey company Markit reported the sector hiring people at the highest rate for more than three years.
We must of course continue to treat such evidence with a degree of caution. Manufacturing output is still significantly below the pre-recession peak in 2007. Nevertheless, with exports also on the increase—9% above 2007 levels in real terms—there are grounds for guarded optimism.
The greater part of the credit for this turnaround must go to the manufacturers themselves and to their employees for their fortitude and flexibility in difficult times. However, the Government also deserve recognition for taking concerted steps, in partnership with industry, to secure the long-term future of our manufacturing base. Like me, many noble Lords will have vivid memories of the 1970s, when high-profile government interventions in the industrial sphere went so badly wrong. Those poor decisions overshadowed policy-making for decades and that does much to explain why support for our manufacturers was mostly inadequate thereafter. The result was production hived off overseas, domestic supply chains eviscerated and vast numbers of jobs destroyed. It is astonishing to recall that, in 1975, manufacturing employed more than 7 million people—over 30% of the total workforce.
Two years ago, however, the coalition resolved to address these problems, all of which had long been common knowledge. The industrial strategy, led by my former department but involving the whole of government, set out a clear path to drive investment and growth, not for the next year or two, but beyond the current Parliament. For years, business has been crying out for long-term certainty, which is the absolute prerequisite for planning and investment. Via the process of agreeing 11 sector strategies, covering areas as diverse as automotive, healthcare, renewable energy and construction, industry leaders were equal partners with government in establishing priorities and agreeing sector-specific plans of action. Above and beyond these strategies, the Government are addressing shortcomings that affected the growth prospects of all types of business, including manufacturers: in particular, access to finance, support for innovation and the skills shortages. Perhaps I may briefly illustrate these.
On finance, clear issues remain regarding capital availability for business. The Government have taken significant steps to alleviate the situation. I would highlight the regional growth fund, providing £3.2 billion for companies to spend on capital investment, R&D and training. Two new institutions, the British Business Bank and the Green Investment Bank, are now up and running, working respectively to diversify sources of lending and to accelerate our transition to a green economy, with all the opportunities that that must present. There is also specific support for manufacturing now, recognising that we need a sustainable network of specialist suppliers to keep industry on track. The advanced manufacturing supply chain initiative has made £345 million available to encourage the repatriation, anchoring and growth of these firms.
On innovation and R&D, the past few years have seen a couple of major co-investments: £2 billion over seven years for the Aerospace Technology Institute and £1 billion over 10 years for the Advanced Propulsion Centre—its mission to bring low-carbon technologies to market and to create safeguards for some of our 30,000 jobs in that area. It is worth noting that, although our manufacturing sector accounts for about two-thirds of UK R&D spend by businesses, fully one-third of that comes from just 10 companies. Hence, the catapult network was created—I am very keen on the catapult network—with long-term, public-private funding worth £1.5 billion. Its purpose is to make research expertise and facilities readily accessible to smaller firms. In that network, the High Value Manufacturing Catapult, which is spread across the UK, has already engaged in more than 1,500 individual projects with small and medium-sized enterprises, the ones from which we will see our large companies grow in the future.
With regard to skills and inspiring the next generation, arguably the most deep-seated issue facing manufacturers is the lack of job-ready employees, particularly now, with unskilled factory positions largely a thing of the past. Manufacturing today could not be further removed from those tired images of metal-bashing. It is all about satellites, robotics and pharmaceuticals, and 50% of capital expenditure goes to intangible assets such as design and branding.
The most substantial response to this challenge has been the unprecedented growth in apprenticeships, backed by record public investment. I particularly applaud the attention given to higher-level apprenticeships, which are necessary for demanding technical roles. This, too, has been very much a project in partnership with industry, with employers setting rigorous apprenticeship standards appropriate to the needs of their sectors. Manufacturers have especially welcomed the confirmation of a new £18 million college located in the Manufacturing Technology Centre in Coventry—set to become a beacon of excellence for vocational training.
At the same time, repeated surveys have shown that manufacturing simply fails to register among the career aspirations of young people. This is particularly true of girls. Tackling this persistent mindset—permanently changing the views of parents and of teachers too—is where we must direct our fire-power. There is a lot of evidence to show that when teachers talk about careers with children in schools, particularly with girls, if a girl comes forward and says that she has three A*s at A-level, the teachers usually think, “Well, you’re going to university then, aren’t you?”. We have evidence of young girls who want to do engineering, particularly wanting to take apprenticeships with some of our biggest companies, and being told by a teacher in their school, “Well, I don’t know anything about that. You’ll have to ask someone else”. This has to stop.
Something which has recently become an annual fixture is See Inside Manufacturing. I encourage your Lordships to go and see this if they get a chance to do so. Last year, more than 6,000 pupils and teachers visited manufacturing sites, and this gives them a better understanding of manufacturing. I have been pleased to hear about another new initiative, Inspiring the Future, which sends volunteers into schools to discuss the great jobs that exist in science, engineering and manufacturing. I really do hope that more and more of your Lordships will do the same thing. We must grab the attention of young people at the earliest opportunity.
The policies I have mentioned by no means represent the full range of support for our manufacturing companies. There is substantial help for manufacturers with energy bills, for example, with a £7 billion package announced in the Budget. There is also the reconstituted Manufacturing Advisory Service. There is an awful lot of help out there ready to take us even further.
I hope that this intervention has sketched the broad outlines of the coalition’s partnership with our manufacturing base and that it has communicated my support for this agenda. Working together with industry has always been the best way to go. It is clearly a world away from what occurred under the previous Government, when manufacturing halved in size through a combination of neglect, inconsistency and stifling regulation. Uncertainties inevitably remain—our ability really to address endemic skills shortages and the scale of competition posed by countries both emerging and fully emerged, to name but two. However, there is now real cause to believe that good days lie ahead for manufacturing. I congratulate UK businesses on their resilience and I have every faith in their ability to succeed, with appropriate support from government at last.
Lord Monks (Lab)
My Lords, I congratulate the noble Baroness, Lady Wilcox, on initiating this debate and on championing the cause of modern manufacturing in Britain today. I am pleased to see that manufacturing is getting attention in this House. It got some a few weeks ago with the excellent maiden speech of the noble Lord, Lord Bamford. Most of us who are interested in manufacturing very much welcome his presence in this Chamber, providing a new, strong voice for British manufacturing.
As the noble Baroness, Lady Wilcox, rightly said, manufacturing is going rather better than it has done for some time. She mentioned the role of employers, managers and employees. I may not have been listening carefully enough, but I did not hear any appreciation of the role of trade unions in her litany of people who are to be congratulated. However, unions have not got enough credit for the agreements made by them to preserve jobs and capacity through the dark days of the recession in 2008, 2009 and 2010. It was a terrific period of British industrial relations. It is worth noting that a lot was done, responsibly and quietly, and there is still capacity around, unlike in previous recessions when we lost it.
The noble Baroness, Lady Wilcox, put her case in a generally balanced way. UK manufacturing is certainly not a basket case. The problem is it is simply not big enough. There is not enough of it and what there is is not particularly well distributed. The very poor balance of payments, which has been negative since 1983, should be at the front of our mind. The noble Baroness made one or two rude remarks about the 1970s but we did run a balance of payments surplus for most of that decade. It is worth remembering that the trend really reversed in 1983. There have been many reports, from Richard Lambert and others, about what we need to do about British manufacturing, so we know we have to rebalance our economy more in that direction, with investment in infrastructure and boosting the weaker regions. I declare an interest, as a member of the advisory committee of the regional growth fund, which is very much engaged on this work. As a country, we know we should save more, invest more, borrow less and live less on debt. We know that we cannot continue to treat the City of London with exaggerated reverence, adopting an almost protectionist zeal which we do not apply to any other sector of the British economy. The City can be an asset, but the banks can be near lethal to the country, as they were in 2007-08. We need banks that lend to the real economy. Industrial investment was about 2% of bank lending last time I looked. This is, again, not a new problem. In the late 1920s, Winston Churchill said that the problem with Britain was that finance was too proud and industry too humble. He had a point then and it is even more the case today.
In his report No Stone Unturned, the noble Lord, Lord Heseltine, had a go at some measures to try to get the UK more match-fit than it is now. I will emphasise one or two points that he made. We want, at least, to get up to the level on the other side of the North Sea. Similar countries with similar living standards such as Germany, the Netherlands, the Flanders part of Belgium and the Nordic countries have high productivity economies, with good records on their balance of payments and exports. They combine this with strong social states, excellent training systems and, by the way, influential trade unions. They are savers, innovators and investors. They are not by any means perfect: in certain areas, we have people who match them and exceed what they do but, again, not enough. The critical mass here is not large enough.
We have tended to cover up our weaknesses rather than face them squarely. We did this with North Sea oil revenues and then we did it with the boom in financial services. Manufacturing did not really matter in the 1980s and 1990s because we had another way of earning our living. There are no further windfalls like those in view. There are no more short-term fixes except, perhaps, another dose of devaluation, of which there have been seven since the end of the war. We cannot rely on devaluation as a centrepiece of our future strategy, as we tended to do in the past. By the way, the last thing we need is a self-imposed exile from the EU unless it bends to our model—a sort of voluntary Dunkirk. Would we be better alone? We need to work with others to learn how they do it and what we can apply ourselves.
Looking at what other countries do—some do it very well—is central to our future. We should look not just in the direction of Germany but in the direction of the Asian economies. South Korea spends five times the amount on innovation and research than we do. There are a lot of competitors who know what they are doing and they are doing it with great purpose and determination. We need to match that.
I add a German-Dutch-Nordic lesson as regards the advantage of co-determination over the more adversarial system that has prevailed in this country in terms of relationships at work. The co-determination principles seem outrageous to many in British business but they keep managements more long-termist and a bit less inclined to help themselves to a disproportionate share of company profits. It is no accident that much of our successful manufacturing is in foreign ownership. The foreign takeovers of British businesses and their presence in many key strategies is a lesson to the rest of us. I welcome them very much. They have filled a gap rather than ousted good British managements. However, we need to be aware that these companies’ head offices and R&D centres often are somewhere else rather than here.
On the public interest test, we need to look at France in terms of takeovers and mergers. The way in which it is dealing with Alstom and the assurances that it is getting from General Electric are a real object lesson. We would not have been in anything like the same position had the takeover of AstraZeneca by Pfizer gone ahead. We need to be as tough as other countries tend to be. It is interesting that the Business Secretary will be at the Economic Affairs Select Committee next week.
Lord Ahmad of Wimbledon (Con)
I am sorry to interrupt the noble Lord but he has spoken for eight minutes in a seven-minute time-limited debate.
Lord Monks
I apologise to the House. I congratulate the noble Baroness, Lady Wilcox, on introducing this very important subject. This is not the end of the debate.
Lord Young of Graffham (Con)
My Lords, I congratulate the noble Baroness on introducing this debate. First, unequivocally, manufacturing is important, but I also believe that it has to be put in context. Let me explain. Three hundred years ago, 97% of jobs were agricultural; 250 years ago, along came the Industrial Revolution; and by this time in the last century we were a manufacturing nation. There is no doubt that that was the way in which you created wealth. But life moves on.
The noble Lord, Lord Monks, paid tribute, with which I rightly agree, to the role that the trade unions played after 2008 and 2009 but I notice he did not refer to the role that they played in the 1960s and 1970s. Nevertheless, by the time I came into this House, I was instrumental in introducing three Japanese car companies into this country to rescue a proud industry that had been broken down by years of turmoil and conflict. If you look at us today with not only Nissan, Honda and Toyota but also with Jaguar Land Rover, you realise that we make more cars than we ever made before. If you go into a car factory, you do not see many people because if you want an efficient manufacturing business it has to be done by robots which work 24/7, never take a tea break or ask for a raise, although they have to be funded differently. However, robots do not run by themselves.
I turn now to some work on education which I have been doing for the previous 10 months. An educated and talented workforce is key to any industry we have in this country. I introduced the youth training scheme 32 years ago this month, which is when we ran the pilots for the first of the schemes. I went down to a small manufacturing company in the West Country, and I went to the quality control department. I saw a young lad, who was in one of the pilot groups, calculating deviancies and plotting on charts exactly what was going through the quality control system. I said to him, “You must have been very good at maths”. “Oh no, sir”, he said—that was the way they spoke in the West Country—“I didn’t get anything at school”. The supervisor said to me, “As soon as he saw the relevance of what he was doing, he learnt”.
Over the next three years I went round the country, week in, week out, and I saw this time and again. I came to the conclusion that in reality the fourth R is relevance. In those days, after 10 years of compulsory education, up to 30% of young people left the school system illiterate, innumerate or sometimes both. I come back all these decades later and go round looking at the school system again, and I see that conditions have not changed that much. The Prime Minister asked me to look at this, and I have been working on small firms for him since the beginning of the coalition. I went to him over a year ago and said, “Whatever we do, we have to look at the way we educate our people.” This has nothing whatever to do with the curriculum—we have no complaints about that, except that I sometimes think that it could be more relevant. It has to do with motivation.
Education has to encourage young people to see the relevance of what they are doing, and encourage them to work. That is why I hope that the report which I published last week will come into effect. I believe it will have a transformational effect on the state of education in this country. It includes such things as an enterprise adviser for every head teacher. Here I should satisfy the noble Lord, Lord Monks, that I have the agreement of both the head teachers’ unions, and we work closely together. The enterprise adviser will be responsible for bringing speakers into the schools system, to talk to pupils not when they are 17—as I have done and, I suspect, many of your Lordships have done—but when they are 12 and 13. They would then be able to appreciate the relevance of what they are about to be taught. It would be best for pupils to be spoken to not by the great successful captains of industry, but by someone who left their school a few years ago, has a little business round the corner and has a nice car—that is a key element. He or she can say to them, “This is the reason I succeeded”.
It is not only enterprise. In my book, yes, enterprise makes entrepreneurs, but it is also about seeing the glass as full, and being positive. I am convinced that this can be taught. Enterprise is also about bringing in advisers who can talk about STEM subjects to encourage young people to get the basic skills to go into manufacturing, because today manufacturing does not consist of people with screwdrivers. It consists of people who can operate computer programmes and people who can look at the way that robots work.
I have not spoken in your Lordships’ House for many years. I see that my time is nearly up, and I have no intention of getting into trouble. I am grateful to your Lordships.
Lord Shipley (LD)
My Lords, I thank the noble Baroness, Lady Wilcox, for enabling this debate. I agree with almost everything that the noble Lord, Lord Monks, and my noble friend Lord Young of Graffham have been saying.
There used to be a fashion for suggesting that the decline in UK manufacturing did not matter given the rise of our service economy. In my view, any commentators who still believe that are profoundly mistaken because we need both. Having a strong manufacturing sector creates jobs and helps our balance of trade. It still represents half our exports and over two-thirds of our research and development investment. It can contribute much more, particularly in high-value manufacturing. It has, recently, been expanding at almost twice the rate of the rest of the country. All this is important because manufacturing growth will substantially be located outside London and the south-east, and this can help to rebalance the UK economy away from overdependence on financial services and on London and the south-east.
I first draw attention to the nine High Value Manufacturing Catapult centres—all outside London and the south-east—which provide manufacturing companies with access to equipment and facilities that they might not otherwise have, and join up academia with industry and government to develop new technologies. Output growth and rising business investment now suggest that recovery is sustainable because it is no longer consumer spending that is driving growth. Now, business investment is too. Demand for UK manufacturing is now strengthening as part of that. The recession had a heavy impact, but manufacturing output is now back to similar levels to before the recession and is growing, helped by lower corporation tax, better employment allowances, tax incentives for investing in new equipment and increasing the level of financial support for exporters—all introduced by this Government.
However, a large number of potential SME exporters are reportedly unaware of UKTI and UK Export Finance. It seems clear that our export performance could be much stronger, particularly if there were a clearer regional remit, a set of regional targets for UKTI and better connections for SMEs with export finance.
I take absolutely what my noble friend Lord Young of Graffham said about robots, but new figures show that the UK’s automotive industry now employs 750,000 people, having added 44,000 jobs last year. That is partly about demand for new models and partly about companies reshoring, but a very important increase is happening. The F-35 project, which will have a 70-year life and in which BAE Systems has a 15% stake, is another example of the UK’s leading role in innovation.
The Government have been helping to create jobs, many of them in manufacturing. There have been jobs for young people, with some 2 million apprenticeships by the end of this Parliament, and jobs across the country, as the noble Lord, Lord Monks, said. Some £3.2 billion has been available through the regional growth fund. Like him, I sit on the independent advisory panel as deputy chair. Of course there are also all the green jobs—£3 billion to fund the world’s first Green Investment Bank.
This debate is about strengthening manufacturing. I was very interested by the Engineering Employers’ Federation report published recently, Pioneering Great British Products, which said that we had failed to celebrate UK inventions by setting no example for young people to aspire to. It is important to rectify that when we think of all the things that the UK has invented.
I want to raise the issue of women in engineering, which is the lowest percentage of the workforce in Europe at 8.5%. When you look at Scandinavia, which has a quarter, or Italy and France, which have a fifth, you realise that we need 100,000 new engineering graduates each year to meet current demand—twice current levels. More needs to be done but half our state schools send no girls on to university to study maths and sciences. It is a massive loss of talent given this expanding sector. Early careers advice to choose the right courses and enter careers in engineering and sciences is very important.
The greatest threat to a manufacturing-led post-recession recovery is the lack of skilled labour. Retaining skilled people with manufacturing and engineering skills is of paramount importance to companies. Too often, skilled employees struggle to find skilled work after they have completed a contract or been made redundant, and they end up leaving the sector. I am pleased that Vince Cable, Secretary of State for Business, Innovation and Skills, responded to this challenge by requesting senior industry leaders to find a solution. As a result, a new programme, the Talent Retention Solution—TRS—was developed and financed by the sector for the benefit of all companies and individuals wishing to work in advanced manufacturing and engineering. It puts skilled individuals looking for work in touch with companies searching for new employees. It is a UK-wide scheme which now includes employers from aerospace, automotive, civil engineering, defence, energy, marine, nuclear, power generation and renewable industries. It has an employers’ group, chaired by my colleague and noble friend Lord Willis of Knaresborough, and it provides specific, easy-to-use recruitment advice and services to companies.
For the first time in our manufacturing history, we have a system to capture talent before it is lost. That system is now expanding to include undergraduates and FE students, so I hope that the expensive waste of talent will become a thing of the past. Interestingly, BAE Systems said that TRS has helped to place more than 400 people leaving the shipyards on the Clyde and in Hampshire since closures were announced last November.
There is clear potential in reshoring more. In its economic outlook, published in March, PricewaterhouseCoopers concluded that up to 200,000 jobs could be created in the UK in a decade through reshoring, particularly in textiles, advanced manufacturing, research and development and business support. I hope the Government will encourage that process because it is very important.
In my home region of the north-east of England, it is really exciting to see the amount of investment and activity now taking place. High-value companies are expanding, exporting, growing and generating jobs. Manufacturing industries are leading the north-east economic recovery. Confidence is high; orders are up; productivity is up, and two-thirds of north-east manufacturers anticipate a rise in orders in 2014.
This Government have put in place the foundations to grow the manufacturing sector and it should be commended for doing so.
Lord Carrington of Fulham (Con)
My Lords, I, too, congratulate my noble friend Lady Wilcox on this important debate and on her powerful opening speech.
I started my working life in manufacturing in the early 1970s. I worked on the shop floor, making components for the motor industry, in what were called—in those distant days—the metal-bashing industries. A sorry place it was, too. Labour was largely unskilled, using outdated tools to produce motor components that met any specification or tolerance limits required by the customer only by coincidence. Indeed, most of the skilled workforce in the factory seemed to spend their time rectifying or hiding the errors in the motor components so that they could be shipped to the desperate customer and sold on to the poor, unsuspecting motorist. Perhaps it was not surprising that the UK motor industry went into precipitate decline. Sadly, the decline in British manufacturing was not confined to the motor industry, as I later discovered when I was financing exports to the Middle East. But we have come a long way since then.
The lessons were very simple. Manufacturing needs good, professional management. It requires high and continuous levels of investment, equipment and research. It must be responsive to the changing needs of its customers and to anticipate changing markets. When I worked in the motor components industry, the Government were trying to pick winners. They were trying to direct investment. They were trying to tell manufacturers how to do their job while, at the same time, taking too much in tax—mostly through personal taxation, since little profit was made in companies such as the one for which I worked. They took so much in tax that no manager or investor had any incentive to take risks or to invest.
Since the much needed and vital reforms of the 1980s, under the leadership of Baroness Thatcher, British manufacturing has changed out of all recognition. Thanks to my noble friend Lord Young, the motor industry is a near perfect case study, with resurgent motor manufacturing and superb motor components suppliers. Exports boom and the quality of vehicles is second to none. What we have learnt is that the Government cannot run industry. All they can do is to create a supportive, nurturing environment so that industry can flourish. They cannot double guess the entrepreneur, still less the market.
It is no use pretending that the Government can protect jobs. The only protection for jobs is that someone wants to buy the goods being sold at the price at which they have been manufactured. That is why we have to have a low-tax economy. We need a globally competitive corporation tax rate to encourage our industry to invest and to attract new investment from abroad. We also need low personal taxes. No one will work hard unless they get to keep the fruits of their labour, and the cleverest people in manufacturing, as in the service industries, will have many offers to work elsewhere in the world.
The world has changed. We can compete with low-wage manufacturing in eastern Europe, Asia and Africa only by producing high-tech goods and having high quality in traditional products. Competing solely on price has proved time and again not to work. However cheaply we can produce something, someone else can produce it cheaper.
Just as manufacturing industry needs low taxes, so it needs a high level of education in the workforce, which is why the Secretary of State for Education’s reforms are so important. It does not matter if a student gets high marks in a debased exam; what matters is if he or she can read, write and understand numbers. Then they can progress to a full education.
I used to run an organisation with the second-largest apprentice training scheme in the UK—again in the motor industry. We would take on several thousand apprentices every year and, even after rigorous aptitude testing and positive reports from their schools, a depressing number of them would require us to start their apprenticeship with remedial reading, writing and maths so that they could understand the basic instruction manuals. That was after 11 years of schooling.
The really sad thing about that is that after about 12 weeks of remedial work, we got those boys and girls up to a satisfactory level of literacy and numeracy. The problem was not the apprentice, it was the school, which either did not notice those talented young people’s problems or did not care. In any event, the school had done nothing about it. I am glad that our Government are tackling that scandal.
Having the UK business environment right is vital, but not enough. Industry needs markets into which to sell its goods. I am sure that we are all in favour of free trade and open markets; then we can compete in the world. Sadly, much of the rest of the world does not see it that way. It is the age-old problem; many countries see it to be in their national interest to protect their local industries from foreign competition. The emerging or emerged markets in the Far East are not alone in putting up formal and informal trade barriers. The EU does the same, and the USA has always done so throughout its history. Let us not kid ourselves that we can be any different.
It would be wrong in this context not to pay tribute to Joseph Chamberlain, who died 100 years ago yesterday. He was a very great man and a very great politician, whose influence in making the Conservative Party the vibrant, radical party it is today is still immense—not in policies, but in attitude and political style. His last great campaign of tariff reform was designed specifically to tackle the problem of unfair competition. He advocated the raising of tariffs against those countries that did not allow us to export to them on the same terms as we allowed their imports.
The trade problem with manufactured goods that Chamberlain saw more than 110 years ago is still with us. Large countries—empires, as Chamberlain called them—such as the USA, Germany and Russia were manipulating trade agreements to their advantage while we naively clung to the belief that if we manufactured a better mousetrap, the customers would beat a path to our door. Sadly, as he knew and we know on a daily basis, if we allow unfair competition—no matter whether it is from Asia, America or Russia—we can have the best manufacturing industry in the world but it will still go under.
Lord Giddens (Lab)
My Lords, I, too, congratulate the noble Baroness, Lady Wilcox, on having secured this debate and introduced it so ably.
There is cross-party agreement these days that the economy should be restructured over the next few years and that active government intervention will be needed to achieve that. Deindustrialisation and offshoring may produce economic benefits, but once they reach a certain point, their social and economic consequences become destructive.
A key question for our times is how to achieve a resurgence of manufacture with reindustrialisation instead of deindustrialisation, and reshoring rather than offshoring. I was pleased to hear the noble Lord, Lord Shipley, mention this, if only briefly. I discussed the issue of reshoring in your Lordships’ House about two years ago and I would now like to offer an update on it because it is decisively important. It goes against a few of the things that the noble Lord, Lord Carrington, just said.
To understand this debate, we have to turn to the United States. The reshoring debate has been going on in the US for quite a while but has only recently percolated to our shores. We could say that we have actually reshored the reshoring debate, as reshoring has quite rightly become part of government policy and recently figured in the discussion of the All-Party Manufacturing Group. Discussion and analysis in the United States has been led by another group with a big G: the Boston Consulting Group, which has produced a series of really interesting reports on this issue. Those reports are helping to fuel a significant transformation of the American economy in respect of manufacturing.
