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Heidi Alexander (Lewisham East) (Lab)
1. What changes there were in the number of apprenticeship starts for under-19s in the academic year 2012-13 compared with the previous academic year.
The Minister for Skills and Equalities (Nick Boles)
Over the past two years, we have removed 54,000 apprenticeships for under-19-year-olds that had a planned duration of less than 12 months, so the overall number of apprenticeship starts for that age group has fallen by 15,000. The number of apprenticeships for under-19-year-olds including a real job and lasting for more than 12 months increased by 25,000.
Heidi Alexander
On a recent visit to Bromley college, I was told by a construction skills tutor that in the eight years he had worked there not once had he taught a bricklaying apprentice. When I asked him why, I was told that the qualification associated with such an apprenticeship is very rigid, making it neither attractive nor appropriate for employers. If we want to reduce the reliance of the UK’s construction sector on migrant labour, should we not be doing more to make skills and experience available to our young men and women, so that they can go on to get jobs in the construction industry?
Nick Boles
I actually agree with the hon. Lady about many of the old standards for apprenticeships, which is why we have introduced the trailblazer programme so that groups of employers are putting together relevant and demanding but accessible standards for young people. I visited a fantastic new further education college the other week—Prospects college of advanced technology in Basildon—where I met a few apprentices who are doing a bricklaying apprenticeship and find it very worth while. The hon. Lady is right, however, that many of the old apprenticeship standards were inadequate and unattractive to young people and employers.
Sir Peter Luff (Mid Worcestershire) (Con)
Does my hon. Friend think that the public sector itself is setting a good enough example when it comes to offering apprenticeships?
Nick Boles
Some parts of the public sector set a fantastic example—the Ministry of Defence is a very good example and the NHS is another—but not all Government Departments and, I suspect, not all of us as Members of Parliament, are doing everything we could. I urge every part of the public sector to do everything it can to create apprenticeships so that more young people can get on the ladder to a successful career.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is very bad news that the number of apprentices under the age of 19 is falling and that the number of apprentices who go on to study degree-level skills is just 2% and rising at a very slow pace. The Opposition are clear that our priority for expanding university level education is for technical degrees so that more apprentices can earn while they learn up to degree-level skills.
May I ask the Minister about the expansion plans? In the autumn statement, the Chancellor said that he would sell the student loan book to expand the number of degree-level places. On 20 July, the Secretary of State said that he and the Deputy Prime Minister had put that plan in the bin. Will the Minister tell the House what the story actually is? Are we going to expand degree-level places, and how on earth are we going to pay for them?
Nick Boles
Frankly, what is regrettable is that the Government of which the right hon. Gentleman was a major part created entirely phoney, Mickey Mouse apprenticeships, called programme-led apprenticeships, which involved no employment at all, no job and lasted less than a year. We make no apologies for culling those qualifications, which were a fraud on employers and young people. We are increasing the funding for higher apprenticeships and the plans have been set out.
Stephen Mosley (City of Chester) (Con)
Since May 2010, more than 3,000 young people in Chester have started an apprenticeship scheme, and those fabulous opportunities have become available only because more than 600 local employers are offering apprenticeships. Does my hon. Friend have any intention of changing the incentives that companies receive for taking on apprentices in order to encourage more companies to get involved and for more young people to have this fabulous opportunity?
Nick Boles
I thank my hon. Friend for his comments. Chester is just one example. The truth, contrary to what the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) has said, is that in 2012-13 more people were in an apprenticeship—that is, at the start, middle or end of one—than ever before. The more than 830,000 young people that year is a number that the previous Government never even came close to, despite their Mickey Mouse apprenticeships.
My hon. Friend is right about incentives, particularly for young people to take apprenticeships and, more importantly, for employers to take them on, because often they are the ones who require the most supervision, and that is exactly what our funding reforms will deliver.
Richard Graham (Gloucester) (Con)
2. What steps he is taking to reduce regulation on businesses.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am delighted to say that we are the first Government in modern history to reduce the overall burden of domestic regulation on business. Our one-in, two-out approach has cut the annual cost of regulation for businesses by £1.5 billion so far, and the red tape challenge has identified more than 3,000 regulations that we are planning to scrap or improve.
Richard Graham
One of the Government’s most encouraging steps has been to speed up payments by Government to suppliers that are small and medium-sized enterprises, but the Federation of Small Businesses and others estimate that the problem of late payment by businesses to businesses has increased significantly. Will my hon. Friend therefore work with business groups, such as the CBI, to encourage all their members to settle within 30 days, and will he consider establishing a kitemark for businesses that live up to that?
Mr Vaizey
I agree with my hon. Friend. We really need much greater openness about the payment practices of businesses. Knowing who are good payers and bad payers is essential in deciding with whom to trade. We will therefore bring forward legislation to require large and listed companies to publish their payment practices and performance. We will also work with business groups to strengthen the prompt payment code.
Simon Danczuk (Rochdale) (Lab)
There have been a number of attempts to amend the Deregulation Bill to reform retransmission fees for public sector broadcasters in the UK. Will the Minister look at the report published on Monday, which argues that reform could provide millions of pounds for the creative industries in the United Kingdom? Does he agree that the reform of retransmission fees should be included in the Deregulation Bill?
Mr Vaizey
The hon. Gentleman is referring to ITV’s report, which calls for ITV to be allowed to charge fees to other platforms. I am sure that the hon. Gentleman will have read the brilliant speech given by the Secretary of State for Culture, Media and Sport at the Royal Television Society earlier this week, when he said—I can almost quote it from memory, it was that good—that he will take a “long, hard look” at retransmission fees.
Mr David Nuttall (Bury North) (Con)
Given that many of the regulations that affect business emanate from the European Union, will the Minister meet the new EU commissioner for the internal market, industry, entrepreneurship and SMEs, Elzbieta Bienkowska, in the near future to urge her to introduce and adopt the UK Government’s one-in, two-out rule?
Mr Vaizey
We have a new set of Commissioners, so may I put on the record my gratitude to Neelie Kroes, who was the Commissioner I worked with most closely under the previous Commission, but who has now retired? I always enjoy meeting European Commissioners, and I also enjoy the fact that so much of the innovation that this Government come up with is now being copied by our European partners.
Mr Robin Walker (Worcester) (Con)
3. What recent assessment he has made of the competitiveness of the UK as a place to do business.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
Last week, the World Economic Forum released its annual assessment of international competitiveness. The UK rose in the rankings to ninth place, and in relation to the responsibilities of my Department, to fourth place for labour markets and to second in the world for technological readiness and innovation. This is further evidence that our economic policies are delivering a more competitive economy. We are delivering on our commitment to make Britain the best place in the world to start and grow a business.
Mr Walker
I am grateful to the Secretary of State for that answer. I congratulate him and the Department on that progress. This Government have put making the UK the best place in the world to start a business right at the heart of that strategy, and businesses in Worcester are embracing that challenge. Does my right hon. Friend agree that it is a huge achievement that, since 2010, about 2,800 new businesses have been started in Worcester?
Vince Cable
And not only in Worcester. Indeed, one of the most rapidly growing programmes, operating through the British business bank, is the start-up loans scheme. My hon. Friend may be aware that approximately 19,000 start-up loans have now been made, with a value of over £100 million.
Mr Dennis Skinner (Bolsover) (Lab)
One business that is not growing—the Business Secretary knows that as well as me, because we met him a few weeks ago to talk about its demise—is the deep-mine coal industry. There are only three pits left now. Does he really want to preside over the demise of the last deep-mine coal pits in Britain? Two of them are in Yorkshire, and one is in Nottinghamshire. They are reaching the end of their lives, but they have reserves that should be exhausted. I have got a plan, and he knows about it. The Government should apply for state aid and get £70 million, which is only a tiny proportion of the £700 million that this Government took from the National Union of Mineworkers pension fund in February. That is all we need in order for those three pits—Hatfield, Thoresby and Kellingley—to be able to exhaust their reserves. Those are the conditions in Europe. Why does he not apply for the money, instead of being led by the Tories surrounding him, who are determined to see the end of the pits in Britain?
Vince Cable
The hon. Gentleman is right that we had a very good and constructive meeting with him and his colleagues on the future of the remaining deep-mine pits. He will be aware, because I think we explained this, that the state aid issue is much more difficult than he—
Vince Cable
I fear it is. I think that the hon. Gentleman will also recall that most of the deep-mine pits closed under the previous Government. However, we indicated that we were willing to advance a loan to make the closure of the pits a lot less brutal than it otherwise would be.
David T. C. Davies (Monmouth) (Con)
RBS has today recognised the competitiveness of the UK, or at least the southern part of the UK—the bits that are run by the coalition Government. Does my right hon. Friend agree that if RBS wants to domicile itself in the southern part of the United Kingdom, it should bring its jobs with it and not expect us to underwrite any mistakes that it may make in future?
Vince Cable
As it happens, I met the chief executive of RBS a couple of days ago. It is making good progress on sorting out the problems with its balance sheet and returning to normal business lending. I have been pointing out for quite a long time that the position of RBS in an independent Scotland would be very difficult, since its balance sheet is 10 times the size of the Scottish economy. It could hardly operate within Scotland as an independent country.
Andrew Miller (Ellesmere Port and Neston) (Lab)
Under the seventh framework programme, our universities were incredibly successful at accessing money, but our SMEs were not. Under Horizon 2020—the next programme —what steps will Her Majesty’s Government take to improve the lot of SMEs? Secondly, will the Secretary of State confirm that universities such as Edinburgh, which were hugely successful under framework 7, will not be successful if the vote goes the wrong way next week?
Vince Cable
On the hon. Gentleman’s latter point, he is right that Scottish institutions benefit disproportionately from UK research because of the excellence of their work and that they would no longer be guaranteed access to UK funding streams in an independent Scotland, although I hope they would maintain their excellence. We will certainly try to ensure that SMEs are taken properly into account in the competition for European funding. His point is a good one.
Mark Pawsey (Rugby) (Con)
A recent report showed that reshoring is increasing across the economy. That happens when UK companies source more of their products from the UK. It is estimated that over the next 10 years that could create 200,000 jobs and boost output by up to £12 billion. Does the Secretary of State agree that that is an effective demonstration of the increasing competitiveness of the UK economy?
Vince Cable
It is. Indeed, reshoring is happening in somewhat surprising areas. I had a meeting only yesterday with representatives of the British textile industry, which almost disappeared years ago. A significant amount of reshoring is taking place because companies want to be close to the market and regard the business environment as attractive. The same is happening in the aerospace supply chain and elsewhere. We are doing what we can to support that through the regional growth fund and other Government schemes.
Mr David Hanson (Delyn) (Lab)
Does the Secretary of State accept that companies such as Airbus, which is close to my constituency and which employs thousands of people, are successful and competitive because they work with German, French and Spanish colleagues to produce world-class planes? Does he agree that it is therefore essential that we remain part of a Europe-wide Union to ensure that we remain competitive?
Vince Cable
The right hon. Gentleman is absolutely right. The Airbus factory in north Wales is an extraordinarily impressive part of British manufacturing. Most of us who have been there have been overwhelmed by the quality of its work. He is right that it is a European company and that it could not operate on any other basis than as a European network. Another key factor in its success has been the industrial strategy and the support that it receives through the aerospace growth partnership.
Jim Shannon (Strangford) (DUP)
Northern Ireland is becoming a vital part of the United Kingdom’s business, trade and investment sector. It is showing clearly what it can do within the United Kingdom. Last week, Magellan Aerospace announced a £6-million investment and 47 new jobs in my constituency. Alongside that, there has been a £6.8 million investment in an advanced engineering and competitiveness centre for Northern Ireland, based in Belfast. Will the Secretary of State, in conjunction with the Northern Ireland Assembly and the Minister of Enterprise, Trade and Investment, Arlene Foster, develop innovative solutions in the advanced engineering sector, which are crucial to competitiveness and the growth of the British aerospace industry?
Vince Cable
Indeed, we will. I have had good discussions with Northern Ireland colleagues about the very successful advanced manufacturing sector. Bombardier has an expanding presence in Belfast, as the hon. Gentleman will know, and there are other parts of the aerospace supply chain that we are keen to develop in Northern Ireland.
Mr Chuka Umunna (Streatham) (Lab)
Before I ask my question, I am sure that on the anniversary of 9/11 the whole House will want to remember those who lost their lives, including British citizens, on that terrible day 13 years ago. Our thoughts, best wishes and prayers go out to their families and friends.
Scotland’s vibrant financial services sector is important to the UK’s competitiveness, and more particularly to Scotland’s competitiveness in the global marketplace. RBS has been mentioned, and no doubt the Secretary of State will also have heard Lloyds bank and Clydesdale bank say that they will relocate their headquarters to London in the event of separation. The vote next week is, of course, for the Scottish people, but does that not illustrate the lorry load of uncertainty for jobs, competitiveness and growth in Scotland that will come with the break-up of one of the most successful unions the world has ever seen?
Vince Cable
I absolutely agree with the hon. Gentleman and he makes the point well. In addition to the lists of institutions he has just given, Standard Life in the insurance sector has made it clear that it could not remain in Scotland were it to be an independent country. That relates to the need for large financial institutions to have a regulator, and in some cases a lender of last resort. A country the size of an independent Scotland would not be able to support those institutions. The hon. Gentleman is absolutely right in his approach.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
4. What steps his Department is taking to increase the number of highly skilled workers.
The Minister for Skills and Equalities (Nick Boles)
The hon. Gentleman is far-sighted and consistent in his support for the need for advanced skills in our economy, and he knows better than anyone that there are two ways to acquire those skills—through a university degree or through an apprenticeship, ideally a higher apprenticeship. That is why the Government are expanding and improving both routes.
Mr Sheerman
I hear what the Minister says, but I would hate for him to go into the next election with the mantra, “Complacency, complacency, complacency” on skills. There is an OECD report on the lack of skills of our graduates in this country, and Sir Michael Bichard has said that 16 to 19-year-olds are not equipped in a country where we are desperate for skills and do not have enough technicians, and where there is a real problem. What will the Minister do about that?
Nick Boles
There is no complacency because we are aware of quite how terrible the situation was that we inherited from the previous Government. Technical qualifications had been created that had literally no value, and we have swept them away. As I said earlier, there were apprenticeships that did not involve any work or any employer, and we have swept them away. There is a huge amount more work to be done to ensure that young people who have not secured good GCSEs in English and Maths go on studying and get those qualifications later in their careers. There are a huge number of further priorities for us and for any future Government, but progress has been made and it is good.
Andrew Jones (Harrogate and Knaresborough) (Con)
5. What support he is providing to pubs.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
The Government have introduced a number of measures to support pubs, including ending the beer duty escalator and cutting beer duty. We are supporting pub tenants through the introduction of a statutory code of practice to govern the relationship between pub-owning companies and their tied tenants, with an independent adjudicator to enforce the code. The measures will be introduced through the Small Business, Enterprise and Employment Bill.
Andrew Jones
I thank my right hon. Friend for that reply. Pubs are often the hubs of their communities, but in Harrogate and Knaresborough we have had a spate of local pubs being converted into supermarkets. Will my right hon. Friend work across Government, particularly with the Department for Communities and Local Government, to see what more can be done further to support pubs, and keep them open and at the heart of local communities?
Vince Cable
My hon. Friend is right, and I believe that his constituency houses the Pub is The Hub voluntary organisation that plays an extremely important role in that respect. I think it receives significant funding from my colleagues in the Department for Communities and Local Government and the Plunkett Foundation, and I encourage my hon. Friend to support that organisation in its work.
Sir Bob Russell (Colchester) (LD)
I endorse the question that has just been put, so will the Minister look across the Government—if we can have joined-up Government—at possibly reducing the rateable value on traditional community local public houses, which face a lot of competition from binge-drinking premises and supermarkets?
Vince Cable
The issue of rateable valuation will arise in the revaluation, when it occurs, but my hon. Friend will be aware that pubs have benefited significantly in the autumn statement from the package on business rates, which is worth £1 billion. A third of all pubs have now benefited from the £1,000 discount given to low-value property.
Toby Perkins (Chesterfield) (Lab)
The Opposition very much welcome the news that the Government are bringing forward a new pubs code in the small business Bill—we would, because we have asked for it on three occasions, and the Secretary of State has voted against it. He will know that there is concern that the appeals mechanism gives tenants the opportunity to have a “Here’s what you could’ve won” review of their appeal without any right to question it. There is also a sense that the small, family-owned brewers are being brought into a problem that they did not make. What representations has he had on the Bill, and can he give us any assurances that it will satisfy people who are worried about our pubs, so that we do not have to keep returning to the issue, and so that the industry has certainty on what the future in the next Parliament will look like?
Vince Cable
We have no wish to create problems for the small, family-owned pubs, which are an extremely important part of the industry. The hon. Gentleman will be aware that one cornerstone of the proposals is the free-of-tie rent assessment, which does not apply to pubs with smallholdings. Small, family-owned pubs are already subject to the voluntary code. In a sense, it would be right for tied pubs of all kinds to be given some protection.
Mr Rob Wilson (Reading East) (Con)
6. What steps his Department is taking to encourage investment in science.
The Minister for Universities, Science and Cities (Greg Clark)
I am looking forward to travelling after Question Time to Birmingham, to the British science festival, where we will reflect on the important contribution that science, research and innovation make to our long-term competitiveness and growth. The Government have ring-fenced the science and research programme at £4.6 billion a year from 2011 to 2016, and we are committed to providing £1.1 billion a year in science capital, increasing with inflation to 2021—the largest ever capital grant to UK science.
Mr Wilson
May I take this opportunity to congratulate my right hon. Friend on his new position. Reading university is an outstanding higher education institution and will shortly welcome thousands of new students, who will receive a high-quality education. The university contributes to jobs and growth in the area and is planning a new science park. Will my right hon. Friend assure me that the autumn statement will reflect further support for science and the plans and priorities of universities such as Reading?
Greg Clark
I am grateful for my hon. Friend’s kind words. He has been a great champion of higher education in Reading and across the country. One of my tasks over the next few weeks is to work on the science and innovation strategy, including the science capital consultation, which will be published alongside the autumn statement. That will make clear and reinforce for a 10-year horizon the continuing importance that we attach to science.
Mike Kane (Wythenshawe and Sale East) (Lab)
Manchester is the home of the revolutionary material graphene. This week, we heard the tremendous announcement of a £60 million second hub for graphene in the city. Will the Minister join me and everyone involved in securing that funding, particularly Manchester university and Masdar, the Abu Dhabi clean energy and renewables technology group?
Greg Clark
I will indeed. Along with my hon. Friend the Life Sciences Minister I was with the chancellor of the university of Manchester yesterday. I congratulate the vice-chancellor, Nancy Rothwell, and all responsible on securing a huge coup for this country. Having a Nobel prize-winning piece of research located for the future in the UK and in the north-west is a cause for great celebration.
Diana Johnson (Kingston upon Hull North) (Lab)
7. What steps the Government are taking to ensure the value of the minimum wage keeps pace with inflation and encourage firms to pay a living wage.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
Since 2010, the national minimum wage has increased faster than average earnings. From 1 October, the adult rate will rise above inflation to £6.50, giving more than 1 million workers the biggest cash increase in their take-home pay since 2008. Last year, I asked the Low Pay Commission to look at the conditions needed for faster increases. It concluded that we are in a new phase of year on year, faster real increases in the national minimum wage.
Diana Johnson
Since 2010 there have been only three prosecutions for breaches of the national minimum wage law. If the Secretary of State agrees, as I think he will, that more needs to be done to enforce the minimum wage, why in January did Liberal Democrat Members vote down Labour’s proposals for tougher enforcement, including additional powers for local authorities to take enforcement action?
Vince Cable
Both sides of the coalition will be introducing and supporting tougher enforcement measures in the small business Bill. The hon. Lady will already know that, adding to the enforcement regime we inherited, we have introduced not just the naming and shaming procedure but the prospect of significantly tougher penalties and much larger fines.
Margot James (Stourbridge) (Con)
My right hon. Friend will know of the previous Government’s poor record on enforcing the minimum wage. Is he confident that with his new proposals we will dramatically improve on that poor record?
Vince Cable
We will, and an administrative measure that will help that process is an increase in Her Majesty’s Revenue and Customs’ enforcement budget. As my hon. Friend will know, the first stage in the process is to insist that the enforcement authorities address deficiencies in the minimum wage. She is right also to emphasise that the enforcement regime we inherited was a rather weak one.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
9. What steps he is taking to increase access to higher education.
The Minister for Universities, Science and Cities (Greg Clark)
Last year, the Chancellor announced that we would remove the cap on the number of university places in 2015-16 so that no bright person who wants to study at a higher level should be turned away. The Government have also put in place a new framework placing more responsibility on higher education institutions to widen access, and that approach is paying off, with more young people admitted to university this year than ever before and a big increase in the number of young people from disadvantaged backgrounds.
Oliver Colvile
Earlier this year, the Government announced plans to create a further education college for nuclear engineering. As my right hon. Friend will know, not only is Devonport home to an engineering university technical college, but its dockyard deals with the refitting and refuelling of nuclear submarines. As he might also know, it faces a real challenge with Hinkley C. What progress is he making in introducing either higher or further education for engineers?
Greg Clark
From the work we did on the Plymouth city deal, I know that my hon. Friend is fully apprised of the need to invest in skills in Plymouth. The Government are working with the Nuclear Industry Council to determine the remit and location of a national nuclear college, and we hope to announce some progress later in the year.
Mr David Willetts (Havant) (Con)
May I welcome the Minister to his post and congratulate him on those excellent figures for participation in university? Will he confirm, however, that many of the best access initiatives, such as bursaries and summer schools, are financed from the income from fees above £6,000 and that if fees were reduced to £6,000, those excellent initiatives, which have improved participation, would have to be closed?
Greg Clark
My right hon. Friend is absolutely right. I pay tribute to him for the work he has done in this field, which is respected on both sides of the House and across all the institutions of higher education. One of the great pleasures of taking this office was to check my desk drawer and discover that there was no note from my predecessor with some unwelcome news. It is a very happy inheritance.
My right hon. Friend is absolutely right: the system we have in place for student finance, which he took through the House, is proving remarkably successful. We have seen record student numbers, and only this week the OECD said that the
“UK is…one of the few”
countries
“that has figured out a sustainable approach to higher education finance”
and that
“that investment…pays off for individuals and tax payers.”
He grasped the nettle and made the reforms, and those reforms are now working.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I welcome the Minister to his post, and as he rightly acknowledged, he has some big shoes to fill—I, too, pay tribute to his predecessor, the right hon. Member for Havant (Mr Willetts), and the extraordinary work he undertook. I am surprised, however, that he did not leave the new Minister a briefing on the disaster of the student loans system and the £50 billion to £100 billion extra that will now be written off as public sector net debt as a result of the spiralling resource accounting and budgeting charge.