The most recent work of the Boston Consulting Group is a study of 25 nations that account for 90% of global exports of manufactured goods. The study uses several indicators of manufacturing cost competitiveness and concludes that the old perception of low competitiveness in the West, compared to high competitiveness in Asia, is becoming obsolete. The manufacturing cost advantage of China over the US, for example, has shrunk to no more than 5%. It is tiny now. According to the study, the UK is not far behind. In other words, we could put it this way: the tectonic plates of the global economy are shifting quite radically, which creates very significant opportunities for not just the UK but other pre-existing industrial countries.
According to the BCG, more than 50% of US manufacturing companies with a turnover of more than $1 billion are actively contemplating bringing their production back to America. That is in its detailed survey study. The reasons given are: rising productivity in the United States; a more transparent regulatory structure than is achieved in other countries; better patent protection, which is important for businesses functioning in some countries elsewhere; the increasing costs of transportation; the positive impact of automation; and low energy prices associated with the shale gas revolution. That is a very significant package of changes, so big change is imminent in the nature of the global economy and its competitive structure. In the United States, local and regional activism has also made a big impact—as should happen here.
Looking at the situation here and the debate about reshoring, your Lordships can see that it is only just beginning. We simply do not have enough research in this country to know how we compare with the United States. A study carried out in 2013 found that 15% of companies surveyed were thinking of bringing back production to the UK. However, that was a pretty limited study and it described it as,
“a trickle rather than a flood”.
We simply do not have the data and we must gather some.
I will conclude by making a number of brief points, which I will enumerate. First, more research is needed into what firms are actually doing and how they take their decisions. That needs government support: will it be forthcoming? Secondly, and crucially, the results need to be made available to businesses. The American research shows that many companies are operating with obsolete assumptions about the global economy and are therefore taking decisions without the full array of relevant information.
Thirdly, experience in the United States shows that regional activism is crucial. As other noble Lords will no doubt ask, have the Government really done enough to follow up on the Heseltine report?
Fourthly, there is an extremely high level of technological innovation in most areas of manufacturing, especially IT and robotics. Reshoring is therefore going to be much more complex than simply bringing back pre-existing processes and jobs. Handled properly, as the very interesting experience in the United States shows, these innovations can facilitate reindustrialisation and reshoring rather than inhibit them, partly because of the impact they have on labour costs.
Fifthly, it is often said that as a country we lack the skills necessary for reindustrialisation to be successful. This has been mentioned by noble Lords. We have to approach this with some caution, given the landscape of enormous technological change. Rather than fixed skills, we are likely to need open and adaptable learners. For this reason I go slightly against the orthodox wisdom of my party. I have reservations about the role of apprenticeships, which are so often talked of as of key importance. We have to prepare ourselves for a complex world in which there will be processes of deskilling as well as of reskilling and where established skills can become redundant almost overnight. There is likely to be a different pattern of learning and adaptation from the past, and I would welcome any comments from the Minister on these points.
Lord Jenkin of Roding (Con)
My Lords, I very much welcome the chance that my noble friend Lady Wilcox has given us to discuss this hugely important subject. Later, I shall refer to one or two of the things that she said in her excellent speech.
Like the noble Lord, Lord Monks, I read the speech made by my noble friend Lord Bamford with huge interest and admiration. It was very eloquent, particularly about the role of professional engineers—engineers who have done a full professional course and qualified—which is what I am going to talk about exclusively this afternoon. During the debate on the Queen’s Speech my noble friend said that,
“behind every product there is an army of talented creators, makers and engineers … We need their brains, hands, knowledge, creativity, design and technical skills and, most importantly, we need them to know that they are valued by society as a whole”.—[Official Report, 10/6/14; col. 268.]
I thought that was an inspiring description of what engineers do. Yet here we are in a country which it is widely recognised needs to be training twice as many professional engineers as it is training at the moment.
This led me to study a remarkable article by an extremely knowledgeable academic, Professor Kel Fidler, who gave a paper to the Royal Academy of Engineering on engineering and big science. He called his article Sorting Out Engineering: The Need for a Major Review. That is what I want to recommend to the Minister this morning. I can only summarise the professor’s arguments as the article covers pages, but I want to talk about the main subject. Of course, the training of technicians, which my noble friend Lord Young of Graffham referred to, is enormously important, but the shortage of university-trained engineers is one of the things that are holding this country back.
The professor’s first point is—and here I differ a little from what has been said— that despite all the considerable efforts to attract the interest of young people, and they have been considerable, the proportion of applicants to go to universities to study engineering courses has been virtually unchanged over the past 10 years at around 3.5%. There has been a modest increase, but it simply parallels the increase in the number of applicants. The professor said that,
“all the initiatives to get proportionately more young people onto engineering … courses … have so far been unsuccessful”.
Of course there is much enthusiasm—things such as the Big Bang attract enormous numbers of people—but it does not turn them on to choosing engineering as a career. That is what we really have got to tackle and so one asks why. There is no shortage of facilities in universities. That is clear. There is excellent teaching and equipment. As my noble friend Lady Wilcox noted, the real problem is that, in the words of the professor,
“many young people and their teachers remain largely ignorant about the nature of engineering”.
This ignorance is also true of parents, teachers and the nation as a whole.
The National Grid summed up some of these things recently in its report Engineering Our Future: Inspiring and Attracting Tomorrow’s Engineers:
“Engineering is seen a job rather than a profession. The work has an image of being menial, dirty and about fixing things … This leads to low appreciation of what engineers do for society. Both parents and young people placed engineering below medicine, teaching and policing in its contribution to modern life”.
If this is true it is immensely disturbing.
I will make another point. It is more controversial. There is confusion between engineering and science. I know that there are many departments of engineering in universities called “engineering and science”. However, they are not the same. Again, Professor Fidler makes the point that,
“science is about understanding the world … engineering is about creating things … embracing design, creativity and innovation”.
So what do we do about it? The Americans again have pointed the way and other speakers have made this point. The National Academy of Engineering in 2008 recommended a rebranding of engineering as a strategy. It wanted the message to get across that:
“Engineers make a world of difference. Engineers are creative problem solvers. Engineers help shape the future. Engineering is essential to our health, happiness and safety”.
Back in 1981 when my noble friend Lord Young of Graffham worked with me for a short time when I was Industry Secretary, I inherited the Finniston report, which recommended a major reshaping of the professional institutions of engineering. It failed abysmally. There was a total refusal on the part of those institutions even to contemplate change. A third of a century later we are still paying the price. This must not happen again.
This is where I come to the professor’s main recommendation, which I commend to my noble friend. He says that all the major stakeholders such as the Government, the nation, the professional engineering institutions, the Engineering Council, the Engineering Employers’ Federation, the Royal Academy of Engineering and industry—and, I add, certainly the trade unions—must get together. They must decide not just what needs to be done—there have been endless reports—but how it is going to be done. In my view, this requires the leadership of Ministers and I look forward to the Minister’s reply.
Lord Broers (CB)
My Lords, I, too, compliment the noble Baroness, Lady Wilcox, on obtaining this important debate. I regret that I have to catch a plane this afternoon and will not be able to stay until the end of the debate, and I apologise to the House for that. However, I was not going to miss this opportunity to support the noble Baroness in her campaign for manufacturing, which has been so effective, and to encourage her to continue it.
I must say that it is interesting to find the noble Lord, Lord Jenkin, for whom I have huge admiration, giving the speech that I normally give. As an engineer I sometimes feel modest—or not—about that, or that I am claiming too much for engineers. Of course, the noble Lord is absolutely right.
I shall address two topics that are very much in resonance with what the noble Baroness, Lady Wilcox, was saying. I shall talk about the catapults, which are already contributing to innovation, and the need to increase the number and quality of workers with STEM skills to meet the needs of our engineering and science-based industries, and I think that all noble Lords have touched on that.
There are now seven catapults, of which there are two with which I am especially familiar: the High Value Manufacturing Catapult, which the noble Baroness, Lady Wilcox, mentioned, which is already contributing to a broad range of manufacturing technologies, and the transport catapult, which was officially opened by the Secretary of State, Vince Cable, two weeks ago. I declare an interest: I chaired the TSB’s Transport Knowledge Transfer Network which generated the proposal for that catapult. The transport catapult, among other things, is exploring the opportunities that modern communications and processing technologies present for co-ordinating different forms of transport and providing faster and more convenient end-to-end transport. Both catapults have attracted outstanding leaders and have already built very strong research and development teams. The point that I wish to make is that the establishment of these technology transfer institutes is a long-term project, and the Government—in this case, the TSB—must be prepared to sustain their support and be prepared to scale it up to match industry’s involvement, should the catapults prove even more successful than predicted.
The development of modern technologies can take up to 10 years, and a planning horizon of five years is essential. The High Value Manufacturing Catapult is already facing this situation, and although it is early days for the transport catapult it is also gaining industrial involvement at a level above what was predicted, which is very encouraging. Let us not make the mistake that has been made in the past with initiatives like that recommended by the Alvey commission, whose initial initiative was to rebuild the UK’s microelectronics industry; after a strong start that initiative was basically abandoned, leaving that technology, which underpins all manufacturing and modern technology, to others. Support for the Fraunhofer-Gesellschaft is long-term and sustained, and to a certain extent it was the model for our catapults.
My second topic is the supply of people with STEM skills. Cranfield University recently published a White Paper on UK manufacturing productivity to coincide with the national manufacturing debate organised by Professor Rajkumar Roy at Cranfield in May, which I chaired. The White Paper contains a 25-year analysis of the issues affecting manufacturing productivity in the UK, as reported in news articles. The most important of the 12 issues identified is the skill and education of the workforce. The second is investment, and so on, but I want to concentrate on skills and education. This topic also arose in several of the presentations at the debate from leaders of industries ranging from automotive to information technology and communications, and of course it has arisen endlessly in this debate. The issue concerns training and education at all levels, from shop-floor employees to the creative engineers who conceive and design products, and includes the continuing education of the workforce as well as initial tertiary education. It includes apprentices, technicians and engineers and the ability of workers to progress through those categories during their careers. Somewhat controversially, it was suggested that our university sector, which now includes some 150 universities, does not contain enough institutions that specialise in producing graduates with professional STEM skills and that there are too many universities that aim to be liberal arts universities—to use the American description—rather than institutes of technology such as MIT and Caltech. David Willetts, Minister for Universities and Science, spoke at the debate very eloquently in support of the need for a strong manufacturing sector; however, he did not agree with that suggestion.
Leaving aside the discussion of whether our university sector supports our industrial needs optimally, there is a huge problem looming in the supply of an appropriately trained workforce. In 2012 the Royal Academy of Engineering estimated that in the UK we could have a shortfall in STEM graduates of about 0.5 million by 2020. Overall, less than 50% of our students actually enter STEM industrial jobs each year, building towards that 0.5 million. Perhaps even more troubling is the prediction that many of the brightest will enter the financial sector, where they will spend their time evaluating what others do rather than producing something themselves.
Lord Denham (Con)
There is slight unhappiness that the noble Lord, who is probably speaking for longer than the permitted limit, will not stay for the end.
Lord Broers
I do not think that I want to be beyond the limit. I am at the limit now; thank you for the interruption.
It is essential that we do all that we can to support our manufacturing sector. The easiest way to do that is to produce more and better STEM-skilled workers for our industry. If we fail we will endanger the recovery of the nation’s economy and allow our huge deficit in the balance of payments to grow even further.
Lord Ahmad of Wimbledon (Con)
Before the next noble Lord speaks, I remind the House that the debate is time-limited. It is also the normal convention that if someone does not stay until the end of the debate, as a courtesy to the House, they should scratch. That is just a small reminder.
Lord Horam (Con)
My Lords, I do not want to intervene in this controversy. I will carry on with what I intended to say.
It is often said that in Bill Clinton’s campaign manager’s office there was a sign: “It’s the economy, stupid”. I often think that government Ministers—and, indeed, shadow Ministers—ought to have a sign in their office: “How are we going to earn our living?” It was forecast some time ago in the 20th century that in the 21st century China would do all the manufacturing, the United States would produce all the food, the Middle East would produce all the energy—and what would Europe do? We would be the museum that all the other continental members would send their tourists to see.
I am glad to say that it has not quite worked out like that; but there is no doubt that over the last 30 years there has been a relative decline in the share of manufacturing in the UK, as in other countries. As the noble Lord, Lord Shipley, pointed out, there was a time when everyone said that it did not matter and was irrelevant; we would all earn our living through financial services or other things. However, the fact is that the great recession has put paid in spades to that argument. Many of the profits earned and the growth made during that period has proved to be an illusion. We are back to the reality that manufacturing does matter.
The noble Lord, Lord Monks, said that there was not much left. He ought to read Evan Davis’s excellent book Made in Britain—perhaps he has—which indicates that there is quite a lot of manufacturing left in this country. It is not only high-end manufacturing. I am a fellow of my old college at Cambridge and go to Cambridge quite often. What is happening there in the knowledge industry is staggering, quite frankly, and is hugely beneficial to the country.
I do not know what they are doing in Oxford, by the way. It seems mainly to produce politicians—but never mind; Cambridge is doing a fantastic job on the science and engineering side. It is not just a case of new industries. The other day I met a man who was in the textiles industry—an old industry from my old part of the world, the north of England—who was doing a marvellous job of producing suits with gold thread in them. The gold thread was often imperceptible, in some cases entirely so, but people in the Middle East love them and that man is doing a fantastic job of reviving the textiles industry.
The fact is that we rather like manufacturing. My father was in the car industry, to which my good and noble friend Lord Carrington referred in his excellent speech, as did my noble friend Lord Young. That industry has been revived as a result of his efforts, those of the late Lady Thatcher and of my noble friend Lord Tebbit. He, too, played a part. My father loved his time in the car industry and loved being a mechanic down on the shop floor.
Like my noble friend Lady Wilcox, who initiated the debate, I was involved in the food industry. She was involved in the food industry in her youth—although she is, of course, still young. My noble friend worked for Schweppes while I worked for Rowntree’s. A lot of research went into developing new products and I still take great pride in the products that we manufactured. If noble Lords ever sink their teeth into an After Eight thin mint, I hope that they will think of me as, in a small way, I was one of the people involved in developing such products, which now sell worldwide. I think that 57 billion Kit Kats are sold worldwide, which is a staggering performance by British industry.
Of course, it does not really compare with all the magnificent products that the company of the noble Lord, Lord Bamford, produces, but it still contributes to our manufacturing output and I am very pleased that for that short period of my life I at least did something and was not purely a politician. Therefore, I think that the Chancellor’s rather clunky phrase, “the march of the makers”, is absolutely apposite and I am grateful to my noble friend Lady Wilcox for bringing this issue to our attention and for setting out some of the things that the coalition has done.
It is very important at a very serious level to see the bigger picture here. Noble Lords may have read the excellent book published recently entitled The Fourth Revolution, by the editors of the Economist, my old newspaper. The authors point out that the threat from the East in terms of state-directed capitalism and authoritarian modernisation—the threat is epitomised by China but is also a feature of many other Asian countries—is a very serious one for this country’s economy and way of life. We need to respond to it urgently.
How do we respond? First, we need more consistency in our approach. It is vital to have continuity of thinking on education between, say, the noble Lords, Lord Baker and Lord Adonis, and now Michael Gove. Education has been touched on a great deal in this debate. Whatever Government come to power after the next general election, it is important that we maintain this continuity of thinking.
As regards infrastructure, even if the Conservatives do not win the next election, I hope that HS2 will go ahead and that a Labour Government will maintain that infrastructure spending. There has been far too much chop and change by government. Further, it would be helpful to have fewer blunders by government. I am going through my reading list at the moment. There is an excellent book entitled The Blunders of Our Governments by Anthony King and Ivor Crewe, which is very relevant to the point I am making.
Four blunders in the book occurred under the Conservatives, six under Labour and two under both Governments. I am afraid to say that there is probably one under the coalition as well. Some of the blunders that Governments made have had a seriously negative impact on the establishment of a coherent strategy to challenge the continuing development of the eastern model.
Finally, we need better governance not just at the UK level but, as the noble Lord, Lord Monks, hinted, at the European level. What Europe has done in relation to the euro is not an example of good governance, and America has not handled its debt well. I come back to where I started: we have to place a high priority on how we earn our living.
Baroness Deech (CB)
On a point of order, I wonder if the noble Lord has left the House misinformed about the relative contributions of Oxford and Cambridge. Oxford, once the home of car manufacturing, is now at the forefront of new technology and turning biological and pharmaceutical inventions into drugs that benefit the whole world.
Lord Horam
I was not being entirely serious in my remarks about Oxford and Cambridge.
Lord Whitty (Lab)
My Lords, unlike the noble Baroness who initiated the debate, I stopped working in the manufacturing industry in the 1960s. For most of my workmates at that time, I might as well say that I stopped working, full stop. In those days manufacturing jobs for both white collar and manual workers were the only real jobs, certainly for young men. The situation has dramatically changed. In those days, of course, as others have said, the proportion of our economy and workforce that was engaged in manufacturing was not much less than that of Germany. On both counts, it is now less than half that of Germany.
I went on to work for the Ministry of Technology—I am diverting slightly from what I was intending to say—which was, of course, the great intervener. Some of those interventions have paid off in the long term with high-tech, high-end manufacturing which still exists in this country.
The reason we were knocked off our perch on manufacturing at a macro level was partly North Sea oil, which helped bits of manufacturing that relate to North Sea oil but undoubtedly raised the exchange rate to price out large chunks of British manufacturing for a long period of time. In parallel with that was the development of the financial sector, as my noble friend Lord Monks has said, so that the banks became the master rather than the servants of the economy. And, of course, I also acknowledge, as the noble Lord, Lord Young, said, that in parts of the manufacturing sector the industrial relations scene had a detrimental effect; particularly in one part, the automotive industries, which I will come back to in a moment.
The history of intervention has been mixed but on balance positive. I am very glad to welcome Mr Vince Cable to the list of intervening Ministers, which started with the post-war Labour Government and continued through Tony Benn, Michael Heseltine and others. At last, the Government—or rather, the Conservative Party—have at least in part abandoned the view that the market will sort all these things out.
We need intervention. We need support from government, at local as well as national level. We need a supportive banking system, particularly for small business—we have not yet got that. We need positive engagement by the trade unions in the restructuring of jobs and of industry. We need a major commitment to raising skills. The basic education system is one problem, but lifetime re-education and reskilling is necessary for all grades of worker.
I will give a few examples of the combinations of these things that have happened and have been successful. Although the current Government tend to take responsibility and credit for it, much of this started under the previous Government. For example, my noble friend Lord Drayson started a new industrial strategy for the defence industries, which has greatly benefited their competitiveness; it was dealt with in a way that was greatly collaborative with the trade unions, including my own, the GMB, and the unions that now form Unite. In the automotive sector, as others have remarked, it was even more dramatic. From the very poor situation that we were in—hit dramatically by the recession further down the road—the revival of manufacturing in that sector has been partly down to foreign investment, partly down to clear government intervention by my noble friend Lord Mandelson and then Vince Cable, and partly down to a much more constructive relationship with the trade unions, started mainly by Unite with Tony Woodley. Without those deals on hours, pay and conditions, much of the automotive industry would not have survived the recession. There are lessons to be learnt from that.
There are smaller scale examples as well. We have managed to solve, with great union involvement, what looked like a very difficult situation with Manganese Bronze, the manufacturers of London taxis. They are now going to be produced again.
On a broader but more local scale, when AstraZeneca left Manchester it was a disaster for the area and for the potential technology and science within it. However, the local authorities, the university and the private sector, together with the workforces, have now combined to establish a science park on that site that will bring technology back to what was the heart of the Industrial Revolution and of our manufacturing pre-eminence in the north-west.
More locally still, we and local government need to support local firms. It was drawn to my attention earlier this week that in Erewash in the east Midlands, the Labour council group is being very supportive of small firms. We need to ensure that that is backed at the national level. One of the recommendations of my noble friend Lord Adonis, who has just joined us, is that 25% of all public procurement should go to small firms. All Governments should learn that lesson. Another aspect of my noble friend’s report is the key issue of taking everything, or a lot, away from national interventions and giving support to local government and new local and regional institutions. It was also the theme of the recent report by the noble Lord, Lord Heseltine; it is something that you have to do on a large scale to make work and it will fit in with the Labour Party’s commitment to greater devolved authority to the regions, particularly the city regions.
So we have to act at the local as well as the national levels, engage the workforce and the unions, and invest heavily in lifetime training. In that way, there is a future for British manufacturing, which again can compete effectively with countries such as Germany, Korea and Japan, which have done this far better in recent decades.
Lord Chidgey (LD)
My Lords, listening to the noble Lord, Lord Whitty, I started to reflect that I spent the first 30 years of my working life as a professional engineer and the next 20 as a professional politician. I am not sure whether that was upskilling, reskilling or, as some might consider, downskilling. I hope that it was not the latter.
I congratulate the noble Baroness, Lady Wilcox, on bringing this debate to us, and wish to pick up on something she said about the Markit/CIPS purchasing managers index survey. It is important because, according to the media, it is a constantly watched figure. The index for June was 57.5, compared to 57.0 for May—a clear indication that the economy is continuing to move in the right direction. Despite this, there remain issues of potential concern. Despite considerable effort by the Government, manufacturing exports are still failing to grow at a proportionally acceptable level. The United Kingdom is also importing far too much of what we consume. The UK’s seasonally adjusted trade deficit in goods was £8.9 billion in April compared with £8.2 billion in March—roughly double what it was for the same period in 2012.
A reading above 50 on the Markit index indicates that manufacturing is expanding and playing its part in the 0.8% growth in the economy registered in the first quarter of this year. We can be reasonably confident that the following few months, allowing for holidays, will show good manufacturing figures, due to an increase in exports, unlike in the eurozone—which, as far as I know, has not been mentioned—where the Markit index has fallen to 51.8, compared with the UK’s 57.5. That is a remarkable difference.
By the time I entered Parliament in 1994 and became employment spokesman, manufacturing’s share of the UK’s economic output had halved, from around 40% post war to less than 20%, with over 1 million skilled workers out of work for more than a year. The noble Lord, Lord Monks, will remember that when he was secretary-general of the TUC and I came to chat to him in his office about the national minimum wage, these were the issues that we had to cope with back in the early 1990s.
Today, manufacturing represents some 11% of the UK’s output, but this further fall is in part due to much stronger gains in the service sector. Nevertheless, contrary to common belief, UK manufacturing is strong. According to the trade magazine, The Manufacturer, the UK is currently the 11th largest manufacturing nation in the world, accounting for 11% of the UK’s gross value added and 54% of UK exports, and employs directly 2.6 million people.
In the global aerospace manufacturing industry, the UK ranks second in the world. The automotive industry exported a record-breaking 84% of the 1.6 million vehicles manufactured in 2011. The chemicals and pharmaceutical industries add £20 million every day to the balance of trade. Most importantly, underpinning these achievements is an average annual productivity increase of 3.4%—two-and-a-half times greater than the UK economy as a whole.
Manufacturing dominates the UK’s research and development spending. In 2012, that spending totalled £12.2 billion. R&D spending in the services sectors totalled only £4.3 billion, despite these sectors accounting for 79% of our economic output. BIS and the Government Office for Science report that over the next 20 years we will have an increasing dependence on high-skill workers. In response to that assessment let me turn to the fourth report of the Institution of Mechanical Engineers, of which many years ago I became a graduate and associate member. The report, entitled Engineered in Britain, points out that the UK needs to double the number of engineers entering the profession each year between now and 2020 to meet economic demand and to counter the increasing number of engineers retiring. This is a result of the baby boomers. To achieve this, we will need to increase annual engineering graduate output from the current level of some 46,000 to 87,000.
The number of qualified apprentices needs to increase from 27,000 to 69,000 over the same period. These apprentices should not be confused with the 1.8 million that the coalition Government, inspired by the Lib Dems, have played a major part in creating. Although playing an essential role in helping to upskill the general workforce, the 1.8 million apprentices should not be compared with the highly skilled engineering apprenticeships, which lead to highly qualified technicians.
Efforts to increase the number of entrants into science, technology, engineering and maths—the STEM subjects and STEM-based professions—by government and industry have improved recently, especially when they include engineering apprenticeship. There is, however, a lack of co-ordinated action between all parties at all levels to address the problems. I listened with great interest to my noble friend Lord Young’s comments and look forward to his report. From what he said, I think that it covers this aspect.
A key area of concern raised by the Institution of Mechanical Engineers is that we are not recruiting more entrants into the ranks of technicians and engineers because of a lack of high-quality careers advice. There are insufficient connections between schools and local industry to educate and inform students of the range of career opportunities available to those who study STEM subjects. I heard the most appalling tale a few weeks ago about a bright young lad who wanted not just to study engineering but to become an engineer. His teacher told him, “No, you are far too bright to do engineering”. I am speechless. I am presently trying to find internships for high-end A-level students—boys and girls, interestingly—looking for gap-year placements in industry before taking up offers of places at Oxford, Cambridge and other main universities to read engineering.
Without a future pipeline of skilled engineers and technicians, manufacturers will need either to import the required talent or export their facilities to countries where engineers are in supply. It is vital that schools and local industry collaborate to inform students of the opportunities, qualifications and skills required to enter STEM professions. I very much take the point made by the noble Lord, Lord Jenkin.