My question today, however, is different. This week, the Minister has to decide whether to abolish the disabled students allowance. All over the country over the next month, disabled students will be applying to Oxbridge and medical schools, and they deserve to know whether they will have good support in place—not just PCs, but people. This week, will he heed the call from vice-chancellors, the National Union of Students and Members on both sides of the House and ensure that disabled students do not have their chance to study—wherever they get into—destroyed by the abolition of that vital allowance?
Greg Clark
I second the praise that the right hon. Gentleman gave to my right hon. Friend the Member for Havant, but it is curious that he should reflect in the way he did on the finances of the system. I would have thought that he of all people might have cause to reflect on the state of the finances. Reading his recent pamphlet, I noticed that he said that to win arguments
“we must show that we will spend taxpayers’ money sensibly, effectively and efficiently.”
I wonder whether, on reflection, he would regard that as consistent with his record in government.
On the disabled students allowance, I think everyone here shares the ambition, as I stated in my first answer, that everyone who is capable of benefiting from a university education should be able to do so. That of course applies forcefully to people with disabilities. The decisions we take on support for people with disabilities will be entirely about making sure that they have the support to be able to pursue their studies to the best of their abilities.
Mr Philip Hollobone (Kettering) (Con)
11. How many registered businesses there were in May 2010; and how many such businesses there are now.
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am delighted to say that Office for National Statistics figures show that there were 2.1 million registered businesses in March 2010, and that now there are 2.17 million.
Mr Hollobone
New businesses are established as a result of brave decisions taken by individuals who are trying to make the most of their own enterprise and initiative. Since the Department has declared Northamptonshire the most enterprising county in the country, is it not now time to praise entrepreneurs such as those who attend the monthly business breakfast club in Kettering run by the Federation of Small Businesses, who have refused to be cowed by the longest and deepest recession since the war and who through their own hard work and initiative are getting Britain back to work?
Mr Vaizey
It does not surprise me at all to hear that Northamptonshire is the most enterprising county in England, because it has one of the most enterprising Members of Parliament, and my hon. Friend continues to innovate in his role. I am delighted that Kettering and Northamptonshire reflect the huge boom in businesses—part of the 400,000 extra businesses overall that we have seen created since the coalition came to power.
Mr David Heath (Somerton and Frome) (LD)
As far as the south-west is concerned, the growth of small businesses will be dependent on four critical infrastructure issues, all of which fall to the Government to decide within the next few months. The first is the road system, the A303; the second is the rail system and communications to the far south-west; the third is flood defences; and the fourth—the Minister will not be surprised to hear me say this—is access to high-speed broadband for all businesses right across the rural areas of the south-west. Will the hon. Gentleman give a commitment to talk to his colleagues in other Departments to make sure that the south-west gets the infrastructure it needs?
Mr Vaizey
I congratulate my hon. Friend on his enterprising approach in getting so many different Departments into one question. I will want to make the case, but it is ultimately the decision of my colleagues in the Department for Transport when it comes to the road structures and of those in the Department for Environment, Food and Rural Affairs when it comes to flood defences. Let me say, however, that broadband roll-out is going incredibly well in the south-west. Cornwall is one of the most well connected counties in England, while Devon and Somerset are not far behind.
Valerie Vaz (Walsall South) (Lab)
12. What steps his Department is taking to ensure that scientific advice carries appropriate weight across government.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (George Freeman)
UK leadership in science advice to Government is well recognised internationally. Most Departments have a chief scientific adviser, and many have science advisory councils and specific scientific advisory committees on selected subjects. My Department supports the work of the independent Government Office for Science, which works with Departments across Whitehall to ensure that their advisory systems are fit for purpose. The Government’s chief scientific adviser, Sir Mark Walport has close contact with both the supply and demand for science advice across government, and the Government Office for Science publishes guidance on the use of scientific and engineering advice in policy making and a code of practice for scientific advisory committees. Science advice is one of the things Britain does best.
Valerie Vaz
I thank the Minister for his response and welcome him to his post, but the fact is that the science budget has been eroded in real terms. The Minister with two brains was removed, and he had the support of the scientific community. Can the Minister explain how the Government Office for Science can be effective when the chief scientific adviser posts in the Department of Energy and Climate Change and the Department for Transport—two crucial Departments—remain unfilled?
George Freeman
I thank the hon. Lady for her welcome. She talks of cuts in the science budget. Let me put on record again the fact that the Government have protected and ring-fenced the science budget. Let me also take this opportunity to pay tribute to my predecessor, my right hon. Friend the Member for Havant (Mr Willetts), who achieved that success in conjunction with the Chancellor. As for the two Departments that currently do not have scientific advisers, Sir Mark Walport and the Government Office are actively in the process of recruiting and putting in place arrangements to ensure that adequate scientific advice is available.
Ian Swales (Redcar) (LD)
Scientists at Teesside university have come up with a unique method of detecting and ageing blood traces at crime scenes. Will the Minister ensure that that technology is fully used throughout the criminal justice system, and will he join me in congratulating Teesside university on once again being a finalist in the entrepreneurial university of the year awards?
George Freeman
I certainly join the hon. Gentleman is congratulating his constituents on the work that they are doing. Let me also emphasise the importance of Government procurement in supporting innovation, which is one of the Government’s key priorities.
Barry Gardiner (Brent North) (Lab)
The Minister rightly spoke of the importance of having scientific advice available, but it must of course be based on scientific evidence. As he will know, last year the Government consulted on proposals to stop local authorities gathering evidence on the scientific effects of air pollution in their areas. He will also know that, just this year, the Department for Environment, Food and Rural Affairs has said that it will not collect any future scientific data on the badger culls that are taking place. Will the Minister ensure that data that are important as bases for scientific advice are collected across Government?
George Freeman
It is a bit rich for Opposition Members to talk about cuts when we have protected the science budget. We inherited one of the worst crises in the public finances, and we have a duty to correct it.
This country is internationally respected for the level of scientific advice that we put into policy making. Across the board—on badgers, on genetic modification, and on all the other difficult issues that we face—we are basing policy on the best scientific advice. [Interruption.] It ill behoves Opposition Members to criticise our approach. They set the standard in taking advice from spin doctors; we take advice from scientists.
Mr Speaker
I have a sense that the hon. Member for Brent North (Barry Gardiner) feels an Adjournment debate application coming on.
Mr Rob Wilson (Reading East) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
Let me begin by paying tribute to three former ministerial colleagues who have left the Department. Appropriate cross-party tributes have already been paid to the right hon. Member for Havant (Mr Willetts), but as I worked with him very closely for four and a half years, I can say that he was a superb colleague who has left a major and constructive legacy. I also pay tribute to the right hon. Member for Sevenoaks (Michael Fallon), who is now the Defence Secretary, and to my noble Friend Viscount Younger of Leckie.
I welcome a series of new colleagues. The new Minister for Universities, Science and Cities is the right hon. Member for Tunbridge Wells (Greg Clark). The new Minister for Culture and the Digital Economy, the hon. Member for Wantage (Mr Vaizey), will be responsible for digital industries and related activities. The Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Mid Norfolk (George Freeman), will be responsible for life sciences, and Baroness Neville-Rolfe is the new Minister responsible for intellectual property.
My Department plays a key role in supporting the rebalancing of the economy through business to deliver growth while increasing skills and learning.
Vince Cable
My Department published some detailed analysis, which I think enjoyed wide consensus. It was objective in relation to the potentially damaging effects not just on business and the British single market, but on research in the United Kingdom. As I said earlier, Scottish university institutions have attracted a disproportionate share of finance for the very good reason that they do excellent research, but that arrangement clearly could not be guaranteed in an independent Scotland.
Mr Chuka Umunna (Streatham) (Lab)
Sir David Barnes, former chief executive officer of AstraZeneca, told us that while companies should manage their tax affairs efficiently, it should not have been the driving force for Pfizer’s proposed takeover of AstraZeneca because it was
“a narrow basis on which to build an enduring and constructive business partnership.”
Does the Business Secretary agree with that general principle in respect of the takeover of important British companies?
Vince Cable
Yes, I do agree with that, and I made that very clear at the time. I think that the response of the Government, as well as of the shareholders of AstraZeneca, was a factor in persuading Pfizer not to pursue that bid.
Mr Umunna
The tax avoidance mechanism—tax inversion—that Pfizer sought to use through that takeover has been one of the main driving forces behind this year’s surge in cross-border deals. However, this week US Treasury Secretary Jack Lew said the Obama Administration would crack down on inversions pending further action by Congress. Does the Business Secretary share my concern that if we see takeovers of British firms being primarily driven by the desire to avoid US tax, there is a real risk of a large flight of capital back to the US when the threatened crackdown comes, leaving important UK companies high and dry?
Vince Cable
Again, I agree with the hon. Gentleman’s basic proposition. As it happens, much of the alarm that was raised some months ago about large American companies taking over British companies or British-based companies on the back of those tax provisions have proved wholly unfounded. He is quite right that takeovers, although they are generally beneficial to the UK economy, should not be driven by artificial short-term tax considerations.
Mark Pawsey (Rugby) (Con)
T3. Businesses in Rugby tell me that the changes this Government have made to the employment tribunal system have encouraged them to expand and take on more staff, and the growth in employment demonstrates that. Does the Secretary of State share my concern that Labour’s proposals to scrap our reforms would mean a return to the bad old days when companies were discouraged from taking on that extra person through fear of getting tied up in a weak or vexatious tribunal claim?
Vince Cable
Indeed, and the world competitiveness report acknowledged that Britain ranked number four in the world in overall attractiveness in labour markets. My hon. Friend is right that the reforms we have introduced are certainly one factor in that we have had a growth of 2 million in private sector jobs since May 2010. One factor that has not been noted, and certainly has not been noted by Opposition Members, is the very large number of cases now being dealt with by ACAS that would otherwise have gone through an expensive and frustrating legal procedure.
Diana Johnson (Kingston upon Hull North) (Lab)
T2. In asking my question, I want to make it clear that I want the Scots to remain our countrymen and women and not to become our competitors. The Government set up the UK Green Investment Bank in 2012 to boost investment in green technology and enterprise across the United Kingdom. With Hull and the Humber area emerging as a major UK centre for green energy and renewables, we would have extended a very warm welcome to having the bank in Hull. However, as we all know, its main headquarters is in Edinburgh, so can the Secretary of State just confirm that the UK Green Investment Bank can only be located within the United Kingdom?
Vince Cable
I think we all share the views that have been expressed across the House: that the United Kingdom is better together for a whole variety of reasons. The green investment bank is functioning very successfully with its current headquarters and operations. I think it has disbursed approaching £1 billion in a wide variety of projects from offshore wind to street lighting systems in Glasgow. It is a very successful initiative of this Government and I trust it will remain so.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
T4. Given the importance of superfast broadband to businesses in both rural and urban communities, what is the Department doing about BT’s near-monopoly in contracts, which is leading to BT now missing out whole villages and even sections of Lancaster city in my constituency of Lancaster and Fleetwood?
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
I am happy to meet my hon. Friend to talk about the specific circumstances in his constituency. I would say to him that our broadband roll-out programme has now covered more than 1 million homes, and we are covering about 40,000 homes a week. We are going flat-out on this, and we are achieving great success.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
May I say that I lament the moving of the right hon. Member for Havant (Mr Willetts)? One of the weaknesses of the parliamentary system is this stupid churn of Ministers, especially the good ones who should have been in the Cabinet and doing their job right through to the election.
May I push the Secretary of State on the subject of entrepreneurs? We need more of them in our country, along with more business start-ups. There are some very good tax incentives at the moment, so will he speak to the Chancellor about spreading the tax relief incentives out beyond the private sector? Let us give equal status to social investment and social enterprises. He will know that, at the moment, the cap is much lower.
Vince Cable
That has been an active subject of discussion with the Chief Secretary to the Treasury. Indeed, we have had a social enterprise day supporting worker-owned enterprises, and a consultation is taking place at the moment on how such activity can be facilitated through the tax system. I note the hon. Gentleman’s comment about the churn of Ministers. I should point out that I have been in my present job longer than anyone since someone called Peter Thorneycroft in the early 1950s.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
T5. As my hon. Friend knows, Plymouth is the host of the Peninsula medical school. In the light of the Ashya King case, in which Ashya’s parents had to flee to another country to get treatment for him that was not available in the UK, what plans does he have to accelerate research into new drug and medical technology?
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (George Freeman)
My hon. Friend makes an important point. That case highlights the importance of Britain remaining at the forefront of medical innovation. To that end, we have set out our groundbreaking 10-year life science strategy, and I pay tribute to my predecessor, my right hon. Friend the Member for Havant (Mr Willetts), for that. My central mission in this new role is to ensure that Britain leads the world and is the best place in the world to develop 21st century medicines and health care technologies.
Joan Walley (Stoke-on-Trent North) (Lab)
From his talks with north Staffordshire MPs the Secretary of State knows the importance of the proposed European directive on origin marking. People need to be able to find out exactly where a plate has come from by turning it over, and the directive will be of great importance to the competitiveness of the ceramics sector and to public health standards. The next meeting of the working party on consumer protection and information will take place on either 16 September or 1 October. Will the Minister review his position before that meeting and abandon his opposition to this proposal? Will he also ensure that his officials are working on a full appraisal in order to enable the proposal to go forward?
Vince Cable
The hon. Lady and her colleagues from the ceramics industry constituencies have been very effective in pursuing this issue with me. When she last raised the matter with me, I reopened the question and we have been looking at it carefully. I will report back to her on where we will be positioned in relation to the latest discussions in the European Union.
Miss Anne McIntosh (Thirsk and Malton) (Con)
The Department announced the local growth fund recipient projects in July, and, for some bizarre reason, the A64 was left off the list. This has put a real question mark over the chances for rural economic growth across Ryedale and North Yorkshire. Will the Secretary of State review that decision at the earliest opportunity?
The Minister for Universities, Science and Cities (Greg Clark)
North Yorkshire did pretty well out of the local growth fund. It has the BioVale campus, which I know my hon. Friend is strongly in favour of. Such was the calibre of the projects that we were able to allocate £6 billion of investment. I am now keen to move on to the next set of allocations, and she has just made a strong pitch for investment in her area.
Mr Dennis Skinner (Bolsover) (Lab)
I wonder if the Secretary of State would care to amend the reply he gave to me about when the pits closed. Just for his information, between the end of the pit strike in 1985 and the onset of the Labour Government in 1997, 170 pits were closed, out of less than 200. Those are the figures. They cannot be denied, and if he checks the record he will see that I am speaking the truth. On a second issue, is it not stupid to be getting rid of 3,000 mining jobs in the three pits that I have referred to while at the same time importing more coal from Russia when there are supposed to be sanctions? Is there not a stench of hypocrisy here?
Vince Cable
The hon. Gentleman is, of course, right on the figures. When we came into office there were only three pits left and none of the 170 he mentioned had been reopened, although there was a long period of Labour government during which that could have happened if the economics had been as he describes them. We have been actively involved in the case of these three pits; we have no wish to see a sudden closure and mass redundancies, and we continue to talk to potential commercial parties about it.
Caroline Dinenage (Gosport) (Con)
Businesses in my region really welcome proposals in the Small Business, Enterprise and Employment Bill on prompt payment. However, £46 billion is currently owed to businesses in the UK—that is an increase of £10 billion on last year’s figure—so as the Bill goes forward will Ministers consider making the code even tougher and broadening it to more companies?
Vince Cable
The hon. Lady is right to say that, particularly given the overall problems with access to finance for small and medium-sized companies, the issue of late payment is crucial and that this is happening on a massive scale. We will, in the course of this Bill, be making it much more transparent how larger companies, in particular, make their payments—we will be helping small companies in that way. I am happy to look at how we can strengthen the code, and indeed we are talking to the Institute of Credit Management about how we can do that.
Barry Gardiner (Brent North) (Lab)
Two years ago, figures were released showing that the green economy, although representing only 6% of the wider economy, was responsible for 30% of the growth in the economy. Will the Secretary of State tell us the current figures and, in his new line-up, which Minister has been specifically appointed to be responsible for green economic growth?
Vince Cable
There is a green economy group operating through government. I serve on it, together with the Secretaries of State for Environment, Food and Rural Affairs and for Energy and Climate Change—I believe it has Treasury representation on it, too. We put enormous importance on having a green thread in policy and we have taken major initiatives in that respect, notably through renewable energy innovation, supply chain development and the establishment of the green investment bank.
Andrew Jones (Harrogate and Knaresborough) (Con)
What is the Department doing to make the UK a better place to do business for our already strong pharmaceutical sector? I am particularly thinking about encouraging clinical trials and bringing forward new medicines, which of course will benefit not only our economy, but patients receiving treatment in our NHS?
George Freeman
My hon. Friend makes an important point. As a Minister in the Department of Health and in BIS, it is my job to make sure that we are building a landscape in which the UK is the best place to get quick access to patients, tissues, data and trials. Unless we can get innovations to patients more quickly, not only will we let them down, but, more importantly, we will not attract the investment into 21st century health technologies that we and our patients need.
Richard Graham (Gloucester) (Con)
The Secretary of State rightly highlighted the importance of re-shoring to revitalising our manufacturing and rebalancing our economy. Innovative companies such as Gloucestershire’s Future Advanced Manufacture Ltd discussed with aerospace customers how to manufacture locally parts previously made in the far east, and has done this with success. Does he think that there are more opportunities, with his Department leading, to discuss with the aerospace industry how the big contractors can look at their supply chains and consider re-shoring opportunities through small and medium-sized enterprises?
Vince Cable
The hon. Gentleman is right to say that the aerospace industry is one in which the British supply chain had been badly depleted over the years, and it is now being rebuilt. When I was last in India on a departmental trip I did visit an Indian aerospace company that was relocating to the UK, so this does happen. Through the aerospace growth partnership, which is a key element of the industrial strategy, re-shoring and building up the supply chain is a key element in the long-term planning of the sector.
Mr David Heath (Somerton and Frome) (LD)
May I ask the Secretary of State about the remuneration of university vice-chancellors, because the entry level appears to be about £160,000 a year? There are 127 vice-chancellors receiving more than £200,000 annually, 33 receiving more than £300,000 and four receiving more than £400,000. What is it about running a university that makes it so much more difficult and so much more remunerative than running the country?
Greg Clark
The robust tradition among universities is that they are independent institutions; Ministers do not have the ability to direct them. Universities are now in a competitive environment: they compete for students and with each other for research funds. I am sure that vice-chancellors across the country who are meeting today in Leeds at their annual conference will have the hon. Gentleman’s message relayed to them.
Mr David Willetts (Havant) (Con)
I was hoping to ask the Minister about Glasgow and to confirm that in a nationwide competition, Glasgow city won the funding to get £25 million of investment in smart city technologies. Do we not think that the best way for Glasgow to remain a smart city is for it to remain part of the United Kingdom?
Greg Clark
My right hon. Friend is absolutely right. Not only did Glasgow win that investment, but I was delighted to sign a city deal with it during the summer that involved the establishment of a new centre for stratified medical imaging in that great city. It is one of the advantages of being part of the United Kingdom that the excellence of Scottish institutions allows them to punch above their weight in terms of population and GDP. The question that is being asked in the Scottish research community is why spoil such a huge success story.
Mr David Nuttall (Bury North) (Con)
Thank you, Mr Speaker. When university tuition fees were increased, some feared that it would result in a fall in the numbers applying to enter higher education, particularly those from poorer backgrounds. Will the Minister tell the House whether those fears have proved justified?
Greg Clark
I am grateful to my hon. Friend for giving me the chance to point out that those fears have been completely unjustified. Since 2010, there has been a 17% increase in students from the poorest backgrounds, including an 8% increase in the past year. More students from disadvantaged backgrounds are going to university than ever before, and the gap between the richest and the poorest has never been smaller.
Mr Speaker
Points of order come after business questions rather than during questions.
Sir Bob Russell
The Secretary of State will not be here very long and I would like him to hear my point of order.
Mr Speaker
The hon. Member for Colchester (Sir Bob Russell) may be able to persuade the Secretary of State to return for his important point of order. I am afraid that procedure must take precedence over convenience.
Business of the House
(10 years, 3 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 the week when we return from the conference recess?
The First Secretary of State and Leader of the House of Commons (Mr William Hague)
The business for the week commencing 13 October is as follows:
Monday 13 October—Debate on a motion relating to Palestine and Israel. The subject for this debate was determined by the Backbench Business Committee.
Tuesday 14 October—Second Reading of the Recall of MPs Bill.
Wednesday 15 October—Opposition day [6th allotted day]. There will be a debate on an Opposition motion, subject to be announced.
Thursday 16 October—Debate on a motion relating to progress on the all-party parliamentary cycling group’s report “Get Britain Cycling”, followed by general debate on the national pollinator strategy. The subjects for both debates were determined by the Backbench Business Committee.
Friday 17 October—Private Members’ Bills.
The provisional business for the week commencing 20 October will include:
Monday 20 October—Consideration in Committee of the Recall of MPs Bill (Day 1).
I should also like to inform the House that the business in Westminster Hall for 16 and 23 October will be:
Thursday 16 October—Debate on the 13th report of the Public Administration Committee on “Caught red-handed: why we can’t count on police recorded crime statistics.”
Thursday 23 October—Debate on the eighth report of the Science and Technology Committee on “Communicating climate science.”
Ms Eagle
I thank the Leader of the House for announcing the business for after the conference recess. May I associate myself with the tributes paid by the deputy leader of the Labour party, the Leader of the House and other Members during Prime Minister’s questions yesterday to Jim Dobbin? We will all miss him.
Following President Obama’s address to the American people overnight and on the anniversary of 9/11, will the Leader of the House promise to keep the House updated on the rapidly developing situation in Iraq and Syria?
The Opposition Benches might seem just a little more sparsely populated than usual, but I assure you, Mr Speaker, that our Members’ absence is in a good cause. They are all in Scotland campaigning to save the Union. I will be joining them later today and I know that the Leader of the House is also bound for Scotland. Does he therefore agree that we can only build a better, fairer and more just future for the generations yet to come by realising that our two great nations are far better staying together than being torn asunder? May I welcome his Government’s support for the legislative programme outlined by the former Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), to give the Scottish Parliament greater powers in the event of a no vote? Does he agree that this demonstrates that the choice facing Scotland is not, as the nationalists would have us believe, between the status quo or separation?
Last Friday, the Government were defeated three times on the bedroom tax when the Affordable Homes Bill promoted by the hon. Member for St Ives (Andrew George) was given a Second Reading by 304 votes to 267. The bedroom tax is callous and cruel and has caused misery to hundreds of thousands of people across the country who have no realistic chance of moving to a smaller property. Many of them have been forced to turn to food banks to feed their families at the end of the month and many more have fallen unavoidably into debt. Will the Leader of the House confirm when the money resolution will come forward to enable the Bill to go into Committee? Clearly, there is no longer a majority of MPs who favour this cruel measure, and even Ministers are voting against it, so may we have a statement from the Secretary of State for Work and Pensions outlining how he plans to move forward?
This week, the Minister for Employment flew to the other side of the world to talk about the welcome fall in youth unemployment. What she did not mention in her choreographed boast was that long-term youth unemployment on the Wirral, where she and I both have our constituencies, has increased sevenfold since 2010, that the number of zero-hours contracts has trebled and that families are £1,600 a year worse off under this Government. By 2019, the number of working people claiming housing benefit will have doubled, increasing the cost by a massive £13 billion. Just when we thought that the Minister for Employment could not be any more out of touch, she suggested that the unemployed should undergo psychological tests to check out their attitude. The tests will apparently decide whether those looking for jobs are determined, bewildered or despondent. It sounds like these tests could sensibly be used on Tory Back Benchers.
During the Newark by-election, Tory MPs were expected by their Whips to visit the constituency at least three times, yet I hear that the Chief Whip, who is strangely absent yet again, has now made trips to Clacton-on-Sea optional. Following this week’s defection of two Tory councillors in Clacton to UKIP, are Tory MPs too bewildered or despondent to go there?
This week, months of research and planning finally culminated in a long-expected and spectacular launch. The press was lined up, waiting with bated breath, and fans lined the streets. Some had camped out overnight. There was going to be a product even slimmer than the iPhone 5s—the Liberal Democrat pre-manifesto, otherwise known as the iLie 3. The Deputy Prime Minister clearly takes seriously his pledge not to make promises he cannot keep, as he has promised to plant a tree for every child born and to legalise all drugs. The problem is that the only trip he is going on is to the Back Benches. There is, however, some good news—I hear that the manifesto is on a shortlist for a prestigious prize: the Booker prize for best new fiction.
Mr Hague
I am grateful as always to the hon. Lady. What she has said about Jim Dobbin was one of many heartfelt tributes in the House this week.
We will always keep the House updated—although we are entering a four-week recess for the conferences and the referendum—on developments in foreign affairs. Yesterday we had a foreign affairs debate in which many hon. Members took part. The Government will keep the House updated whenever possible.
I am pleased—it is unusual for me to say this—that the Labour party is out campaigning. The shadow Leader and I will be doing so—not together, although we will both be in Scotland—[Interruption.] Well, perhaps we will meet up later today. We will be on the same side, and for an important reason: as we discussed in the House yesterday, the decision to be made next week by the people of Scotland is not an opinion poll or an election; it is a permanent decision that will affect their children and grandchildren. Therefore, it is right that this will have such intense attention over the coming days.
The hon. Lady referred to the process put forward by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). All the main parties have endorsed the proposed timetable, including for a Command Paper to be published at the end of October.
The hon. Lady asked about last week’s private Member’s Bill debates. As discussed at Prime Minister’s questions yesterday, this is, in our eyes, a basic matter of fairness. The Bill that has been introduced would cost the country up to £1 billion, but I have not heard any proposals on how to replace that money. Many of the people whom the Bill intends to help are already supported within the existing policy—elderly people are exempt and disabled people who need overnight care from a visiting carer are allowed an extra bedroom. Of course, the House takes its own view on private Members’ Bills, but Government policy on the matter has not changed.
I am pleased that the hon. Lady, unusually, turned to employment matters, but she ought to have referred to the prediction of the Leader of the Opposition that 1 million jobs would be destroyed by Government policy. Since then 1,750,000 jobs have been created in this country; long-term unemployment is down, both on the last quarter and since the election; the Work programme is helping 1.4 million people, and has already got more than 500,000 people into work; and we have more than 1.8 million apprenticeship starts since the election. That is a strong record on employment and it will be a major factor at the coming general election.
Talking of elections, I thank the hon. Lady for referring to the Newark by-election, which was a great Conservative election victory—in fact, the first by the Conservative party in government since I was elected 25 years ago, which just shows how well we are doing in the run-up to the general election. She linked that with asking, as always, about the whereabouts of the Chief Whip, who is on his way to Clacton to campaign in the by-election. She will find plenty of Conservative MPs campaigning in Clacton, including me next week. That will be another of my visits around the country and I look forward to it.
Mr Hague
I will be going to Clacton next week, and I trust that Opposition Members will be going there, because in Newark their vote fell, which, for an Opposition, is quite remarkable in a by-election. If they are not careful, the same will happen in Clacton. We all enjoy taking part in by-elections, and that is particularly so for the one in Clacton.
I note that the hon. Lady has written an article for the LabourList website, which talks about the Labour party now showing
“real fiscal responsibility and an understanding that in the next Parliament we will have less money to spend, not more.”
Will she convey that to the shadow Chancellor, or, still better, become shadow Chancellor? I would happily nominate her for that post, because he does not seem to show any recognition of having put the country £160 billion a year in debt. He recently racked up £21 billion of spending commitments without having the slightest idea of how to pay for them.
Sir George Young (North West Hampshire) (Con)
With the publication of the recall Bill, will the Leader of the House tell the House what progress has been made with the Bills that were announced in the Queen’s Speech and say whether the recall Bill is a constitutional Bill, with all stages to be taken on the Floor of the House?
Mr Hague
We are making good progress. The introduction today of the Recall of MPs Bill means that we have introduced 10 of the 11 Government Bills promised in the Queen’s Speech, and they are proceeding well through Parliament, despite the fact that we have had some additional emergency legislation, as my right hon. Friend knows. I announced in the business statement that the Committee stage will begin on Monday 20 October on the Floor of the House, so, yes, we will be taking all stages of the legislation here.
Mr George Howarth (Knowsley) (Lab)
At last week’s business questions, I asked the Leader of the House about local government grant cuts, particularly as they affect Knowsley. He very helpfully suggested that I take the matter up at Communities and Local Government questions on the Monday just gone, which I did: I asked a very detailed question. While it is well known that the Secretary of State does not do detail, I got a reply from an Under-Secretary that bore no resemblance to the question I asked. Having taken up the Leader of the House’s helpful suggestions so far, does he have any others that might help to resolve this problem?
Mr Hague
I am full of helpful suggestions—“Ask at the next DCLG questions” would be the first one. Of course, as the right hon. Gentleman, who is a very experienced Member of the House, knows, there are many other ways in which to raise issues in this House—through Adjournment debates and promoting Back-Bench business debates—and he is very well able to do so.
Caroline Dinenage (Gosport) (Con)
In the light of South West Trains’ announcement that £210 million will be invested in rolling stock and not a single penny will be used on rail routes between Portsmouth and London, will the Leader of the House agree to a debate on the much-needed improvements to this important route, which has been painfully neglected for decades?
Mr Hague
The investment that my hon. Friend mentions is coming in to provide additional capacity to meet the expected increase in the number of peak-time passengers arriving at London Waterloo, and it is targeting the suburban network by creating extra platform capacity. A small number of evening peak services to Portsmouth will be lengthened, with more cars in the train, and I hope she welcomes that. I know that she will continue to make the case for investment that benefits her constituents. Again, there are many opportunities open to her, and to other hon. Members, to raise such issues in the House.
Chris Bryant
Having spent Monday and Tuesday in Clacton-on-Sea and Wednesday in Glasgow, back here it feels a bit like a Greek tragedy is going on, because all the action is happening everywhere other than in Parliament. Everything the Leader of the House announced for the future business feels, yet again, like a whole load of largely irrelevant matters compared with the imminent danger to the state of the Union, the collapse of the effing Tories, the imminent dangers that people are facing in terms of rail fare increases, and, most importantly, the bedroom tax—the one issue on which we did actually have a debate, when last Friday we came to a resolution in this House by a significant majority—which affects thousands of people. Yet still the Leader of the House will not announce when he is going to table the money resolution so that the Bill can go into Committee. When will that be?
Mr Hague
Well, the Conservative party will be having an open vote on who is the candidate, because we believe in as much democracy as possible in by-elections. I hope that the hon. Gentleman will not deride too much what has been going on in this House. He is right that there is a great deal going on elsewhere, including the referendum campaign, which is crucial, as we have all agreed. However, yesterday we had a full day’s debate on foreign affairs—on Ukraine, the middle east and all matters of international and national security. When we come back, we are going to consider the Recall of MPs Bill—something that was mentioned in all our party manifestos at the last election and is in the coalition programme. I hope that he will not run down too much what is happening in the House of Commons. As he knows, last week’s vote was on a private Member’s Bill, as distinct from a change in Government policy, and of course we will treat it as such in the normal fashion.
Andrew Griffiths (Burton) (Con)
My constituent Graham Gallier is awaiting trial in Kenya on charges he denies. I have deep concerns about the legal process to which Mr Gallier is being subjected: his case has been repeatedly adjourned, his passport has been held for more than three years, his health is declining and he is being denied access to justice. I am grateful for the help that the Foreign Office has given me so far, but could we have a debate on access to justice for British citizens in other jurisdictions, so that cases such as Mr Gallier’s can be raised?
Mr Hague
I know that my hon. Friend has taken up this case with my ministerial colleagues in the Foreign and Commonwealth Office and I will draw their attention to the fact that he has raised it this morning. The UK has a very strong consular network around the world. Indeed, it is something else for voters in Scotland to remember next week that one of the world’s strongest consular and embassy networks is that of the United Kingdom. Of course, that network will continue to assist my hon. Friend’s constituent and I will ask FCO colleagues to keep him informed.
Valerie Vaz (Walsall South) (Lab)
May we have an urgent statement on a code of practice in the NHS that makes the interests of children paramount and that balances the views of parents and clinicians so that public money is not wasted in court and police costs?
Philip Davies (Shipley) (Con)
May we have a debate on waste and bureaucracy in local authorities? When I worked for Asda, there were eight or nine levels between the most junior role and the chief executive. I have just found out from a freedom of information request to Bradford council that it has 42 different job levels in the local authority. Does the Leader of the House agree that an awful lot of money could be saved by cutting out some of those job levels and that that would also create a much-needed career path for people, who could start at the bottom and follow a path to reach the top? That often happens in supermarkets, but it very seldom happens in local authorities.
Mr Hague
My hon. Friend makes a powerful point. There have been many efficiency savings in many local authorities over the past four years. Indeed, in the best-run local authorities, layers of management have been taken out and there have been huge administrative savings, but that has not been uniform across the country. The pressure on local authorities to conduct efficient administration without excessive layers of management must continue.
Nick Smith (Blaenau Gwent) (Lab)
May we have a statement from the Secretary of State for International Development on the Ebola outbreak in west Africa? It is affecting three countries and there have been nearly 2,300 deaths so far. It is important that we provide public health and any other expertise necessary to try to help Médecins sans Frontières and Governments there to stop the outbreak as soon as possible.
Mr Hague
The Government are closely engaged with this issue. The hon. Gentleman is probably aware that the Government’s emergency committee, Cobra, has met on this subject, chaired by my right hon. Friend the Foreign Secretary. The Department for International Development has already been assisting the countries concerned. We have made our own precautions and successfully treated some people in this country, so the Government are very conscious of the issue and discussed it in Cabinet this week. As we approach a recess, I cannot offer an immediate statement by DFID, but I know that Ministers will want to keep the House updated whenever possible.
Mr Nigel Evans (Ribble Valley) (Con)
May we have a debate after the party conference recess on mental health provision and services in the United Kingdom? I recently did a tour of my constituency and, after housing, it was the No. 1 issue. It relates not just to health-care provision in hospitals and social services, but to those who have finished full-time education and cannot get employment. What is to happen to them? It is a huge worry for them and, indeed, their families. This is a Cinderella service that now needs to be addressed in the mainstream in this Chamber.
Mr Hague
My hon. Friend raises a very important issue. I am proud that this Government have legislated to ensure that improving mental health and treating mental illness are given the same priority as treatment for physical health. We are committed to introducing access and waiting times standards for mental health from next April. We are investing more than £400 million for access to National Institute for Health and Care Excellence-approved psychological therapies, more than £50 million for improved access to mental health care for young people and more than £7 million, additionally, for mental health services for veterans. A great deal is therefore being done to improve the situation, but I know that my hon. Friend will continue to press this issue.
Simon Danczuk (Rochdale) (Lab)
Last week, the Home Secretary announced the lord mayor of London, Fiona Woolf, as the new chair of the child abuse inquiry. Although I am anxious for the inquiry to be got up and running, I am disturbed by the apparent links between the new chair and Lord Brittan, who is alleged to be at the heart of the paedophile scandal and cover-up surrounding Westminster. Does the Leader of the House share my concerns, and does he agree that there should be a debate on this issue in the House?
Mr Hague
The hon. Gentleman has raised this issue many times, and he is very rigorous in pursuing such matters. We are all anxious for the inquiry to get under way, as he says. Fiona Woolf has had a long and distinguished career. She has held high-profile and challenging positions, including as president of the Law Society and chairman of the Association of Women Solicitors, and she is only the second woman since the year 1189 to hold the position of lord mayor of London. She is a very distinguished person, who is well able to conduct the inquiry to the very highest standards of integrity. The Government are therefore confident that she has the skills and experience needed to set the direction of the inquiry, lead the work of the panel, challenge individuals and institutions without fear or favour, really get into this issue and stop these terrible things happening again. I think that we should support her in doing this work.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Scots and Yorkshire folk have a great deal in common. They say, “You can tell a Yorkshireman, but you can’t tell him much.” We hope fervently that the Scots will vote to stay with us.
Rural businesses in North Yorkshire look with some envy at rural businesses in Scotland that have pretty much total 100% rural broadband coverage. Will my right hon. Friend agree to an early debate on why his constituency and mine will have less than 80% fast-speed broadband coverage by 2015-16, whereas the Scots will have a much better deal?
Mr Hague
Yorkshire and Scotland do have much in common, including a lot of sound common sense, and we hope that it will be displayed next week.
Superfast rural broadband is very important to my hon. Friend’s constituents and to mine. Public expenditure is higher in Scotland than in North Yorkshire in particular, and indeed than in much of the rest of the UK. In fact, Scots benefit from spending that is about £1,200 per head higher than we have in England, which affects such things. However, we are investing £790 million in superfast broadband access—North Yorkshire is at the forefront of the rural counties that will benefit from that—and 1 million UK premises are already connected, so this work is well under way, including in England.
Kevin Brennan (Cardiff West) (Lab)
Further to our exchange last week about having a debate on the Welsh language, the Leader of the House will know that the “Gododdin”, the early mediaeval Welsh epic poem, features a battle at Catterick in his constituency—soldiers from the Welsh settlement of Edinburgh fought in his constituency—while the very name of Glasgow comes from the Welsh for a “green place”. Does that not show that, from Aberdeen to Aberystwyth, the historical ties that bind the people of this island are deep and enduring, and that they should not be idly cast aside?
Mr Hague
The hon. Gentleman makes a very strong point. I have a copy of the “Gododdin” at home, and I am well aware that a battle was fought in about the year 600 in Catraeth, as Catterick, where I live, was then called. I sometimes visit the mound by the church where the warriors killed in that battle are supposed to have been buried. The fact that there was a Welsh-speaking tribe and that a battle in England included people who had come down from Scotland is, as he says, a reminder of our intrinsic ties and of the dark times when this kingdom was not so united. I hope that people will also bear that sort of history in mind when they vote next week.
Sir Bob Russell (Colchester) (LD)
May we have a debate on a dysfunctional aspect of the Department for Business, Innovation and Skills? When the list for today’s oral questions was first published, I was in fourth position with the following question to the Secretary of State:
“What guidance he issues to companies delivering publicly-funded projects on taking the national interest into account when awarding contracts and sub-contracts.”
The Department refused to answer the question, saying that guidance should come from the Cabinet Office. There is a clue in the title of the Department, in that it contains the word “Business”. May we have a debate on the business aspects of the Department for Business, Innovation and Skills and their relation to the national interest, particularly given that it is an issue that concerns two companies in my constituency?
Mr Hague
I hope that my hon. Friend can get an answer to his question from one Department or another. He is able to pursue the matter with the Cabinet Office. There are many ways of promoting and bringing about debates, including Back-Bench business debates, of which we have a great many. He might want to put forward aspects of the Department for Business, Innovation and Skills for such a debate.
Diana Johnson (Kingston upon Hull North) (Lab)
The latest figures show that Hull, which is the 10th most deprived area in the country, will lose £628 per household during the course of this Parliament, whereas Elmbridge in Surrey will gain £41 per household. May we please have a debate before the local government settlement in December to look at the fairness or unfairness of the way in which the coalition Government allocate local authority funding?
Mr Hague
We debate local government finance on a regular basis in the House. The level of Government support for local government spending remains vastly higher in the vast majority of urban areas of this country than in many of the more rural areas. Of course there are variations over the years, but the level of support in a city such as Hull is much greater than that in constituencies elsewhere in Yorkshire, such as mine. This matter can be argued both ways, and the hon. Lady argues that the funding should be greater in her constituency. We have all made that argument over time, and she will be able to do so the next time these matters are debated.
Mr Peter Bone (Wellingborough) (Con)
Will the Leader of the House arrange for the Leader of the House to make a statement tomorrow in order to, I hope, scotch the rumour that if, unfortunately, Scotland votes to become independent, there will be a move to put back the general election until Scotland becomes independent? Will he confirm that that would require the introduction of new legislation, and that the Government have no intention of bringing forward such legislation?
Mr Hague
That has not been discussed within the Government. All of us on this side of the argument should concentrate on ensuring that there is a no vote in the referendum in Scotland next week, which means concentrating on the arguments about that. After the result, we can discuss its implications, but the time for that is afterwards. We should concentrate on ensuring that people are encouraged to vote no.
Mike Kane (Wythenshawe and Sale East) (Lab)
One of the oldest centres of Christianity, Iraq, is being purged of Christians and other minority communities. This weekend, I shall host a round table with the Mancunian Iraqi-Christian diaspora and Iraqi bishops whose flocks are in exile. What message of solidarity should this House send to those displaced communities in our country?
Mr Hague
I pay tribute to the hon. Gentleman for undertaking that work. It is another illustration of how tragic and serious the crisis and bloodshed in Iraq are, and of why we cannot ignore them. That is why we have promoted political unity in Iraq. We have stressed to Iraqi leaders the need to bring together all communities in Iraq and to have a Government who command the united support of the different communities and religions, so that they can decisively tackle the threat from ISIL. Progress has been made on that. As the hon. Gentleman knows, there is a new Prime Minister of Iraq, and a new Government are being formed. International support is being given to that Government.
Mr John Baron (Basildon and Billericay) (Con)
Many colleagues welcome Government assurances that any proposed military intervention in Iraq and Syria will be subject to a full debate and vote in the House. Given the significance of President Obama’s statement only hours ago, and the fact that the US seems to be adopting policies such as air strikes in Syria, which certainly go beyond what those on the Front Bench expressed yesterday as their comfort zone, will the Government make a statement as soon as possible to the House, particularly given that we will be in conference recess for the next month?
Mr Hague
We had a full day’s debate on foreign affairs yesterday, although I know my hon. Friend is talking about the speech of President Obama overnight. President Obama was talking about action that will be taken by the United States, which does not mean that there is any immediate change to the British Government’s approach. The approach expressed by the President of building a strong international coalition, working with Governments in the region, and working with others to defeat the threat from ISIL is the approach of the British Government. We have stated what we are doing, including the provision of lethal equipment to the Kurdish peshmerga forces and our diplomatic work to bring about political unity in Iraq. None of that has changed and it is not different today from yesterday. We will, of course, keep the House regularly updated at every opportunity.
Mr Philip Hollobone (Kettering) (Con)
If the Scottish people vote to separate from the United Kingdom, and/or if the RAF is ordered to prepare for air strikes against the Islamic State, will my right hon. Friend as Leader of the House recommend to the Prime Minister that the House be recalled?
Mr Hague
As usual, we must always judge a case for the recall of Parliament when it arises. Most recalls of Parliament that I remember from the last few years have been on situations that were entirely unexpected. It is common for hon. Members to ask in advance of a recess about particular situations that it could be argued might lead to a recall, but it is often something else entirely. We must judge all these situations as they arise, and it is not right to make any announcements or assumptions about that at the moment.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
Could we have a debate on upland hill farmers, which is a subject that affects my constituency and that of my right hon. Friend? Upland hill farmers are under intense pressure from organisations like the national parks, Natural England and many others that make demands about the way farming is carried out in this country. In some cases that is fair enough, but if we want the upland areas of the United Kingdom to stay as they are and look as they do now, we must allow farmers to farm. Most of the uplands are not natural but man-made, and people enjoy them because of what they are. Will my right hon. Friend see whether we can make time to debate what is an important industry in both our constituencies and across much of the United Kingdom?
Mr Hague
Hill farming is an important industry, as I know well from my constituency, and upland hill farmers are crucial to some of the most beautiful and outstanding areas of the country. We have had debates over many years—I remember promoting such debates more than 20 years ago as a Back-Bench MP. There are opportunities to bring about such debates through Adjournment debates and the Backbench Business Committee, and I encourage my hon. Friend to pursue those opportunities.
Mark Pritchard (The Wrekin) (Con)
Notwithstanding the £38 billion black hole left by the previous Government, may we have a debate on the UK defence budget? Given increasing threats against UK citizens and UK interests around the world, is it not time to increase the defence budget rather than squeeze it?
Mr Hague
We have a £33 billion defence budget, which is the biggest in the European Union and the second largest in NATO. I think we should be proud of the fact that we are spending in excess of 2% of our GDP on defence—we are one of only four NATO countries to do so. My hon. Friend will be aware that at the NATO summit we encouraged other countries to enter the new commitment to increase their defence spending in future. We had the Prime Minister’s recent statement on the NATO summit, so I do not think we need to debate all that again immediately. There will be regular opportunities in the course of many debates to raise such issues and the vital importance of defence spending.
Martin Vickers (Cleethorpes) (Con)
The Government have understandably indicated that, if the Scottish people vote no, proposals will be introduced for further devolution to the Scottish Parliament within days. That will increase the concerns of my constituents and others in England that we are being treated less favourably than people in other parts of the UK. Will my right hon. Friend assure the House that an early statement will be made on how the Government intend to meet the aspirations of the English people and devolve further powers within England?
Mr Hague
The decision next week is a matter for the people of Scotland, but its implications will be felt across the UK. We have a good record of devolving powers, as we have to Wales or, through the Localism Act 2011, to local authorities. We are a flexible and adaptable Union—that is one of the great strengths of the United Kingdom. That must take account of the people of England as well. As proposals come forward on Scotland over the coming months, there must be every opportunity to debate the implications for England.
Mr Andrew Turner (Isle of Wight) (Con)
In view of the increased number of migrants both from the EU and from outside the EU in the past 12 months, may we have a debate on the subject and an explanation of why we are going in the opposite direction to the manifesto commitment?
Mr Hague
Net migration has fallen by a third since its peak and we have capped economic migration from outside the EU. My hon. Friend will welcome measures such as limiting EU jobseeker’s benefit to only six months, and removing entitlement to housing benefit. I am sure other hon. Members would welcome an opportunity to debate the matter. My hon. Friend may wish to seek such time from the Backbench Business Committee.