Lord Lyell (Con)
My Lords, I am immensely grateful to my noble friend Lady Wilcox for giving us the opportunity to speak today. I am probably unique in the speakers list in that at no time in my 76 years have I been involved, actively or passively, in manufacturing. However, I am very proud to have been an apprentice in that great city of Glasgow, known so well to the Minister—an apprentice chartered accountant. The motto of the Institute of Chartered Accountants of Scotland is “Seek the truth”. I can tell noble Lords, there is nothing a chartered accountant cannot do.
That is why, 37 years ago, when Lord Belstead and I were looking at the Patents Bill—a hugely important Bill that updated the law that had existed in the United Kingdom since 1949—he said to me, “Just pop off and learn a bit about the pharmaceutical industry”, so I did. It will give my noble friend Lord Bates on the Front Bench great joy to hear that I will cut my speech right down. I will speak on pharmaceuticals, which is a hugely important industry in your Lordships’ House and around the country, not just because of its intellectual primacy in the United Kingdom but because of its role in manufacturing.
One has to have enormously high qualifications in this branch of manufacturing. In his excellent speech, my noble friend Lord Carrington pointed out how it is entirely necessary to have very high skills. You may start with reasonable skills, but nothing is a lost cause: build them up. That is why we have thousands of young people—I hesitate to call them boys and girls—involved in the pharmaceutical industry. My noble friend can write to me to confirm this later, but I think that the United Kingdom’s pharmaceutical industry is so successful that it runs a £2 billion trade surplus every year. It is a glowing industry that deserves the support of your Lordships and my noble friend.
I want to add a few words on the motor industry. This is the week—it is always in July, or at least it has been for 50 years now—when we sit in front of the television saying, “Hey ho, it’s the British Grand Prix at Silverstone”. For the past 20 years my noble friend Lord Astor and the noble Lord, Lord Drayson, have hosted downstairs representatives of the Motorsport Industry Association. They are representatives, great and small, of the entire motor industry in the United Kingdom. It is suitable that it is held around the time of the British Grand Prix at Silverstone. I do not know which channel it is on, but I hope all your Lordships will be able to look in to give encouragement to the British motorsport industry at Silverstone this weekend.
Silverstone is within striking distance of the heart of what used to be the motor industry. In that particular area of the east Midlands there are hordes of small and medium-sized enterprises, of the type that were fostered by my noble friend Lord Young of Graffham during his great career. Helping SMEs is an ongoing drive and commitment of all Governments. The motor industry is based all around the country, including Coventry, but there is a heavy concentration around Silverstone because they have the facilities there for high-powered testing of components.
Your Lordships will see that an enormous amount—I think 15% to 20%—of the components in most grand prix motor cars originate, are manufactured and are sourced in the United Kingdom. I could be wrong, and I would certainly accept correction. Nobody could have done more to foster the motor industry than my noble friend Lord Young. We can look at Nissan, which is based in the north-east, and also at Toyota and Honda. I do not think he has mentioned it, but we can look at another market we would not necessarily think of: Rolls-Royce, Bentley and BMW are massive contributors to the British motor industry. Those cars are produced here and go all over the world.
I occasionally go to the great city of Liverpool, due to the lightweight Lyell activity of cheering on a great team there. Its motto is, “Only the best will do”. They do not manufacture young men, although they train them well, but plumb opposite their training ground is Halewood, which used to be a major producer of Ford motor cars. Jaguar Land Rover—perhaps that should now be Tata—now produces very high-powered and excellent Jaguar motor cars there. I may be wrong, but I think that the advice I had from the University of Warwick is that it now produces a very upmarket Range Rover called an Evoque at Halewood—if it is elsewhere, I apologise—and I believe that it is now on a three-shift system, such is the demand for them, mainly from China. That is an example of everything my noble friend has been looking for in innovation from young and old people. Young people are brought into it for a career. You can find that success there.
To quickly conclude, I was enormously impressed and encouraged by the advice I had from the University of Warwick, which does everything that should be done for young apprentices. Young boys and girls train from the age of 16 to about 20 or 25. They then either move into the industry or carry on in research on the pathway set out by my noble friend Lord Carrington.
Lord Sheikh (Con)
My Lords, this is a very important debate about the future of our nation’s economy. I would like to commend my noble friend Lady Wilcox for introducing the subject and for her excellent speech.
Without seeking to rebalance our economy we will struggle to secure the long-lasting recovery that we seek. It was the manufacturing sector that made our country great and it can do so again. In recent years our economy has relied too much on services and too little on goods. I say that despite coming from a background in financial services. We must of course promote our services industry, but it is also imperative that we manufacture and export specialist products. We have the resources to produce and export such goods, as well as the expertise of our people. We must begin to make things again and reactivate our manufacturing capabilities.
I am pleased that the Government have improved our infrastructure, and that they will make further improving it a priority. Strong infrastructure is important to enable goods to be transported throughout the country and overseas. As noble Lords will be aware, specialisation leads to division of labour; as a result of this many products are manufactured in a variety of places. We must therefore provide businesses with the means to get things from place to place as quickly as possible.
Manufacturing declined massively under the previous Government. In addition, they allowed our skill base to drop considerably. I agree with the Government’s policy of taking robust action and improving our system of training and education, particularly in relation to apprenticeships and vocational training. I am very pleased that, under the Conservative Government, we have created more than 1.7 million apprenticeships. This will enhance our manufacturing base and help in our recovery.
We must also enhance our work with universities to bolster our manufacturing capabilities. Much of what is manufactured in this country requires very advanced skills, and while our academic institutions do great things, I feel that the two do not work alongside one another as well as they should. We need a joined-up approach that will allow academia to feed into industry and vice versa. I would like to ask my noble friend the Minister to comment on this matter, and on what the Government are doing to ensure that it will happen.
We need to encourage the bright thinking that will further promote our manufacturing sector, but we must also protect the ideas that we as a nation produce. In my professional role, I have worked on the insurance of copyrights and patents. I welcomed the Intellectual Property Act, which was introduced by this Government.
Output in our manufacturing sector declined sharply in 2008-09 and, after a short period of growth, it declined again in early 2012. Then 2013 saw something of a recovery, and indeed things do seem to be moving in the right direction in certain sectors. The UK is traditionally a base for high-quality pharmaceutical manufacturing, particularly of innovative medicinal products and delivery systems.
Another area where a revival has been seen is in our motor industry. This is one area where Britain fares very well on exports. Last year, 82% of all cars made in the United Kingdom were exported overseas. Unfortunately, across the board the picture is not that good. More needs to be done to increase our manufacturing capabilities. In this regard, I feel that we need to give assistance to SMEs, which are the backbone of manufacturing and other business activities. They are resilient and certainly determined to do well in whatever they undertake. I am a great supporter of SMEs and in my business life have rendered them support, with the result that my company has flourished and the SMEs, too, have done well.
On many occasions in your Lordships’ House, I have stressed the importance of placing a greater focus on trade, and particularly exports. From more overseas trade comes growth, and from growth will come prosperity and stability. It will also enhance our manufacturing sector and stimulate investment and innovation in new technologies.
We also have much work to do if we are to hit the Government’s target of doubling UK exports to £1 trillion by 2020. The continuing efforts of UK Trade & Investment must be acknowledged, and I applaud the Chancellor for expanding the resources available for exports. Doubling the amount of lending available to exporters and cutting interest rates on this lending will be welcomed across the board, but the fact that exports are still stalling suggests that more should be done. Do the Government plan any further measures to give a shot in the arm to exports?
In this regard, we also need to do more to target emerging markets, particularly those such as India, Brazil, China and Africa. We also need our embassies to take on a more commercial role, opening doors for our businesses and assisting them by pushing the brand of UK plc. They can also assist our business and political leaders in organising more trade missions. I ask my noble friend to comment on those points.
I end by saying that the United Kingdom is doing well financially on its path to recovery. The Government’s achievements can be summarised as follows: the deficit has been cut by a third; more than 1.5 million new jobs have been created; more than 1.7 million apprenticeships have been set up; and our growth, which is expected to be about 3% this year, will be the highest of the G7 countries. We cannot be complacent; we must continue our efforts to improve our financial health and achieve success in every way. More manufacturing will certainly play a vital part in achieving this.
Lord O'Neill of Clackmannan (Lab)
My Lords, I welcome the opportunity to debate manufacturing today, and I thank the noble Baroness, Lady Wilcox, for her success in getting this on to the Order Paper.
Manufacturing accounts for just over 10% of output but it would appear to be on the edge of expansion. I know that in some circles there is a sense of euphoria about recent progress, and the improvements are to be welcomed. However, a note of caution has to be struck, because the fragility of the achievement so far has to be protected and nurtured, and I think that there is a feeling along those lines across the Chamber today.
It is also fair to say that part of the improvement is due to the fact that recessions cannot go on for ever—eventually, they end. We could have a debate about whether this recession could have ended more quickly but that is not for today. I simply say that the improvements in manufacturing output are to be welcomed but they have to be put in context. Yesterday’s Financial Times quoted the Bank of England as estimating that output per hour in 2013 was still 16% below the pre-recession trend. Therefore, we have a lot of catching up to do. I say that not to denigrate the achievements but simply to put into context the scale of the task that faces us.
In part, it has to be said that low productivity—my noble friend Lord Monks referred to this in his opening remarks—is attributable to the fact that due to very imaginative deals being struck between manufacturing businesses and the workforce, and particularly the unions, a number of jobs were protected during the recession. It is fair to say that productivity probably collapsed at that time because there were more people than there was work to be done. Equally, in a number of instances, businesses were in effect buying orders by putting in artificially low prices simply to keep the businesses going. Although that was helpful in reducing unemployment and maintaining the skill base, it probably also denied businesses the resource they needed to invest in the kind of productivity-increasing equipment that we all know manufacturing requires on a daily basis.
It is also fair to say that there is still some work to be done on the whole question of bank lending. We have had a double bind in that respect. I have to say that as a supporter of the Labour Government I was always disappointed by the low priority that they placed on manufacturing. Their infatuation with financial services as the panacea for all economic ills was not shared by those of us who, like me, at that time represented constituencies in Scotland and the industrial areas of the United Kingdom. There were difficulties and it was frustrating to see the indifference shown at times towards those difficulties by that Administration.
I also have to say that this Government have gone some way towards helping with finance. Investment tax credit arrangements are being put in place as a consequence of the Budget. However, for tax credits to be effective, you have to make profits in the first place. Therefore, we come back to the fact that if you need investment, you probably have to get it from a bank, or if you are engaged in green activities, you may eventually get the investment from the Green Investment Bank. We are beginning to see an ending of Treasury hostility towards supporting investment. The Treasury view used to be that if you gave money to firms to help them invest, all you were doing was helping the firms that would not have invested in the first place, and the other firms that would invest did not need the money anyway. That rather cynical view is now under scrutiny. I am very happy that an organisation with which I am associated and which is listed in the register of interests, the Manufacturing Technologies Association, is engaged in a serious study of the effectiveness of this Budget proposal. I think that that will be quite interesting. It may well be that ultimately the Treasury has some answering to do if it proves to be the success that many of us would like it to be.
We have heard a lot about the car industry today. When I chaired the Trade and Industry Committee in the Commons at the turn of the century, I remember having a meeting with my colleague, the noble Lord, Lord Bhattacharyya, and the management of Jaguar. They explained that they had a wonderful new car which would be a great success, particularly on the west coast of America, but they did not have the money to match the discounts that their competitors, Mercedes and BMW, were able to offer. Equally, they had a range of cars and platforms for new models in prospect which they felt could beat the pants off the rest of the world. What they lacked was money from a potential investor and it was not until the Tata group came along that they got that degree of support. It says something about UK financial institutions and the priority we place on manufacturing that open goals of this nature were so spectacularly missed by the British financial services system. Our car plants are world class. Nissan’s plant in Washington is the most successful in the Nissan empire. We have the workforce and the innovative capabilities. A number of these places are not just assembly plants: they have design capacity and capability far beyond that.
I have been slightly critical of the previous Government, but credit is due to the noble Lord, Lord Mandelson, and his work in setting up the TSB and the catapults. I will finish on this point. One catapult is a manufacturing base within Scotland. We need to have access to the other centres of advanced engineering which are opening across the United Kingdom. If the vote were to go the wrong way on 18 September, Scotland would be left in the wilderness. If anything demonstrates the interdependence of our country, not only within the United Kingdom but within Europe, this is it. So many inward investors would not have come here had we not been members of the European Union and continued to be members of the European Union. I hope that we will continue to be members of the United Kingdom as well.
Lord Flight (Con)
My Lords, I add my congratulations to my noble friend Lady Wilcox on both her speech and her commitment to manufacturing. I echo her comments about the noble Lord, Lord Bamford, and pay tribute to what he has achieved for the British economy. It is welcome and good that he has joined this House.
It is great to see manufacturing now recovering, and I would point to two important things. The first is the point made by the noble Lord, Lord Giddens—that much of the supply chain that has been overseas is now starting to come back to the UK. The plates are moving: the financial advantages of manufacturing in China are now far fewer. Secondly, although productivity has, disastrously, not grown overall in the past decade, it has grown by about 1.4% per annum in manufacturing, while actually falling in the service sector. So although it has had a rough time, the manufacturing sector has managed to raise productivity. I do not wish to be complacent, but 16 months of manufacturing expansion and second quarter growth of 2% is pretty good. Productivity is rising further; domestic and international order books are full. This is about the best climate for manufacturing for a generation.
Others have talked about the British car industry, in which 750,000 people now work. Investment is up, as is demand for new models; the supply chain is, as I said, coming back to the UK; and vehicle production of about 2 million per annum is expected by 2017. Domestic car manufacturing is up by 10.3%, representing £64 billion of GNP. There has been a 9.7% increase in investment in new technology, worth about £1.9 billion. My noble friend Lord Lyell referred to the pharmaceutical industry, the gross exports of which amount to £20 billion; with net exports standing at £4.9 billion, not just £2 billion, they have virtually doubled. This is another industry in which Britain is very strong, with the help of Oxford, as has been mentioned; some £4.3 billion was invested in research in the past year.
I welcome some particular things that are happening beyond this. A huge expansion in entrepreneurship is going on. My noble friend Lord Young is to be congratulated on having got this going many years ago. The new generation is much more willing to give it a go. Some 35% of people coming out of school are quite happy to have a go at setting up their own business. The number of new, young businesses is huge: there are now more than 4 million in this country. There is a huge growth in new technology, and not just in the Greater London area. The new technology can be—and often is—exploited easily by SMEs. I declare an interest as chairman of the Enterprise Investment Scheme Association, a government scheme which offers tax incentives to put risk capital into small businesses. The amount put in last year doubled, as it did the year before. Some £12 billion of risk capital has now been put up and it looks as if it will double again this year because there are now a lot more professional parties involved in finding the right businesses to invest in and monitoring those investments. There is also a real boom going on in risk equity for SMEs.
I pay great tribute to what my noble friend Lord Young has just said about motivating people. I am sure that he would want to join me in paying tribute to what my noble friend Lord Baker is achieving. The university technical colleges are brilliant and are supplying a real need, both in motivating young people who often do not get motivated in mainstream schools and in helping them get the skills where employment is good. My wife has been involved in getting a university technical college for Westminster. It will, I am glad to say, specialise in engineering, and its two main business backers are British Rail and British Telecom. Both of those companies need more engineers as a lot of their existing ones are getting old. There is a lot more scope for university technical colleges. In case noble Lords are not aware, the working day at these is 8 am to 5 pm, there are only two weeks holiday a year and students, who are often successfully motivated, are really involved in the areas they are looking at.
My noble friend Lady Wilcox pointed to the high-tech nature of today’s manufacturing, but where is the line between manufacturing and services? It was very easy to consider in old-fashioned thought, but with all the IT and software products and everything going with the internet, what is manufacturing and what is services? I wonder whether government statistics are up to date in this area. I suspect that if what I call “new manufacturing” is included, manufacturing is a lot larger than the 10% of GNP we recorded it as being in old-fashioned terms.
I greatly welcome, as others have done, the Government’s initiative to start, at last, to address our infrastructure needs. For over a decade, Governments have failed to do this in airports, roads, rail and energy supplies. I anticipate that energy will be the rising manufacturing activity, as we will need more of it over the coming years. Candidly, this is partly a result of the misdirection of huge resources to subsidise inadequate and unreliable alternative energy, rather than investing sooner in nuclear power. There is now, to my astonishment, a proposal that the Government should start paying industrial users to shut down to avoid power shortages hitting the public. If there is any truth in that, it is an absolute disgrace and I challenge the Government to make clear that there will be more than sufficient energy supplies for a considerable recovery in British manufacturing.
Lord Borwick (Con)
My Lords, making things is great fun, and the joy that one gets from seeing a finished product in the hands of a contented customer is one that a lawyer or accountant will never feel. Despite the eyebrow-raising assertion of my noble friend Lord Lyell that there is nothing that an accountant cannot do, I doubt that the feeling that they have is the same. I have spent most of my working life manufacturing different products. I have manufactured London taxis and metal parts for other makers too. I thank my noble friend Lady Wilcox for raising such an important issue.
In order to strengthen the sector, it is important to think about what manufacturing is. When I was manufacturing taxi cabs, our products were decorated with a “Made in Coventry with Pride” sticker on completion. In this context, the word “made” does not really mean anything. Much like Humpty Dumpty said to Alice in Through the Looking Glass, a word means,
“just what I choose it to mean—neither more nor less”.
“Made” is not the same as “manufactured”.
Consider the best-selling shop-bought pizza in Italy. It is the same as the UK’s best seller, and it is made by a company called Dr Oetker. It is also the best-selling frozen pizza in 33 other countries around the world. That product is made by a German-owned food company on an industrial estate in Lancashire. Who really makes that product is an open question. Manufacturing is a series of processes that usually happen in several locations. There are the ideas, the design and development and the assembly of the product. We must ensure that the sector in the UK is adding value along the way.
We should remember some basic principles if we want a strong manufacturing sector. They are lower taxes and less regulation. The Government have been doing great things. Cuts to corporation tax are making the UK more competitive. However, we must stay on the tax-cutting path. Competitive tax rates are offered elsewhere, particularly in developing countries. In a global economy, manufacturers can make the rational choice to go elsewhere and cut their costs.
We must also avoid introducing other damaging taxes. For instance, when the carbon floor price was introduced, the aluminium smelting plant in Lynemouth, in the north-east of England, announced that it was closing, mainly because of the Government’s decision. Some 515 jobs were lost as a result. It is not only the level of taxation that is the problem—it is the maddening complexity of it all, too. Businesses have to cope with that. It means paying higher administrative costs for paying the bills. As I said, the Government are moving in the right direction, but lower and simpler taxes will help strengthen the sector.
When I was running my own manufacturing firm under the previous Government, I had several discussions with the quangos that were set up to help business. I remember only two things from those conversations: that they wanted to take credit for my success, and that I would not employ any of them. They were useless. However, I understand that my noble friend Lord Livingston of Parkhead has brought a genuine sense of purpose to his role as Trade Minister. The people whom the Government hire to operate in these roles are important and he has sought those who have business experience to drastically improve this process. Joe Greenwell, who leads the Automotive Investment Organisation, is a good example. As the former chairman of Ford UK, he is the right person to help create a friendlier environment in which to do business in the car industry.
Overall, more work on stripping out bureaucracy and cutting tax would be the quickest and best ways to strengthen the sector. Despite the commonly held belief that manufacturing is on the decline, the truth is rather different. However, one thing that does worry today’s manufacturers is that the younger workforce lacks the skills needed. That is a genuine cause for concern. I believe that, as with most things, developing a strong manufacturing sector starts at childhood. Children often have a natural affinity for manufacturing. Lego, Meccano, play dough and many other toys are fantastic training tools for young people with a knack for making things. I fear that that is drummed out of them at school and by computer software. Young people with a skill for making things are often lumped together on vocational courses at school. The perception of these vocational courses is that they are inferior to university degrees and that the children taking them are less intelligent, which, of course, is not always the case.
Attempts by the Government to encourage more apprenticeships mean that the senseless drive to send the majority of school leavers to university will not leave youngsters with other talents behind. However, there is still work to be done. GNVQs, for instance, often separate business courses from manufacturing courses. This makes the teacher have to answer the reasonable child’s question: “What’s the difference between manufacturing and business?”. Teachers, who often have no experience of either, have to distinguish between them. They seemingly say: “Business is things like travel agencies and tourism, where you get to travel the world; manufacturing is holding a spanner fixing things in a drab factory”. It is no wonder that young people would choose business over manufacturing. The joy of making things, and how that fits into the manufacturing process more widely, should be encouraged at school. That would help strengthen the sector for years to come.
Lord Hunt of Chesterton (Lab)
My Lords, I greatly commend the noble Baroness for introducing this important debate about strengthening manufacturing, stimulating it and encouraging young people. I was an engineering graduate of the University of Cambridge in the 1960s. In those days, we all had to have industrial experience on the shop floor. For six to eight weeks, I worked with ICI in Runcorn and Widnes on maintenance operations. Such was health and safety at the time that I used to get extremely drunk from breathing the fumes from the leaking pipes. It is a wonder that I am here today. I worked at Vickers in Barrow tightening nuts on the diesel electric motors. All the tools said, “nuclear only, not to be used anywhere else”, so we learnt how there was cross-subsidisation in Vickers.
In France and the Netherlands, engineering students continue to have to spend much more time in industrial internships, which, regrettably, have been dropped from many British engineering courses. I met with a successful consultancy last week, which said that it often recruits people from the continent because of their practical experience. However, many British students, who are extremely able to an international standard, take various jobs. The consulting company of which I am chairman in Cambridge often uses excellent students for that purpose, but it is not hands-on manufacturing.
The present and previous Governments in the UK have increased the numbers of apprentices in engineering, which the industry welcomes. However, as many noble Lords have mentioned, there is still a great lack in the numbers of apprentices and technicians. Last evening, I spoke to a representative from Airbus at the Royal Society. He commented on the literally thousands of intermediate technicians being trained in the colleges and at the Airbus factories in Toulouse. Companies, such as JCB—we will hear from the noble Lord, Lord Bamford, next—and Rolls-Royce contribute with their excellent schemes working with local universities, although the number of top-class, practically trained technicians and engineers will not be sufficient in the UK.
It is always amusing to me that the other side talks about money, money, money but when it comes to engineers they never talk about salaries. We have not had a single contribution on that. Do they know that the starting salary of an engineer is about half what they would get in law? Most art students start with higher salaries than engineering students. It is an extraordinary situation. When Siemens hires engineers in the UK, it pays them significantly less than it pays its engineers in Germany.
I ask manufacturing bosses over here to pay their engineers more and then they will get more of them. Schoolteachers know that. They are extremely aware of salaries and they jolly well know that most people who leave university with engineering degrees and go into engineering will get a lower salary. To become an engineer in this country is almost like entering the church—perhaps I missed a comment from the Bishops’ Benches. I hope that the other side will take on that point.
The other important point is of course that all parties now agree that government can play a very major role in stimulating investment in advanced manufacturing. After the last election there were nasty remarks in taxation magazines that this Government were going to withdraw the tax relief on R&D. However, I am glad to say that sense prevailed, and doubtless will continue to do so beyond the next election, certainly if Labour is returned. This has been a very important point. I am very well aware that this arrangement of tax relief on R&D has meant that small SMEs have been able to continue a very high level of R&D activity. Indeed, in that respect we are rather better than some of the continental countries.
All parties agree that in certain areas of manufacturing technology, selection is now a desirable approach. The Government have a whole raft of these, such as aerospace, automobiles, chemicals, industry and drugs, and we heard today about some of them. However, there is very wide concern, expressed particularly by the noble Lord, Lord Heseltine, that the foreign ownership of much of UK industry means that the strategic decisions are no longer made by the UK. For example, a Japanese company is going to have a big railway facility in the UK, but was very emphatic that all the key engineering designs will be done in Japan. Through our excellent R&D, the UK can try to get its feet under the table of these strategic long-range discussions.
Noble Lords might be interested to know that, after 350 years of the Royal Society, in this year’s summer exhibition there is a joint exhibition of a British team and a French one. The French have been allowed in, which is fantastic. I am one of the exhibitors, and I am labelled under Toulouse for this purpose. This is an extraordinary exhibit of smart wings, which airbus planes will be flying with by around 2025. This shows how we have to combine new materials, aerodynamics, bird flight and control systems. However, sadly we are learning that with the withdrawal of British Aerospace as a major shareholder and a British Government position that is not completely clear, the strategic decisions in Airbus are largely taken by the Governments of France, Germany and Spain.
It is important that the very complex messages we have been giving have not meant that we are right at the strategic level. As I have mentioned before in this House, when a Prime Minister—whose name I have suddenly forgotten—flies around the world, he does not seem to fly on an airbus, unlike the Prime Ministers of our major European colleagues. It is a very important point, and this is a major area of British manufacturing. We have excellent people, but commitment is required. BIS and Whitehall understand that if you have ambitious, able graduates, they want to do something that is at the top level in the world. The top level in the world is the City, so of course they go there. It is very important to underline the need for top strategic engineering areas, because that is where we will have our best people.