Henry Smith (Crawley) (Con)
I very much support the increase in the cancer drugs fund announced by the Government, and was delighted previously to open a new digital mammography unit at Crawley hospital. Nevertheless, I was concerned to see recently the results of an assessment of my constituency that indicated that cancer survival rates were below the national average, largely owing to the need to get early diagnosis. Will he consider a debate on the importance not only of cancer treatment but of awareness of cancer symptoms, so that people can be diagnosed and treated much more promptly?
Mr Hague
Yes, tackling diagnosis is vital. We have committed more than £450 million over the period of the spending review up to next year to support earlier diagnosis. We have debated related issues, most recently on Monday, when the House considered the e-petition on research funding and awareness of pancreatic cancer, but I am sure the House would benefit from further opportunities, particularly to coincide with the next early diagnosis reminder campaign, which is running in October and November.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
On Sunday, I visited one of my constituents, Mrs Margaret White, who happens to be the former chairman of my local party. She had been released from hospital and went home, but unfortunately, there seems to be no care plan for her. May we have a debate on the national health service and its interrelationship with local authorities, to ensure that such people are looked after much better?
Mr Hague
It is a priority for the Government to ensure that patients receive joined-up health and social care. That is exactly what the better care fund seeks to achieve through pooled budgets between the NHS and local authorities, which is being done in every single area for the first time. I am sure that that is the right approach, but such a debate, which my hon. Friend can seek through all the normal channels, would help the House to consider individual cases like the one he mentions.
Paul Uppal (Wolverhampton South West) (Con)
For 46 years, Barbara Hepworth’s bronze “Rock Form” sculpture has stood in the Mander centre in my constituency. In spring, it was removed without warning and has not been seen since. For three months, the major stakeholders in the Mander centre, RBS and Delancey, refused to deny that they intended to sell the “Rock Form”, which, in the current market, would probably fetch several million pounds. Given the cultural importance of the piece, will my right hon. Friend provide a debate on the need to protect and preserve cultural landmarks in our towns and cities?
Mr Hague
Many hon. Members will appreciate Barbara Hepworth’s work, as many visitors to the Mander centre will have done over the past 46 years. It is possible to protect such sculptures through statutory listing, and my hon. Friend may seek a debate on the wider issues about protecting our cultural landmarks, but I am sure that my ministerial colleagues at the Department for Culture, Media and Sport would also be pleased to meet him to discuss what can be done to help his campaign and save this particular sculpture for the future enjoyment of his constituents and many visitors to Wolverhampton.
Andrew Bridgen (North West Leicestershire) (Con)
While not wishing to annoy the House, I am afraid that I must again raise the issue of nuisance telephone calls. My constituents tell me that despite registering for the telephone preference service they find themselves inundated with unsolicited calls at all hours of the day. May we please have a debate about what more the Government can do to lift this blight from people’s lives that causes so much misery to our constituents?
Mr Hague
There is great concern in the House about this problem—it was raised last week as well—and the DCMS is taking measures to address it. It published its nuisance calls action plan on 30 March and since January 2012 regulators have issued penalties totalling more than £1.9 million to companies for breaching the rules. Further work is under way to see what more can be done to tackle the issue, as set out in the action plan, and I know that DCMS Ministers would be willing to discuss that with my hon. Friend.
Jeremy Lefroy (Stafford) (Con)
A senior NHS executive recently asked counterparts in European countries how they could continue to offer consultant-led maternity units of the same size as the one in Stafford—2,000 to 2,500 births a year—whereas in the UK these are often said to be unsustainable. He was told that different implementation of the working time directive was a major consideration. May we have a debate on the continued provision of safe consultant-led maternity and paediatric care in district general hospitals, including the impact of varied implementation of the working time directive?
Mr Hague
This is an important issue, as I have seen in my own constituency, and the Government are committed to reducing the negative impact of the directive on the NHS. The Health Secretary commissioned an independent taskforce, chaired by Professor Norman Williams, which looked closely at evidence of how the directive affected different parts of the medical profession, and work is now being done on the recommendations. Furthermore, the European Commission has recently requested information on the impact of the implementation of the directive from all member states, and our response must take account of the concerns that my hon. Friend and others have expressed. He can also seek a debate in the normal ways.
Andrew Jones (Harrogate and Knaresborough) (Con)
Local charity Dementia Forward is working to make Harrogate a dementia-friendly town. This is a great initiative encouraging both businesses and members of the public to understand and help those living with dementia. One in three people aged over 85 suffers some form of cognitive impairment, meaning that there is real scale to this challenge, so please may we have a debate to explore what more can be done to help communities become more dementia-friendly, to celebrate the work of dementia charities and to encourage everybody across the UK to recognise the scale of this issue, which is only going to grow over time?
Mr Hague
Again, this is an important issue and the initiative in Harrogate is welcome. Seventy communities have already signed up to the dementia-friendly communities recognition process, which more than doubles the original ambition of 20 cities, towns and villages signing up by 2015. Major businesses have committed their staff to supporting the process and the Government are supporting the work of the Yorkshire and Humber dementia action alliance. This is all very good work and of course I encourage my hon. Friend to seek debates and other opportunities to promote this matter in the House in the usual ways.
Mark Pawsey (Rugby) (Con)
The “Big Tidy Up” will be starting in Rugby this weekend when a team of volunteers, supported by Rugby borough council and local businesses, will be targeting litter in a new project that will bring people together to benefit their local environment. The Leader of the House may be aware that the Select Committee on Communities and Local Government is about to consider the issue of litter. Could we have a debate to consider how further to encourage such activity as is going on in my constituency?
Mr Hague
I wish “Keep Rugby Tidy” well; I hope it will be a successful weekend and that future activities will do well. This is setting a good example not only in the locality but around the country. I cannot offer a debate on top of all the other things before us, but there are ways for my hon. Friend to seek further parliamentary time. I wish everyone in Rugby well with this initiative.
Point of Order
(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. I hope you will consider an innovation, although not a very modernising one. As you know, we are commemorating the 100th anniversary of the start of the first world war and the House has 19 shields of Members who were killed during that war. Three more of them are to be added before we come back after the recess. I wonder whether we could on 6 November feature a commemoration on the front of the Order Paper of the first Member of Parliament who died 100 years ago, Captain Arthur O’Neill who died at Zillebeke Ridge, and then continue that practice throughout the period of the war to commemorate the death of those Members who died 100 years ago.
Mr Speaker
I have two points in response to the hon. Gentleman. First, if memory serves, the decision to install a further three plaques followed a request by the hon. Gentleman. I would not want his natural self-effacement, to which we are all accustomed in this House, to get the better of him. I want him to enjoy the proper plaudits for the action that is about to be taken. Secondly, I rather like that idea. It is new to me. I do not know whether there are any notable cost implications. It is an innovation, and I think it a rather attractive one. I would like to see whether the idea could be taken forward.
Bill Presented
Recall of MPs Bill
Presentation and First Reading (Standing Order No. 57)
The Deputy Prime Minister, supported by the Prime Minister, Mr William Hague, Greg Clark, Tom Brake and Sam Gyimah, presented a Bill to make provision about the recall of Members of the House of Commons; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 94) with explanatory notes (Bill 94-EN).
Backbench Business
(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Energy-intensive Industries
(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Alex Cunningham (Stockton North) (Lab)
I beg to move,
That this House welcomes the measures announced in the 2014 Budget Statement which reduce cost pressures created by the imposition of carbon taxes and levies; notes that without such measures, there is a serious risk of carbon leakage; further notes, however, that UK manufacturing still pays four times as much for carbon compared with main EU competitors because of taxes such as the carbon floor price; and calls on the Government to build on the measures announced in the Budget by producing a strategy for energy-intensive industries, as recommended by the Environmental Audit Committee in its Sixth Report of Session 2012–13, HC 669, in order to produce a fairer and more efficient system which delivers genuine potential for investment in a low-carbon economy.
I am delighted to have the opportunity today to open this debate and to move the motion in my name and that of the hon. Member for Redcar (Ian Swales). I am grateful to the Backbench Business Committee for granting time in the Chamber for this important debate about the impact of taxation on our country’s energy-intensive industries, which employ or support up to half a million jobs.
I know that other hon. Members, many of whom have energy-intensive industries in their constituencies, would have liked to be here today to contribute to this debate, but have rightly chosen to travel to my homeland to chat to my fellow Scots who have yet to make a final decision on whether or not to vote to keep the United Kingdom together. Just as I am sure they are here with us in spirit, I am sure that most, if not all of us, recognise and support their mission, which will have a direct impact on the issues that we are discussing today.
Before I get into the main body of my speech, I formally declare my membership of the all-party parliamentary group for energy-intensive industries, which campaigns on the issues to be raised today and whose members helped to secure this debate. Much of the debate will centre on the impact that carbon taxes and levies are having on our energy-intensive industries—EIIs—and will seek to encourage progress in working towards a strategy for EIIs that will deliver genuine potential for investment in a low-carbon economy.
Whether it be through petrochemicals, nitrate fertiliser or steel production, the Tees valley, where my Stockton North constituency sits, has long been synonymous with heavy industry and the thirst for energy that it necessarily entails. The town of Billingham, which is home to a large chemical centre, has played a particularly significant role in Britain’s industrial back story. The cooling towers and chimney stacks that still adorn, if not dominate, parts of the region’s skyline—along with the famed transporter bridge—are testimony to Teesside’s proud industrial heritage, but the decline of those industries will be hastened if actions are not taken to lessen the burdens imposed by carbon taxes and levies.
As Member of Parliament for Stockton North, I shall be speaking for Teesside and highlighting the various hurdles that many of our EIIs are facing there; but as a member of the energy-intensive industries all-party parliamentary group, I shall be speaking not just out of local or regional interest, but to highlight issues that are having an impact on industries the length and breadth of the country. The reach and scale of the problems extend far beyond the north-east, and to products such as cement, glass and ceramics.
If I may borrow a phrase from my hon. Friend the Member for Southampton, Test (Dr Whitehead), the next Government will come to power at a time when the three prongs of an “energy trilemma” are driving potentially competing agendas that must be addressed by any emerging energy policy. That means that, at the same time as taking steps to guarantee that our energy supply is secure, we require measures to ensure that energy prices for consumers, both domestic and industrial, are affordable, as well as movement towards decarbonising supplies to ensure that the energy sector contributes to carbon reduction rather than undermining it.
As I have already made clear, EIIs form the cornerstone of the United Kingdom’s manufacturing sector and, by virtue of that, the cornerstone of the wider economy. Figures for the sector vary, but the Environmental Audit Committee has suggested that EIIs employ 125,000 people in the UK. The UK’s foundation industries, which have a significant overlap with EIIs and account for higher numbers of supply-chain jobs, are reckoned to employ nearly half a million people—which amounts to roughly 20% of total manufacturing employment—generating gross value added worth £24.6 billion. Those industries account for between 3% and 4% of GVA across the UK economy as a whole. In the Tees valley alone, the process sector consists of more than 1,400 local firms in the supply chain, generating sales worth more than £26 billion a year and £12 billion of exports and comprising 50% of the UK’s petrochemicals GDP, while producing 60% of its chemical exports.
As well as being a key source of productivity, investment and employment, EIIs are central to our successful transition towards a low-carbon economy, manufacturing such “green economy” products as lightweight plastics, insulation, and components for wind turbines. For every tonne of carbon dioxide produced by the chemicals industry, more than two are saved downstream by its products. However, if we are to meet the carbon reduction targets set by the last Government—which, as Members will know, bind the UK to reducing carbon emissions by a third of 1990 levels by 2020, and 80% by 2050—significant reductions in emissions are required throughout the economy. In addition, as part of its EU obligations, the EU must obtain 15% of its energy consumption from renewable sources by 2020, which represents a fourfold increase on 2010. Electricity generation is expected to contribute most to the meeting of that target, primarily through the use of wind and nuclear power generation, but also through carbon capture and storage.
While the decarbonisation of electricity generation will be critical, along with measures to improve the energy efficiency of homes and transport, industry—which accounts for about a quarter of UK emissions—is rightly expected to make a substantial contribution. Given that EIIs account for more than 50% of industry-related emissions, they are expected to deliver reductions of at least 70% from 2009 levels by 2050. However, those obligations, although noble and justifiably ambitious, come with a set of associated difficulties.
EIIs operate in highly competitive global markets, and energy is typically their largest production cost. For instance, INEOS, which provides several hundred jobs at its Seal Sands site in Stockton North, tells me that electricity constitutes 70% of production costs associated with its manufacture of chlorine. As a consequence, energy price is business-critical, and it is only possible for the industries concerned to operate in countries with competitive energy prices. In other words, energy costs are influencing, if not directing, investment decisions for EIIs. At a time when the UK’s energy prices compare unfavourably with those in much of Europe and the rest of the world, that is bad news for the manufacturing sector as industries are driven towards more competitively priced markets such as the United States.
Let us take the cement industry, for example. Cement imports currently stand at 14% of UK consumption, up from just 3% in 2001. As the UK has enough cement import capacity to replace domestic manufacturing, there is a real risk that industries in the sector could take the decision to offshore production where costs would be lower. Such a decision would have damaging knock-on consequences. Not only will cement and concrete be vital for the construction of a new, low-carbon energy infrastructure, but the UK would stand to lose out on £2.84 of economic activity generated for every £1 spent on construction. Indeed, such “carbon leakage” can already be seen in the energy-intensive sector, with high-profile closures caused by these uncompetitive energy prices. BASF and Tata, for instance, last year announced closures resulting in over 600 job losses, doubtless a decision influenced by the energy costs, which are more than 50% higher than those of direct competitors elsewhere in Europe.
At the same time, other international companies are redirecting investment en masse to more competitive locations. While wholesale prices are driven by high gas prices, that is distorted by the very high policy costs imposed in the UK. Energy costs for industrial users in the UK are around 45% higher than in France and around 70% higher than in Germany—a competitiveness gap that is wider still in comparison with the US and China, where wholesale prices and policy costs are extremely low.
A stark example that hammers home the extent of this competitiveness gap is offered by GrowHow, based in my Stockton North constituency and at Ince near Chester, which has told me of the struggles it faces as a result of relatively high energy costs. Gas—GrowHow’s main feedstock—costs more than three times that of their Russian competitors, who operate on state-fixed gas cost. Similarly, German electricity prices on a delivered basis for very large users in 2013 equated to €38 per MW against £70 per MW in the UK.
The situation is set to get much worse over the next decade. The Department for Business, Innovation and Skills forecasts that UK energy and climate change policies will add around £30 to every megawatt of electricity for EIIs by 2020, substantially more than for any other country in the world. Needless to say, that is a huge threat to the entire energy-intensive sector—a threat that the next Government, regardless of colour or composition, must take steps to meet.
Joan Walley (Stoke-on-Trent North) (Lab)
I congratulate my hon. Friend on securing this debate. Does he agree that the huge energy security and energy affordability issues that we face place our manufacturing industries right at the cutting edge of how this debate is to be taken forward, but we must also not lose sight of the need in the long term to decarbonise, and in doing that we will be making our manufacturing industries more competitive? As my hon. Friend rightly says, there is a short-term issue in terms of transition to that low-carbon economy and it is for that reason that the Environmental Audit Committee, which I chair, recommended that there should be a particular strategy for companies that are intensive users of energy. We have not really seen any progress on that, and I hope that when the Minister replies to the debate we can really look at how we can make our manufacturing companies competitive, losing no time in making sure that we have an international agreement on climate change—because we must not lose sight of that—but keeping our manufacturing processes there in the short term to be there for the long term.
Alex Cunningham
My hon. Friend gives a comprehensive summary of where I think we should be, and I hope to develop some of the points she made later in my speech. This is not just about the short term; it is about planning for the future as well.
Of course, the situation with regard to these energy costs is set to get much worse over the next decade. As I have said, the Department for Business, Innovation and Skills forecasts that UK energy and climate change policies will add around £30 to every megawatt of electricity for energy-intensive industries by 2020—substantially more than for any other country in the world.
David T. C. Davies (Monmouth) (Con)
I have a great deal of sympathy with what the hon. Gentleman is saying. Does he agree that it is now time to scrap these ludicrous carbon taxes?
Alex Cunningham
Carbon taxes have been imposed by consecutive Governments for very good reason, but if our industries are to be competitive, the time has come to examine them carefully and to determine how we go forward. This is not just about taxation, however; we must also take into account the issues that my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) raised a moment ago.
Needless to say, the rise in energy costs is a huge threat to the energy-intensive sector, and it is one that the next Government must address. That brings me back to the trilemma that I mentioned. The present Government have designed policies that focus on reducing carbon emissions from industry, but those policies, influenced by regulatory activities in the EU, rely heavily on measures that seek to enhance energy efficiency while putting a price on industry’s carbon emissions. A cap-and-trade market for carbon was created through the EU’s emissions trading system, introduced in 2005. That market spans the EU and aims to reduce emissions at the lowest possible cost while incentivising low-carbon investment by making emitters financially liable for their emissions. It is intended that, from 2013 onwards, the capping level will fall by 1.74% a year for power stations and industry, so that total emissions are 21% lower in 2020 than they were in 2005.
The Government responded to industry concerns with a compensation package of £250 million announced in Budget 2011 for the period 2013-15, boosted by a further £150 million and extended to 2016 in Budget 2013. But, by December 2013, the emissions trading system compensation scheme had paid out only £18 million to 29 companies in the energy-intensive industries sector. Part of the problem is that although member states are permitted to compensate those at risk of carbon leakage arising from the emissions trading system, there is no obligation to do so. This results in energy-intensive industries being burdened with additional costs, be it through burning fossil fuels and buying allowances to match their emissions, or indirectly through the higher electricity prices that result from generators burning fossil fuels. As we know, the costs are passed on to consumers.
However, because the weak carbon price in the emissions trading system was deemed too low to incentivise lower-carbon investment, the Government then added a further policy cost to the price of energy by introducing a UK carbon price floor to top up the carbon price to an acceptable target rate. This undoubtedly limits the competitiveness of EIIs, many of which are unable to pass those costs through to their customers.
In my role as a member of the all-party group—not to mention as an MP representing an industrial centre—I have regular contact with those in the energy-intensive sector and frequently listen to the issues that they find themselves contending with. Through those conversations, I understand that no other country has imposed a policy similar to the carbon price floor here in the UK, nor are there plans to do so. It has been widely acknowledged that the carbon price floor does not, in fact, reduce emissions from power generation; those are capped at EU level. Instead, the carbon price floor significantly increases the proportion of decarbonisation costs that is borne by UK electricity users. Those are costs that drive investment decisions and can lead to companies relocating overseas rather than developing their businesses in the UK.
To be sure, the EIIs that I have spoken to strongly support the drive for greater energy efficiency. In many cases, energy efficiency is more cost-effective than subsidising low-carbon generation. For instance, GrowHow tells me that, since 2010, it has reduced carbon emissions associated with its main fertiliser product by 40%. By reducing nitrous oxide emissions, it has made savings equivalent to more than 4 million tonnes of CO2, which means that, relative to its competitors, it is very efficient, and as much as three times as efficient as Russian producers.
Despite the fact that industry has delivered substantial energy and carbon savings over recent decades through investment and innovation, the cumulative impact of energy and climate policies is now putting extraordinary pressure on EIIs, necessitating continuous improvements in energy efficiency to remain competitive—although that is not to suggest that they are not doing that anyway.
Indeed, as industries approach the limits of what is realistically achievable with current technologies, the capacity of businesses to invest in the UK is ultimately undercut and the sustainability of the entire sector in the UK placed under threat. That, of course, brings with it the simultaneous possibility of the loss of jobs and investment to other countries with less vigorous climate change policies. That is disheartening, not just because of the obvious negative impacts for local economies and for the national economy more broadly, but because it overlooks the necessity to safeguard our existing industries and the employment they provide in order to make that all-important transition towards a low-carbon economy. Only through the continued provision of support to these industries can we hope to attract new investment.
We need look no further than Air Products in my constituency for an example of the types of investment in low-carbon industries that successful industrial clusters can attract. Shortly after committing to invest in building one of the world’s largest renewable energy plants on Teesside, the company announced investment in a second similar plant, influenced no doubt by the favourable business conditions that will see the wide availability of feedstock while allowing for local knowledge, skills and infrastructure to be used constructively and competitively. It speaks volumes that Sembcorp is developing with SITA a similar 35 MW plant on Teesside also to provide electricity from waste, further highlighting the potential for investment in the low-carbon economy that can result from the development of strong industrial clusters.
There can be no doubt that the Tees valley’s successful process industry cluster is central to the region’s position at the centre of the UK’s move towards a high-value, low-carbon economy, attracting significant investment over recent years and developing a reputation for green excellence. The area continues to work with government on a low-carbon action plan, on industrial carbon capture and storage, and on industrial heat networks as part of the city deal agreement, leading the way on bio-industries and energy from waste while increasingly being seen as a destination for green investment.
Such examples confirm the UK’s potential competitiveness on the international stage, but EIIs need access to secure internationally competitive energy supplies if they are to continue locating in the UK and investing in areas such as the Tees valley. That means having a level playing field for EIIs within the single EU market, taking account of the cumulative burden of climate policies on industrial energy prices. We cannot mistake the fact that the Chancellor deserves credit for capping the carbon price floor at £18 per tonne of CO2 from 2016 to 2020 instead of allowing a linear rise to £30 per tonne by 2020, as was originally planned. Calculations indicate that such a move could save UK EIIs in the region of £4 billion over three years, but that cannot disguise the fact that industries are still exposed to an expensive unilateral tax and received no form of compensation for the first year of its operation. With the compensation being announced a few years at a time, there is no long-term certainty about business costs, which deters investment in the sector in the UK.
Estimates suggest that the carbon price floor has already added 5% to EIIs’ energy prices and budget reforms will cap the impact at 8% from 2016 to 2020. Although that is certainly an improvement on the original trajectory, which would have added 14% by 2020 and 26% by 2030, we must recognise that even after this modest reform UK industrial electricity users still face four times the carbon cost borne by EU competitors, let alone competitors outside the EU, which do not face carbon costs at all.
Similarly, EU energy and environmental state aid guidelines published earlier this year limit compensation for the impact of the Government’s carbon price floor on electricity prices, so it can be paid only to EIIs in sectors already eligible for emissions trading system compensation. The Government therefore have no legal means of compensating EIIs for the impact of the carbon price floor in sectors such as cement, glass and ceramics, even where clear evidence exists of energy intensity and risk of carbon leakage. So despite the fact that indirect emissions trading system costs to the cement sector during the period 2014 to 2020 are estimated at £82.7 million, and the cost of carbon price support over the same period is estimated at £104 million, the European Commission’s guidelines conflict with UK domestic policy to allow support against the carbon price support tax for the cement industry.
Incidentally, representatives from that industry have pointed out that cement did not make it on to annex II of the EU ETS indirect CO2 aid guidelines because the tests that were applied were based on trade intensity of cement, which is currently only moderately traded, rather than the raw product before grinding—cement clinker—which is traded much more intensely. That leads to the conclusion that unless every EII sector is deemed eligible at the EU level for emissions trading system compensation, the only equitable solutions available to address this industrial competitiveness problem are withdrawal of the carbon price floor or efforts to reform the emissions trading system itself to encourage a stronger, more robust carbon price signal.