Lord Bamford (Con)
My Lords, I also congratulate my noble friend Baroness Wilcox on securing this important debate on manufacturing, and I thank her for her excellent speech. This is a debate that really matters, as we consider our economic future in a fast-changing and more competitive world.
I begin by declaring an interest. I am an industrialist, and I am also an engineer. My family business, JCB, has 11 factories in the UK, employing more than 6,000 people. Perhaps I could respond rather quickly to the noble Lord, Lord Hunt, and say that I think that engineers are paid properly in Britain. As an illustration, last week we advertised on the net for engineering graduates with experience, and we got 1.3 million hits. They were from around the world but, all the same, being an engineer cannot be too bad.
My recent maiden speech touched on many of the themes which have formed part of this debate. Today I would like to focus first on what has been done to support UK manufacturing, and secondly on what still needs to be done. In 2012 I wrote a report on the state of UK manufacturing, which was written for policymakers of all political parties. It included recommendations to support our manufacturers. The key recommendation was to improve capital investment incentives. When I started my report, the annual investment allowance was a mere £25,000. I congratulate the Government on initially raising this to £250,000, and on raising it further in this year’s budget to £500,000. This is quite an increase, which will certainly help to unlock investment.
I also called on the Government to continue lowering corporation tax. I am pleased to say that the rate is now down from 28% in 2010 to 21% today, and there are plans to reduce it still further to 20% next year. This is a real boost to business confidence. Capital-intensive industries think long and hard before investing in equipment such as machine tools, which can cost many millions of pounds. Payback can take years or even decades, so the importance of such measures must not be underestimated. They make a real difference to manufacturers.
Research and development are our industry’s life-blood. Do noble Lords know that German companies submitted 47,000 patent applications in 2012, compared with just 15,000 in the UK? That is three times as many. Why is this the case? The answer is alarmingly simple. Germany places more value on research and development than we do. However, the Government are now on the right track. The recent patent box legislation means that manufacturers can now translate innovation into profit, which can then be put back into the business and so back into UK manufacturing. The report also called for more help for exporters. I am pleased that my noble friend Lord Livingston of Parkhead is realigning UK Export Finance, which many of you will of course know under its previous name of the ECGD. This will support many more manufacturers than before, both large and small.
All of these steps taken by the Government are vital. I am glad that they have had an immediate and positive effect but, as I said before, more needs to be done. Our overriding priority must be our young people. I therefore welcome the Government’s focus on apprenticeships, but what really matters to manufacturers is not the number but the quality of apprenticeships. We need meaningful apprenticeships, which offer young people the chance to develop world-beating skills. Such apprenticeships should last anything from three to five years, not six to 12 months, and culminate in a proper degree. Quality apprenticeships must become a vital part of our long-term manufacturing strategy.
It is for this reason that the long-term future of UK manufacturing requires real cross-party support. We also need to give absolute priority to continued investment in our young people up and down the land. I end by asking my noble friend the Minister if he could ensure that the quality of our apprenticeship programmes is given far more priority, to ensure a vital and competitive global future for our country.
Baroness Trumpington (Con)
My Lords, I wonder how many noble Lords read in the Times last week about beautiful Dumfries House and its fabulous contents. It has been bought by His Royal Highness the Prince of Wales and turned into a hotel staffed by formerly unemployed young people. It occurred to me that there must be other places, not necessarily of course stately homes, but premises of a kind that are either getting dilapidated or are not sufficiently occupied. They could be used for the education and employment of unemployed young people, turning out a profit for the owners of the buildings and profit for the young people who will be thus employed, and who could gain further experience that they could use in their future lives. This would be a practical way of stopping the decay of many buildings while helping the young people of our nation.
Lord Young of Norwood Green (Lab)
My Lords, I, too, congratulate the noble Baroness, Lady Wilcox, on introducing what we would all agree has been a fascinating debate. There are far too many facets for me to comment on in a relatively short speech, but I congratulate her on both the subject and her contribution. I did not necessarily agree with every aspect of it, but most of it was an excellent analysis.
The characteristics of successful 21st-century British manufacturing embody much of what we want to see in the modern economy—not a race to the bottom based on low-cost, low-value and low-skilled work. That is not a race that British manufacturing nor the British economy can or should try to win. However, we can win a race to the top based on an emphasis on, as many have said, high skills, innovation and competitiveness in which goods manufactured in Britain are the best in the world for technology, quality and product reliability and for which the customer is prepared to pay a premium.
I think that you can look at the statistics and find a number of different figures in relation to the performance of manufacturing. Indeed, when I looked in the Library for information on this debate I found it worrying. I do not wish to put gloom on this because I do not think this is an area for gloom. I am responding to my namesake. It is good to see in person the noble Lord, Lord Young of Graffham—I redirect a lot of his post. To be serious, the comment on page 4 of the Library’s report to us states that:
“In terms of manufacturing as a proportion of national economic output, the UK has fallen from 15th in the world in 1970 to 114th in the world in 2012”.
There is no room for complacency, but the idea that we are not a manufacturing country any more is too far on the pessimistic side. Plenty of manufacturing is taking place but, as my noble friend Lord Monks said, we could do with a lot more of it.
I would welcome the Minister’s response about the areas that the Government have rightly placed some investment in. What is the feedback on the Catapult centres? What is the return on that worthwhile investment? I ask the same in relation to the advanced manufacturing supply chain initiative and the Manufacturing Advisory Service. Are these government initiatives having the kind of impact that we know is necessary?
Throughout this debate, one area that has been shown to be fundamentally important is finance. The noble Lord, Lord Flight, suggested that everything was rosy in this area but, if that were the case, why are manufacturers still telling us that one of the biggest problems they face is access to finance? I do not wish to exaggerate this because I do not believe I have to. Manufacturing is often viewed by the banks with either ignorance or hostility. It is not often seen as a sector to lend to even though it should be viewed as one of the growth areas of the future. Many innovative manufacturers with the potential for high growth, the capture of global markets and good job creation are denied the funding they need because the bank says no. We still do not seem to have cracked that problem. In the first quarter of 2014, net lending to business from banks participating in the Government’s Funding for Lending scheme fell by £2.7 billion. I would welcome the Minister’s comments on that.
We also surely need—the noble Lord, Lord Bamford, referred to this—to call for a long-term approach. He talked about the payback on high-level investment in machinery and equipment. In other words, we have to call for patient capital instead of short-term trading because this is where both the business interest and the public interest lie. We have to argue for tax rules that encourage investment rather than provide tax dodges. We know that there is a good rate of return for investment in science. Government funding played a significant part in keeping Jaguar Land Rover going. Will the Minister tell us what the rate of return on our investment in tax credits is, for example?
Perhaps the other most important area that has been mentioned is the question of how we attract the level of people that we need in engineering, specifically in the manufacturing industry. I could not help smiling when the noble Lord, Lord Hunt of Chesterton, talked about it being harder to get into engineering than into the church. Perhaps it is a case of blue collar versus white collar. Whether or not that is really the case, throughout this debate we have realised that we have to attract more young people—both boys and girls—into engineering. That is a huge challenge.
Paying low wages subsidised by the taxpayer is no way to attract people into an industry. Central to good pay is productivity. That is where our record is not so good and worse than all our competitors. Surely the real measure of our economic progress is not just GDP but the growth in GDP per hour worked. You do not raise productivity by cutting wages and sweating the assets. That is a race to the bottom. The principal source of growing productivity is our capacity to learn to do things better, not necessarily cheaper—achieving the same objective in a completely different way because of new investment in new tools, new methods and new sources of information.
Last but by no means least is an area that I am not sure was referred to—the question of management training. One statistic I still find amazing is that only one in five of our managers has received any training at all. If we are talking about improving the way that people are managed and improving productivity and performance, surely that has to enter the equation.
I conclude on the question of how we attract young people, because it is a key part of what the noble Baroness, Lady Wilcox, has put into this debate. My experience reflects what a lot of people have mentioned today. So many schools are still pushing all young people on to the academic route, thereby implying that a vocational career is somehow second class. We all know that that is wrong. We know that we need more young people—both boys and girls—to choose a vocational career. Why do they not? It is because we still have this prevailing attitude in schools. While I support what the noble Lord, Lord Young of Graffham, said about having someone to advise on entrepreneurship, which is not a bad thing, it is not the only thing that advice is needed on. We must get successful young people in engineering back into the schools to say, “Look; this is a really worthwhile career”. The Government must insist that schools carry out what they should be doing on careers advice—that is, advising young people on the whole range of careers available. They still are not doing so. If you go into schools and talk to young people about apprenticeships, you will find that, in many cases, they know little or nothing about them, and teachers are not promoting them. What are the Government going to do about this? If we are serious about starting at that key end by encouraging young people to perceive apprenticeships as a really worthwhile career, we have to change those attitudes. One of the ways to do this is through teachers—because they are such key influences—and by inviting young apprentices back into schools.
We have colleges in the UK that provide brilliant standards of high-level apprenticeships and vocational training. The trouble is that we need more of them. Take Nelson and Colne College in the north-west. It is one of the very best colleges in the country. It has the third highest success rate for 16 to 18 apprenticeships. It has been awarded STEM assured status by the New Engineering Foundation. It recognises excellence in STEM; and it has helped more than 300 jobseekers move off benefits and 50 young people progress to apprenticeships. It has done this through a determination and belief that high-quality apprenticeships which offer genuine job prospects are a fantastic opportunity for both young people and for businesses. It has built on that success.
As the report by my noble friend Lord Adonis recently highlighted, it is exactly this type of institution that we should be encouraging and promoting. Does the Minister not think that offering better support through local enterprise partnerships for business hubs to spread apprenticeships would be a more effective way of ensuring that colleges such as Nelson and Colne can continue to meet the needs of the local economy and employers, rather than the Government’s current approach to funding, which is causing some concern to small and medium-sized enterprises?
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)
My Lords, I am grateful to my noble friend Lady Wilcox for initiating this important debate. It has been very encouraging to see that there is agreement across the House about the importance of manufacturing in the UK. As the noble Lord, Lord O’Neill, said, there is much more to do. I am also encouraged that so many of the issues raised here today are being acted upon. As my noble friend Lord Shipley indicated, for far too long there has been a misplaced assumption that we are a nation of grocers, bankers and lawyers. My noble friend Lord Horam provided a slightly more colourful anecdote to illustrate this point. There is an assumption that countries such as Germany, China and South Korea excel at manufacturing, but we do not.
UK manufacturing has a proud record of innovation and achievement and I will first reflect on some national statistics. My noble friend Lord Chidgey raised some interesting points when he spoke about the Markit figures. Some recent figures came out from Markit’s senior economist, who said:
“UK manufacturing continued to flourish in June, rounding off one of the best quarters for the sector over the past two decades”.
The sector delivered around £140 billion in gross value added last year alone. It produces over half our exports in goods; invests more than any other sector in R&D, and employs an increasingly skilled workforce of more than 2.5 million highly skilled people.
The UK aerospace sector is the second biggest globally, and Britain now has the most productive car sector in Europe. By 2017, UK industry predicts that Britain will be producing 2 million cars a year, beating our all-time peak of 1.92 million in 1972. In contrast to 1972, these will be cars that people actually want to buy. Remember the Hillman Imp? I do not know whether my noble friend Lord Young ever drove one, but I pay tribute to the work that he has done over so many years, including introducing foreign investors into the automotive sector, not only to effect change but to contribute so much to its success. That is a point which the noble Lord, Lord Lyell, highlighted. We are also developing new industries. Earlier this year, Siemens announced a £310 million investment in offshore wind at Hull, creating more than 1,000 jobs.
However, there is no use manufacturing if you cannot sell what you make. Earlier this year, my noble friend Lord Livingston, the Minister of State for Trade and Investment, accompanied the Deputy Prime Minister and 40 businesses to Mexico and Colombia. To reassure my noble friend Lord Sheikh, linking Britain to fast-growing new markets such as these—beyond Europe—is a vital part of the Government’s plan to provide sustainable growth and to compete in the global race. For example, in May this year Chinook Sciences secured an infrastructure deal worth more than £300 million to build the world’s largest advanced thermal energy-from-waste facility in the United Arab Emirates. Back in Europe, UKTI helped Augusta Westland seal a £1 billion deal to supply 16 helicopters to the Royal Norwegian Air Force, safeguarding at least 3,000 jobs.
My noble friend Lord Carrington spoke about the importance of free trade and the need to prevent protectionism. The Government favour the expansion of free trade around the world, for example through the Transatlantic Trade and Investment Partnership that is under negotiation at the moment and for which I have high hopes.
The noble Lord, Lord Monks, emphasised the role of the trade unions in manufacturing in the UK and made some important points about it. I agree with the noble Lord that there is a positive role for unions to play—for example, Unite’s part in securing the future of Ellesmere Port, both for the products and for the people who work there.
I should like to touch on the subject of intellectual property, which my noble friends Lord Bamford and Lord Sheikh, raised. The immense creativity and openness to innovation that runs through the UK’s manufacturing industry will be key to sustaining the positive signs of recovery we have seen in recent months. As Minister for Intellectual Property, I am committed to making sure that businesses are able to reap the rewards of their creativity.
My noble friend Lord Bamford raised the importance of research and development and my noble friend Lord Lyell highlighted the importance of the pharmaceutical sector. The House will know that the UK has a strong comparative advantage in pharmaceuticals and life sciences which builds on our world-class research base. Our catapult centres in cell therapy and stratified medicine support our life sciences sector. Through the Research Partnership Investment Fund, we are also supporting new research. A £34 million partnership between the University of Strathclyde, GSK, AstraZeneca, Novartis, Cancer Research UK and others, will accelerate innovation and establish new supply chains for medicines.
Many small businesses are unaware of the different types of intellectual property and how they apply to their business. In the last year the Intellectual Property Office spoke to 18,000 small businesses, helping them to understand IP and how they can best protect their innovation and—most importantly—use it to generate revenue.
Our innovative manufacturers are making products for today’s and tomorrow’s global markets and this is delivering UK jobs and growth. Only last month I was honoured to be invited to Berlin by the European Patent Office to present an award to Professor Chris Toumazou of Imperial College. He received the award for research and production of a “lab on a chip”. This is a ground-breaking development in the field of medical diagnostics which allows rapid diagnosis of life-threatening conditions.
People such as Professor Toumazou are inspirational figures for young people considering a career in science. He left school at 16, qualified as an electrician and graduated from the then Oxford Polytechnic—now Oxford Brookes University—before he found his niche in research at Imperial College, London. He then went on to become their youngest professor at the age of 33.
I am pleased that my noble friend Lady Wilcox and the noble Lord, Lord Whitty, recognised the significant measures being implemented through the industrial strategy. It was launched in September 2012 by my right honourable friend in the other place, Vince Cable. There have been some significant successes. As my noble friend Lady Wilcox said, we have announced a co-investment of £2 billion over seven years for the Aerospace Technology Institute to keep the UK at the leading edge, not only on wings—if noble Lords will excuse the pun—but also on engines, aerostructures and advanced systems.
Together with the automotive industry we are investing £1 billion over 10 years in a new Advanced Propulsion Centre. This will bolster our capabilities in the research, development and commercialisation of low-carbon technologies, thereby securing 30,000 jobs. The High Value Manufacturing Catapult was mentioned by my noble friend Lady Wilcox and the noble Lord, Lord Broers. It has secured more than 1,500 projects with private clients and has seen a similar number of engagements with SMEs.
The noble Lord, Lord Broers, stated that the TSB should be prepared to scale up the catapults. Technology entrepreneur and venture capitalist Hermann Hauser has been asked by Vince Cable to make recommendations to Ministers on how the Government can take forward the successful catapult network. Hermann Hauser’s report will feed into the science and innovation strategy, which is due to report in the autumn. Just this week, the TSB outlined plans for a further £400 million of investment in British innovation, including £72 million for new initiatives to support high-value manufacturing.
I will now focus on supply chains and reshoring. On the latter point, the noble Lord, Lord Giddens, gave some interesting examples from the United States. The subject was raised by my noble friends Lord Carrington and Lord Flight. We are taking action to ensure that we have the manufacturing supply chains needed to create strong, sustainable, balanced growth.
I hope that I can now answer some questions raised by the noble Lord, Lord Young of Norwood Green. Through the Advanced Manufacturing Supply Chain Initiative—AMSCI—we are providing funding for capital investment, skills and innovation to support the repatriation, anchoring and growth of manufacturing supply chains in England. Forty-four successful AMSCI projects have secured half a billion pounds of public-private investment, creating or safeguarding more than 15,000 jobs directly and a further 15,000 indirectly. More than 180 organisations have been involved, including many SMEs. A fifth round of AMSCI was announced by Vince Cable on 9 June. This will make available a further £100 million of funding for which companies can bid for support. The recently launched Reshore UK provides a one-stop-shop service, jointly delivered by the Manufacturing Advisory Service and UKTI, which helps British business return to and reinvest in the UK.
Many Peers spoke on the important subject of innovation. Creativity and innovation are in our DNA. Some of the world’s most exciting, cutting-edge technologies are being developed here in the UK. Forty per cent of the world’s small satellites are made in Guildford, and we are making great strides with graphene, composite materials and 3D printing. We have invested £600 million in the eight great technologies, which will be an important source of growth by transforming existing products and by creating entirely new products and industries.
For example—my noble friend Lord Young of Graffham made this key point—effective automation and use of robotics and autonomous systems will be key to the future of manufacturing productivity. We have therefore set up a special interest group bringing together industry and academic experts to outline a future vision for the UK. Its strategy was published on 1 July.
The world is seeing phenomenal levels of growth in the volume and speed of data being created. The internet of things, which allows devices from heart monitors to kitchen appliances to communicate through wireless internet connections, is real and with us now. The advent of 5G and smart cities will broaden possibilities even further.
The Government are working closely with businesses and academia to ensure that the UK can capture value from “big data”. Noble Lords can be forgiven for not knowing what that is. Big data is a term describing the analysis of complex and often large-scale data sets to convert raw data into knowledge. I hope that that is clear. The £42 million Turing Institute announced by the Chancellor in the Budget will help the UK remain at the forefront of this rapidly moving, globally competitive discipline.
I now focus on the important subject of skills, which has been a key theme of the debate this afternoon. It was raised by my noble friend Lord Young, the noble Lord, Lord Young of Norwood Green, the noble Lord, Lord Shipley, my noble friend Lord Jenkin, the noble Lord, Lord Monks, my noble friend Lord Carrington and others.
The UK cannot sustain growth in advanced manufacturing and innovation unless we have people with the right skill set to develop, exploit and embrace new technology. My noble friend Lord Young of Graffham spoke passionately about teaching enterprise. That is very much noted. That means having a skills pipeline at all levels from technicians through to postgraduates. The Perkins’ Review of Engineering Skills, published in November 2013, was a call to action to ensure the long-term supply of engineering skills. In response, the Government have announced up to £30 million in funding for employers to bid for to address engineering skills shortages in sectors with specific needs.
We have committed an additional £185 million over four years for the teaching of high-cost subjects such as science, technology and engineering. We have developed traineeships to give young people the skills and work experience that they need to compete for jobs or apprenticeships. We are developing a network of new national colleges to provide specialist vocational training up to degree level for critical sectors facing skills gaps. Colleges announced so far include advanced manufacturing, high speed rail, and nuclear. Since 2010, we have opened 17 university technical colleges providing high-quality technical education for young people aged 14 to 19, with a further 33 in development. My noble friend Lord Flight rightly paid tribute to my noble friend Lord Baker—and of course, not forgetting Lord Dearing.
My noble friends Lord Jenkin and Lord Borwick raised the issue of increasing the attractiveness of engineering and improving its image. That is an important point. I agree with my noble friends: it is vital that all stakeholders work together to address misconceptions about engineering careers and increase their attractiveness to young people. The Government are already taking action and we are keen to work with those who share our aims, because we want our best and brightest young people to see innovative, high-tech, high-value engineering as a desirable, rewarding career with the status to match—and, as my noble friend Lord Borwick put it so well, the joy of making things.
That is why we launched See Inside Manufacturing, an initiative mentioned by my noble friend Lady Wilcox, which is a partnership between BIS and industry sectors that aims to highlight the exciting opportunities and careers in manufacturing and engineering. Since SIM was piloted in the automotive sector in 2011, it has been extended to 10 sectors currently, and last month we announced that it will be expanded to all manufacturing sectors.
On 7 May, my right honourable friend the Chancellor of the Exchequer launched the Your Life campaign, including a call to action to get educators, industry and government to commit to boosting women’s participation in technology and engineering. My noble friend Lord Shipley highlighted that important point. I should at this stage spare the blushes of my noble friend Lady Wilcox, who raised this issue in her speech, but I note that she was the only Baroness who put her name down to speak today on this important subject—until the female representation in the Chamber today was doubled by the intervention of my noble friend Lady Trumpington.
So far, more than 180 organisations have pledged to do more to highlight the career opportunities open to those studying STEM subjects, committing to create more than 2,000 new entry-level positions, including apprenticeships, graduate jobs or paid work-experience posts. In addition, top firms are sponsoring a new DfE scheme to recruit post-doctoral graduates to become science and maths teachers, injecting top-level expertise into state and academy schools, including those with poor progression in those topics.
Many Peers talked about inspiring people into manufacturing. BIS funds the STEM Ambassadors programme, which sends more than 28,000 volunteers from industry and academia into schools to raise awareness among children of the range of careers that science and technical qualifications offer and provide stimulating scientific activities to increase their interest in STEM subjects. That complements the changes that the Department for Education has made to the design and technology curriculum to make it an inspiring, rigorous and practical subject. Even the youngest children are now using creativity and imagination to design and make products that solve real and relevant problems within a variety of contexts, but I acknowledge that we need to do much more.
My noble friend Lord Bamford raised the important issue of the quality of apprenticeships. I can reassure my noble friend that quality is very much a top priority. We are undertaking major reforms to ensure that the programme meets the future needs of a changing economy. The reforms put employers in the driving seat by giving them the role of designing new apprenticeships. Quality will be further improved by including higher expectations in English and maths and by more rigorous testing and grading at the end of the apprenticeship.
The noble Lord, Lord Monks, raised a separate, interesting point about the importance of competing with countries across the North Sea. He mentioned Germany and the Scandinavian countries and he is absolutely right. We need not just to compete with them but learn from them—which I think was his point as well.
My noble friend Lord Carrington spoke about reshoring in addition to the quality of manufacturing. I want to add another point on reshoring. Paradoxically, perhaps this is why businesses abroad are returning to the UK: not for lower prices but for the quality of the goods and the consistency of service that they get here. In addition, as was mentioned, the Patent Box provides much needed incentives for businesses to innovate.
My noble friend Lord Horam made an interesting point about the fledgling return of the textile sector. My ears pricked up at that point because I started in the mills in Scotland. In Paisley, 12,000 people were employed in the mills and I very much hope that we will continue to encourage regrowth in this sector.
My noble friend Lord Sheikh asked what the Government were doing to promote joined-up thinking between higher education and industry. Through the Engineering and Physical Sciences Research Council, we are investing around £800 million per year in research and postgraduate training. We also support partnerships between manufacturing industry and research partners. A £43 million partnership between the University of Sheffield’s Advanced Manufacturing Research Centre and manufacturing companies is developing the technologies needed for the future.
There is still much more to do, as I said at the beginning of my speech, but I believe that the industrial strategy is starting to have a real impact. Official figures for April 2014 show that manufacturing output is rising at the fastest pace since February 2011. Companies are bringing production back to the UK because they can see that the Government are committed to a long-term path. This gives them the confidence they need to invest both in new technology and more robust domestic supply chains and in skills, through a massive expansion in apprenticeships and the creation of new national colleges, and by putting employers in the driving seat on skills.
Overarching this, we have put in place an industrial strategy founded on stability, longevity, partnership and collaboration. These are the essential ingredients. As my noble friend Lady Wilcox put it so succinctly, supported by my noble friend Lord Horam, we are determined to ensure that this clear, long-term approach survives the current political cycle to maintain the certainty and confidence that our industry needs.
Baroness Wilcox
My Lords, I take the opportunity that I am given to thank everybody for taking part in this debate today. I particularly thank the Minister for such a full response. I do not think that he missed out anybody who spoke so there is no reason for me to pick up in any way on individual speakers. I have been walking with giants today. I have been sitting here, listening to manufacturing being described in various ways. I did not know or recognise some of them but was happily reminded of others.
I have only two regrets today. First, I missed out the role of trade unions. The noble Lord, Lord Monks, should take it as a compliment that I did in as much as I did not see them as sitting on the other side of the net from me. It has always been thought that from this side we are not going to listen and from the noble Lord’s side they are going to ask for everything. But where I worked in my business we had to work together as a team. If you got people into a fish-filleting factory at 3 am to fillet 30 tonnes of mackerel and someone started having an argument before we could get it out of the door, it was in everybody’s interest to fix it. Modern industry has to go forward and things will change so fast that we cannot entrench positions. I apologise that I did not mention the trade unions but it should be taken as a compliment that I felt we were all singing from the same hymn sheet at this stage.