There can be no doubt that the UK must strive to avoid meeting its carbon targets by offshoring state-of-the-art energy-efficient EIIs. The objective must be sensible and economically sustainable decarbonisation, not de-industrialisation. In that respect, the UK’s status as the least energy-intensive economy in the G7 should perhaps be treated with caution rather than celebration.
We must think outside the box and look beyond punitive taxation schemes for alternative means to decarbonise, sending a signal to the rest of the world that it is possible to retain industry and decarbonise simultaneously and leading by example. A report last year by the American Chemistry Council found that 97 chemical industry projects worth a staggering $71.7 billion have been announced as a result of the US’s shale gas boom.
As a result of shale gas extraction, the price of energy and petrochemical raw materials in the US has plummeted, allowing a boom in the chemicals industry—so much so that INEOS tells me that the majority of its profit now comes from one-third of its business sales in the US. Although I am under no illusion that the UK will be able to replicate the US’s experiences entirely, extracting shale gas is likely to reduce energy and petrochemical raw material costs significantly. I also appreciate that fracking for shale gas is a controversial process and recognise the potential risks that it brings. But the appropriate response to concerns about the safety and environmental impact of shale gas extraction is to ensure that we have the right regulatory and monitoring framework in place. Any questions are best answered on the basis of evidence gathered from carefully regulated and comprehensively monitored exploration.
Although there is little prospect of fracking in north-east England, the abundant offshore coal reserves and potential for gasification present an opportunity to secure the future of EIIs—both in the Tees valley and the wider UK—while safeguarding thousands of jobs and helping to drive a much-needed economic recovery in the area. A failure to explore such options further would be an opportunity wasted.
Similarly, with the Tees valley already producing around 50% of the UK’s hydrogen and having an established hydrogen pipe network, the application of carbon capture and storage, as detailed in the region’s city deal, along with investments such as Air Products and the potential extraction of hydrogen from industrial sources mean that there is a significant opportunity to produce green hydrogen in Tees valley, which is capable of supplying the increasing demand for hydrogen fuel cells.
Our EIIs need support through this place, with a re-examination of taxes, carbon capture development and new energy sources. As recommended in the Environmental Audit Committee report, we need to set that path for maximum feasible decarbonisation, and I hope that we will do that soon.
Mark Pawsey (Rugby) (Con)
It is a great pleasure to follow the hon. Member for Stockton North (Alex Cunningham) and I congratulate him on securing a debate on such an important issue. I support the motion on energy intensive industries, and wish to speak about cement manufacture. The hon. Gentleman has already spoken about construction materials, but it is to that sector that I wish to address my remarks.
My constituency is best known as the birthplace of rugby football, but for many, it is the home of Rugby cement. Cement has been produced in the Rugby area for more than 150 years, starting with a small-scale lime production at Newbold in 1865. Operations moved to the present site in Lawford road in the 1960s. Today, the plant, which is operated by CEMEX, is one of the most modern in the world and represents a total investment of £200 million. It has the largest kiln in the UK, and a production capacity of 1.8 million tonnes of cement per annum. It provides direct employment for many people, involving a large number in the supply chain. It is estimated that CEMEX contributes £25.5 million per annum to the local economy in Rugby. On the assumption that the average house contains about 18 tonnes of cement, the Rugby works produces enough cement for the construction of more than 72,000 houses.
The energy used in cement manufacture is not used to raise the temperature in the kiln. The kiln has traditionally burned coal but is increasingly using alternative fuels, which, in Rugby’s case, means chipped vehicle tyres and waste-derived fuel. Waste-derived fuel is such an important component that a new plant to provide it and to make a material known as Climafuel is under construction in my constituency. That fuel is derived from household and commercial waste and is making effective use of material that years ago would simply have been put into holes in the ground. Rather than in the kiln, the cement manufacturing sector uses high levels of electricity to transport material around the plant and to grind down the grey clinker that comes out of the combustion process into the grey powder that we would all recognise as cement.
I want to add my concerns to those already expressed by the hon. Member for Stockton North that the cost pressures of the imposition of carbon taxes will mean that it will become uneconomical to manufacture cement in Rugby. Part of the problem, as he has set out, derives from EU legislation and it is good that the Government have recognised the pressure on UK manufacturers caused by EU environmental legislation and that they have applied to the EU for compensation to mitigate the impact. The problem for cement manufacturers is that the European Commission, which published environmental protection and state energy guidelines on 19 May 2014, failed to include the cement sector among those that will receive compensation against the cost of the carbon price support. Regrettably, only those sectors eligible to receive support against the EU emission trading scheme’s indirect CO2 costs, which are listed in annex II, can qualify for support for other carbon-related costs. Cement manufacture is not included and therefore will not benefit.
It is important to note that the carbon price support tax, which affects the UK only, will put the UK cement industry at a disadvantage compared with those in other EU countries. It also puts the cement manufacturer at a disadvantage against the manufacturers of other materials. For example, steel attracts compensation for both EU ETS indirect costs and the carbon price support tax.
The cost to the cement sector of the ETS over the period 2014-20 is an estimated £82.7 million and the cost of carbon price support over the same period has been estimated at £104 million. The cement manufacturing sector will have to meet those costs if no compensation is received and they will merely add to the cumulative burden that the sector is facing as a result of energy and climate change policy.
The situation faced by cement manufacturers is unfair. Construction products must be allowed to compete on a level playing field, because if they are not UK manufacturing capacity—that means jobs—will be lost. Although cement is a heavy product, it travels easily and cheaply on a barge and can be imported from all over the world. There is enough cement manufacturing capacity in the UK to supply all our needs, but cement imports stand at 14% of UK consumption, up from 3% in 2001. Cement is coming in from many parts of world. An international company such as CEMEX, which runs the plant in my constituency, is aware of the cost of producing a kilo of cement in locations across the world and if the cost is too expensive in Rugby, it will simply not continue to manufacture there.
There are steps that can be taken, and that process has started. The first is a full or partial review by the EU of the emissions trading scheme, which is taking place. The Commission might amend it before the applicable date of 31 December 2020, and I believe the Commission should urgently review the cement industry’s case. I understand that the European cement industry’s trade body lawyers have communicated with the Commission, which has said that it has
“no plans currently to reopen the ETS State aid guidelines and/or the Annex with the sector”
but that it
“would however be interested to hear the industry’s views on what may have changed for the cement sector”.
Therefore, there is a window of opportunity to address the problems that the cement industry faces.
The second change that would benefit the sector is the Government taking action by accelerating renewables compensation and their compensation of certain sectors for higher energy costs resulting from the renewables obligation. The UK plan is to implement a scheme from 2016-17, but that could be brought forward to 2015-16 if there were to be such an announcement in this year’s autumn statement. I understand that the Department for Business, Innovation and Skills has already informed the Mineral Products Association that its favoured option is to review or amend the ETS, if the Commission will allow that.
Will the Minister respond to these points? On 26 June, the then Business Minister, my right hon. Friend the Member for Sevenoaks (Michael Fallon), said:
“I intend to ask the new Commission this autumn for an early review of the ETS and to include new sectors, such as cement, that have missed out so far.”—[Official Report, 26 June 2014; Vol. 583, c. 456.]
Will the Minister confirm that she will honour that undertaking and raise the issue, as promised, with the Commission? When she writes to the Commission, will she seek a review of annex II of the ETS indirect CO2 aid guidelines and stress the urgency of the need for an early and positive decision, because of its influence on the UK-only carbon price support tax?
Will the Minister agree to ask the Commission to give priority to issuing state aid approval following a favourable review of annex II of the ETS indirect CO2 aid guidelines? Does she accept that the UK cement industry is at a disadvantage compared with its European counterparts and other, competing construction materials that attract EU ETS and carbon price support compensation?
The consequences of the actions taken by this Government mean that our economy is the fastest growing in the G7, and construction is at the forefront of that economic growth, so it would be a tragedy if UK manufacturing were unable to continue to contribute to that growth because it had been priced out by a burden imposed by environmental taxes and levies, which make it less expensive to manufacture overseas. Instead, businesses will simply ship materials in.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I welcome this debate on energy-intensive industries, and I thank my hon. Friend the Member for Stockton North (Alex Cunningham) and the hon. Member for Redcar (Ian Swales), as well as the Backbench Business Committee, for securing it.
I also thank you, Mr Speaker, for your flexibility in enabling me to contribute. Unfortunately, constituency engagements mean that I might not be able to stay for the winding-up speeches. I apologise to the Minister and to my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for that. I will read Hansard with increased interest.
I am keen to contribute to this debate because energy-intensive industries are such an important part of our economy, as my hon. Friend the Member for Stockton North said in his excellent opening remarks. They employ about 200,000 people directly in the UK and support 800,000 jobs throughout their supply chain. They are an important part of the real economy, particularly, I might say, outside the south-east. My constituency is home to several energy-intensive businesses, such as Michell Bearings, which has been in Newcastle since 1920. There are many more throughout the north-east.
If we can look back that far, 160 years ago the north-east—one of the most innovative regions in the world—was leading the UK into the first, carbon-based industrial revolution. Sir Charles Parsons established his engineering works in Newcastle and he invented the multi-stage steam turbine, which was the iPhone of its day and helped to power Britain into a new era. Mosley street in my constituency was the first street in the world to be lit with electric light—something to which we have become all too accustomed.
Newcastle university, also in my constituency, was founded on local strengths such as marine, electrical, civil and chemical engineering, as well as agriculture and medicine, and they remain key strengths of the city and the university today: global reach and local roots. Today, the region remains a global base for manufacturing innovation. It is the only English region with a positive balance of trade. As well as the industries and companies that my hon. Friend the Member for Stockton North spoke of, we have fantastic facilities such as the National Renewable Energy Centre in Blyth and the Centre for Process Innovation on Teesside, which were both set up with the help of One NorthEast—regrettably abolished by this Government. In Newcastle, we have recently opened the Institute for Sustainability.
Energy-intensive industries and carbon reduction are crucial to the north-east economy. There is not, and should not be, any contradiction between the two. The transition to a low-carbon economy is a huge opportunity for the UK, with the potential to be a major source of jobs and growth. However, that transition is being put at risk as a direct result of this Government’s failure to develop a long-term, sustainable energy policy. They have failed to get behind green businesses. The UK is falling behind with investment in green growth, meaning that jobs and industry that should be coming to this country are now going overseas. I have spoken to the senior management at companies that would prefer not to be named who have said that the lack of a clear long-term energy strategy is putting off investment that could create jobs tomorrow, next month and next year. That is clearly detrimental to our economy overall.
The lack of an overall energy strategy and an integrated strategy for supporting energy-intensive industries is putting jobs and investment at risk. Conflicting signals from this Government about support for green energy versus terminology such as “green crap”—I think that was it—has seen the UK’s attractiveness to renewables investors slide down international tables. If we want to support the real economy and to build a long-term, sustainable economic environment, businesses need to know what they can expect from Government. They need long-term regulatory and policy certainty, and they are not getting that from this Government.
As my hon. Friend said, the carbon price floor was intended to create a floor underneath the EU emissions trading scheme, but since the collapse of the ETS price, energy-intensive British firms have been faced with far higher energy bills than European competitors. We need to know how Government are going to support these vital industries over the next five, 10 and 20 years, because that is the kind of life cycle they have for building plant and investing in countries. We need a long-term energy policy that supports and drives green growth and creates jobs in a low-carbon economy—a policy that gives investors the certainty and confidence they need to invest by committing to decarbonising the power sector by 2030. Yet as a direct result of this Government’s mixed messages, we are falling behind.
I have always considered myself a champion of new technologies in this House and elsewhere. When energy-intensive industry representatives first spoke to me of their concerns about some of the Government’s energy policy, I asked them what they were doing to improve their energy efficiency. Were they, for example, asking the Government and policy makers to subsidise obsolete industrial processes? Following further investigation, I was made to understand that many of the processes related to reducing energy consumption and improving energy efficiency are reaching the limits of the laws of physics. I am sure we are not all as familiar as we perhaps should be with the periodic table and the chemistry education we received, but I think we can all understand that a certain amount of energy is needed to change the state of molecules and to change gas to liquid. We have made so much progress in the efficiency of many such processes that it is not possible to go further. Given that so many of the processes are essential to our manufacturing base and a balanced economy, it is unarguable that they need to be supported during this transition.
The energy costs of energy-intensive industries can be more than three quarters of their addressable costs, and they are often already operating in highly competitive markets. There is also already a considerable incentive for them to innovate and become more energy efficient.
The industries need support from Government and a clear, long-term direction of travel. They need action in a number of areas, including fixing the broken energy market, as Labour has promised to do; exploring new sources of green energy, such as clean coal; and specific and long-term support so that they can continue to compete internationally.
In government, the Labour party was more courageous in this area than many others. The Climate Change Act 2008 made us the first country in the world to introduce a legally binding framework to tackle climate change.
David T. C. Davies
I am listening with interest to the hon. Lady, but does she not agree that the Climate Change Act is actually one of the reasons why we got ourselves into this awful situation in the first place? We are taxing industries in order to try to solve a problem that I am not even sure exists.
Chi Onwurah
I thank the hon. Gentleman for his intervention, but his final comment gave away his position. He said that we are taxing a problem he is not even sure exists, but the consensus on the need to address climate change is global and we certainly owe it to our children and our children’s children—[Interruption.] The hon. Gentleman is chuntering, but I am afraid I cannot follow him. The Climate Change Act is not responsible for climate change; it is a response to climate change and one that is necessary for the long-term sustainability of our economy and the global economy.
Angela Smith (Penistone and Stocksbridge) (Lab)
Are not the industries under discussion also totally behind the drive towards a green economy, because that in itself creates opportunities for new products, innovation and economic growth?
Chi Onwurah
I thank my hon. Friend for putting very clearly—I should have done so myself—the position of many in the energy-intensive industries, who see the need for a long-term future for their significant investments and wish to see a more competitive transition towards it.
David Mowat (Warrington South) (Con)
I have been listening very carefully to the hon. Lady. To say that members of the energy-intensive industries want us to go further and faster than other countries with the green stuff is a bit of a leap. Although no one disputes that we must decarbonise, the issue we need to address—the hon. Lady has not yet done so—is the extent to which we need to do that more quickly and more unilaterally than others. That is a fair question.
Chi Onwurah
I think that the hon. Gentleman has misinterpreted the remarks of my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith). She said not that the energy-intensive industries seek to go further and faster, but that they recognise the need to transition to a green economy if they are themselves to have a long-term economic future in this country and globally. I certainly support that position.
David Mowat
I will not intervene on the hon. Lady again, but as she said that I had misinterpreted the point, I want to come back on that. The issue is that we in this country are doing things unilaterally that other parts of the EU are not doing—it is not an EU issue—and that is a problem for many of the people, including my constituents and perhaps those of the hon. Lady, who derive their income and prosperity from the 900,000 jobs in energy-intensive industries. The valid point for us to debate is the extent to which we should be out of step with other countries, including in other parts of Europe.
Chi Onwurah
It was of course the hon. Gentleman’s Government who introduced the carbon floor tax, but I very much agree that it is legitimate for us to discuss such subjects, which is why I was so keen to take part in this debate. The way in which the UK leads in moving to a sustainable economic future is itself an opportunity for jobs and innovation, but it should also protect our energy-intensive industries.
I shall soon bring my remarks to a close, but I wanted to say that the previous Labour Government established the Sustainable Development Commission, the Committee on Climate Change, and the Warm Front scheme to tackle fuel poverty, and they invested in low-carbon industries. The economy was growing, but the air quality in our towns and cities nevertheless improved. Our CO2 emissions fell by 10.8 million tonnes in our final year in government, when our greenhouse gas emissions were 66 million tonnes lower than in 1997. We helped 5 million households to get better insulation and keep warm, which reduced emissions and saved consumers money at the same time.
The next Labour Government will carry on that work. We recognise that a secure, clean energy mix is vital to powering our economy, meeting our climate change obligations and protecting customers from bill rises driven by events overseas. A long-term strategy should look at and support innovative new techniques, such as carbon capture and storage and underground coal gasification. Five-Quarter, a company spun out from Newcastle university, is leading the world in looking at the development of underground coal gasification as a clean way to deliver electrical power.
My key point is that aggressive action to tackle climate change is not incompatible with a strong manufacturing base. With the right strategies and support in place, the north-east can be the vanguard for a UK that competes globally in manufacturing and labour-intensive industries, while also setting an example in tackling climate change.
Ian Swales (Redcar) (LD)
I congratulate the hon. Member for Stockton North (Alex Cunningham) on securing the debate. On this issue, I regard him as an hon. Friend, and I was delighted to support his motion. Our constituencies are divided only by the River Tees, but they are joined by many pipelines.
I have taken a keen interest in these issues since I entered the House. I worked in the electricity industry for five years, and in an energy-intensive part of the chemical industry for more than 20 years, so I am very familiar with many of the issues.
As the hon. Gentleman said, the Tees valley is a “hotbed”—an interesting word to use—of such businesses. In fact, it has 18 of the 30 largest carbon emitters—energy-intensive industries—outside the energy sector in the UK. My constituency has the Sahaviriya Steel Industries steelworks, Tata Steel activities, Sabic petrochemicals and Lotte petrochemicals, which are some of the biggest businesses, as well as many others.
As the hon. Gentleman said, there is a proud history of such businesses in the north-east. On the wall of my office in Portcullis House is a picture of Lambeth bridge lying in pieces before it came down from Middlesbrough to be installed close to this place. When I took the Secretary of State for Business, Innovation and Skills around the Tata beam mill in my constituency, the work force were making beams for the new World Trade Centre. They told us proudly that their beams are in nine of the 10 tallest buildings in the world. That emphasises the point made by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), which is that steel cannot be melted without using a great deal of energy. Steel beams cannot be made without using a great deal of energy. There are physical and chemical limits to what companies can do.
When I first became an MP, one of the key requirements for me was to get the steel works in my constituency going again. It will be of no surprise to Members that I therefore had to meet Ministers at the Department of Energy and Climate Change. The new owners wanted reassurance about the UK’s energy policy and an assurance that they would get the emissions allowances that were required to restart the plant. The owners were probably slightly naive and did not ask enough questions about how many issues they would face on the energy front. They have been surprised by the depth and breadth of the various environmental obligations on them.
As Members have said, Governments in other parts of the world are nowhere near as aggressive towards energy-intensive industries as ours seem to be. The former Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), who was recently moved out of office, was told by his civil servants that energy costs in the UK were not out of line with those in other countries. That is the line that Ministers were being sold. He visited Germany because of the representations that he kept hearing from industry and was shocked by what he found. He had not realised that industry gets such a lot of support in Germany and that industrial energy costs can be as low as half the cost of domestic energy. The comparisons that the hon. Member for Stockton North has given became clear to him.
I was keen, along with other Members and particularly the hon. Member for Penistone and Stocksbridge (Angela Smith) in the early days, to form the Energy Intensive Users Group. The group was originally envisaged as an offshoot of the all-party parliamentary group for the steel and metal related industry, but we realised that it was a far bigger issue.
David Mowat
The hon. Gentleman made the important point that Germany’s electricity costs for energy-intensive industries are substantially lower than ours, even though its domestic energy costs are substantially higher, because it has a cross-subsidy. Does he know, or does anybody know, why that is not an issue in respect of state aid?
Ian Swales
The hon. Gentleman makes an extremely good point, which I will return to later. When I see the UK’s attitude to these sorts of policies, I often feel like we are playing cricket, while other countries are playing rugby, boules or other sports that we do not recognise.
At the first meeting of the Energy Intensive Users Group, I was stunned not just by the number of outside attendees from industry, but by their seniority. We quickly realised that it was a huge issue that faced many industries, some of which have been mentioned. I do not think that paper has been mentioned. That is yet another industry that sent a representative from its trade body. As a result, there has been a great deal of representation to the Government. I am pleased to see at least some bending in response.
UK businesses that are involved in the generation and consumption of energy are saddled with up to seven different carbon taxes from the UK and Europe. Interestingly, even the senior executives of those businesses cannot always describe clearly what all the taxes are and what they do. Despite the action that the Government are taking, the trends are not great. It is estimated that political costs will increase the electricity bills of industry by a third by 2019-20. Policy makers do not seem to understand that if a company spends millions of pounds a year on energy, it already has quite an incentive to use less. It does not need to be beaten with a stick by the Government to persuade it to use less energy, let alone seven sticks. These companies know that they are spending a lot of money on energy, and are already doing a lot about it. They know that energy costs are a competitive issue, whether there are taxes or not. The irony of a heavy tax burden is that it removes cash from those companies that they could otherwise devote to energy-saving initiatives. Many companies work on thin margins or in commodity businesses that do not have high margins. The more taxes they pay, the less likely they are to be able to invest in reducing carbon consumption and generation.
A Minister from the Treasury rather than from the Department of Energy and Climate Change is responding to this debate, and I wish to ask about the attitude of the Treasury towards these taxes. Does it take the broad view about business competitiveness, look at the overall picture, and compare the taxes being rendered with those rendered from Europe, or is it just a way of raising money? These businesses are almost all competitive and traded internationally, so in this regard the UK is no more an island than the EU is. Our policy decisions affect these businesses on an international basis.
The hon. Member for Warrington South (David Mowat) mentioned the EU. The minute we want anything done, the standard response from civil servants is “State aid”. That is a perfect method of obfuscation and delay, which, in many areas, we as politicians are buying when we should instead be fighting a lot harder. I know there are specific issues with the steel industry and the EU, but many other industries are not as limited. Politicians should not allow state aid to be used as an excuse for delay or for no action, particularly given that some of the things we are talking about are, ironically, UK-only initiatives. I cannot see how the European Union can interfere with initiatives such as the carbon price floor, which are taken only in this country. I would like Ministers to be a lot more aggressive with civil servants, not just about whether state aid issues apply, but if they do, about how quickly they can be removed. Some of the issues I am thinking of have been washing around for most of the four years that I have been in this place.
Europe has the emissions trading scheme, which has not totally met its objectives, as the allowances originally given to companies were fairly generous but the tight market that was expected to lead to carbon trading has not occurred. Ironically, however, Sahaviriya Steel Industries in my constituency has a specific problem because it was virtually out of business during the reference period when the allowances were decided. It now pays $1 million a month in carbon cost to the EU, because it does not have enough allowances to operate. It is also expanding, so carbon costs are yet another handicap.
Businesses can do many things to reduce energy use, but as the hon. Member for Newcastle upon Tyne Central said, there are physical and chemical limits. I do not disagree with some of the EU moves on best available technology, or with new moves to look at what is technically feasible and ensure that companies in the EU move towards that best available technology. I hope that we do not get regulatory regimes that drive everybody else out of business if they are not the best, as that will not help anybody. However—I hope the Government will take notice of this—when the best available technology frameworks are established for different businesses, that will at least show what is possible with regard to reducing energy consumption and contribution to climate change. If a company is doing something in another country, we can do it here; if it is not being done anywhere, we must ask whether it is sensible to try to drive a company to use 50% less energy, for example. I would like to see constructive work with the EU on that, ensuring that we are as bold as we should be when dealing with its requirements.