Secondly, I am also sad that I was the only female to put her name down to speak in the debate. That shows us that we really have to work a bit harder at 50% of the population to see whether they can understand what manufacturing actually means. Perhaps we can get a few more soaps on the television to show girls taking part in such very exciting and good careers. I am very grateful to my noble friend Lady Trumpington for making her intervention as it meant that I was not alone. Thank you very much indeed to everyone.
Rural Economy
(10 years, 5 months ago)
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The Earl of Shrewsbury
That this House takes note of the case for investment in the rural economy.
The Earl of Shrewsbury (Con)
My Lords, the rural economy by its very nature is substantial and widely diverse: from agriculture, horticulture and arboriculture through mineral extraction, rural crafts, tourism, hospitality and field sports—the list goes on. Our countryside is a powerhouse of business and productivity, with agriculture as its backbone. Indeed agriculture, food production and processing is the largest manufacturing sector in the United Kingdom. I declare an interest as a member of both the NFU and the Countryside Alliance, and I live on the edge of the Peak District National Park.
Tourism also plays a major part in the rural economy. Inextricably linked to agriculture, the rural tourism industry all but died during the last foot and mouth epidemic and the bluetongue crisis. Thankfully, that dire situation is well on the way to full recovery, and Great Britain’s rural areas are indeed open for business. The UK’s national parks are a major draw for tourism with many additional benefits to local businesses of all types: hotels, pubs and restaurants, B&B establishments, holiday lets and activity centres, to name but a few. These parks are some of our most iconic landscapes, archaeological and historical sites, as well as our most valuable wildlife habitats. These beautiful regions contain strong communities who care passionately about their surroundings. These areas are living landscapes in the true sense and are visited by millions of people every year.
However, all is not always well in these rural areas. Many small communities have lost their social focal points. Pubs are closing at the nationwide rate of 18 per week, many of them in rural areas. Village shops have closed in large numbers although some communities, such as the village where my noble friend Lord Geddes lives, have invested in their own community shops, which is to be applauded. Many small post offices have closed, thus denying those communities financial services. For the rural community to grow, access to services is absolutely essential. Seven out of 10 villages in England no longer have a shop and rural Britain has lost over a quarter of its bank branches since 1995. The announcement in January this year by the Post Office about making available a current account in more than 100 branches, rising to 2,000, is most welcome but it is unclear how many of these branches will be in rural areas. I commend to your Lordships the post office at Rosehall, Glen Cassley, in Sutherland. It is a real outpost. That post office and village shop was saved from total closure by the local landowner for the community. He also happened to own Harrods, so he had a bob or two to spend.
Rural crime such as metal theft, fuel theft, livestock theft and fly-grazing presents major problems, as do fly-tipping, poaching and burglary, in areas which are often remote. In 2012, rural theft cost an estimated £42.3 million. Farm Watch and rural watch schemes— similar to neighbourhood watch—can be very effective in enabling the rapid exchange of intelligence about offences and suspicious activities but do not exist in all rural areas and are not always operated as effectively as they could be. The fact is that increasing pressures on police budgets have meant that rural areas have insufficient coverage, leaving country folk often feeling isolated and fearful of crime. All these matters need to be addressed with greater vigour and along the lines of the National Farmers’ Union’s action plan.
Turning to planning matters, planning policy in rural areas does affect food production, and the availability of an affordable housing supply is crucial to the well-being of the agricultural sector, as well as all rural communities. Figures released by the National Housing Federation on 30 June 2014 to mark the start of national housing week show that rural areas have become some of the least affordable areas to live in the country. On average, house prices in rural areas are 11 times the average salary. Wages would need to rise by 150% for potential homebuyers in these areas to buy a home. The problem continues to worsen, and it is imperative that the issue of affordable rural housing be addressed as a priority. Community-led affordable housing initiatives for smaller rural communities are needed, with properties both for sale and for the rental sector. Indeed, in Ballater in Aberdeenshire, people find it extremely difficult to get on to the housing ladder because retirees from below the border think it is a wonderful place to retire and the price of properties has gone up out of the reach of locals. It is very sad when you see that happening.
The Government’s recent proposals to make it easier for empty and redundant buildings to be converted into productive use are to be welcomed, but there is a caveat here. Such conversions are considerably more expensive than new-build and fraught with structural and planning difficulties. I know; I have been there. There is a very strong case for VAT to be cut on the labour element of domestic repair, maintenance and improvement of these buildings. It would not only generate growth and jobs but would protect the countryside against unnecessary new developments while bringing empty properties back into use and cutting carbon emissions. Will my noble friend make every effort to persuade his colleagues in the Treasury to look again carefully at the VAT position?
It is impossible for me to speak in a debate which addresses the rural economy without mentioning the importance of field sports to the well-being of that economy and their substantial contribution to the environment. I declare an interest as president of the Gun Trade Association and as a lifelong devotee of country sports. With regard to the rural economy, field sports and, in particular, quarry shooting, very often provide almost the only employment in less favoured, upland parts of the United Kingdom. Currently, 480,000 people shoot live quarry, and the annual spend from shooting sports is around £2 billion. Considerable sums are spent each year by foreign visitors on high quality, high cost game shooting on many of the country’s top sporting estates, with the obvious benefits those customers bring to the rural economy. The shooting sports, which provide the equivalent of 70,000 full-time jobs, are involved in the management of two-thirds of the rural land area. Two million hectares are actively managed for conservation as a result of shooting, with £250 million per annum being spent on conservation. These are significant figures.
Finally, I shall address the issue of broadband and its vital importance to the rural economy. Without the adequate supply of superfast broadband facilities, the rural economy is stifled. More and more institutions, such as Defra, HMRC and many more, are requiring customers to send in returns and other information in electronic form. If one does not have broadband—many people do not—one is expected to use an agent at significant extra cost for rural businesses. They simply cannot afford it. While I praise the Government’s effort and commitment to improving rural broadband coverage, and I welcome strongly the funds they have put aside for councils, four years since the announcement of BDUK, people who live in areas with little or unreliable broadband and mobile phone signals have yet to see the situation improving. A vastly improved broadband and mobile telephone rollout to all rural areas is key to the future growth and well-being of the rural economy. Will my noble friend confirm the current position of the rollout of broadband and 4G to the rural areas most affected? What is his estimate of when this essential service will be available at a competitive rate?
I have managed only to scratch the surface of the rural economy, and I have endeavoured to paint a broad picture. I welcome the opportunity to discuss these issues as they are all very serious. I shall listen with great interest to the debate, and I look forward to my noble friend’s responses. I beg to move.
Lord Plumb (Con)
My Lords, I have the pleasure of congratulating, thanking and supporting my noble friend Lord Shrewsbury. He opened a debate of great importance to all of us about investment in rural areas. Much was said earlier about the speech made by my noble friend, Lord Bamford. Many of us will never forget his maiden speech. He started, “I am an engineer”, and went on to describe how he makes things. I am a farmer, and I grow things. The pioneering spirit of the manufacturer and the farmer are why today we can claim agriculture as a huge success.
Living in the countryside is not always the idyllic life often shown in pictures or stories. Even the most sophisticated methods of husbandry cannot remove the risk of seasonal changes, as we witnessed this year. The demand for land in rural areas increases as the population expands—and they are not making any more. Land becomes scarce and expensive. We need it to grow more food for a growing population. The scale of the challenge is enormous. More needs to be done to remove obstacles to increased production from less land, and to get greater access to new markets while protecting the environment and preserving village life. More needs to be done to understand the implications of volatility, get better value out of science and technology and drive domestic growth.
The Minister may agree that we need a policy framework to help the economy which is right for consumers and producers. The most recent reform of the CAP was unnecessarily complicated. I have been involved in reforms of the common agricultural policy since 1973, and I can honestly say that it is more complicated than before. We need subsidiarity and to retain the emphasis on protecting the environment and the countryside as a whole. Of course, we need less red tape. The Minister may like to tell me whether the reduction of red tape since the report came out has changed very much. We need greater freedom to increase production. Declaring policy is one thing; the implementation of that policy is another. It still seems that the image of rural occupation is less important than industrial employment.
Land occupation is changing as farm size increases, and it is increasing rapidly. There are 3.7 million people involved in agriculture and food. The food industry cannot exist without the farming industry. Our colleges and universities are full of young people, enthusiasts and entrepreneurs who want to get into the countryside. They want to work and to produce. Many organisations are helping, not least the Prince’s Trust. I am often asked how in this changing world I would define the small farmer. I always answer, “It’s a chap about five feet tall”. It is the size of the business and the size of the production area that matter, not the size of the farmer. Often people say, “I haven’t heard ‘The Archers’ lately”, or perhaps, “We like ‘Countryfile’ on a Sunday evening sharing with us the wonderful views of our hills and valleys, and Adam and Matt are such charmers”. So how can we educate more urban dwellers to understand rural development and country living? It is insulting to say that farmers have created a degraded, horrible landscape. The countryside is obviously a diverse place, and it is neither wild nor natural. To keep a healthy industry, we need the birds, the bees and the butterflies, the hedgerows, the tracks, the fields and the crops in a land which is often described as “Farmageddon”. They are all there under the good management of today’s generation, which is the one thing that embraces the conservation challenge encouraged by Natural England’s scheme. Agriculture can make a much larger contribution to the economy given the investment it contributes.
There are three things I wish to mention briefly: education, the Arthur Rank Centre and rural crime. Many noble Lords have mentioned the importance of skills, which is second to none. Education starts with schools. There is an organisation called FACE—Farming & Countryside Education, which helps in schools. It is not very big. The organisation visited 362 schools last year, representing more than 18,000 pupils and worked with a further 12,000 pupils in 137 schools.
The Rank centre combines a lot of the organisations that support farmers in one form or another. It was started by that great entrepreneur himself. The centre pulls together many bodies and organisations by identifying the needs of local communities. It is a progressive organisation which recognises the many risks of living and working in the countryside. Its leader often reminds us, talking of risks, that Jesus never said, “Blessed are the cautious”.
Rural crime has already been covered by the noble Earl but I hope the Minister can agree that we need an adequate police protection system in rural areas. In many areas lengths of cable have gone off the electric poles, taken overnight. It is quite unbelievable. As the noble Earl so rightly said, £42 million was the cost of that crime last year. Rural theft is an issue of great concern to us and 38% of farmers have been the victims of crime, including arson, criminal damage, poaching and illegal fly-grazing. The insurance company NFU Mutual conducts an annual survey of rural crime. As the insurer covers around 70% of the rural market it provides a useful snapshot of rural crime patterns. Rural theft and its cost is of great significance in country areas. The link between rural crime and serious organised crime should not be underestimated.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank my noble friend Lord Shrewsbury for providing the opportunity to debate this extremely important topic. It will be difficult to cover everything I would like to say in my allotted time. There is much to celebrate and many projects in the pipeline, but there are also some worrying trends.
Turning first to the positive, the counties of Devon and Somerset have been successful in securing government investment for the rollout of superfast broadband. This is a long-term project running until 2017 and also covers the unitary authorities of Bath and North East Somerset and North Somerset. Connectivity is vital if we are to attract new businesses and ensure that those already located in rural areas remain competitive. Even when this project is completed, it is likely that some deep rural areas will still not be connected, with large areas where more than 2 megabytes per second will be unachievable. Somerset County Council has this week committed a further £2 million, on top of the £10 million already invested, to this project to ensure it is successful. It is to be congratulated on this.
Another major investment project bringing jobs to rural Somerset is the proposed new nuclear reactor at Hinkley Point. Based on a travel-to-work time of 90 minutes, this will bring huge opportunities for employment over a large area, but the FE providers must invest in the skills that will be needed to meet this demand.
A significant plank of the rural economy is tourism. This is especially true in South Somerset. We have many historic and beautiful villages but recent publicity has dented our image and is deterring visitors. I refer, of course, to the terrible flooding during the winter. This occurred at the very time when people plan and book their holidays and the media images suggesting that Somerset was “closed for business” did not help. While many flood-affected businesses are now thankfully recovering, there is evidence that bookings and visitors are down in Somerset compared to last year, which was also a bad year for floods. Many small businesses are linked to the tourism supply chain. I fear a similar effect on the rural economy to that suffered during the foot and mouth outbreak in 2001, when the countryside was shut down for months on end and many in the farming community, as well as businesses, went under and did not recover.
As has already been said, rural communities are suffering the loss of services and facilities. People have lost the habit of supporting local businesses. This is partly related to prices and the desire to use cheaper supermarkets, but also to shopping online. The phrase “Knowing the cost of everything and the value of nothing” springs to mind. The past 10 years have seen large numbers of village shops, small garages and filling stations, post offices and rural services generally, become unviable and close. My own council finds it difficult to resist a change of use on premises in rural areas when it knows that domestic dwellings have far more monetary value than redundant shops and pubs. Once a local facility is lost there is little chance of reversing the process. The loss of these facilities causes a real sense of isolation for the elderly who would have used these outlets to keep up with the latest gossip. It would also have been a means for ensuring that those who were frail and needed assistance were known about and looked out for.
Lastly I would like to comment on the plight of young people and young families in rural areas. The lack of affordable housing in rural areas means many young people can no longer live and work in their local communities. South Somerset has a low-wage economy but house prices are relatively high. In one market town the average wage is around £17,000 but the average house price is around £170,000. Many noble Lords will think that this is cheap, especially if they live in London, However, there is a huge affordability gap and many young people will just never get on the housing ladder. Wages in remoter rural areas will be even lower, while house prices have been pushed sky-high because our villages have often become the target of second-home owners, who visit on the odd weekend.
Current youth unemployment statistics indicate that 2.46 million young people in England and Wales are out of work or trapped in underemployment. This is 40% of the youth population, compared to 28% of adults aged 25 to 64. Many of these will be in urban areas, but rural communities also have problems with finding jobs for their young people. There is a lack of apprenticeships to meet their needs. Young people often suffer a double whammy. While those in rural areas are transported to and from school by bus during their education, as soon as they need transport to begin their road to independence, there is nothing for them. If their village has a bus, it will only be during the working week and perhaps just one or two a day. There will be nothing in the evenings when they wish to hang out with their friends, or go to the cinema in the nearest town, which might be some 15 miles away.
It is not just the young who suffer from the lack of transport. This also affects the elderly. A trip to the doctor’s surgery, the library or just into town for a cup of coffee and a change of scenery becomes a major expedition which may require a costly taxi trip. Having recently broken my leg and having had recourse to taxis both at home and here in London, I can bear witness to just how much more expensive a taxi journey is in the countryside compared with London; it can be as much as one-third more.
There are many other areas that I could cover, including the loss of employment land, the reluctance of some communities to welcome housing development, the viability of our market towns and the skills agenda, but I am sure that others will cover these areas during the debate. Sadly, there is no magic wand to be waved here, but I look forward to the Minister’s comments at the end of this interesting debate.
Lord Cavendish of Furness (Con)
My Lords, I thank my noble friend for securing this debate and congratulate him on its introduction.
I need to declare my interest rather comprehensively today, since much of what I want to say relates to what I do and have done for these past 40 years and more. I have a beneficial interest in a landed estate based mainly in south Lakeland. The estate’s activities include farming, forestry, leisure, minerals and housebuilding. We own and run a racecourse and have a full-time payroll of 250 people, 150 of whom are engaged in extracting, processing and selling slate, more than half of which is exported.
I have intervened on various occasions in debates on this subject. Almost two years ago to the day, there was a debate introduced by my noble friend Lord Jenkin, with his usual authority and command. I joined others on that day in highlighting the role of SMEs and their potential to lead us out of those dark days of recession. Some harsh truths were explored that dealt with the obstacles that lay in the way of recovery. Today, while everyone can agree that a huge amount remains to be done, it is fair to say that the performance of the British economy is not just better; it is better by magnitudes more than any of us had reason to expect on that July morning two years ago. Credit must go to enterprises large and small in rural areas for the significant part that they have played in turning the economy around.
However, since in the past I have been critical of things done or not done by this coalition Government, I feel entitled to offer them sincere congratulations on their contribution to the national recovery that we are witnessing today, and for what they continue to do. Only recently we saw the introduction of the small business Bill, which represents a serious effort to relieve the burden of regulation on small enterprises and provide better access to public procurement opportunities. Two days ago saw the Second Reading of the Consumer Rights Bill, which goes further than the title suggests and, I believe, will be good for business and growth. The Government have helped, and they seem on track to do more for small business and the rural economy. It is in that spirit that I draw attention to those things that still need to be resolved. Some of them, I am bound to say, are defects in our national approach to business and are largely outside the responsibility of government.
There remain some seemingly intractable long-standing problems. Others are probably better qualified to speak about this, but every survey suggests that there is still a long way to go in providing better broadband coverage in the countryside, and there is compelling evidence that this is harming rural enterprise. Some 80% of adults polled last summer said that nothing would have a greater impact on their enterprises than improved broadband provision.
The same could be said about mobile coverage. Visitors that I have spoken to from Africa, India, Australia and America find it beyond belief that they cannot use a mobile telephone when they are in Cumbria, a place that, after all, seeks to attract tourism. I hope that the Minister will respond to those anxieties. When he does, will he tell the House whether he feels that there is enough competition in the provision of these services?
I hope that the Minister will also tell us whether there are discussions with planning authorities—a matter brought up by the noble Earl in his opening remarks—given that planning delays are an obstacle to economic growth in rural areas. It is clear to me that these barriers to rural growth go beyond the well understood and largely quantifiable harm that they inflict. What none of us can say for certain is what effect these barriers have on people who are thinking of investing and are deterred by these structural weaknesses.
I shall touch on some other problems that need to be resolved and fall mostly, but not entirely, outside the scope of the Westminster Government; they are cultural in character. For all my time living and working in Cumbria, both as an individual and as a local councillor, virtually every visitor attraction and every business offering hospitality was underinvested. At intervals you could maybe attribute this to the fiscal climate, but even when credit was plentiful and the national economy was expanding there persisted a culture of low expectations. With any business, but especially with the visitor service and hospitality industries, it has always been self-evident, I would have thought, that even small and regular improvements pay rich dividends. It is gratifying to see at last this is being recognised, albeit slowly.
However, I believe that, as has been mentioned, there is a link between the tax regime, both direct and indirect, and the willingness and ability of small businesses to invest and reinvest. Indeed, the tax regime deserves more study as it applies to the rural economy. As a matter of equity, it may be worth pointing out that under the current local government financial settlement, rural residents will pay council tax that is on average £88.36 higher per capita than will urban residents, but the urban residents will receive £169 more in government funding. I wonder whether the Government might reflect in the next round whether it is fair for the settlement to be driven purely by population density, when you consider the additional costs of essential services that arise as a consequence of rural remoteness.
Low personal taxation is also a great spur to partnership and collaborative endeavour. I well remember that in the punitive days of high taxation it was impossible to work with other partners, as we were all striving to get different outcomes from our business. It is an excellent feature of the new age that we can all work together. My local village, called Cartmel, where we stage our national hunt racing, is also home to the village’s famous sticky toffee pudding, a world-class Michelin starred restaurant, a cheese maker, a meringue maker and a microbrewery. At the heart of all this is the glorious Cartmel Priory, whose vicar is also chaplain to the racecourse. Most of us, including the church, have subscribed to what is called a pop-up village, a collapsible edifice that goes on tour showcasing our various enterprises. I wonder if it is a coincidence that—rather bizarrely, I admit—the New York Times listed Cartmel as one of the 52 must-see destinations of the world. I make the serious point that local partnerships spawned through a communality of interests promote prosperity, and there is much pleasure to be had from taking part in them.
Many of the solutions for a healthy rural economy should remain in the hands of us, the local people. However, there is no escaping the truth that leadership in the countryside is at a premium. Whether it is attracting people to run the local institutions that we enjoy and benefit from, or whether it is drawing people into local government, it gets harder and harder. What is the reason for this? Well, why should they participate? Successive Westminster Governments have reduced local government to a shadow of what it used to be. They bully and harass what is left and send in power-crazed, unelected and unaccountable quangocrats to boss us about and, on a bad day, wreak havoc with our environment. If there is to be sustainable rural prosperity, local autonomy must be established; that would probably take a generation but it would be worth starting.
I also think that Whitehall and the Government should be a little more careful who they listen to. There is a breed of mostly men whom the BBC would describe as business leaders. More recently, these people are describing themselves rather condescendingly as “we business leaders”. They make statements on behalf of business that are certainly unrepresentative of many of my local SME friends and colleagues. There are people speaking on behalf of the CBI who have never made anything, done anything or taken a risk. Many large companies are not just indifferent to smaller ones; they are hostile to them and ruthless in their dealings with them.
I see that my time is up. I am not blind to the risks that lie ahead but I cannot remember a time when I felt so optimistic or exhilarated by my local economy; there is a buzz about the place. I see a bright future for farming. The Minister has dealt with the problems of the CAP, and he does not need telling that farming is a long-term business.
Lastly, Cumbria has the great good fortune to be attracting very significant investment in the near future. Many billions of pounds are coming its way. In short order, solutions must be found to cater for increased demand in all sorts of areas. It occurs to me that there is no precedent for such a combination of events on this scale. I ask my noble friend if it would be worth considering the possibility of inviting these major players to join forces in bringing about some front-end infrastructure investment in their own self-interest. If so, could the Government have a role in brokering such an arrangement?
Lord Curry of Kirkharle (CB)
My Lords, I very much welcome the opportunity to debate this important issue. I am very grateful to the noble Earl, Lord Shrewsbury, for stimulating this debate. I need also to declare a number of interests. I farm in Northumberland; I am a trustee of Clinton Devon Estates in Devon; I am chair of the Waitrose farm on Leckford Estate; and I am a member of the NFU and the CLA, along with other various interests.
I will not try to duplicate the comments already made by noble Lords, which I fully endorse. I particularly endorse the comments made by the noble Lord, Lord Plumb, on the importance of education and the role of FACE—Farming & Countryside Education—and how important it is to ensure that young people have a good understanding of farming, food and the countryside.
I want to comment on three specific issues regarding the rural economy. First, it is difficult to define. The rural economy does not have a ring-fenced border: it merges into urban and city economies. For rural businesses and enterprises to succeed there needs to be a recognition that rural, urban and city are interdependent. Too often in the past—and it is still a serious risk today—government policy, and therefore government spending, has been focused on cities and urban areas without appreciating that an inclusive policy that embraced the hinterland would be more effective.
City deals are a current vehicle for stimulating economic growth and I understand why. However, there are very few parts of England that are more than 15 miles from a city in this densely populated country of ours—although that is not quite so true of Scotland and Wales. Rural areas have suffered in the past through urban-centric policies. The rural development agencies, with few exceptions, struggle to embrace the rural economy. Having been established initially to deliver urban regeneration, they remain committed to that cause. I worked closely with them on the sustainable farming and food strategy during the 2000s.
The local enterprise partnerships are now crucial to this issue. They, too, in the main, are primarily focused on urban and city areas, so we need, with the help of Defra and the Minister, to ensure that they firmly embrace rural issues and the rural economy within their remit. With their expanded role to help and administer rural development funding they need knowledge on their boards of the rural areas they cover. They need appropriate consultation mechanisms to ensure that they are spending funds wisely. The LEPs need to develop strategic plans that see the integration of rural and urban within a single plan, as I said at the beginning. To present the option to businesses looking to locate into an area with either a rural or an urban location would be a step forward.
The rural areas of Britain have so much to offer in terms of quality of life, the working environment, parking and so on. I ask that the Minister satisfies himself that the LEPs have strategic plans that they implement and that recognise the importance of rural areas.
My second point is one that has already been made and will be repeated, I am sure, a number of times this afternoon—that is, the importance of agriculture within the rural economy. I continue to hear lots of comment about: the relative value of energy generation and how that could dwarf the value of agricultural output; the importance of tourism and how that could put farming into the shade; and that diversification away from agriculture and other business activities contributes far more to the rural economy than agriculture does. All these things could be true; we definitely need a diverse rural economy. As the noble Earl, Lord Shrewsbury, said at the beginning, the more diverse the better. We need to create employment and wealth to sustain rural communities and maintain rural services. We need affordable rural housing, as has been mentioned already. We urgently need high-speed broadband in every hamlet.
I want to give an example of what is possible. In the farm from which I took my title, Kirkharle, which is where we started farming in 1971, I employed two young men. Latterly it was farmed by contract and no one was employed directly. Through the development of rural business help and a retail visitor centre, 13 businesses are now established on that holding, employing about 30 people; so it can be done. The legislative framework within which rural businesses operate is also important; the noble Lord, Lord Plumb, referred to that. I congratulate the Minister on departmental progress in that area. There is still much more to be done.
I stress that agriculture is the platform on which to build our diverse rural economy. Mention has been made already of the dreadful experience in 2001 of foot and mouth disease, when the whole rural economy was shut down. Farmers have buildings; they have housing plots, with planning permission; they live near to villages. They can be the engines for enterprise and innovation through diversification as well as contributing to the nation’s food security through efficient food production.
My final point is to stress the importance of the work my noble friend Lord Cameron is engaged in in seeking to rural-proof government policies. We need to go further than has been the case to date, to ensure that impact assessments undertaken for new legislation include not just the impact on business, as they do now, but specifically the impact on rural business. That is very important.
I have already apologised to the noble Earl, Lord Shrewsbury, for the fact that I need to leave to go to a long-standing engagement. I apologise that I will not be able to hear the rest of the debate, but I will read Hansard with keen interest.
The Earl of Caithness (Con)
My Lords, I, too, am grateful to my noble friend Lord Shrewsbury for introducing this debate. It is an important topic for us to be covering at present.
I am particularly grateful to be following the noble Lord, Lord Curry, for two reasons. First, he started with a point that I wanted to raise; that is, how difficult it is to define the rural economy. I have different figures regarding the benefit of the rural economy and there is a difference between those figures of well over 50%—so it depends what basis the figures are on. One must of course remember that the rural areas cover not just those lovely little green fields outside towns in Sussex and south-east London where people could be walking today, but the wild moors of Scotland, which in six months’ time will doubtless be under four or five feet of snow. People have to live, work and earn their living in both those circumstances, with whatever variety of weather nature throws at us.
The noble Lord, Lord Curry, also mentioned Kirkharle. I mentioned Kirkharle in the tourism debate in your Lordships’ House on 12 June. I am glad to see my noble friend Lord Gardiner of Kimble on the Front Bench. He answered that debate; he knows the points that I raised, so I will not go through them again. No doubt he will bring them to the attention of my noble friend the Minister who is going to reply.
The noble Lord, Lord Curry, mentioned what happened at Kirkharle and I want once again to mention what has happened at the Castle of Mey, of which I am a trustee. That now employs 50 people during the summer months, six on a full-time basis. That is what is keeping the rural economy in these remote rural areas going.
The question of broadband has been raised, so there is no need to reiterate that. My noble friend Lady Bakewell mentioned the date of 2017, but that covers only 95% of the UK. The remaining 5% will be in rural areas and they are going to be hugely discriminated against unless further action is taken. I ask my noble friend the Minister when the Government’s response is expected to the Law Commission review on the Electronic Communications Code. This will be an important step forward, because the present position is unclear and inaccessible.
I will move now to an old pet subject of mine—that is, housing. I used to be a land agent and was also consultant to an estate agency, so housing has been in my life since I became qualified many years ago. There is a balance to be struck between new housing and agricultural land, as my noble friend Lord Plumb said. Indeed, we discussed this many times in the agriculture committee of your Lordships’ House. But, undoubtedly, agricultural land will have to be surrendered, and quickly. The present situation with regard to affordable homes in the countryside is getting much more difficult. I remember how difficult it was to resolve when I was a Housing Minister more than 25 years ago, and it is much more acute now. It is a very difficult problem to resolve but when one flies over our green and pleasant land, as I do on a fairly regular basis, one sees many areas that could be developed reasonably, without causing long-term damage to the countryside or affecting necessary agricultural production.
My noble friend Lord Shrewsbury mentioned house prices. If we get more development in rural areas, there must be a greater chance of keeping open the post offices, shops and pubs which are closing at present. My noble friend Lord Shrewsbury also mentioned country sports. These are immensely important, particularly in the more remote rural areas. In Scotland, they are a vital part of how the countryside and local villages operate. Surveys carried out in the rest of the UK and in Scotland show how much country sports are welcomed because they bring in extra tourism and extra finance and people who spend money. That is what is crucial. It is very nice to have our pretty rural areas but, unless people are active there and tourists and visitors bring in money, those pretty little areas will remain just that and will not be places in which people can earn their living.
I conclude by referring to the importance of investment. There are two types of investment: government investment and the more important private investment. The key to encouraging private investment is stability, whichever Government are in power in this country. Unless one has a consistent policy, people will not invest in the countryside in the way that they should. Therefore, stability is hugely important. There are enough problems given the whole question of the economy and the incidence of diseases that are unique to the countryside as opposed to urban areas.
I urge the Scottish Government to be very careful how they tread with regard to country sports, the countryside and its ownership because a delicate balance has to be struck. When it works well, it is very good and beneficial for all and for the economy as a whole. However, if one tinkers with it and tries to amend it, it will very easily collapse like a pack of cards.
The Lord Bishop of Oxford
My Lords, I, too, am grateful to the noble Earl, Lord Shrewsbury, for giving us this opportunity to debate this matter. We all approach this important subject from different angles. I want to emphasise one that is economic and the other that is personal in the sense of our own personal investment and commitment. I serve a diocese which is largely rural although it has large centres of population such as Oxford, Reading, Milton Keynes and Slough. However, the rural expanses of Oxfordshire, Buckinghamshire and Berkshire are considerable, with 815 churches and 650 clergy, all of whom are strongly connected to the all-round flourishing of our diverse communities.
The economic vulnerability of many rural areas is well known and has already been rehearsed this afternoon in different ways. I simply wish to highlight one particular element of that vulnerability, which is the plight of micro-businesses, which I come across a lot. Businesses with fewer than 10 employees make up half the employment in rural areas, yet it is these businesses that find it most difficult to access the appropriate advice, training and relatively small-scale grants and funding which they need to develop and expand. It appears that there is limited practical help for micro-businesses and business start-ups, with advisers tending to be professionals rather than entrepreneurs, which means that their advice is not always appropriate. However, the Centre for Entrepreneurs says that micro-businesses have been the largest contributors to new jobs in the United Kingdom over the past five years.
It is very good that the rural growth network programme has operated pilots in five areas to reduce barriers to economic growth in the countryside such as shortage of work premises, the slow internet connections we have talked about and business communities being spread out over wide areas. The churches’ contribution in this connection is through the Germinate! programme at the Arthur Rank Centre, which seeks to encourage micro-businesses. This is a highly practical six-session rural business start-up course, the pilots of which were very well received. It will be rolled out into a national programme to be delivered locally through community groups and churches. This programme is being delivered and developed alongside something with the rather evocative title of beer mat mentoring. This initiative has been established for some years and comprises monthly meetings in pubs of new entrepreneurs and old hands who offer practical mentoring accompanied by liquid refreshment—orange juice, I assume.
I said that I wanted to emphasise two angles—one economic and the other personal. By personal, I mean the investment that comes from people of good will investing their time and talent in the future of the countryside and the communities in which they live. That is where our churches and schools come into their own. So often the church and the school are the focus of community life, particularly when, as we have said, the village shop and pub have vanished. The school is often the hub of the community and needs our investment of time and talent. Sixty per cent of village schools are church schools and in the new educational landscape that we have not all of them are safe. However, they can group together in voluntary clusters or multiacademy trusts, and in that way they can gain the advantages of economies of scale and so on. For all sorts of reasons, we need to protect these schools. I very much hope that the Department for Education will not resort to a philosophy of “the weakest to the wall” with these small schools because small rural schools are so often worth their weight in gold, as the heart and hub of our rural communities. The Church of England will publish a report very soon on how to support our rural schools effectively.
A practical appeal that I often make is for capable people to volunteer to be school governors. Such people are key to ensuring success in this uncertain environment. I think that the Church of England already has 22,000 foundation governors in its schools but obviously community schools need high-quality governors just as much.
Our rural areas need both kinds of intentional support: economic—I have just highlighted micro-businesses—and personal—people who will make that personal investment in schools and communities. There is much more to be done.
The Earl of Arran (Con)
My Lords, as we move towards the 2015 general election, clear policy direction is emerging from each party regarding their manifestos. The Chancellor, for example, fired an opening shot last week in Manchester proposing the building of HS3 and the development of a northern city linking Manchester and Leeds to rival the unstoppable growth of London. This suggests that the next election seems to be urban-blinkered and will focus on the growth of cities, where more than 50% of our population already live.
What, however, does this mean for the rural economy? Where does it feature as a national priority? Should the rural economy be taken more seriously if we are to avoid creating a two-speed economy? Nationally, this sector contributes £211 billion every year—nearly 20% of national wealth creation. There are more than half a million rural businesses and 3 million employees. Although rural areas have 20% of the national population, they have 30% of the total number of businesses, and that is growing. There is clear evidence, supported by the Commission for Rural Communities, that this sector could be worth an extra £347 billion if policy encouraged rural business growth.
Where I live, in the south-west of England—no finer place—the rural areas are home to more than 50% of the population and its success is vital to our future. It has quietly battled through the recession and not only sustained its position but continued to add jobs and produce wealth. Without clear support and direct qualities, however, this growth will not continue and a huge opportunity will be lost. What could also be achieved from a concerted campaign is new hope for those who live with the day-to-day problems of poverty.
An alarming new survey has revealed that one-third of households—750,000 homes across the south-west—are so deprived that they are going without three or more of the basic necessities of life. Many of these things we should take for granted, such as eating a balanced diet, heating or maintaining our homes, taking part in leisure activities, and even the ability to celebrate our birthday. All are, however included in this devastating report. What is also clear is how these problems are masked in the rural economy where declining village services, lack of access to public transport and, crucially, access to work opportunities represent a growing problem for support services and the welfare system. Should we be surprised that food and clothes banks have become an accepted normality in 21st-century Britain?
So what is holding back growth and what should be done? Again the evidence is clear. The barriers include affordable housing, transport infrastructure, communications infrastructure, access to finance and investment in the agritechnology sector. All of these have been mentioned to some extent this afternoon, but they are particularly important.
By looking at a number of examples, the reasons why growth is being stifled are clear. First—and again this has been stressed so clearly—there is the issue of affordable housing: the latest figures show a shocking state of affairs. Housebuilding has stalled so much in the south-west that the homes shortfall has grown by 36,000 properties since the last election. Around 60,000 homes have been built across our six counties in four years, but we need 96,000 to meet estimated annual demand. In Devon, Somerset and Cornwall, the housing crisis is arguably the worst outside London with house prices in places more than 10 times local wages. This means that just 6% of homes are within reach of a typical working family on an average income. In some areas this reduces to 1%. This has a disproportionate impact in rural areas and is forcing too many younger people to abandon rural life and often the south-west altogether. Government and planners must both shoulder the blame for this crisis.
Secondly—and I make no apology for mentioning this once again—there is rural broadband, arguably the single most pressing issue for the rural economy. Who would start a business today without superfast broadband? Despite numerous initiatives and some recent new investment in rollout programmes in the south-west, there is a damning Public Accounts Committee report on rural broadband delivery. Even after the investment is completed, more than 50% of the rural population will have to accept broadband at less than a tenth of the speed of urban areas, as my noble friend Lady Bakewell has already mentioned
Thirdly, I come to agritechnology: George Eustice, the Agriculture Minister, is the first to admit that we have spectacularly failed to invest in agricultural technology and science. Product development has stalled and many rural environmental schemes are creating unintended consequences in terms of pest controls. The sad story of bovine TB and clear evidence of growing tick-related infections are part of this evidence base. We need to set new horizons for a 21st-century farming industry with leading-edge products and land management together with the necessary skills to sustain delivery.
I am very grateful to my noble friend for introducing this debate. For as concrete steals across the western world, rural affairs take an increasingly second place. That is wrong and very stupid. Let it be clearly understood: the rural economy is a unique asset for this country. We are squandering it and thereby wasting a huge potential for the future. As much as I dislike them, the establishment of a royal commission on the state of the rural economy would be a minimum action if we are to avoid becoming even more urbanised.
Lord Trees (CB)
My Lords, I add my thanks to the noble Earl, Lord Shrewsbury, for initiating this debate. I suggest that the rural economy is not just important but crucial to the well-being of the nation. A vibrant rural economy sustains our countryside, which in turn nourishes us spiritually—as an outdoorsman, a mountaineer and naturalist I value that hugely—and nourishes us literally. It is food, livestock production in particular, that I want to concentrate on today. After all, the production value of the livestock industry in the UK in 2013 was more than £12 billion.
We take food too much for granted. That is hardly surprising when one walks into a supermarket and sees the shelves groaning under the weight of food. But it was not, of course, always thus. Like many in this Chamber, I grew up, for the first few years of my life, with food rationing. Yet by the 1990s, the political view was that feeding the nation was not an issue. We lived in a settled world with global free trade and in a wealthy country, so we could buy whatever we wanted. If Polish milk could be bought cheaper than British milk, so be it. That was a complacent view then and is certainly a complacent view now. Thankfully, there has been a welcome political change and it was perhaps Hilary Benn who first signalled this at the Oxford Farming Conference in 2009, when he said:
“I want British agriculture to produce as much food as possible. No ifs. No buts”.
The current Secretary of State has said similar things.
What has happened to cause this change? Globally, we realise that this is not quite such a settled and peaceful world. Currently, when we think of Ukraine and Russia, we think of gas, but we should also think of wheat. If Ukraine implodes and Russia restricts wheat exports, as indeed it did in 2010, we will still be able to get wheat but the price will rise considerably. Political unrest means shortages, price increases and the potential for food to be used as a weapon.
Globally, more land is being used to produce biofuels. In fact, more than half the sugar cane in Brazil is now grown to produce ethanol. Climate change affects our global ability to produce food and rightly causes us to question the carbon costs of international freight. On top of all these factors looms the sword of Damocles of population growth—set to reach more than 9 billion by 2050. That is compounded by the rapid and dramatic change in the dietary habits of the fastest-growing populations, namely those in Asia. In 2000, the World Bank estimated that world demand for meat would rise by 85% by 2030.
All these factors amount to increasing competition for food resources, so food security has become an important issue. It is not the same as self-sufficiency, but a reasonable degree of self-sufficiency provides political and economic security, control over our animal welfare standards and a measure of biosecurity in that the less we import the less likely it is that we will import something undesirable. However, what has happened in the UK in the past two decades is that self-sufficiency—meaning food products that we can produce here—has declined from approximately 87% in 1995 to around 76% now. I suggest that this is dropping to an undesirable level. With increasing competition for land use in the UK, we need to maximise our food production at the same time as minimising pollution and greenhouse gas emissions. That in turn requires investment in farming technology and livestock health. The recent government agri-tech strategy is a welcome initiative but the first-round bids amounted to more than six times the funding on offer.
Investment in livestock health can not only increase productivity but also markedly reduce greenhouse gas emissions. For example, one particular condition of dairy cows causes up to a 24% increase in greenhouse gas emissions per unit of milk produced. The greenhouse gas emissions produced by lambs growing to market weight can be reduced by 10% if gastroenteric worms are properly controlled. As well as primary research, we need translational research to deliver to farmers the benefits of more basic research.
Finally, as others have said, these measures need to be supported by investment in rural communications, both digital and physical. Coupled with this, we need to ensure investment in the rural provision of veterinary services and surveillance. Rural veterinary practices face a challenging economic environment. They are significant rural SMEs and deliver vital healthcare to improve livestock productivity, ensure animal welfare and provide front-line surveillance for highly infectious and perhaps exotic disease. The government veterinary surveillance system is currently undergoing major restructuring and serious concerns about this have been raised with respect to animal and public health by the Royal College of Pathologists among others. It is essential that any changes ensure that we maintain and strengthen our disease surveillance capacity.
I remain optimistic, however. We have a resilient farming community and a dynamic and entrepreneurial veterinary profession. However, the ability to continue to contribute substantially to the provision of nutritious and affordable—that is an important word—food to the nation will crucially depend on a recognition of the importance of this national industry with concomitant private and public investment and, I suggest, some co-ordinated, long-term and strategic planning of land use.
The Earl of Courtown (Con)
My Lords, I join other noble Lords in thanking my noble friend for instigating this important debate on this subject, which, if anything, we should have the opportunity to debate more frequently.
I realise that there is no intention, but sometimes those in the countryside feel let down by the urban majority. If we had had this debate 20 or 30 years ago, it would have concentrated largely on forestry and agriculture. Now, for example, where I live in a rural area of Gloucestershire, we have tourism, manufacturing, IT service industries, mineral extraction and even, in one of our old air bases, the breaking up and recycling of old airliners. This raises the question of whether the rural economy is any different from more urban or traditional manufacturing industrial areas. I would argue that, apart from the environmental capital and the stewardship of agricultural land by the farming community, there is very little difference.
Much has been covered by other noble Lords, so I will try not to repeat too much of what has already been said. We have spoken at some length about broadband. In the past, when we have debates on the economy or the rural economy, I always have asked local businesses what is at the top of their shopping list of what they require for a correct environment in which to make money. In the past 10 years, they have found borrowing difficult or unavailable. Finance has been the big problem. This has prevented investment in SMEs, the backbone of our economy. My right honourable friend the Chancellor’s economic plan is helping these SMEs to thrive. However, the difficulties with access to broadband cannot be underestimated. This morning, I read about a business in Somerset that sells cut flowers and uploads its photos on to the internet. The lady in question was up at 5 am today because it was the only time when she could upload these pictures. I know that supplying faster broadband is a priority for the Government, but where the infrastructure is outdated it will be some years before we gain from faster broadband. This is the key to many of the problems in rural areas. I do not think that there are any plans to renew our local telephone exchange, but I gather that that is one of the reasons why we have very poor broadband at home.
Also mentioned has been the factor of mobile phone coverage. Businesses operating anywhere these days must have mobile phone coverage. Why on earth can I get perfect mobile phone reception at the top of an Alp in Switzerland but if I am on the road between Cirencester and Lechlade, there is no coverage whatever?
The other important thing is logistics, and I have been looking at the transport situation. Where I live we are served well by two motorways and a pretty good train service but, in addition, there is a trans-European road network that stretches from the south of Spain to Ross-on-Wye. Apparently, there is only one two-mile stretch on the whole of that journey that does not have a dual carriageway, between a place called Nettleton Bottom and Birdlip. Here there are daily delays in traffic and, sadly, crashes and fatalities on many occasions. Can my noble friend the Minister update me on any plans for the building and construction of what is known locally as the “missing link”?
Another aspect that has been touched on is tourism and how important it is. It came to my attention earlier today that a family of wild beavers can now be found in Devon. I gather there are plans to move those beavers to an animal park. Surely it would be better to leave them to be examined and used for research in the wild, and to aid tourism in future.
I will finish now, but I look forward to hearing the responses of my noble friend the Minister.
Lord Cameron of Dillington (CB)
My Lords, I must first declare an interest as a farmer and a landowner. I must also congratulate the noble Earl on introducing this debate to the House.
Why is the rural economy important for the UK? Well, it is worth £348 billion. As was said by the noble Earl, Lord Caithness, there are various figures, but that is the highest I have seen. It is a huge amount. The countryside also hosts more than half a million businesses. There are actually more manufacturing businesses in the countryside than there are in the towns, so perhaps we should have combined the two debates we had in the Chamber this afternoon. Rural tourism adds £29 billion to the economy, and food and farming contribute approximately £84.7 billion. Our rural economy is vital for UK Inc, and it also provides the wherewithal to maintain and manage our most cherished national asset, our countryside, as mentioned a moment ago by the noble Lord, Lord Trees. England—not Britain—is, I believe, the fifth most densely populated country in the world, yet it still has some amazing countryside, which continues to be a vital factor in the health and well-being of our nation.
What are the Government doing about cherishing this incredibly important asset, our rural economy? Actually, they are doing quite a lot, to give credit where credit is due. For instance, the RDPE provides £60 million-worth of grants for micro and SME rural businesses. There is £20 million there for farmers and foresters, and another £20 million for skills and knowledge transfer. Skills and training used to be the major problem for rural businesses, which had difficulty accessing courses and facilities, but with the internet this is now getting better, or should be.
Talking of which, and to continue to praise the Government, the Government are putting £530 million into the rollout of high-speed broadband, which is another huge amount of money. Another £20 million is being put into rural community broadband. At this point I have to say that all the messages I have heard say that this rollout is going much more slowly than originally intended. As we have heard already this afternoon, it is causing a lot of problems. There definitely needs to be a big push to drive the actual implementation, but—bearing in mind that online shopping in the UK is greater per head of population than in any other country in the world—I believe that the rewards for doing so will be huge, if we can deliver.
Meanwhile, just to complete the picture, VisitEngland is investing £12 million in promoting rural tourism and Defra has allocated £10 million for local tourist initiatives. There are six pilot rural growth networks with funding of £15 million and a £2 million fund especially for women-led enterprises. Anyone in this House who, like me, has addressed the WIRE conference—where WIRE stands for women in the rural economy—will know that it is a pretty formidable force in our rural economy.
It would appear that the dead hand of the Treasury has been resuscitated as far as the rural economy is concerned. Even the planning system—often accused of being the real dead hand—is being loosened by a series of reforms, started under the Labour Government and continued under this Government, which should, in theory, make life easier for rural entrepreneurs, even if these reforms all too often run into the barrier of local resistance to change.
What is missing? On planning, one of the gaps is a lack of long-term vision of what makes a sustainable village, and how a good mix of young families, ample workspace and housing that is affordable for ordinary employees, or suitable for their retired parents, can be accommodated. The process for drawing up village and neighbourhood plans needs to be simplified and encouraged. However, central government must also share some of the blame for not rural-proofing all of its policies. For instance, the bedroom tax is disastrous for rural workers because there is virtually no small accommodation available in rural areas. The proposal to do away with the need for affordable homes on sites with fewer than 10 houses could be devastating for the rural workforce and the rural economy if it is implemented. Virtually all village sites have fewer than 10 houses and such an exemption could wreck the balance and likely future of a sustainable community.
Apart from good positive planning and ample affordable housing, my next ask would be for better transport, as has already been mentioned by several noble Lords. Transport is the life-blood of rural living. For the economy, we need better trunk roads to get our goods out to market and pull tourists in. I hope that the Infrastructure Bill, which I should probably be debating right this very minute in the Moses Room, will help in this respect, especially in the south-west. However, we also need better local public transport links for access to work. Big buses are hopeless, but more help for combined business and community transport would be beneficial.
There is also Wheels 2 Work. How does a young person, looking for their first job, find a job in the countryside? Unfortunately, they need their own transport to get to it. They cannot get their own transport because they have not got a job that pays the money to buy the transport. It is a Catch-22 situation. The only answer is to lend them a moped for six months. This is a brilliant scheme that costs less than jobseeker’s allowance and probably means that these kids will never be a burden on the state again. However, there is still reluctance by BIS and the DWP to save the state money by investing in these schemes.
Lastly, I make a plea for more interdepartmental rural-proofing. For instance, the Wheels 2 Work scheme, which I have just mentioned, is relevant to the Department for Transport, BIS and the DWP. They should all be thinking about it and gathering the evidence. Affordable housing is relevant to the DCLG, BIS and the DWP. Again, they need to work together to realise what needs to be done. Rural-proofing and rural understanding need to be embedded in the early stages of every department’s work.
Let us take, for instance, BIS, which is probably the most relevant department to today’s debate. The first thing to understand is that good evidence is vital to good rural-proofing. “Rural” should be a constant feature in government employment or manufacturing surveys and so on, so that rural economic needs can be assessed. Then, of course, they should respond to those needs. BIS’s agencies, UKTI, the TSB, LEPs and so on should all be asked annually to show how they have designed or will deliver new programmes and measures so that they are accessible to rural firms in all sectors. To have effective rural-proofing, you need constant vigilance.
As I think has been made very clear this afternoon, our rural economies are a crucial part of UK Inc. However, their specific problems need focus, care and attention. Only by giving that detailed attention will they be able to play their part in enriching our lives.
Baroness Royall of Blaisdon (Lab)
My Lords, I, too, am delighted to speak in this debate, and I am grateful to the noble Earl for enabling us to discuss and focus on these important issues.
Too often, when it comes to developing economic growth strategies, rural Britain is overlooked in favour of cities and conurbations, and I recognise that at times my own party has been guilty of that. However, harnessing the talents and skills of rural Britain is absolutely key to the future success of our nation. The noble Earl mentioned national parks and areas of outstanding natural beauty. I should be grateful if the Minister would agree to meet me to discuss a long-standing application from the Forest of Dean to become an area of outstanding natural beauty. We do not have a pop-up village but we do have cheese-makers, micro breweries, the excellent Three Choirs Vineyards and so much else.
As we have heard, people who work on the land make a huge contribution to the rural economy through farming and food production, and horticulture and forestry, protecting and conserving our environment for future generations and managing the impact of climate change. Yet many of those who work on the land, rather than own the land, work very long hours and are still too often poorly paid. I still lament the abolition of the agricultural workers board, which, based on the Government’s own impact assessment, will remove nearly a quarter of a billion pounds from the rural economy. As the noble Earl, Lord Arran, said, rural poverty is still a huge problem and, sadly, food banks are flourishing. Apparently 4,000 people in the Stroud district alone have had to resort to going to a food bank in the past year.
Many of the back-breaking and poorly paid jobs are now filled with people from eastern Europe and further east. It is not just in urban areas that we depend on immigrants to undertake those tasks which we no longer wish or choose to fulfil. However, the countryside today is about much more than farming and the growing tourist industry; it needs a sustainable third sector and successful businesses to thrive, as well as good public services. We need to invest in the infrastructure and businesses that drive rural economic growth, and we also need to invest in the people who live and work there.
In rural areas there is an ageing population and a high rate of youth migration. That presents a unique set of challenges and places pressures on local goods and services different from those experienced in urban areas. We want our young people to flourish, to have a good education which enables them to choose either a vocational or an academic path, and to have the skills and confidence to take advantage of opportunities in the wider world, but we also want to provide opportunities in rural areas for those who wish to stay or those who wish to return. To my shame, I do not know FACE, mentioned by the noble Lord, Lord Plumb, but I will seek to find out more about it.