Investment has been mentioned, and the manufacturing industry has been declining. During the previous Government, it went from being 19% of the economy to 10%, although some growth is occurring. I worry about these businesses because there is capital investment inertia. It is not about whether company A is operating today, tomorrow or next year; it is about what investment decisions are being taken. Are the plants being kept up to date and maintained? Above all, would the company concerned re-invest in such a business?
I remember my experience as a financial director in the chemical industry. We decided to get out of a business, but 24 years later that business is still running. It has never been renewed, but it has been patched up and sold three times since then. Those are the types of decisions taken. If we have an unattractive climate for investment in this country, things will close down not overnight but steadily, and we are seeing some of that.
The Engineering Employers Federation, which covers all the businesses we are talking about, says that energy costs are its No. 1 issue for growth and investment. Many of these companies are foreign owned. The biggest employers in my constituency are Singaporean, Thai, Indian, Saudi Arabian and Korean. Decisions are being taken not in the north of England or London, but in Seoul, Riyadh, Bangkok and so on. If our energy infrastructure costs do not look competitive and sensible, companies do not need to come here or re-invest.
Despite sounding somewhat critical, I welcome the Government initiatives. The mitigation moves that they have mentioned are helpful for big energy users in my constituency. I hope the initiatives will take place with due speed—that has been an issue—that there will be certainty and that they are not a one-off. We are talking about long-term businesses taking long-term decisions. If the Government believe that throwing a carrot towards a business for 12 months makes a difference—well, obviously it makes a difference to its cash flow in those months, but it will make no difference to its strategy. Uncertainty does make a difference in the wrong direction.
I welcome the fact that the UK Green Investment Bank is majoring in investing in industrial energy reduction, as well as renewable technology, and I welcome the renewable heat incentive, which should help. The regional growth fund has put money into such businesses—most recently, £9 million went into a huge project at Sabic in my constituency, which will result in the petrochemical cracker being able to crack gas. I am pleased about the Tees valley city deal, which I helped to push for and even construct. It will get carbon capture and storage around Teesside, which I still regard as the No. 1 location for investment in carbon capture and storage for industries outside the energy sector, although we have the energy sector as well.
Alex Cunningham
I am grateful to my new hon. Friend for giving way, and I believe that that is the central issue on Teesside. Will he join me in congratulating the industrialists on Teesside who, despite being competitors, have come together because they know that the future is about investment in carbon technology?
Ian Swales
I agree with the hon. Gentleman. Such a technology will create an infrastructure that will benefit all those sectors, and they do not compete that much with one another. The Tees valley can be a hotbed of competitive steelmakers, chemical producers and so on. Strategically, the country should get on with that.
All hon. Members have mentioned the importance of energy-intensive industries. They are important to the economy, to the development of green industries—let us think of the amount of steel involved in tidal power—and to the security of the country. We should not kid ourselves when we count carbon. In a debate a while ago, the hon. Member for Warrington South asked, “Is the carbon for my Volkswagen car mine or the Germans’?” We are kidding ourselves if we think we are doing the right thing by de-industrialising this country, exporting jobs and importing carbon. That is one point on which I depart from the hon. Member for Newcastle upon Tyne Central.
David Mowat
I agree with the sentiment the hon. Gentleman expresses, but I do not recall saying that. I have a Volvo, not a Volkswagen, so I might have talked about Swedish carbon.
Ian Swales
I think he mentioned Volkswagen in the context of chiding the Germans for their carbon emissions. I made the point that a big manufacturing exporter such as Germany is probably bound to have higher carbon emissions on a production basis.
It looks as if I will be fighting the hon. Member for Newcastle upon Tyne Central for the first copy of Hansard tomorrow, because I, too, must leave the Chamber, to join the Government’s rail electrification taskforce. I apologise in advance to the Minister. I will look closely at her remarks tomorrow.
Angela Smith (Penistone and Stocksbridge) (Lab)
It is a pleasure to follow the hon. Member for Redcar (Ian Swales). I pay tribute to my hon. Friend the Member for Stockton North (Alex Cunningham) and congratulate him on securing this important debate. I echo his comments on the relative emptiness of the Chamber. To emphasise the point, the relative emptiness is not because Parliament does not recognise the importance of carbon taxes and energy-intensive industries, but because all hon. Members are aware of the huge constitutional issues we face. Many of our colleagues are in Scotland trying to save the Union, and I pay tribute to them for doing so.
The debate has included one contribution from an east midlands Member and three contributions from north-east Members. I shall try to balance that by giving the perspective of the manufacturing sector in Yorkshire and the Humber, which is one of the most important manufacturing bases in the country, alongside the north-east, the north-west and, importantly, Scotland. A conservative estimate is that at least 800,000 people work in energy-intensive industries in the UK. I will call them “foundation industries”—I do not like the term, “energy-intensive industries” and “foundation industries” is a much better description. Foundation industries are critical to the whole of our manufacturing base. Included in those 800,000 are the supply chains built around the key industries.
We are entering an era of shortening our supply chains—the production and supply of components for other industries are being re-shored in the UK, which is welcome. If we look at the supply chains of BAE Systems, one of our most important manufacturing companies, it is immediately obvious how well balanced the company and its supply chain are in the country. Its impact is felt not only in the north-west in Barrow-in-Furness and Warton, but throughout the country, particularly in Scotland, Yorkshire and the Humber and the broader north-west.
That illustrates an important point about Scotland. Manufacturing in Scotland is important not only to the Scottish economy but to the whole UK economy. The shortening of the supply chains and the building of stronger supply chains in our country is making the integration of our manufacturing base more important than it has ever been in our industrial history. From that point of view, UK manufacturing is stronger together, just as the UK is better together with Scotland. That point in the debate is often overlooked. All the talk is of the pound and everything else, but it is important not to forget that if we are to rebalance the UK economy, manufacturing is the best point at which to start because it is already well balanced. Manufacturing in Scotland is an integral part of that.
Ian Swales
The hon. Lady is right. One of the most important foundation chemicals is ethylene. There is a pipeline between the north-west of England to Teesside and then Scotland. That pipeline helped in the recent Grangemouth dispute.
Angela Smith
My hon. Friend the Member for Stockton North made the point about shale gas, which gives us the potential to supply a good, domestic feedstock for the chemical industry. It would be more efficient and better for us all round for that feedstock to be delivered throughout the UK, rather than having borders between Scotland and England. That is an obvious point, but it is important to put it on the record.
The definition of “foundation industry” varies, but broadly we mean steel, cement and lime manufacturing, chemicals, ceramics, glass and paper. The contribution those industries make to key economic activities such as transport and construction is fairly obvious, but their importance in other ways is often overlooked. For instance, the chemicals industry has contributed to the growth of food manufacturing in this country, and chemicals will continue to be important for agricultural use and in ensuring that we maintain a healthy food production capacity in this country. We thus realise how apt the term “foundation industry” is, as they are key industrial sectors.
At a conservative estimate, those industries make a contribution of roughly £15 billion to UK GDP per annum. Depending on the definition of “foundation industries”, their combined turnover varies between £70 billion and £95 billion per annum. They provide 11% of the UK’s gross value added. Their contribution to UK export capacity is very significant: they contribute at least 30% of our export capacity, but I have read somewhere that it could be as high as 54%. Again, that depends on the definition of “foundation industry”.
The foundation industries have a strong research and development profile, which is often underestimated and overlooked in terms of their importance to the UK. The future of the sectors is dependent on high-quality research and development profiles, on significant investment, and on ensuring that we stay ahead of the game in manufacturing capacity and at the high-value-added end of the manufacturing spectrum.
I pay tribute to the first of the catapult centres developed in the UK—in south Yorkshire, at the advanced manufacturing park at Catcliffe—more than 10 years ago by Yorkshire Forward and others in Sheffield and Rotherham. The park is focused on engineering, particularly steel engineering, and is going from strength to strength. A partnership in Sheffield between Boeing, Rolls-Royce, the university of Sheffield and Sheffield Hallam university is building a brand new factory, Factory 2050, alongside the original buildings, and is now investing heavily in research into nuclear capacity. It is a highly successful venture that provided the blueprint for the Government’s catapult centre strategy.
As a Sheffield and Barnsley MP, I am incredibly proud of the innovative work done in south Yorkshire in using the concept of catapult centres to promote the collaboration between academic institutions and our manufacturing centre to make us world class in innovation and the development of new technologies. Our foundation industries are also at the forefront of work force investment. They have a good record on paying their work force well—these are good jobs—and investing heavily in apprenticeships and ongoing professional development training. The country needs more of that. In many cases, our foundation industries provide a good example of best practice.
My constituency has many foundation industries within its borders. Fox Wire produces world-class cabling for the oil industry and many other applications. Tata Speciality Steels provides steel for the aerospace industry and is at the top end of steel manufacturing in this country. In fact, one reason it is headquartered in my area is that it cannot find elsewhere the skill sets it needs to maintain its position as the best in steel manufacturing. We are very proud of that. In addition to those industries, British Glass is headquartered in my constituency, and I also have cement, paper and ceramic interests, so I represent a range of manufacturing interests.
One of the ceramics companies in my constituency, Naylor, is a family company, not foreign-owned, and has been in existence for more than 100 years. Only this week, it secured six-figure funding towards a £2.5 million project to increase capacity, while reducing energy consumption, at its Cawthorne factory in my constituency, through a combination of smart metering and an in-house plastics reprocessing plant to make use of its own waste on site. There are limits to what can be done to reduce energy consumption, but these are practical, innovative ways of continuing to reduce energy use. In addition to energy efficient lighting, a new energy efficient kiln and dryer has created extra capacity, while reducing energy costs, and led to 30 new jobs. I am proud of Naylor. This superb company is increasing its exports profile and winning awards all over the place, while being dedicated to reducing its carbon footprint—because it makes financial sense. I think the hon. Member for Redcar made this point. The industry is already incentivised to reduce its carbon footprint because it will make business more efficient and cost-effective.
Briefly, Sheffield city region provided some of the funding for that project, which is a tribute to an important element in the ongoing constitutional debate—local decision making. We need some devolutionary thinking on getting investment in manufacturing in the rest of England, never mind the other constituent parts of the UK.
Industry is committed to reducing energy use. For example, Celsa, a recycled steel plant in Cardiff, is one of the most energy and labour efficient plants in Europe, and we have seen significant reductions in electricity consumption by the steel industry in the past 30 years. The figures are startling. I do not have them to hand, but the electricity consumption of steel making in my city has gone down significantly in the past 30 years. On that point, will the Minister respond to the request by steel makers across the UK that the Government reconsider the advanced capital allowances for energy efficiency? The scheme is based on generic lists of technologies and excludes the more specific but often large energy efficiency opportunities that our foundation industries want to engage with. I would be interested to hear whether the Treasury is prepared to reconsider that scheme and take the common-sense approach of applying it to these large-scale energy efficiency projects.
The role of foundation industries in developing a green economy should not be overlooked, as I said in an earlier intervention. I was not saying that we should move faster than the rest of Europe; in some ways, I was making the reverse point. We must be careful not to damage the competitiveness of the foundation industries in this country, precisely because they are critical to delivering the green economy we need, not just in the UK but across European and globally. We know that the foundation industries have an important role to play in developing renewable energies, such as carbon capture and storage, and we know that they play a valuable role in the production of energy-efficient construction materials, particularly in respect of chemicals. The chemicals sector is doing a good job of developing wonderful new materials for use in construction projects, not just for commercial but for domestic building, as I saw when I visited a research project at Nottingham university involving several chemical companies, including BASF. That project is doing impressive work to cut the carbon footprint of domestic building projects and to cut energy costs across the board, especially for home owners.
British Glass is developing new trading standards and is keen to see glass play its part in developing a green economy, and new glass technologies are being developed all the time. Let us not forget either that wind turbines require a lot of steel in order to help reduce our carbon footprint and produce green energy. The steel industry also points out that the development of the lightweight vehicles we increasingly see on our roads is largely down to work by the steel industry to reduce the weight of construction materials. The foundation sectors are doing a great deal of work to develop the green economy, but the costs being incurred by our industries as a result of our carbon-intensive industrial past must not be forgotten.
We are now paying the clean-up costs of an industrial legacy that has left many of our environments badly degraded. As an example, the water industry in Yorkshire has to pay out millions of pounds a year to clean up the water collected from a catchment that is badly degraded—by peat degradation. The water must go through multiple processes to remove the peat before it can be put into our catchment and our networks. A great deal of work is involved, and we have to recognise that the industry is paying the costs of carbon pollution in the past. That should not be overlooked when we reflect on the arguments in favour of transitioning to a green economy. It is very short-sighted to argue that the green economy is not important to our future; it quite clearly is.
Let me move on directly to the impact of carbon taxes and levies on our foundation industries. My hon. Friend the Member for Stockton North made the point, which should be reiterated, that Tata Steel, for instance, has estimated that year-ahead wholesale electricity prices are 70% and 45% higher than in Germany and France respectively. That is driven in large part by policy-driven taxes and levies for the most intensive users; those were 2.5 and 6.5 times higher than in Germany and France respectively in 2011.
The British Ceramic Confederation has pointed out that DECC’s own analysis shows that climate-related charges are already 19% of the industry’s base load price, which will rise to 47% in 2020. The manufacturers’ association EEF has stated that the Government’s own estimates indicate that industrial electricity prices will increase by 50% by 2020 and 70% by 2030. Moreover, Tata Steel is clear that the levies with the greatest impact today are the renewables obligation and the carbon price floor. The company also points out that many of its steel competitors in Europe will either be completely exempt from many of the levies or have their charges capped.
As far as I am concerned, the Government’s recognition of the damage inflicted on our manufacturing sector by the carbon price floor is most welcome, but why on earth they introduced the floor price in the first place remains a mystery. As I say, we welcome their acknowledgment in this year’s Budget of the mistake made. The proposals laid on the table represent something of a step forward in resolving the issues, but they do not resolve all the issues related to the imposition of the carbon price floor in particular on our sectors.
The 2014 Budget announced that the carbon price floor would be frozen at £18.08 from 2016-17 to 2019-20, saving all UK business an estimated £4 billion over three years. The Government will review the carbon price floor beyond 2020, once the impact of the reform of the EU emissions trading scheme is clear. They are extending existing compensation for CPF and ETS for 2019-20 and we of course have the compensation package in place.
It is my understanding, however, that the compensation package is underspending, so the Minister, who until a moment ago was busy on her mobile phone, might like to concentrate on providing an explanation of why the Government are underspending on their compensation package to industries that desperately need to see it delivered. She needs to explain, too, why it continues to be the case that the UK does not appear to be punching at its weight when it comes to making the case to Europe that more of our foundation industry sectors should be included in state aid guidelines. [Interruption.] I am sorry, but the Minister should realise that this is not a laughing matter.
We need to know why the Government are not working harder to make the case to Europe that more of the sectors affected by the carbon floor price should be included in European state aid schemes. That is at the heart of this debate. Sectors such as ceramics make intensive use of electricity—use of the electric arc furnace is not confined to the steel industry; it is used in ceramics, too—yet the ceramics sector has been almost entirely excluded from the compensation on the table at the moment. The Government should explain that, or at least make a commitment to ensure that that unfairness in the compensation schemes on the table is removed as soon as possible.
We need to see a commitment to introduce the announced mitigation measures for the renewables obligation as soon as state aid approval has been granted by Brussels. As I said, we also need to see a commitment to ensuring that the sectors included in state aid are extended as soon as possible. We need an approach that gives specific consideration to premier league energy-efficiency projects, or incentive schemes such as the enhanced capital allowances that I mentioned. We need to see UK support at the October European Council meeting for including the principle of the continuance of robustly protecting the competitiveness of the sectors most at risk at the level of best performance. We need to see, too, a commitment from the Government to support the industrial strategies developed by the foundation industries, such as the chemistry growth partnership and the developing UK metals strategy.
Finally, I want to hear the Minister’s response to the argument that a consolidation of the taxes and levies on the table at the moment would be a sensible way forward. A significant number of taxes and levies are being placed as a burden on our foundation industries. Indeed, one company in my constituency has to employ a highly skilled individual full time just to deal with compliance with the range of levies and taxes that need to be delivered year on year. The Government need to think again about the impact on industry of having to work through so many different schemes and so many different levies year on year. Nobody is arguing against the principle of carbon taxation—
Angela Smith
That might not quite be comprehensive, but most Members in the Chamber today agree with the principle of carbon taxation. What we want is sensible carbon taxation, delivered efficiently but at the same time ensuring that we have a level playing field with the rest of the European Union. That is not the case at the moment. I hope that the Minister has listened carefully to what has been said, and that she will come up with some constructive responses in her speech.
David T. C. Davies (Monmouth) (Con)
The hon. Member for Penistone and Stocksbridge (Angela Smith) has just said that nobody will argue against the principle of carbon taxation. First of all, I am going to argue absolutely against the principle of carbon taxation, and I shall briefly set out why. It is interesting to note that while not many people will argue against that principle, everyone in the Chamber has been arguing about the practical consequences of carbon taxation.
It was wonderful to listen to the speech made by the hon. Member for Stockton North (Alex Cunningham). If I had shut my eyes, I might have believed that I was at a meeting of the Global Warming Policy Foundation, as he delivered a damning critique of the effect of the taxes that have been levied. He set them out far better than I could, but the point is that levying unilateral taxes on our manufacturing industries is absolutely crazy. It simply means that business goes elsewhere, to other countries, and the same amount of carbon dioxide gets pumped out into the atmosphere, so there is no particular benefit, if indeed there would be any benefit from reducing carbon dioxide; that companies are far less willing to come into the UK, because they do not know what our energy policy is; and as the hon. Member for Penistone and Stocksbridge has just pointed out, that many companies are having to employ people in order just to comply with all the taxes that are being introduced.
I look forward to hearing the speech of my hon. Friend—indeed, my friend in all senses of the word—the Member for Witham (Priti Patel). She certainly cannot take the blame for any of this, because she has only recently become the Minister. I am sure that she will take a very sensible view, and I am confident of her desire to support the UK manufacturing industry. However, I have no doubt that she will point out to us, as others have already, that the Chancellor has taken steps to cap the carbon price floor at £18, and that the compensation scheme will be extended.
We have all got our knickers in a twist. Having levied all sorts of taxes on our manufacturing industries, we are now going around saying “Hang on a minute, these taxes will damage these industries, so we will provide some compensation, but not for all of them, just for some.” So steel gets a bit of compensation, and cement and pottery do not. It is all done in a random fashion.
Surely there is a basic, fundamental question that we should be asking. If we all agree that these taxes are bad—and I think we do all agree that they are bad, or we would not be providing compensation in some instances—why bother with them in the first place? It does not make any rational sense to levy a load of taxes on carbon-producing industries and then give some of those industries some of the money back, but not quite enough. That, to my mind, is completely and utterly irrational.
The elephant in the room, however, is global warming. No one wanted to talk about that, but the whole rationale for these taxes is that we are going to stop runaway global warming. Why does no one mention it, given that it is the root cause of all these carbon taxes? We need to start thinking about the rationale for them, because there has been no increase in temperature since 1998. No one disputes the fact that carbon dioxide is a global warming gas—it is a scientific fact—and no one disputes the fact that there has been an increase in temperatures over the last 200 years, although the increase is less than 1° C; in fact, it is about 0.8° C. It is reasonable to assume that some of that increase is a result of the carbon dioxide that has gone into the atmosphere. However. it is equally reasonable to assume that not all of it is, and even that not much of it is.
At the time when we were becoming industrialised, we were coming out of a very cool period, the “little ice age”. We have always experienced fluctuations in temperatures. It was warmer in Roman times, it got cooler in the dark ages, it got warmer again during the mediaeval period, and then it got cooler again during the little ice age. Some of the very small increase in temperatures that we have seen is no doubt due to perfectly natural fluctuations, and that is borne out by the fact that there has not been a straightforward increase in carbon dioxide and temperatures. Between 1940 and 1970 it was getting colder, despite the increase in carbon dioxide going into the atmosphere, and since 1997 there has been no increase in temperatures. I asked the Met Office and environmentalists, who thoroughly support these green taxes, “How long must we have no increase in temperatures before you start to think again about the taxes that you want us, the Government, to levy?” The answer from the Met Office was “Another 50 years”, but it will be too late for all these industries in 50 years’ time.
Angela Smith
The hon. Gentleman clearly did not listen to my illustration of how careful we must be about swallowing that kind of argument. The water industry in my constituency is paying the cost of having to clean up pollution in the local water supply, which is a result of almost 200 years of unregulated industrial activity that badly polluted the catchment area from which we take our water. Does that not indicate to us that we must be careful about how we look at the future of industrial and energy activity in the UK?
David T. C. Davies
It indicates to me that we have got our priorities wrong. We certainly should be looking at water, and we should be looking at chemicals, but the hon. Lady is making the mistake of thinking that carbon dioxide is some sort of poison which should be equated with whatever chemicals were put into the water supply. Carbon dioxide is a perfectly natural gas, and it is vital to growth. Without carbon dioxide, we would not be able to grow anything at all, and it is far from certain that carbon dioxide is responsible for the 0.8° rise in temperature. We can only say that it is responsible for a small amount.
Let us be honest. We have a sort of pseudo-religion of global warming—no one can even begin to question it—and the Intergovernmental Panel on Climate Change publishes the bible of that pseudo-religion in the form of the report that it produces every couple of years. In its latest report, the IPCC itself says that it can only state with certainty that half the temperature increase in the second half of the 20th century is due to man-made carbon emissions. Well, in the second half of the 20th century the actual increase in temperature was 0.5°, so what the IPCC is saying is that it can only state with certainty that man is responsible for a 0.25° increase, which is about a quarter of the figure that we are constantly given. So what is the problem that we are trying to address with all these taxes on our industries?
I have the greatest respect for the Minister, and, as I have said, I am absolutely confident in her ability and her desire to support manufacturing industries. I suspect that she may share some of my concern, shall we say, although I will not embarrass her by putting her on the spot with comments like that. But I hope that she is taking note of something here. The reality is that Members in all parts of the House want to distance themselves from the consequences of policies that they themselves have called for.
A few years ago, no one was more enthusiastic about green policies than Opposition Members. What about that Liberal Democrat Member? I have forgotten his constituency now, but he is not in the Chamber. He was the most enthusiastic of all, constantly championing green policies, yet it was he who drew our attention to the fact that manufacturing companies in this country were paying twice as much as the Germans for their energy. Perhaps he is another one who should be invited to the Global Warming Policy Foundation some time. I think that if the hon. Member for Brighton, Pavilion (Caroline Lucas) had a steel factory in her constituency, even she would probably be whingeing and whining about the taxes that she herself had enthusiastically called for. None of these people will support the Front Bench when it comes down to it. They call for green taxes, but they do not want the consequences. The level of hypocrisy that comes out of the green movement is absolutely astounding.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I fear that the hon. Gentleman has misunderstood the subject of the debate, which is, specifically, carbon taxes on energy-intensive industries. Those taxes have not been supported by Greenpeace, and are not considered to be green taxes at all.