We have much talent in our country and coastal towns, as well as in more rural areas. Young people should not have to leave because of a lack of jobs or because of housing costs. We have extraordinary people, including many volunteers, who are doing much to sustain and bolster our rural communities, but there is a role for an active state to support them, be it broadband or buses, affordable housing or accessible healthcare.
I am delighted that so many noble Lords focused on the crisis in affordable housing in rural areas. New homes are desperately needed and their construction drives local economic growth. On average, households need to earn £66,000 a year—more than three times the average rural salary—to be granted a mortgage to purchase a rural property. In Gloucestershire, for example, the average house price is 11 times the average wage and it would take a private rental tenant 15 years to save for a deposit in order to get a mortgage for a home. I am very proud of Two Rivers Housing in the Forest of Dean. It sustains a well maintained housing stock and builds eco-friendly homes, but many more are needed. Recently it received 360 applications for just 12 homes built in my neighbouring village of Littledean on a rural exceptions site. This is clear evidence that people desperately want to stay in their local communities.
The National Housing Federation is surely right when it says:
“Local people on modest incomes—who sustain our rural communities—are being priced out of the market, out of their communities and into towns and cities where there is cheaper housing and higher paid work”.
What are the Government doing to identify land in rural areas which can be used specifically for affordable homes? As the noble Lord, Lord Cameron, said, rural housing associations have been hit very hard by the bedroom tax. Lack of smaller homes means that even when people are willing and able to move they cannot be rehoused, so they are now in arrears and struggling with debt.
Beyond housing, the rural population—particularly young people—need to know that they will be able to find jobs which they can develop into a career. However, recent developments will not give them much confidence. Rural workers’ wages have risen slower than those in the rest of England, and rural families are already spending £2,700 more on everyday goods compared with those in urban areas.
Many noble Lords have rightly focused on the Government’s broadband rollout, which is so crucial to skill development. It is, however, delayed, and so much so that in Chew Valley in north-east Somerset—as the noble Baroness will know—they are having to turn to the independent supplier, Wansdyke Telecom, for broadband rather than BT. Infrastructure is critical to ensuring that all our regions prosper and deliver the growth and jobs necessary for our country’s success. Today my right honourable friend Ed Miliband has accepted the recommendation of a report by Sir John Armitt to establish an independent national infrastructure commission to identify the UK’s long-term infrastructure needs and hold government to account. I very much hope that the Minister will join my party in accepting this recommendation. We believe that these things are too important to be left to short-term political decisions taken in each Parliament.
As has been said, transport is a huge issue. Rural households annually pay nearly £1,000 more for transport than those in urban areas and this figure is rising. The noble Baroness spoke graphically about the problems and isolation caused by lack of transport. In Somer Valley, for instance, commuters face a 23% increase in their bus fares, with some tickets costing more than the hourly minimum wage. Yesterday I was with the Guide Dogs for the Blind Association which made me aware that the limited availability and continuing decline of bus services impacts particularly on blind and visually impaired people who are reliant on those services. The lack of audio-visual final destination and next stop announcements, particularly on buses in rural areas, is a barrier to independence and work. What are the Government doing to ensure that all new buses are fitted with this technology?
A healthy economy needs a healthy population and healthcare in rural areas faces specific challenges which are very different from those in the urban environment. Last year, the Environment, Food and Rural Affairs Select Committee reported that,
“rural authorities receive lower grant allocations, spend less on social care, charge more for home care and allocate lower personal budgets than those local authorities serving urban populations”.
In February, the BMA warned that nearly 100 GP practices could be forced to close and that large areas of rural England could be left with no GP practice because of national funding cuts. I was interested to learn of the launch of an initiative in Cumbria, headed by the University of Cumbria, to help improve health services in rural communities. The Cumbria Rural Health Forum will focus on how best to address challenges, including the distance people travel to healthcare, managing services for the older population and poor-quality broadband and mobile services. Will the Minister support such an interesting and important initiative and, perhaps, see if it could be rolled out in other areas?
I understand that the Government do not store national statistics on the NHS, but is the Minister aware of the impact of the cuts that have been made in rural GP services? Surely he must acknowledge that, because of the ageing rural population, having a reliable and accessible GP is absolutely critical and that any loss in the service could be potentially disastrous. Of course, social care has its own problems in rural areas, especially where there are long distances for people to travel to provide the necessary care.
This week my noble friend Lord Adonis published an excellent report on how we can mend Britain’s fractured economy and put devolution at its core, ensuring that prosperity is shared throughout the whole country. For too long we have had a centralised system, which is not only unsustainable but wastes talents and skills. In counties such as Devon and Cornwall, Cheshire and Lancashire, and Derbyshire and Northumberland, the economic potential is clear but waiting to be unlocked. This means working with businesses and industry. The RDAs were making inroads but these were abolished for ideological reasons without real thought about the future. We now have LEPs and we must build on their important partnerships. One of their important tasks is to nurture and help our entrepreneurs to grow. The right reverend Prelate mentioned the plight of micro-business.
Many people in our rural areas are bursting with ideas but lack the confidence or support to grow to the next level which would enable them to employ more people and develop their market, be it local, national or international. I have met many inspirational people who have succeeded. For example, Neill Ricketts of Versarien, which is based in Mitcheldean, is working with our major universities and developing innovative technology and products, such as graphene, which will provide engineering solutions for the future. We need to celebrate their success. It is a role model for others and can inspire our young people, who can then maintain their lives in our rural areas. Too often, success is hidden. I have to confess that I was unaware until recently that I live two miles away from the only British-owned manufacturer of road sweepers, Stocks Sweepers. Great things are happening, but too often these are hidden exceptions and are not the norm.
The case for rural investment is clear and has been well made this afternoon. Labour would devolve £30 billion of central funds to regional councils, enabling them to have the power they need to shape their own communities. Building on the knowledge they have about what works best in local areas, councils would be able to invest in the skills and networks that they need. We need strong economies around the country to share the wealth of the recovery and counterbalance the dominance of London and the south-east. By harnessing the individual contributions that people in rural areas make, we can create an economic recovery which works for everyone in the country.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, I thank my noble friend Lord Shrewsbury for bringing forward this important debate and all noble Lords who have spoken for their contributions. I start by declaring my interests. I have a farm and forestry interests. I benefit from the common agricultural policy and I have a minority interest in a commercially operated lake.
Rural growth and investment is hugely important and it is an area on which we place a strong emphasis. Helping rural businesses to unlock their potential to thrive and grow sustainably is one of my department’s four strategic priorities. Almost all noble Lords who have contributed to this debate have spoken about broadband. The rollout of broadband to rural communities is a challenge and it is one of our most important tasks. It has the potential to transform rural areas, bridging the age-old gap between rural and urban areas.
We are currently investing £790 million across the country with a key focus on rural areas. Government allocations must be matched locally, so the total available should be double that figure. Under the current £530 million rollout programme, more than 20,000 homes and businesses per week are gaining access, which will rise to 40,000 per week over the summer. Projections suggest that we will reach 90% superfast coverage in early 2016 and £250 million of funding will extend superfast broadband coverage to 95% of the United Kingdom by 2017. Meanwhile, we are continuing to explore with the industry how to reach 99% superfast coverage by 2018—whether fixed, wireless or 4G. Continuing on the communication theme, we are investing up to £150 million through BDUK’s mobile infrastructure project to build new masts for areas where there is currently no coverage. I hope that my noble friend Lord Courtown, with his particular point on the road between Cirencester and Lechlade, will benefit from that. Competition between operators is also driving what is expected to be the fastest rollout of 4G networks in Europe, following the successful auction by Ofcom of 4G radio spectrum last year.
Promoting strong rural economic growth is something we can and will prioritise through the Rural Development Programme for England. Our objectives will be building knowledge and skills, about which several noble Lords have spoken; funding new and developing micro, small and medium-sized rural businesses, to which several noble Lords referred; and funding small-scale renewables and, of course, broadband. The growth programme, working with the grain of the investment strategies developed by local enterprise partnerships, is expected to generate about 8,500 jobs across England. I thank the right reverend Prelate the Bishop of Oxford, in whose diocese I live, for drawing our attention to the pilot rural growth networks in five rural locations across England. We are looking carefully at the challenges to rural businesses, such as a shortage of work premises, slow internet connectivity, fragmented business networks, competitiveness, skills, and support for micro-enterprises.
Baroness Royall of Blaisdon
Before the Minister moves away from broadband, may I ask him what speed broadband will be throughout rural England?
Lord De Mauley
The noble Baroness may ask, but I will have to write to her with the details. These pilots are expected to create up to 3,000 new jobs and support up to 700 new businesses. We will share what the RGNs learn with other local enterprise partnerships and local authorities. Moving to another of the points raised by the right reverend Prelate, as we move into the new LEADER approach, we have looked to ensure that 70% of projects directly support the rural economy and indeed all of them must make a positive contribution to the rural economy.
Another hugely important investment area is farming and food. In answer to my noble friend Lord Plumb, we aim to remove 350 regulations and improve 428 others as part of our Red Tape Challenge. Of course, the Government cannot and should not do everything, but they can and should set the conditions for growth. We are making Defra’s and its agencies’ guidance simpler, quicker and clearer, with an ambition to reduce the volume by more than 80% by March 2015.
It is so important that we support British farmers by freeing them up and investing carefully in their future. The UK has a world-class research base, to which my noble friend Lord Arran and the noble Lord, Lord Trees, referred, with an impressive track record. My noble friend is right that we have not paid it enough attention. We are investing £160 million in our agritech strategy to improve the United Kingdom’s global competitiveness. We have great research and great farmers, but we have not been so good at moving the results of the research on to farms, and that is what this is about. It is about improving yields and competitiveness, tackling pests, diseases and climate change, and improving our environment.
As my right honourable friend the Secretary of State demonstrated this week during his visit to the United States, being a prominent G7 member does not stop us taking every opportunity to promote fantastic UK produce, such as haggis, and of course the huge range of other products which we have also been promoting in places such as China and across the Far East. I mention haggis because it is a terrific example of why we are better together.
The increasing demand of UK consumers for British food and drink is a huge opportunity for us. We are working with farmers, manufacturers and retailers to capitalise on this. My noble friend Lord Plumb raised the common agricultural policy, with some criticism of its complication. We are implementing the new CAP in England in a way that seeks to minimise the burdens on farmers and the risks of fines from the EU, while delivering value for taxpayers and improving our natural environment. We have made the greening rules as flexible and simple as we can for farmers to meet so that they can concentrate on producing food and helping to grow the economy. We have also cut the number of cross-compliance measures that they have to meet to reduce the burden on them while still maintaining important environmental protections. Our decisions follow extensive engagement with stakeholders on our approach to implementation and a major public consultation.
We are delivering a new IT service to support delivery of the new CAP, and from 2015 applicants for CAP funding will use a single system that is being developed with input from them and is key in our drive to ease the burdens on them. We are also providing regular information and updates on how the new CAP schemes will work in England so that claimants and stakeholders know what they need to do to make claims.
My noble friend Lord Shrewsbury and the noble Baroness, Lady Royall, referred to protected landscapes, which benefit the wider economy by providing attractive places to live, visit and enjoy, and by delivering essential ecosystem services on which the wider economy depends. There are 90 million visitors to national parks and their surrounding areas each year, who spend more than £4 billion—a third of the total rural tourism spend—which supports 68,000 jobs. In order to help our rural communities grow and prosper, we expect national parks and other planning authorities to take a positive and proactive approach to sustainable development, balancing the protection of the landscape with the social and economic well-being of the area. Tourism has been a key driver of the economic recovery. My noble friend Lady Bakewell is right but I think she would agree that the sector displays strong growth potential, with this trend set to continue.
Last week, I was in the Isle of Wight and saw a project similar to those referred to by my noble friend Lord Cavendish. In the Isle of Wight, the Wight Marque has been launched, which local businesses are enthusiastic about and which reflects a trend around the country where businesses are capitalising on an increasing appetite for local produce.
My noble friend Lord Shrewsbury referred to post offices. The network transformation programme is not suitable for about 3,000 of them. They predominately serve small, often remote rural communities. Many are the last shop in the village: he is right. The updated network transformation programme provides for the first time a £20 million investment fund allocated specifically to this part of the network. He and my noble friend Lord Plumb raised the issue of rural crime. Both police recorded crime statistics and the results of the Crime Survey for England and Wales show that the crime rate in rural areas is lower than that in urban areas for all crime types captured. But we must not be complacent. The noble Lord, Lord Cameron, held a meeting with my noble friend Lord Taylor on 24 June. It was a positive meeting bringing together the Home Office and Defra, and both; our departments committed to work together on, for example, the police allocation formula, which is currently being reviewed.
Several noble Lords referred to the important issue of affordable housing. It is a complex problem to which we are devoting close attention. It is an extremely important point. We have ensured that rural communities benefit from the affordable homes programme. In 2011-12 half the affordable homes built outside London were in rural areas. The Government have delivered more than 5,000 affordable homes in the smallest rural communities in the first two years of the current programme to ensure that affordable homes can be provided in these smaller rural settlements. We support rural exception sites, which are small sites used for affordable housing in perpetuity where sites would not normally be used for housing. Since April, the rules on permitted development have given farmers more flexibility regarding development of redundant farm buildings.
The noble Lord, Lord Cameron, and the noble Baroness, Lady Royall, referred to the spare room subsidy. As a result of Defra’s RCPU rural proofing, the Department for Work and Pensions has reviewed the discretionary housing fund and announced a package of £35 million of additional in-year funding for local authorities, including additional support to those affected in the 21 least densely populated areas of the United Kingdom.
Several noble Lords spoke about skills. While farming is not the only rural employer, it is an example of one. The future agricultural workforce is a vital part of meeting the challenge of global food security. We want to ensure that agriculture attracts entrepreneurial, talented new entrants who can rise to the challenges and the exciting opportunities that will occur in the sector in the coming years. I welcome the work that the farming industry does to attract new entrants and to promote farming as a rewarding career. We are currently addressing a number of the findings of the Future of Farming review, on which industry and government worked together, to look strategically at the opportunities and barriers encountered by those making a career in farming.
My noble friends Lady Bakewell and Lord Courtown and the noble Lord, Lord Cameron, referred to transport in rural areas. The Government recognise the importance of public transport for both the sustainability of rural communities and the lives of those who live there. Affordable and reliable transport enables people in rural areas to access services, to be economically active, and to avoid isolation. My department works closely with the Department for Transport to understand the specific problems and impacts of its policies on rural communities. If we can resolve the broadband problems, that will also make a major contribution to communication more generally.
My noble friend Lady Bakewell referred to the results of the recent flooding in the south-west. On 1 March, the Department for Culture, Media and Sport announced a package of support for tourism businesses in flood-affected areas. Some 755 tourism businesses received support—such as in business advice, drop-in clinics and local workshops. My department has made a £10 million fund available to help farm businesses affected by recent flooding across England.
My noble friends Lord Shrewsbury and Lord Cavendish referred to tax. This area is kept under constant review. Noble Lords will accept that HM Treasury’s key focus has to be on deficit reduction and any requests for reliefs and reductions need to be compellingly argued. I shall pass on the comments of my noble friends.
My noble friend Lord Shrewsbury spoke about the rural economic benefits of shooting. I saw a remarkable project this week on the Arundel estate of the noble Duke, the Duke of Norfolk, where the biodiversity benefits of what they are doing there are very clear.
The noble Baroness, Lady Royall, spoke about food banks. We know that some of the poorest families are really struggling to afford to feed themselves. While it is not the role of the Government to control the price of food, the impact of food price inflation is a real concern. Through Healthy Start, the Government provide a nutritional safety net, in a way that encourages healthy eating, to more than half a million pregnant women and to children under four years of age in very low-income and disadvantaged families throughout the UK.
Noble Lords know that we are reforming the welfare system. We recognise the important contribution organisations such as FareShare, FoodCycle and many other food charities and food banks are making by working locally to provide good food to those who need it most. It is worth saying that year-on-year food prices have fallen for the first time since 2006. In fact, prices went down by 0.6% in the year to May 2014.
The right reverend Prelate the Bishop of Oxford made some important points about small rural schools. The Department for Education has reformed the school funding system so that it is fairer, more consistent and transparent and so that the funding intended for education reaches the schools and the pupils that need it most. That department recognises that small rural schools have specific needs and has incorporated measures to address these, including adopting new measurements to capture pockets of rural deprivation and to introduce a sparsity factor within the funding formula.
The noble Lords, Lord Curry and Lord Cameron, spoke of rural-proofing government policy. I thank the noble Lord, Lord Cameron, and his review team, including the noble Lord, Lord Curry, for their ongoing support for the rural-proofing implementation review. We are committed to ensuring that all policies take proper account of rural needs and interests. We will be open and transparent about our record on rural-proofing. That is why we set out in the rural statement a commitment to an independent review of our rural-proofing activity. I am grateful to the noble Lord, Lord Cameron, and his team, who have held ministerial-level review meetings with DWP, DECC, DfT, DCMS, DCLG, BIS, the Home Office and the Department of Health to explore what actions they have taken to rural-proof their policies and programmes. That review will report to Defra Ministers in the autumn.
I hope that that will leave your Lordships under no illusion: rural-proofing is an area that we champion strongly across government. Of course, there is much to be done, but I believe that we are making genuine progress.
The Earl of Shrewsbury
My Lords, this has been a fascinating debate; we really ought to do this more often. The countryside is a very special place. The debate has covered a wide variety of issues, not least broadband. Although I appreciate that Her Majesty’s Government are doing as much as they can to widen the scope of broadband in rural areas, it is not just the fact that a lot of the country has not been covered by it, it is the fact that it is so blooming slow. That is a real bugbear throughout the rural community, where people really rely on it, and increasingly need to.
I am extremely grateful to all noble Lords who have taken part in the debate, and I thank the Minister for his courtesy, as always, in his responses. I finish by saying that the countryside is indeed a magical and most special place, but it is also a place of serious work and investment, not simply a green and pleasant land.
NHS: Better Care Fund
(10 years, 5 months ago)
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Lord Kennedy of Southwark
To ask Her Majesty’s Government what effect the better care fund is having on the ability of the National Health Service to provide services to patients.
Lord Kennedy of Southwark (Lab)
My Lords, I am delighted to have secured this debate today. We are all getting older and living longer, and that is very welcome, as medical and scientific advances make illness and diseases that would have killed us off no longer the threat to us that they were. There is still much to do, although that progress is very welcome.
However, as a consequence, we have an ageing population, which brings its own challenges: how we care for people as they live to a much older age and more people living with long-term conditions. It has long been recognised and has been an aim of Governments to deliver better integration of health and social care and improve people’s health and well-being by ensuring continuity of care while making the best use of resources.
I am sure that, in his response, the noble Earl will tell the House in some detail about the pooling of funds and the plans for local areas, including: the sharing of data and improving continuity of care; the plans for acting earlier so that people can stay healthy and independent at home; and delivering care that is centred on individual needs, with NHS and social care staff working together to deliver better outcomes for individuals.
The King’s Fund has done interesting research in this area and made some predictions about what will be the needs, how we will be living, and the pressures that that will place on the NHS. Those are important considerations in the planning that needs to be undertaken to meet the challenges ahead.
In the next 20 years, the number of people aged over 85 is expected to double. By 2030, the number of older people with care needs is expected to rise by 61%. At the same time, we expect 40% of households to be comprised of people living on their own. The number of people with dementia is expected to more than double in the next 30 years.
It is also a fact that people from the most affluent socioeconomic classes can expect to live as much as seven years longer than those from the poorest socioeconomic classes. Those and similar statistics point to increased pressure and demand on health and social care services, and government at all levels has to respond effectively to that challenge.
The better care fund is a good initiative but, as with many other things that the Government are doing in the area of health, I always have a niggling doubt whether they will put the resources in place to deliver the outcomes that we all want. I do not doubt the noble Earl’s personal commitment but as with many things in the health and social care sector, money more wisely spent at an earlier stage can deliver much better results for the patients and cost much less to the NHS.
I am a diabetic and I declare an interest as an active member of the charity Diabetes UK. I take the example of diabetic foot care and the fact that so many people have unnecessary amputations. Those could so easily be avoided; we are just not dealing with this issue. The cost to the individuals is high and traumatic. Then there is the cost to the NHS for the operations and the aftercare, and of course the projected lifespan after that, too. We need to ensure that people are able to enjoy an active and healthy life within their own communities, thereby reducing the demand for health and social care services. Well over two-thirds of patient bed days are for people with long-term conditions and a greater emphasis on self-management programmes can help to reduce unplanned hospital admissions. Ambulatory care-sensitive conditions accounted for 15.9% of all hospital admissions in England in 2009-10, with an estimated cost to the public purse of £1.42 billion. The rate of admission for those conditions in the most deprived areas was twice that in the least deprived.
Older people who are frail are a key concern for health and social care services and are at risk of sudden decline, including falling or becoming immobile. Identifying those at risk of falls and the setting-up of fracture prevention services for older people has been found to reduce hospital admissions and the need for social care, such as admission to a care home. Care co-ordination and proper case management, if well designed, has the potential to deliver better and more cost-effective care for the individual. However, as I have said, all these things have to be properly resourced to deliver the intended outcomes and savings in the future.
Just look at the whole area of emergency admissions, which can account for 70% of hospital bed days and 80% of stays of two weeks or more. A whole range of factors are at play here for hospital admissions including age, social deprivation, ethnicity and living in an urban area. A lack of alternative options then sees people being admitted to a hospital bed. That might not be the best thing for them but there is no alternative. Then on discharge, the important thing is to have a proper discharge plan in place so that people can remain at home in the long term and regain their independence.
At this point I declare that I am a member of Lewisham Borough Council, which will be involved in delivering services through the fund. The Local Government Association expressed concerns as recently as last month, warning that a larger better care fund is needed for a five-year period, with alongside that a separate transformation fund to ease the impact of these changes. It rightly expressed concern about the lack of clarity on the future of health and social care funding, which could put at risk the efforts to integrate services. The LGA is urging the Government to commit to a five-year plan, taking us to 2020. Can the noble Earl confirm whether this will in fact be delivered? If he cannot, can he tell the House why not? As I said, my worry is that the plan will falter because its provision of resources will be too short-sighted.
I have a number of questions for the noble Earl. If he can answer from the Dispatch Box that would be much appreciated. I do not expect him to do so; all I ask is that he gives a commitment to write to me afterwards and copy that to other noble Lords who speak in the debate today. I will take each question in turn. Will diabetes and diabetes foot care be prioritised as part of the better care fund? Will dementia be prioritised as part of it? Are there any plans to change the procurement rules when implementing the better care fund? What does seven-day working for social care mean? Is it correct that the health and well-being board chairs will have to sign off their local plans? What happens if the parties involved in devising a local plan cannot reach agreement? Is the better care fund’s additional allocation of funding in 2015-16 recurring or non-recurring?
In conclusion, I am delighted to have secured this debate. I look forward to the contributions of all noble Lords, including my noble friend Lord Hunt of Kings Heath and of course the noble Earl.
Viscount Bridgeman (Con)
My Lords, I thank the noble Lord, Lord Kennedy of Southwark, for initiating this very important debate. He has rightly emphasised the need for early treatment of so many of the complaints which he outlined. It has long been recognised that there is a great need for integration of health and social care because this can support people better by improving their health and well-being by ensuring continuity of care while making better use of resources.
The basic mission of the better care fund is for health and care support to work together. From it flows, for instance, acting earlier and improving health education so that people can stay healthy and independent at home, thus easing the strain on hospitals and A&E, and from it also flows care which is tailored to individual needs with NHS and social care staff working together to provide seven-day services with a named co-ordinator.
The better care fund of course faces two challenges coming from very different directions. The first is the funding crisis common to the health sector and local authorities and the second is the increase in life expectancy mentioned by the noble Lord. Nevertheless it is a bold initiative. I welcome the tight but, I hope, not bureaucratic control over the operation of the scheme. One billion pounds of the fund will be tied to local performance. Peer support will be available to those areas which do not perform well. I also welcome the flexibility of the scheme by which £3.8 billion will be pooled in local areas, but the two services will be permitted to go further with additional funding where local conditions make this appropriate. There is a clear mandate for control of the funding to rest with NHS England which in turn will require clinical commissioning groups to use powers under Section 75 of the National Health Service Act 2006 to set up pooled budgets with local authorities. I welcome the checks and balances, for instance, that money from a pooled budget can be spent only with the agreement of both parties, with such spending agreed with the health and well-being board. In cases, which I hope will be rare, where the scheme is manifestly not working, it will be the duty of NHS England to intervene and instruct the CCG to come up with a solution.
Not for the first time, the King’s Fund has come up with a well researched document which draws together a number of studies relevant to the better care fund. It has produced a number of very practical suggestions for making this body viable and effective in its early years. The King’s Fund’s work contains its customary bibliography, and I am sure that the Minister, his department and, indeed, NHS England have taken note of the many constructive suggestions which it contains. The study fully acknowledges that this is a difficult time for the NHS in terms of funding. For instance, of the total of £3.8 billion budgeted for the fund, £1.9 billion will come from allocations to CCGs. It will not be new money. Guidance has come from NHS England that hospital emergency activity will have to reduce by 15%. We are in all-too-familiar territory here. Where patients go, whether to their GP or to A&E, justifies a debate on its own. Suffice it to say here that if the 15% reduction in emergency activity is to be reduced to assist the funding of the BCF, for the hospital it is a matter of considerable urgency.
Many of the recommendations contained in the King’s Fund document are contained in the admirable house of care programme developed by NHS England, which outlines so much of what the BCF should aim to achieve. I shall list only some of them: greater forward planning for LTC patients; involving patients in the self-management of their health; greater access by patients to their health records; agreed common goals for the NHS and care services; and emphasis on staff training. All these are common-sense aspirations—there is no rocket science here—but it is useful to have these brought together in a user-friendly document.
I return to the subject of the 15% reduction in hospital admissions. The Nuffield Trust, in particular, has made a study of more than 30 integrated care programmes, many of which had reducing urgent hospital admissions as a key goal. There have been a number of press reports suggesting that there is a real danger of financial collapse in the hospitals sector. I hope the Minister will confirm that across England there have been a number of pilot operations of the BCF model. I should welcome an update from the Minister on the results of these pilots and his reassurance that this very real problem relating to hospitals is being addressed.
Finally, I think it is true to say that attention has rightly been concentrated on getting the BCF off the ground in 2015-16 and in its first year of operation. Here I take up the point made by the noble Lord. I note that the Local Government Association chairman, Sir Merrick Cockell, while giving his strong support to the BCF is concerned about the longer-term funding, saying:
“Health and social care partners have shown their confidence in joining up their funding by putting in additional money over and above what was required by the Department of Health, but despite this there has still not been any indication that funding will be extended beyond this first year”.
I, too, hope the Minister will be able to say something about the Government’s plans for longer-term funding of the better care fund, the concept of which is welcomed from all quarters.
Lord Turnberg (Lab)
My Lords, there is no doubt that care in the community is grossly underfunded. There are too many elderly people living alone and in need of care that they are being denied. We know that social services are now only able to provide care for urgent cases and then often only a quite inadequate 10-minute visit to help those people get dressed, bathed or fed. We know, too, that GP services are extremely stretched in many parts of the country. I do not think the BMA was simply crying wolf in its recent pronouncements when it said that it is having great difficulty coping with its growing workload. On top of that I hear it is having problems recruiting in general practice, especially in the north.
Now we hear from the Local Government Association that its budgets will have been cut by 15.5% by next year and that it is looking at a black hole of a £5.8 billion deficit by then. It is against this background that we see this inexorable rise in demand for both acute and longer-term care. On the one hand, the increase in numbers of those aged over 80 is heartening and is a tribute, at least in part, to modern medicine, but equally it is troubling that we have to cope with them accumulating multiple illnesses and disabilities. The prospect of dealing with more than 1 million people with dementia by 2030 is not exactly comforting either.
It is irrefutable that social care services need more funding and the Government’s response has been to rob Peter to pay Paul by taking this £3.5 billion out of the NHS and handing it across. Social services certainly need it and the rationale for doing so might seem reasonable on the face of it. After all, the budget for the NHS is so much bigger at more than £100 billion a year and, of course, we know that our hospitals are full of patients who would be much better off at home if care could be provided there. Some 30% of beds are said to be blocked in this way. So let us shift money across. However, that ignores the extreme financial stress that already exists in the NHS, where talk of a looming financial cliff edge in 2015 is commonplace. The impact of the Nicholson challenge with £20 billion savings already made, largely by short-term measures such as wage restraints and redundancies, and predictions of even more stringent savings of some £30 billion by 2020, is sending shivers down the spine of many a trust chief executive when 40% of them are already said to be running a deficit.
I hope the noble Earl will forgive me for introducing a note of aggression in my talk. He knows my normal benign nature does not allow for much aggression but I feel quite strongly about this. There are those who say that we should close some beds or whole hospitals and money will be freed up. That may be true—money will be saved, but at what cost to patient care? We have already heard of the stresses placed on hospitals by rising demands for acute care—that is acute care, not the care of longer-term patients within hospitals. It is the rising tide of acute emergency cases that is taking its toll now on hospital services that is so difficult. These demands are being made now, in the summer, when we have approaching 88% bed occupancy rates. Incidentally, we have the lowest number of beds per head of population in Europe and the shortest length of stay, so we are already pretty efficient.
Of course we should do more to improve efficiency. We should continue the process of focusing specialised services in fewer major centres; we should merge services between small, relatively inefficient hospitals; and of course we should be looking at better models of integrated care across the health and social care divide—that is essential. Today’s publication by the NHS Confederation and the Local Government Association is a step in that direction.
There could be more efficiencies, too, in the bureaucratic machinery that we have set up to run the service. I am struck by the fact that we removed two layers of administration, the SHAs and PCTs, and replaced them with four. We have NHS England with its large staff, the 40 outposts, 27 area teams and of course the 211 CCGs. That says nothing about the clinical senates, of which we hear so little, and the complex network of clinical reference groups. Instead of the promised bonfire of bureaucracy, we have had an explosion of bureaucrats. We could save money here with a closer look at all this superstructure but that is not going to happen any time soon.
Meanwhile, the cash-strapped NHS is being taxed again by the better care fund. To expect to be able to run an acceptable level of integrated care between hospital and community by shifting limited resources from one to the other may be expecting just too much. Yet we are a wealthy country: the fourth wealthiest in the world, according to the ONS, and with more billionaires than anywhere else. In spite of that, we have cut the proportion of GDP that we spend on this from around 8.2% in 2009 to about 7% now, and we are predicted to cut that proportion to about 6% by the end of the decade. I can well understand the Treasury wanting our services to be more efficient, but I cannot see what justification there can be to cut the share of the national cake for the care of our population to just 6%, which is so clearly well behind other OECD countries. The contrast between reports of a country said to be doing so well economically with those that show that at the same time it is starving our vital services is, I find, just too much.
I have a number of questions for the Minister. How is it intended that the money from the NHS will be used for care in the community? Is it to be ring-fenced? Will there be true integration between the NHS trusts and social services in the way that it is spent? Have the Government any plans to encourage recruitment into general practice, particularly in the north, and for A&E consultant posts, two key services at the interface between community and hospital?
Have they given any thought to their predictions for the future funding of health and social care beyond 2015? I know that the Minister will say that future spending plans will have to wait for the next spending review but I fear that the crunch will come rather sooner than that, and probably far sooner than the election. The department must be making contingency plans now about how the service will cope over the winter; I would be surprised if it was not. I wonder if the Minister would be willing to share some of that with us. I look forward to his response.
Baroness Brinton (LD)
My Lords, I congratulate the noble Lord, Lord Kennedy of Southwark, on securing this debate about the better care fund. This is probably a timely moment to pause and reflect on new routes to integration in the health and social care sectors, but we need to do so with some caution. It is too early to see the implementation of the first round of approved projects to its conclusion, and of course both local council and health budgets are under serious pressure, as all speakers so far have indicated. We also cannot expect full integration without being honest about the cost. It will be interesting to see what emerges in the manifestos of all the parties in the run-up to the next general election.
Still, I am pleased that the coalition Government are determined to see a real start to full integration in health and social care. There has been much lip service paid to it over the years but a marked reluctance by everyone, from politicians in Parliament to local authorities, the NHS and front-line staff, to make it happen. I suspect that this has been for a number of reasons.
First, there is the perception that there is financial competition between the two sectors, each worried about not losing funding to the other. Secondly, financial mechanisms are in place that inadvertently discourage integration. Reports from some areas show that this is a serious issue. Thirdly, which is the most important, the two cultures—social care, whether local government or private providers, versus health—could not be more different. I do not think that the NHS would define itself as naturally entrepreneurial; and it takes a long time to change its ways of working. There have been some major crises recently where we are now seeing wholesale changes in the way we work, as exemplified by the Francis report. The social care sector is a mixed economy, with public service providers working alongside large and small businesses and social enterprises—not just a different model to health but a different model within social care. Therefore it is completely understandable that dialogue at the start of this major project is difficult. But there is progress.
Before turning to that progress, I want to give you one story that absolutely illustrates why we need integration. The aunt of a friend of mine, who lives in Bradford, was receiving both health and social care support at home, which was important because it meant she could live independently. One of her issues was ulcerated legs, with one leg much worse than the other. The bad leg was being treated by the district nurse on daily visits. The better leg was checked and put into support tights by her domiciliary care worker. As a result of cuts made by the Labour-controlled council, all domiciliary care classed as moderate needs was cancelled, including hers. Can noble Lords guess what is coming? Under the local PCT rules the district nurse was not allowed to help with the better leg, so this elderly and vulnerable woman had to rely on a male elderly neighbour to put the special support tights on her leg last thing at night. You see, one leg was NHS and one leg was social care. That was until the better leg deteriorated to the point at which the district nurse was permitted to come in and dress that one too. Honestly, you could not make it up.
That is at the front line; it is not the district nurse but the person in the PCT who is setting down the rules. That sort of behaviour in commissioning makes an absolute mockery of integration. That is what I mean by the clash of two cultures. There are other stories of silo thinking. In some areas there is very little discussion between social services staff and health professionals such as physiotherapists and occupational therapists. Patients are referred by physios and OTs, but there is not a continuing dialogue. One physio recommended an electric wheelchair for a patient, on the basis that this would keep her fully independent, but the wheelchair department’s rules are so strict that the patient did not meet the stringent requirements. As a result, the local authority had to offer a carer to come in to help get her up in the morning, costing both the patient and her council much more money than an electric wheelchair would have cost.
That is enough of the difficult stories. Of course, there are shining examples: not just in Torbay, but in Cambridgeshire and other places. I ceased being a councillor in Cambridgeshire 10 years ago, but even then we had a joint trust between health and social services, as it was in those days, to really start to change the funding. The money was pooled and attitudes really started to change.
We need to hear what these good examples are doing, but also to understand why they work. Unless commissioners and finance directors understand the benefits of integration, there will be a reluctance to move away from the current model. The Bradford case illustrates the point perfectly. Three more minutes of the district nurse’s time would have prevented the better leg from deteriorating and thus costing the NHS more in the long run. Therefore, while there are any cases such as the Bradford one we are nowhere near integration. That is why the extra money from the Government for integration—the £2.7 billion to councils to join up with health and social care providers, as well as local authorities’ extra £100 million this year and an extra £200 million next year—is so vital.
I was delighted to learn from Lib Dem councillors at their annual conference last weekend that the LGA estimates that councils have more than match-funded the total money of £3.8 billion for next year, 2015-16, taking it to £5.4 billion. However, the cost of this means that councils are now spending 35% of their total budgets on social care. Therefore support from central government is essential and I do not believe that we can wait until next year for that to happen.
Personally, I somewhat regret the debate about NHS money being taken by local government. I am sorry to disagree with the noble Lord, Lord Turnberg, but I think that changes in practice will reduce the costs of acute care. Indeed, the noble Lord, Lord Kennedy, referred to amputations for diabetes sufferers in this regard. That is exactly the sort of invest-to-save cost that we should be seeing with the better care fund—for example, spending on preventive care to avoid trips and slips, and in ensuring appropriate support at home for patients being discharged to reduce the “revolving door” syndrome whereby patients return to hospital in a few days. Spending on all those initiatives would help to reduce the crisis in acute care and help to reduce the pressures on its budget.
Where integration is working well, there would not even be an issue about whose money it is, not least because the better care fund plans have been jointly signed off by not just local authorities but clinical commissioning groups and health and well-being boards. Plans have also had to demonstrate how local providers have been engaged. Adult social care services have to be at the heart of the integrated system, supporting health in everything they do by improving hospital discharge and bolstering reablement services.
We have to explode the myth that the better care fund was never intended to solve the financial problems in local government and parts of the NHS. That is one of the reasons why population changes are adding £400 million to council social care budgets every year and why, frankly, budgets must be looked at in this current year. Therefore, will my noble friend the Minister say whether the Government are looking at providing support for the health and social care sector before we even get anywhere near winter problems this year? That is absolutely vital.
I believe that the better care fund is right for the nation’s finances. Investing to save rather than saving to invest is the right thing to do. I believe that in the longer run we need a transformation fund to help the culture change and ease the impact of all the changes that we are talking about, but it must have targets, too, and peer support—something which local government is very good at. The introduction by the Labour Government of the Improvement and Development Agency really helped transform councils that were in trouble and helped with the ground-breaking changes in many council services. It would be good to see that stretched into health and other sectors, too.
In conclusion, I am pleased that the better care fund is now getting well and truly under way but am slightly concerned that NHS England seems to be changing the criteria for targets for the first round and hope that that will not delay the implementation of any of the projects. That must not continue. We will be nowhere near full integration until health and social care for older people in this country are fully funded.
Lord Hunt of Kings Heath (Lab)
My Lords, I am indebted to my noble friend Lord Kennedy for raising some real concerns about the way in which the better care fund will impact on the NHS. I thought that his questions went to the heart of the problem. I am grateful also to my noble friend Lord Turnberg for setting the very challenging context in which the fund is to work.
As we have heard, this is a straight transfer of money from the National Health Service to local government. The theory is that this will lead to more community provision, and therefore fewer people will need to go into hospital and it will be easier to discharge patients who have been admitted. The result will be that we need less acute capacity, and therefore the NHS can live on less money. That is the theory. However, there are five or six problems with the way in which this will work out in practice. The first problem is that local authority social care funds have been slashed so much that it is almost inevitable that a substantial portion of this money will be used to shore up their mainstream services. Only yesterday we had a report from the Association of Directors of Adult Social Services saying that these directors have had to cut their care budgets by 26% in the past four years. The budgets are very, very stretched indeed.
The second problem was identified this morning by the Health Select Committee. It described, in particular, managing the care of people with long-term conditions, who are the people we are largely talking about in this debate. It said that moving care for those with long-term conditions to primary community care and self-management—which I am sure we all support—is,
“intended to reduce unplanned admissions to the acute sector”.
That is absolutely right. However, it says:
“Reducing the activity of acute hospitals … and their income from such activity, is bound to have a consequential impact”,
on NHS hospital acute services.
One has to understand, as my noble friend Lord Turnberg said, that although one can certainly find problems with the way in which the health and social care system works at the moment, those who say that the NHS should become more efficient—and of course there are areas where it needs to become more efficient—also have to come back and respond to the point that this country has the lowest bed numbers and the shortest length of stay of any developed country in the world. That is why I certainly have some concern. Obviously, having just given up chairing the board of an acute trust, I come from that angle. But I am concerned whether this will be able to happen in practice.
One of my concerns is the absence of large NHS providers from these discussions. This is a consistent theme in the way in which local authorities, health and well-being boards and clinical commissioning groups have worked over the past years. I think that the reason for this is that they are scared of the acute trusts. They think that they will not be able to withstand the robust argument put forward, and therefore they prefer to exclude them from many of the discussions.
As the King’s Fund said, that is a big mistake. These decisions impact on providers’ existing activity and funding, and the risks arising from that need to be assessed and managed. We have seen it before. Let us take, for example, the four-hour A&E target. Although CCGs and local authorities make decisions that impact on that target, they do not bear the responsibility for it. That is the big problem with the fund that we are talking about. The local authority and the clinical commissioning groups may well make decisions about the fund that will impact on the ability of NHS acute services to do an effective job, but they do not bear the responsibility for it.
I think that the only way to do this would be to give acute trusts a lock on the plans. Unless there is shared ownership, we will not get uniformity in terms of accepting the risk and making sure that the use of this money will indeed drive down the use of acute hospitals. That is where we run into trouble. I am sure that the noble Earl will have seen the recent Nuffield Trust work by Nigel Edwards, who I think everyone agrees is an expert commentator. He says, and I agree absolutely, that,
“nobody can argue with the … sound principle of bringing health and social care closer together”,
as the Labour Party wants to do in its whole person care. However, he says that there is a fatal flaw in that:
“The Fund assumes that hospitals can quickly achieve a 15 per cent reduction in emergency admissions and that these reductions will result in savings in the same year, at full cost”.
The noble Baroness is absolutely right about the need for some kind of transformation fund. Unless you have some kind of double running, you run the terrible risk of money certainly being spent on community provision but acute hospital admissions not reducing, and then the system falling over. That is why we would be very grateful to hear the noble Earl, Lord Howe, respond not only to the questions put to him by my noble friend but also on how the Government will make sure that this community fund is absolutely spent on measures that will actually reduce acute hospital admissions. I hope that he will say—because I believe that this is right—that they should be signed off by the acute hospital providers. This is not an issue where you can simply say, “The commissioners will decide”, because the commissioners do not bear the responsibility. That is often a fatal flaw in the current arrangements. The Government should take a further look to make sure that this system will work effectively.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, I join other noble Lords in thanking the noble Lord, Lord Kennedy of Southwark, for enabling us to consider a topic of considerable significance for patients and service users.
In every area of the country, CCGs and local authorities are now planning together to use the better care fund to transform local health and care, to improve outcomes for people and to secure the best possible value for money by pooling resources. This is one part of a wider picture of change for health and social care. We must move away from traditional models if we are to provide responsive, effective services to a changing population.
Noble Lords will remember that the need for greater integration of health and social care has long been a recognised issue. The NHS and the social care system provide some fantastic care for people when they are already experiencing acute poor health and high care needs. We must, however, get better at providing care for those with long-term, chronic conditions by keeping people as healthy and independent as possible, living in their own homes and communities for longer, and going to hospital only when they really need to for specialist medical treatment. People will be supported to return to their homes, and to independence, as soon as possible.
We are living longer now than ever before, which is obviously good news, but we do not live all our lives in good health. As people live longer, we are seeing a corresponding rise in long-term conditions that require regular treatment. A lot of this treatment currently occurs in hospitals when it does not have to. It happens because the NHS was founded to treat episodic cases of sickness in hospitals, but the needs of the people are changing and we as the Government must work with the health and social care sector to adapt.
The noble Lord, Lord Turnberg, gave us some of the statistics. ONS projections show that between 2010 and 2030 the number of people aged 85 and over will increase by 95%. This increase is equivalent to more than 1.1 million people or a local authority the size of Birmingham. By 2030, there will be more than 3 million more people than today with three or more serious, long-term conditions.
Much long-term care can be undertaken in a way that promotes independence, sometimes with family members and carers, or with the support of professionals in people’s own homes and communities. People have told us this is what they want and, yes, it is a more efficient use of resources. As I said, these truths have been recognised for some time, and this Government are the first to address it head on. There is broad consensus that greater co-ordination of health and social care services to enable this kind of home and community-based care for the majority is the right direction in which to go. The better care fund presents a real opportunity for radical change at scale and pace for people to receive the right care in the right place at the right time. Local authorities and CCGs are working together to plan and deliver this shift to a more integrated system, with resources used to best effect where they are needed most. As the noble Lord, Lord Hunt, pointed out, acute trusts should indeed be part of that work.
As my noble friend Lord Bridgeman mentioned, for the first year of the BCF, it will include £1.9 billion of the real cash increase in the NHS budget. This represents 2% of the 2013-14 NHS budget, and it is being redistributed to help fund care in non-NHS parts of the system, which will in turn help to make acute care more efficient.
The noble Lord, Lord Kennedy, asked about funding for the longer term. I cannot yet commit to a five-year plan because we have said that it is for the incoming Government to look at their priorities next year. The 2013 Autumn Statement, however, made it clear that pooled budgets would be an enduring part of the framework for health and social care past 2015-16. While the structure of the fund and the pay-for-performance elements may change as progress is made, the principle is very much here to stay.
The noble Lord, Lord Turnberg, asked a similar question about funding for health and social care generally. We will set out the funding levels for social care from 2015-16 in the future spending review but the Government have already set out their plans for changes in how social care will be funded in the future through the Dilnot reforms.
On the specific issue of winter funding, which my noble friend Lady Brinton put to me, the Department of Health is constantly looking to the future, as she may well be aware. Possible pressures on the NHS and social care are very much part of that thinking. We have considered what pressures there will be in the coming winter and I can assure her we are planning appropriately.
Leading care professionals—hospital staff, care workers, GPs and researchers—all agree on the need for resource to be put into integrating our health and social care services, so that a better service can be provided at the same cost. This will certainly involve changing the way things are currently done. The NHS model is geared toward treating people as they get ill. We must shift our approach to focus increasingly on keeping people well and providing acute care in hospitals for those who unavoidably get sick. Keeping people well and out of hospital for as long as possible, and reducing their length of stay by co-ordinating with social care, will reduce the strain on NHS acute services. It will also improve people’s experience and improve health and well-being. An integrated service would allow this to happen, and that is what the BCF has been formed to do.
The noble Lord, Lord Kennedy, asked me whether dementia will be prioritised in the BCF. Guidance on the better care fund sets out that dementia services provision can be a part of the better care fund. Many area plans already contain good examples of health and social care working better together to provide dementia services. He also asked me what seven-day social working means. It is imperative to see social care working over seven days. Too often people have to stay in hospital because they are unable to leave at the weekend. Seven-day working, which will see social care operate at the weekend, as it already does in many areas, will see people return home at the earliest opportunity.
The noble Lord, Lord Turnberg suggested that all this was about robbing Peter to pay Paul. With respect, I do not see it like that at all. This is not about taking money from one part of the system and giving it to another. The better care fund will be held jointly by CCGs and local authorities for them to decide between them how best to spend it. They will decide how to make best use of the money available across the whole care system. This provides a real opportunity to join up services and transform people’s lives, particularly vulnerable people.
As I have explained, one of the aims of the BCF is to reduce the burden on acute services caused by avoidable admissions to hospitals. The way that funding for acute services works means that hospitals receive a marginal level of funding for unplanned admissions. Using the available budget to fund better-integrated, more proactive services will help hospitals to balance their budgets by reducing the operational and financial burden created by avoidable admissions. I am sure the noble Lord will be familiar with the 30% tariff for emergency admissions above a certain threshold. All this will allow hospitals to focus on providing specialist and trauma services, for which they receive full funding so it will make them more financially viable than they would be if the current system was retained. I say to the noble Lord, Lord Hunt, that evidence suggests around a fifth of all emergency admissions are avoidable in some way. If we get it right, transforming hospital care could therefore prevent these unnecessary admissions, which can be distressing for patients, quite obviously, and are costly to the NHS.
The noble Lord, Lord Turnberg, asked me whether the Government have plans to recruit more doctors into general practice. I am sure he will know from statistics that the number of GPs has increased since 2010, but our mandate to Health Education England requires them to increase the proportion of trainee doctors going into general practice from 40% to 50%. We have also set out our ambition to increase the primary care workforce as a whole—not just doctors, but nurses and other primary care professionals—by 10,000 by 2020.
Using resources to keep people out of hospital, by improving other methods of care—social care and home care—will lead to better use of NHS services, ensuring that services are focused on people who cannot be treated at home or in the community.
That brings me to the issue raised by the noble Lord, Lord Turnberg, of the impact of the BCF on acute care. All areas need to show that they have assessed the impact of their BCF plans on the acute sector—that is, hospitals. No plan will be approved without this. They will need to show that they have considered both the operational and financial implications and how these will be—
Lord Hunt of Kings Heath
My Lords, I realise that the noble Earl does not have much time but can he just answer this point? Why not give the acute trusts the ability to sign up to it, or not, to prove that it will reduce capacity?
Earl Howe
My Lords, we are looking at ways to assure these plans, and to assure them in a way that is satisfactory to the acute sector. At the moment, I cannot tell the noble Lord precisely how that mechanism will work but his central point is well made. I hope that in due course we will be able to share some of our thinking with him. However, the key point is that acute providers must have been consulted in this process.
This sort of approach is being pursued around the country. We know that it can work. For example, a network of 14 pioneer areas around the country are currently working with central government and health sector and third sector organisations to demonstrate the logic of integration and to disseminate what they have learnt to the rest of the country. That includes data-sharing—a point raised by the noble Lord, Lord Kennedy. Areas that have made significant progress in that respect are Southend, Leeds and South Tyneside.
There are other examples, too. In Greenwich, more than £1 million has been saved from the social care budget. In addition, 64% of people who went through their new integrated care pathway required no further services upon completion of the pathway. That has helped to lead to a 50% reduction in the number of people entering full social care.
My noble friend Lord Bridgeman asked whether admissions had been taken into account in the pilot scheme. Greenwich is a good case in point. More than 2,000 patient admissions were avoided there due to immediate intervention from the joint emergency team.
In Northamptonshire, £3.5 million has been saved through prevented admissions, exceeding the target by 14%. In Leeds, children and families now experience one service supporting their health, social care and early educational needs, championing the importance of early intervention. Since the service has been in operation, the increase in face-to-face antenatal contacts has risen from 46% to 94%.
Those examples, along with many others, should demonstrate to noble Lords that the integration of our health and social services can, and indeed has been, achieved in several areas. Integration will not only preserve our ability to provide services but improve them. The better care fund exists to enable all the local areas in England to do what the pioneers and others are doing to move towards a more responsive, effective and sustainable system that makes much better use of the resources available.