David T. C. Davies
Greenpeace does not support anything as far as industry is concerned. None of the environmental groups do. They call for us to decarbonise completely, but whenever we offer them some handy solutions—such as nuclear power, which generates large amounts of electricity without carbon dioxide—they do not want to know. And what about shale gas? I was interested to hear the hon. Member for Penistone and Stocksbridge call for us to export it, as well as mentioning a company in her constituency that supports nuclear. Exporting shale gas is a good idea. It produces half the amount of carbon dioxide that is produced by coal, and it is vital for the wind industry that we have gas to back it up. However, the greens do not want to know about that. What about the Severn barrage, which was proposed in my constituency? I would have some concerns about the cost, but I believe that it would generate 20% of the UK’s electricity supply without any carbon dioxide. The greens are more worried about the fact that some wader birds would be inconvenienced. They have wings—they could fly somewhere else—but the greens do not want to know about it.
My point to the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) is this. She will never, ever satisfy the green movement. Let us forget about pandering to the green movement. Let us forget about pandering to all those who call for carbon taxes and who are a little more sensible, such as Opposition Members, because they will not support the consequences either. Let us remember that, at this moment in time, it is not the meteorological climate that we need to worry about, because that has not changed for about 18 years. It is the economic climate that we should be concerned about.
I hope, and I am sure, that the hon. Lady will champion Britain as a great place in which to do business, and a great place to which to come and make things, and will do something about these ridiculous green taxes, which do not just need to be scaled back—I will not use quite the words that were used by the Prime Minister, although I welcomed them greatly—but need to be completely scrapped.
David Mowat (Warrington South) (Con)
It is a pleasure to follow my hon. Friend the Member for Monmouth (David T. C. Davies). I seem to recall that I had the opportunity to follow him in the energy debate two weeks ago, so perhaps we are getting to be a bit of a double act. My premise is that we do need to decarbonise, but he makes a valid point about the hiatus: it is true that the climate has not changed, certainly in the last 15 years. There are statistical reasons why that might be possible and the balance of science is still that there is probably an issue. I am not a scientist—nor is any other Member present to the level of being able to interpret these data—but my position is that, at least on the precautionary principle, it is right that we decarbonise.
My remarks in respect of this industry, in which, as we have said, there are 800,000 jobs, will focus on the increasing dichotomy of approach between us and other countries—between us and the EU, the United States and the rest of the world. These taxes are designed to prevent a free market in electricity and energy. A free market in both, particularly at the moment, would involve massive amounts of coal and depreciated nuclear, I guess, and we have decided for policy reasons that we do not wish to do that. We are, however, out of step.
The shadow Minister, the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), said that the debate was about the carbon price floor. It is not just about that. It is about carbon taxes in general. I do not support what happened on the carbon price floor. I think it was an error, and I am glad the Chancellor took the opportunity to fix it. It is a little bit hard to take the Labour party lecturing us on that. We talked previously about what happens whenever we debate an energy measure— through which we can tangibly affect energy prices—in this Chamber. There is always a judgment to be made between speed of decarbonisation, how we act unilaterally, costs and jobs. Whenever we have to make that judgment, however, the Labour party has always, during my time in Parliament, belligerently taken the view that the Government are not being green enough and we need to go further. I remember the debate of three years ago on the reduction of solar PV from six times grid parity to four times grid parity. That was a perfectly reasonable proposal, but the Labour party resisted that and fought it in a striking way.
The key date, however, in terms of the Labour party’s position was 4 December last year when, although we are switching off our coal stations anyway and are going further and faster than others in Europe in doing so, there was a Lords amendment to require existing coal stations to be switched off more quickly than had been planned in terms of the emissions performance standard. Labour Members voted for that, so for them to lecture us on this stuff is a little bit rich. Finally, let me point out that in 2010, at the end of the last Parliament, this country ranked 27th out of the 29 countries in the EU in the amount of renewables. I have no problem with renewables; it is the cost of them that is an issue.
We are now out of sync with the EU. In a good speech, the hon. Member for Penistone and Stocksbridge (Angela Smith) told us about Germany and France having forward energy prices that are 40% and 70% lower than ours. That is not a sustainable position from which countries can agree to invest in industry. The odd thing about EU energy policy is that it has not emphasised reductions in carbon. What EU energy policy has done is emphasise renewables, which is not quite the same thing. The consequence of an energy policy that is about not reducing carbon but having more renewables is that we get behaviour such as that in Germany. Some 40% of its electricity comes from renewables, which is a huge and difficult thing to achieve, yet it now burns so much coal that its carbon usage per capita and per unit of GDP is a third higher than ours. The consequence of EU policy is that we have not decarbonised and we have misallocated revenue that should, perhaps, have gone to carbon capture and storage, which is not a renewables technology. We have not decarbonised. Instead, we have misallocated capital to renewables. I am not against renewables, but I am for—this is the policy—decarbonisation. The hon. Member for Redcar (Ian Swales), who is not in his place, talked about state aid and the fact that the Germans in particular, but also the Belgians and the Dutch, cross-subsidise industrial jobs in order to keep these foundation industries going.
A great deal of marginal foundation industry is reshoring to the eastern seaboard of the United States. There, chemical feedstocks, and electricity, are one third of their price in Asia and here. That is a massive differential. People talk about shale and ask, “Is shale going to happen?” Shale has happened. It is transforming, and transforming quickly, the economy of the United States, while we continue doing feasibility studies while marginal jobs move. It is true that it is not as if whole industries are moving. What is happening might involve, for instance, an investment decision about a bit of marginal kit possibly in Teesside or the north-west—a new cracker, a new process. That marginal decision is looked at in its own right. Increasingly, the decision is made to put it in EU countries, with their cheaper electricity, or on the eastern seaboard of the United States.
We are out of sync, too, with the rest of the world. Every Member who has an interest in this policy area should know this key statistic: this year is a big year for carbon emissions per head, because it is the year in which—per head, not as a country—China will pass the UK in carbon emissions, for which the UK is one of the lower countries in the EU. That is a big number, and it shows the need not only for international action, but for us to stop acting unilaterally unless we can bring other countries with us.
On that point, although the world increased its renewables—our renewables—by a reasonable chunk, the increase in coal was three times greater than the increase in renewables in absolute terms. We must take account of such issues when setting our own carbon taxes and our own policies, reflecting on the 800,000 jobs that exist in the industry, and which we all would agree we want to continue to exist.
The Climate Change Act 2008, passed by the last Government, contains a requirement for us to reduce carbon emissions by 80% by 2050. The issue, however, is that the world has not followed us. Some people might say, “Ah, isn’t it good that we are out in the lead on all this stuff? Isn’t it good that we are demonstrating soft power? Isn’t it good that we are setting an example for the rest of the world?” That might be true—I do not have an argument with that—but the world has not followed us. Nobody else has passed anything like a Climate Change Act, and nobody else, as far as I can see, looks as if they are going to. The consequence is that, rightly, we have the Committee on Climate Change, which produces carbon budgets, and carbon budgets produce behaviour and all that goes with that.
Let me leave the House with this point. I had what I thought was a very scary conversation, in which I mentioned our penalising our energy-intensive industry, with somebody who works for the Committee on Climate Change. He said to me, “Ah, it’s all about comparative advantage.” Comparative advantage means this: if Britain wants to be an industrialised economy into the future, we need to be thinking about which industries we are in, and we need to be choosing—this was the position of this person from the Committee on Climate Change—and prioritising other industries over these foundation industries because they are not the future. I do not agree; I disagree profoundly. Those 800,000 jobs are very important and the number can grow, but that is the atmosphere in which part of this debate is being conducted and for me at least it is quite scary.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I congratulate my hon. Friend the Member for Stockton North (Alex Cunningham), the hon. Member for Redcar (Ian Swales), who is no longer in his place, and the Backbench Business Committee on securing this important and pressing debate on the impact of carbon taxes on energy-intensive industries. I speak in my capacity not only as a shadow Treasury Minister but as a fellow north-east MP. The north-east is one of the most energy-intensive areas of the country, and a base for the many companies that have been mentioned today: Wilton International, INEOS and Tata Steel are just a few of the largest. I am therefore aware of the importance of this issue for the future of our productive industries, for jobs and for economic growth in the region and across the UK.
The Government’s own figures suggest that, at national level, the chemicals, paper, ceramics and metals industries directly contribute about 2% to UK gross value added. They have a combined turnover of £130 billion and directly employ about 330,000 people. The TUC estimates that, if we include those working in the wider supply chain, there are about 800,000 people working in the energy-intensive industries—or foundation industries, as my hon. Friend the Member for Stockton North prefers to call them—and the supply chain.
I recently visited Ibstock, which has a brickworks in Throckley in my constituency. It is the largest brick producer in the UK, with 19 sites across the country, employing around 1,500 people. The North East Process Industry Cluster estimates that 1,400 such companies across the region export £12 billion worth of product each year. So, if we are to achieve a balanced recovery and build a highly productive, more export-led economy, we have to recognise that manufacturing, ceramics, glass, chemicals and steel—all energy-intensive industries—are an important part of that picture. There is agreement across the House on the importance of supporting those industries and ensuring that they create the jobs and economic growth that we all want to see.
The motion before us today refers to the imposition of carbon taxes and levies, and rightly welcomes the relief announced in this year’s Budget to limit future rises in the carbon price floor. However, the bottom line is that this support—capping the future costs of carbon and providing an exemption for combined heat and power plants—has come too late. It is more than 12 months since the measure was meant to begin compensating energy intensives, but that was certainly too late for one company on Teesside, which told me that it had had to close one of its coal boilers in 2014, resulting in 100 job losses. There have been other cases in which manufacturers, steelworks and brickworks have fallen victim to the ill-thought-out carbon price floor, as my hon. Friend the Member for Stockton North has shown.
I understand that the hon. Member for Warrington South (David Mowat) thoroughly resents what he describes as crowing from the Labour Benches on these issues, but many of the problems that these companies are facing in relation to the changes in the taxation system have arisen under this Government, and we warned of the consequences throughout this period. The carbon price support rates of the climate change levy, which underpin the carbon price floor, were entirely the creation of this Conservative-Liberal Democrat coalition Government. They were introduced in the Finance Act 2011, despite the deeply held and loudly voiced concerns of Opposition Members who tried to amend the legislation on a number of occasions before its implementation.
My hon. Friend the Member for Bristol East (Kerry McCarthy), then shadow Economic Secretary to the Treasury, tabled an amendment calling on the Government to at least consider the impact of this carbon tax on a whole range of affected parties, from energy bills and fuel poverty to renewables and the energy sector more widely. More importantly, the Opposition also asked the Government, in carrying out that review, to take stock of the impact of the carbon price floor on energy-using manufacturing industries and on employment in those industries. My hon. Friend said at the time that there was a danger, particularly in the absence of a credible Government plan for growth, that growth and jobs would be exported to other countries, that UK industry would be at a disadvantage, and that jobs and growth would be put at risk. Those concerns, and our amendment, were dismissed at the time, but unfortunately many of them have been realised. The Government’s U-turn in this year’s Budget has recognised that fact, but for some it has come too late.
In March this year, for example, Thai-based steelmaker SSI, located in the constituency of the hon. Member for Redcar (Ian Swales), revealed that it had yet to turn a profit despite producing 5 million tonnes of steel. It has regularly raised concerns about the risk to jobs. Indeed, SSI raised concerns about the carbon price floor, along with the rest of us, back in 2012. In March 2012, we lost Rio Tinto Alcan’s aluminium smelter plant in Lynemouth on the Northumberland coast with the loss of more than 500 jobs. It had been a source of employment in the area for more than 40 years. Rio Tinto Alcan had estimated that its energy costs would jump from £7 million to £100 million as a direct result of carbon taxes—including, of course, the carbon price floor.
I want to turn to the question of compensation. In 2011, the Chancellor promised a £250 million compensation package for the worst-affected heavy energy-intensive industries for the “indirect costs” of the EU emissions trading system and the carbon price floor. Three years later, however, Ministers’ statements and answers to parliamentary questions suggest that only 53 energy-intensive companies have been compensated for the costs of the EU ETS, and that—as far as I am aware; I would be grateful if the Minister updated us on this—absolutely none has been compensated for the costs of the carbon price floor, even though state aid clearance was finally received for that in May.
Energy-intensive industries, having being promised by the Chancellor in 2011 that, thanks to Government support, they would not be priced out of the world economy, have now been waiting for around 18 months for help on the coalition’s carbon tax, but that help remains out of sight. It seems that, due to the delays, the Government have paid only about £31 million of the £250 million compensation that they promised in the 2013 autumn statement. Will the Minister clarify whether the Government intend to pay out the full £250 million by the end of this Parliament, as was originally promised? The Chancellor talked about the world economy, but what about the European economy? The Government’s own figures suggest that our heavy industry has been priced out there, too, as the motion before us today notes.
A recently published consultation paper included estimates from the Department for Business, Innovation and Skills and the Department of Energy and Climate Change of electricity prices faced by energy-intensive companies in the absence of Government intervention, compared with other countries around the world. Given that there is effectively an absence of Government intervention at the moment—aside from EU ETS compensation to just 53 of the thousands of companies affected—the Government’s figures drive home the stark reality of the impact on our productive industries. UK energy-intensive industries face the highest costs of any country in the world. The figures predict that in 2015 our energy-intensives’ electricity costs will be almost double those of their counterparts in Germany—a country already known for its high energy prices—let alone of those further afield in Japan, the US or China, whose electricity prices are dwarfed by ours.
I put to the Minister today the same question that I have put to her predecessor and to other Ministers: when will energy-intensive companies finally start receiving compensation for the costs of the carbon price floor, which the Chancellor promised three years ago? More importantly, will she clarify whether the Government have given up on backdating compensation for the last 18 months in which energy-intensive companies have had to pay for the carbon price floor without any of the help that the Chancellor had promised? The former Energy Minister, the right hon. Member for Sevenoaks (Michael Fallon), originally suggested back in February that the Government would continue to press the case for backdating. Yet, in a delegated legislation Committee in July, he appeared to backtrack on that, saying that it was a “lost cause”. Perhaps today’s Minister will clarify the point: have the Government given up on backdating as a lost cause?
I wish to press the Minister on one further point. Welcome though the state aid clearance in May was, it also turned out to be a further blow for the hopes of many other energy-intensive industries, particularly the glass, ceramics and minerals sectors, which the EU Commission deemed to be
“less exposed to higher energy prices”
and which were therefore excluded from the list of eligible industries. The then Minister of State—he is now Defence Secretary—said in July that he “remained concerned” about this decision and that the Government would seek a review of eligible sectors with the Commission “later this year”. The Financial Times recently reported that the UK Government were “considering options” in that respect and pushing ahead with an application to compensate these newly excluded sectors, although it commented that the chances of success “look slim”. Given that previous Minsters have promised to press the case, only later to seem resigned to lost causes, what reassurances can this Minister give hon. Members and these companies, which we know are interested and following this debate, that the Government are doing everything they can to secure this much-needed support for industries struggling to remain internationally competitive?
Earlier this year the Opposition commissioned Mike Wright, executive director of Jaguar Land Rover, to conduct an independent review of advanced manufacturing in the UK. His report clearly set out the challenges we face, including, most importantly for this discussion, on how we have a proper long-term industrial strategy that promotes investment and helps us realise our full productive, innovative potential. Inherent in that is striking the right balance between becoming world leaders in tackling climate change, and in the technical solutions that come with it, and not putting our businesses at a competitive disadvantage compared with other advanced industrial economies.
I wish to conclude by reminding hon. Members of the Chancellor’s words in 2011. He told this House in his autumn statement:
“We are not going to save the planet by shutting down our steel mills, aluminium smelters and paper manufacturers. All we will be doing is exporting valuable jobs from this country”.
Most importantly, he concluded that
“businesses will fail, jobs will be lost, and our country will be poorer.”—[Official Report, 29 November 2011; Vol. 536, c. 807.]
I could not agree more, but unfortunately that has been the consequence of many of the Government’s ill-thought-through carbon taxes to date, which, in the absence of any comprehensive support or compensation, have damaged our competitiveness, cost vital jobs and served only to export carbon emissions abroad and not to eliminate them.
The Exchequer Secretary to the Treasury (Priti Patel)
I welcome today’s debate and congratulate the hon. Members for Stockton North (Alex Cunningham) and for Redcar (Ian Swales) on securing it, not least because it puts me through my paces in understanding the remit, this whole field and carbon taxes. It has been an insightful debate. The Government’s position has been discussed by a number of hon. Members, but we are clear in recognising the significant role that energy-intensive industries play in the UK economy. As my right hon. Friend the Chancellor said back at Budget 2011, we are committed to ensuring that manufacturing is able to remain competitive during the shift to a low-carbon economy and have pledged to do everything we can to help manufacturers play a valuable role.
We also recognise the difficulties that EIIs have faced as a result of high energy costs, and various cases and accounts of challenges that companies have faced have been cited in today’s debate. That is why we introduced a package of reforms at Budget 2014 radically to reduce the costs of energy policy for business, particularly for manufacturing, while improving security of supply—all right hon. and hon. Members would emphasise that we must do that—and maintaining the Government’s ambition for renewable generation deployment. That package will benefit every household, business and region in the country, saving a total of up to £7 billion by 2018-19. Businesses alone will save a total of £6 billion and the package will particularly benefit the most energy-intensive manufacturers, about 80% of which are based in the north of England, Scotland and Wales, as we have heard. The package will improve incentives for companies to return their manufacturing to the UK and help existing firms to compete in the global race. I do not want us to underestimate that term: we are about competition, we are open for business, and the Chancellor has consistently made the case that this is about British jobs and keeping the United Kingdom a competitive place for manufacturing in EIIs.
Manufacturing fell from being 19% of the total economy in 1997 to 10% in 2010, as my hon. Friend the Member for Warrington South (David Mowat) mentioned, but it has grown strongly in the latest quarter, at 3.3% compared with a year ago. Currently, energy-intensive sectors are responsible for 35% of UK manufactured goods exports. Obviously, the Government want to make the recovery of manufacturing last for the long term and be sustainable, and to have growth that is balanced across the entire UK. I think we would all agree that lowering energy costs is therefore vital for the international competitiveness of UK manufacturing.
If we had not introduced any measures at Budget 2014, UK firms would have been paying just above the average price for electricity among the 29 members of the International Energy Agency, with the proportion of this price attributable to policy costs rising over time, reaching about one third by 2020. That is why the Government announced the series of measures at Budget 2014 radically to reduce the costs of energy policy for business, particularly in EIIs. The measures included capping the carbon price support rate at £18 per tonne of carbon from 2016 to the end of the decade; extending EIIs’ compensation for the cost of the carbon price floor and the emissions trading scheme until 2019-20—I will address the points raised about compensation shortly; introducing compensation for EIIs for the costs of the renewables obligation and feed-in tariffs from 2016 to 2020, which is worth almost £1 billion, in order to protect these energy-intensive manufacturers from the rising costs of the renewables obligation and the feed-in tariffs; introducing, from 2015, an exemption to the carbon price floor for fuels used to produce good-quality electricity by combined heat and power plants for on-site purposes; and introducing new measures to make energy markets more competitive for very small businesses and to help them use smart meters to cut their bills.
I met a range of small businesses this morning. Although we are talking about large EIIs in this debate, these things also have an impact on small businesses, and the Government are very committed to listening to their concerns and addressing the issues they face. I am pleased to say that all businesses will see their electricity bills reduce as a result of this package, provided it receives the necessary EU state aid approval, which was also a subject raised in today’s debate. There will be a total reduction for business of up to £6 billion by 2018-19. The companies that use electricity intensively will see radical cost savings, as, when previous announcements are taken into account, they are now compensated for all Government policy designed to support low carbon and renewable investment up until 2019-20.
A typical energy-intensive business receiving the compensation measures in the package will save about £19 million by 2018-19. Such businesses include Lotte Chemical UK Ltd in the constituency of the hon. Member for Redcar, and GrowHow in the constituency of the hon. Member for Stockton North. Other manufacturers will also see a reduction in their bills through the capping of the carbon price support, which it is estimated will save a typical heavy industrial firm about £800,000 and a typical mid-sized manufacturer £50,000 in 2018-19 alone. That will increase the competitiveness of the UK’s energy intensive industries, which is important as this is all about supporting those industries to be more competitive, particularly in the global race. All businesses have recognised that this is about international competition and our place in the world. The Confederation of British Industry stated that our 2014 Budget package will
“put the wind in the sails of business investments, especially for manufacturers.”
The chief executive of the Engineering Employers Federation said that the Government clearly recognise the need to make UK competitiveness a priority. It is fair to say that the Government are doing their utmost to ensure that the UK is a place in which to do business. We have always said that to achieve a resilient recovery, the UK must back manufacturing.
The chief executive of Tata Steel’s European operations, which has a plant in the constituency of the hon. Member for Redcar, said:
“The measures announced in the Budget are extremely welcome. The Government has listened to the concerns of the foundation industries by introducing a limit on the policy costs they face. These measures are a clear and meaningful contribution to forging a more competitive and sustainable future for UK steelmaking sites, which employ 18,000 people directly and several times that number indirectly.”
The package of measures proves that the Government are determined to see manufacturing remain at the heart of the UK economy and competitive on the international stage.
On carbon pricing, over the next decade we need to attract investment worth more than £100 billion to replace and upgrade our energy infrastructure and to diversify the energy mix. The investment will help to ensure that the UK meets our long-term legally binding greenhouse gas emissions reducing targets and, importantly, to safeguard the country’s long-term energy security, on which we have only just touched in this debate. Establishing a minimum carbon price sends a credible signal to help drive that level of long-term investment in low-carbon electricity generation—a point that was made by the hon. Member for Newcastle upon Tyne Central (Chi Onwurah). But diversification is not concerned with renewable energy alone. The Government are committed to developing a wide range of energy sources to ensure that energy prices remain competitive in the future, and of course nuclear energy and shale gas are central to that.
We welcome the announcement made by INEOS last month that it plans to enter the UK shale gas market, because we are convinced of the benefits that shale gas can bring to industrial production.
Alex Cunningham
The Minister mentioned shale gas and other issues, but in the north-east of England, coal gasification could be a huge saver both for our region and the country. I hope that she will encourage the development of that industry.
Priti Patel
The hon. Gentleman is right that this is not about one or the other or even a trade-off, but about all players in the energy mix. We are talking about long-term energy, security of supply and competitiveness in the long-term energy market, and that requires diversity.
We are also continuing to look into the issues faced by energy-intensive industries. Today, Members have touched on the issues of carbon-reducing options and the competitive impacts. My hon. Friend the Member for Rugby (Mark Pawsey), who talked about CEMEX and the cement plant, touched on the fact that there are a range of sectors that are not on the European Commission’s list when it comes to exemptions and approval of indirect costs. Let me reassure Members that this is about not just an occasional conversation with the European Commission but about being absolutely firm and clear with it and pressing it on this issue. The Government, too, will look at the competitive impacts of their carbon reduction options through a series of road maps. I am talking here about the involvement not just of the Treasury but of the Department of Energy and Climate Change and the Department for Business, Innovation and Skills. This will help focus policy making more on the opportunities and barriers that energy intensive industries face, and allow Government and industry to agree on actions to deliver cost-effective decarbonisation while safeguarding competitiveness.
Over in Brussels, we will press the European Commission to review the list of energy-intensive sectors that are eligible for compensation, with the aim of extending it, given the higher energy costs they receive as a result of the EU emissions trading scheme and carbon price floor. This is an ongoing matter. It is fair to say that we are well placed when it comes to pressing the European Commission and to making our case.
We will press the Commission to provide a more targeted list of sectors most at risk from carbon leakage as a result of the EU emissions trading scheme, for its next phase which begins in 2021, so that the free allowances that these sectors receive can be best focused on those energy-intensive industries that need them the most. The Government are well aware of the cost pressures on the EIIs, and we have developed a suite of measures to reduce those costs, as well as the measures announced in Budget 2014.
Let me address the points that the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) made about compensation. In Budget 2011, we made it clear that £200 million was available, and much that has been spent thus far is within the eligibility of the constraints of the state aid clearance process, and that is all within the framework of the process that has been set out. The hon. Lady rightly said that the Commission published its guidance on eligibility schemes in April this year. That has not been lost on us. We are not thinking, “Well, that’s that. It’s been and gone.” We are absolutely on to this matter. I will if I may come back to the hon. Lady on this with some specifics. It is absolutely not the case that we are not looking at this any more. We want to do everything possible to ensure that that money is going where it is needed and supporting the EIIs that need that compensation. Of course, this comes back to the statement that was made by the Chancellor in 2011. We announced measures in the Budget this year, but we know that more needs to be done, so we will follow this matter through.
We are continuing work in this area securing investment in low carbon technologies; supporting the development of a wider range of alternative energy sources; and working with individual industries as they seek to improve their energy efficiency. It makes business sense for those industries to improve energy efficiency, and they are all going through that process. We welcome this opportunity to set out the wide range of work this Government are doing to support energy-intensive industries as the UK transitions to a low carbon economy.
Alex Cunningham
We have had an excellent and informed debate this afternoon. It is clear that both the Minister and shadow Minister recognise the importance of our energy-intensive industries not just for the jobs that they support but for the products they produce for both the domestic and export markets.
It has been a truly Back-Bench debate, because it went across the political divide. There were lots of things on which we could agree, and a few things on which we could not. We have heard today of a list of world-class industries and companies that are the backbone of our economy and that need the help of this place. In her opening remarks, the Minister said that she was here to learn and be put through her paces. I hope she has been put through her paces and that when she leaves this place today, she can think that it is not about what has been done thus far, but what can be done next to support those important industries.
I am grateful to everybody who has taken part in the debate today. We have made it clear that we have shared anxieties about the pressures faced by our industries, and that those pressures cannot be allowed to run on and on. I hope and am sure that Ministers have recognised the real problems facing these industries, which provide many jobs—the numbers vary and are given as anything from 120,000 to 800,000. The industry is all-encompassing and it is important that we protect those jobs and also protect our traditional and not so traditional industries. We need to find solutions not only so that these industries are strengthened but so that we ensure that they are not diminished.
Question put and agreed to.
Resolved,
That this House welcomes the measures announced in the 2014 Budget Statement which reduce cost pressures created by the imposition of carbon taxes and levies; notes that without such measures, there is a serious risk of carbon leakage; further notes, however, that UK manufacturing still pays four times as much for carbon compared with main EU competitors because of taxes such as the carbon floor price; and calls on the Government to build on the measures announced in the Budget by producing a strategy for energy-intensive industries, as recommended by the Environmental Audit Committee in its Sixth Report of Session 2012–13, HC 669, in order to produce a fairer and more efficient system which delivers genuine potential for investment in a low-carbon economy.
Gurkha Pensions
(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Jackie Doyle-Price (Thurrock) (Con)
I beg to move,
That this House has considered Gurkha pensions and terms of employment.
I thank the Backbench Business Committee for making time to debate the issue of Gurkha pensions and other issues. This is the first time in this Parliament that we have had the chance to consider Gurkha issues, in contrast to the attention they received in the previous Parliament. Last year, the all-party group on Gurkha welfare began an inquiry into the outstanding Gurkha grievances, with a particular focus on pensions. I thank my hon. Friends the Members for Brecon and Radnorshire (Roger Williams) and for Folkestone and Hythe (Damian Collins) and the hon. Member for Ealing, Southall (Mr Sharma) for their support during the inquiry. I pay tribute to Deepak Maskey and the Satyagraha committee, who have engaged with the inquiry with passion and professionalism and have been powerful advocates. They have engaged positively with the institutions of our democracy to make their case and I hope that these issues will now be considered in the spirit of mature dialogue, not least because they will feel that they are being heard and not ignored.
Before we complete our inquiry and submit our report to the Government before the end of the year, we wish to seek the views of the House on these matters. It is a shame that other issues going on in the kingdom might mean that one or two Members are not in the Chamber today, given the level of interest in this issue. It is particularly important that we consider these questions now, not least because the extension of the right to settlement has brought some of the outstanding issues to the fore.
The critical point is about the Gurkha pension and the case for equality. Today’s Gurkha soldiers join the British Army with the same arrangements as British soldiers, whereas those who served before 1997 did not. They claim that they are not being treated equally and that there are two classes of Gurkha veteran, whereas the Ministry of Defence states that it has honoured the terms and conditions under which the Gurkhas were recruited. Those positions are both correct, if diametrically opposed, and it is our challenge as parliamentarians to establish what is fair and what our obligations are to these men who served our country, particularly in view of the military covenant, which gives us obligations to all our Army veterans.
The basis on which the Gurkhas are recruited into the British Army is governed by the tripartite agreement with India and Nepal that established the Gurkhas as an integral part of the British Army, not as mercenaries. The agreement also enshrines parity for Gurkha soldiers with the pay code of the Indian army and states that on completion of service they would return to Nepal. At the time the tripartite agreement was agreed that was a reasonable assumption, but over time, as Britain’s global footprint changed, more Gurkha soldiers found themselves based in the UK. With limited opportunities to work in Nepal at the end of their service, they increasingly chose to settle here and Gurkha terms and conditions did not keep pace with that change. That is regrettable and has led us to where we are now.
Guy Opperman (Hexham) (Con)
I congratulate my hon. Friend on securing the debate and put on record the House’s view that she has been an amazing champion of the Gurkhas in all she has done. Although we owe a huge debt to them, does she agree that the inquiry she has led so ably on a cross-party basis and today’s debate are an opportunity for us properly to address the issues that are concerning us in the report?
Jackie Doyle-Price
Absolutely, and that is very much the spirit in which we have approached the inquiry. We have tried to understand the issues from a Gurkha perspective, but we want to hear from other Members about the wider perspective. Ultimately, we are talking about issues that will impact on the whole British Army and that will have a bearing on the future of the Gurkha regiment in the British Army, and I am sure we all wish to retain that, as we are soon to celebrate 200 years of Gurkha service and we hope to have more. We must also be conscious that we are the guardians of the taxpayers’ pound. Anything we do to address any grievances must bear all those principles in mind, and I thank my hon. Friend for his intervention.
Approximately 20,000 veterans are in receipt of Gurkha pensions. The Gurkha pension scheme was established in 1947 by royal warrant and is the oldest pension scheme in the armed forces. It should be noted that pensions for British service personnel were not introduced until 1975. The scheme was designed to give Gurkhas sufficient to live on in retirement in Nepal and was paid on completion of 15 years’ service from the point of exit. That is an important principle to bear in mind. The fact that it was established indicates a desire at the time to do right by Gurkha veterans as they retired to Nepal, recognising that on their return there would be limited employment opportunities. It was, dare I say, extremely consistent with our obligations under the military covenant.
The pensioners are today typically on incomes of about £223 a month. We are advised that that can purchase a good standard of living in Nepal, although for those who have settled in the UK it is clearly inadequate. It is those pensioners who believe they should be entitled to the same level of pension as British service personnel.
Mr James Gray (North Wiltshire) (Con)
I, too, pay tribute to my hon. Friend for the magnificent work she has done in seeking to find a just solution to this problem. She mentions that the Gurkha pension scheme was available on the completion of 15 years of service. Am I right in thinking that at the same time the British Army pension scheme was available at 20 years of service, thereby giving the Gurkha soldier a significant time advantage over the rest of the British Army?
Jackie Doyle-Price
My hon. Friend the Member for North Wiltshire (Mr Gray) is quite right, although, as my hon. Friend the Member for Aldershot (Sir Gerald Howarth) says from a sedentary position, it was in fact 22 years. The point made by my hon. Friend the Member for North Wiltshire goes to the heart of this: we are comparing apples and oranges when we try to compare Gurkha pensions with British service pensions. They are separate and different, so the key is not equality but fairness. That is the spirit in which our inquiry has been undertaken.
Clearly, there can be no retrospective change to terms and conditions of employment, but I ask that the Government look carefully at the adequacy of the Gurkha pension, particularly in relation to the Indian Gurkha pension and their additional benefits and the cost of living in Nepal. We want a commitment that that will continue to be held in review.
The all-party group was more concerned, however, about those Gurkha veterans who receive no pension. There are a good number of them. Some are veterans of the second world war who left long before the introduction of the Gurkha pension, and in addition some 7,000 veterans receive nothing as they did not complete 15 years of service. We are not satisfied that all those veterans are being treated fairly and we believe that they should be afforded the dignity and honour that service in the British Army should bring.
At the moment, these people are dependent on Gurkha welfare pensions of some £40 a month, administered by the Gurkha Welfare Trust. The all-party group believes that those who were made redundant or unfairly dismissed should have a formal entitlement to a pension, as should those who were medically retired. I note that the Government are in receipt of LIBOR money that is being used to fund services for our veterans, so we would ask that the Government consider making a generous endowment to the Gurkha Welfare Trust to enable it to support those veterans more effectively. We also want them to consider whether it is appropriate that those who were made redundant and were unable to serve 15 years through no choice of their own should be given some formal entitlement to a pension.
Roger Williams (Brecon and Radnorshire) (LD)
I thank my hon. Friend for giving way; if I catch your eye later, Mr Deputy Speaker, I will pay tribute to her for the work that she has done. I believe we were also told that some Gurkhas who are now resettled in this country would prefer to stay in Nepal if they had a pension that made it easier for them and their families to live there.
Jackie Doyle-Price
My hon. Friend makes exactly the point that brought those issues to the fore. The pension terms that we give the Gurkhas are generous for living in Nepal, but not for living here, and they now have the right of settlement. That has brought with it some financial incentives to come to this country. We need to look at that issue in a more mature manner, because there is an additional cost to the taxpayer and it is not necessarily good for the welfare of those people if they move here just because it is financially desirable to do so.
That brings me to the points that I really want to make. Gurkha pensioners receive an income, but if they move to the UK they have access to pension credit, housing benefit and all our public services. We think that the Government could achieve a revenue saving by spending more on Gurkha pensions, thereby saving on welfare bills. That could make the issue hugely complex, but it brings home one of the unintended consequences of extending the right to settlement.
One aspect that we think worth considering—it might be a solution—is whether Gurkhas should have been able to build up national insurance credits, which would have entitled them to a pension. Before 1997, Gurkha soldiers were denied that opportunity. However, Gurkhas were issued with a dummy national insurance number. Many have been surprised subsequently to learn that they have not built up their contributions. Had they been able to do so, they would have generated credits towards a UK state pension, which would have been exportable to Nepal and removed that financial incentive to come here. That would bear examination by the Government; at best it would be revenue-neutral, but it might generate a revenue saving.
We can show why it is financially lucrative for Gurkha veterans to move to the UK. We heard from one veteran who was medically retired after eight years’ service following serious injuries sustained in the Falklands war. He advised us that he received just £33 per month disablement pension, but on moving to the UK he can claim benefits far in excess of that. Furthermore, he receives free health care, as opposed to having had to pay for any health care he might have received in Nepal.
Most Gurkha migrants are in work and the impact of their settlement here is positive, but we are concerned for the elderly Gurkhas with no pension who are selling up all they have in Nepal with only the prospect of a life on benefits here, away from their friends and families. Naturally, many have congregated where there is a critical mass of retired Gurkhas, in particular in Aldershot. That is adding significantly to the burden on local services and is not conducive to the integration of that migrant community. It is not good for the reputation of the migrant Gurkhas elsewhere in the country who live quite cohesively and, indeed, are much valued and loved. I say that with reference to my constituency of Thurrock, where we have a good number of Gurkha families settled who are well established and much loved.
However, it is not good for elderly veterans to settle here just because they have no access to a pension. Many of them do not speak English and they have left their families behind. I am advised that there are 1,000 widows here who have come with the expectation of bringing their families in due course. That will not be possible. Other elderly Gurkhas live on benefits and send money back home, and some are persuaded of the view that with more and more Gurkhas settling, it is only a matter of time before the pension is equalised. They are being given false hope. For their welfare, we need to be quite clear with them by addressing all their grievances, one way or another.
Our report contains a number of recommendations on those issues and a number of others, including whether we are doing enough to provide health care facilities in Nepal for veterans. I hope that when we submit the report the Minister will engage with it constructively, as she has throughout our inquiry. I am sure she agrees that it is only right that we give appropriate challenge to how we are dealing with the issues surrounding our Gurkha veterans, to ensure that this Government and this country do right by people who have given service to our country.
Damian Collins (Folkestone and Hythe) (Con)
I pay tribute to the speech of my hon. Friend the Member for Thurrock (Jackie Doyle-Price) and to the terrific work she has done leading the inquiry on Gurkha pensions and welfare, which has been a considerable piece of work. Hon. Members will know that all-party groups do not have the resources of Select Committees or formal Committees of the House; nor do they have huge secretariats and teams to support them, so holding such an inquiry is a considerable undertaking. I congratulate her on that.
Jackie Doyle-Price
My hon. Friend is being too generous. He generously made his office available to support me and I am very grateful for that.
Damian Collins
It is kind of my hon. Friend to mention that. I thank Daniel Kirkpatrick from my office, who worked on the inquiry.
Like my hon. Friend, I have served on Select Committees and on big inquiries that attracted a lot of attention from the outside world, but I have never attended hearings that attracted such a large audience from the public as did the Gurkha welfare inquiry hearings. Hundreds of members of the Gurkha community and veterans came to listen to the evidence sessions to make their point, which clearly showed the strong feeling in the Gurkha community that serious outstanding issues have to be considered.
As Member of Parliament for Folkestone, I am proud to represent a significant Gurkha and Nepalese community. Shorncliffe barracks in Folkestone is the home barracks for the Royal Gurkha Rifles. We take an active interest in their work and they have conducted themselves with great distinction on numerous tours of duty in Afghanistan and service throughout the world for the British armed forces. We are extremely grateful for everything they have done. The Gurkhas clearly play a unique role in the British Army and we greatly benefit from that.
My hon. Friend set out clearly the issues that the inquiry covered, on Gurkha pensions and Gurkha welfare. I shall not repeat everything she said, but she hit on the most important aspect, which is that there needs to be fairness in the way we deal with those issues from the past. We are approaching the 200th anniversary of the start of this country’s cordial relationship with Nepal. This year, which marks the centenary of the outbreak of the first world war, is the right time to reflect on the service of the Gurkhas to the British armed forces, their service to this country and the amount we have benefited from that service. We should also consider what outstanding historical issues need to be resolved.
I supported the Gurkha campaign to give Gurkhas the right to live and settle in the United Kingdom. Service to this country through the armed forces should in itself be a means of qualifying for British citizenship; I see nothing wrong with that. Indeed, many people around the world who qualify for British citizenship do not have the track record of service to our country that Gurkha veterans have. If someone is prepared to fight and die in the cause of Great Britain and its allies, they should have the right to live here. That is what the Gurkhas now have.
My hon. Friend was right to focus on, in particular, the rights of the 7,000 or so ex-Gurkhas who qualify for no pension at all because they did not complete 15 years’ service. Many of them are veterans of conflicts. Many are veterans of the campaign in Malaya. When that ended, they returned to discover that they no longer had a role and they were made redundant from their post in the Army. As they did not qualify, they did not receive a pension. We should consider whether they should receive a pension, based on the number of years they served short of 15 years, as compensation for their service. We considered that matter in great depth during the inquiry.
A number of Gurkhas were dismissed from their post—many of them believe unfairly, particularly with respect to the incident in Hawaii, which the committee looked at. We ask the Ministry of Defence to look again at that incident to consider whether Gurkhas might have been dismissed unfairly, and therefore to consider whether they should qualify for some pension, based on the number of years they served. As my hon. Friend said, we should also consider the case of Gurkhas who qualify for no pension who were medically discharged from the armed forces through no fault of their own.
We cannot rewrite the terms and conditions of 30 or 40 years ago or more, and no one has alleged that the Ministry of Defence or the Government have in any way not honoured the letter of the commitments made to the Gurkhas at the time, but the question is whether the spirit of those commitments was fair and whether decisions were taken some years ago that would not be taken today—if Ministers were taking those decisions now, they would act differently and in a way that was fairer and that recognised the significant contribution that those Gurkhas made to our armed forces, even though they did not complete 15 years’ service. It is sad to see people who served in our armed forces with distinction but fell short of 15 years’ service living on a pittance and in poor conditions. We would not want that for any veterans of our armed forces, and we do not want it for the Gurkha community.
It is important to consider providing more support for the Gurkha Welfare Trust to support Gurkhas living independently in this country. The fines that the Government have levied on the banks as a result of the manipulation of the LIBOR rates could be used to support military charities. The Gurkha Welfare Trust would be an extremely deserving cause and using some of that money to support Gurkha veterans would be extremely appropriate. I ask the Government seriously to consider that as an opportunity to meet some of the funding commitments that the inquiry sets out. We live in extremely straitened times, and however much we would like to resolve some of these outstanding Gurkha issues, we cannot pretend that there are limitless funds with which to do so. It would perhaps therefore be appropriate to use some of the LIBOR fine money for that purpose.
Through the Department for International Development, we are able to support Nepal as a country, an ally and a friend. Any commitment we could give to making investments through the DFID budget to support welfare and health services in Nepal that provided equality of service and was attractive to ex-Gurkhas could encourage some of them to stay in the country or to return there. Many of them would like to do that, as they said during the course of the inquiry. That would be an appropriate use of resources that would further help to solve the problem.
Encouraging Gurkhas who want to return home to do so, and providing some of them with a decent standard of living through a fair pension that is linked to their years of service in the armed forces, is not only the right thing to do but could save the Treasury funds in the long run, because ex-Gurkhas might then no longer be as reliant on benefits as some of them inevitably have to be currently, as their own income is so low due to receiving so little support from their pension for the service that they gave.
When Her Majesty the Queen made her state visit to Ireland, she said in her speech at Dublin castle that looking back at the history of Anglo-Irish relations, there are some things one would do differently and some things that one would not have done at all. When we look back at our very long friendship with the Nepalese nation and the wonderful years of service that Gurkhas have given to our country, I think we will say that there are some incidences where we would have done certain things differently or perhaps not have done them at all. As my hon. Friend the Member for Thurrock presents the report from the all-party group’s inquiry, and as we approach the Gurkhas’ 200th anniversary and commemorate the centenary of the outbreak of the first world war, this is the right time to consider some of those outstanding issues and settle some of those old grievances.
Sir Gerald Howarth (Aldershot) (Con)
I am delighted to take part in this debate. I join my hon. Friend the Member for Folkestone and Hythe (Damian Collins) in congratulating my hon. Friend the Member for Thurrock (Jackie Doyle-Price) on the fantastic job she has done in dealing with a very sensitive, difficult and complex issue. She has carried out her duties with impeccable commitment and approached the issue with great interest and determination. As my hon. Friend the Member for Folkestone and Hythe said, it is important to point out that this was not in any sense an official inquiry, let alone a House of Commons inquiry or a Select Committee inquiry. It was a very ad hoc inquiry designed to try to see whether interested Members of Parliament could find a way through some of these thorny issues. I congratulate my hon. Friend the Member for Thurrock and agree with pretty much every word she said. I am grateful to her.
I see on the Labour Front Bench the shadow Minister, the hon. Member for Plymouth, Moor View (Alison Seabeck), who is a great lady. I should like to put it on record that although she is alone, we know why that is. It is because at this difficult hour for our kingdom, her colleagues are doing what they should be doing, which is going to campaign in Scotland to persuade our friends in Scotland—our kith and kin—to remain part of this great United Kingdom, whose 300-year history we share and through which we have together contributed so much to the rest of the world. Lest anybody should think that Labour Members are not interested in this issue, let me say that we know that she is the representative of many of her colleagues and their opinions.
As both my hon. Friends said, the Gurkhas are held in very high regard across the United Kingdom. However, as my hon. Friend the Member for Thurrock recognised, this issue is of particular interest and great concern for people in the constituency of Aldershot, which includes Farnborough.
I join others in placing on the record our gratitude for the service given by the Gurkha soldiers and their magnificent contribution to the British Army over nearly 200 years. I am honoured to represent the Queen’s Own Gurkha Logistic Regiment, which is based in Aldershot. There has long been a strong Gurkha presence in the garrison of Aldershot. Between 1971 and 2000, Queen Elizabeth barracks in Church Crookham—formerly in the Aldershot constituency but now, thanks to the growth in the population of the area, in the constituency of my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot)—served as the principal UK base for Gurkhas who were stationed in the United Kingdom.
Together with my hon. Friend the Member for Colchester (Sir Bob Russell), I had the pleasure of serving in the AFPS, which, for the benefit of those who are not familiar with the acronym, is the armed forces parliamentary scheme, not the armed forces pension scheme. We spent three days with 1st Battalion Royal Gurkha Rifles in Nanuki, Kenya, where they were conducting live firing training. It was altogether a fascinating experience. Not personally being an aficionado of curry, I found myself faced with something of a dilemma, which was that I either ate Gurkha curry or starved. In the circumstances, I decided to opt for the former rather than the latter, and I have to say that I found it very much better than I had expected. I did not take too close a look at how it was prepared, but it certainly tasted very good. When the soldiers had finished their live firing at the distant hill, they then had to go and put out the fire that they had made, which I understand they did with their bare feet. That is a message to the enemies of the United Kingdom—do not trifle with a Gurkha because they are tough.
I mentioned the long association that Aldershot has had with the Gurkhas. That has inevitably meant that a large proportion of the Nepalese who chose to reside in the United Kingdom following the recent settlement changes have overwhelmingly returned to Aldershot, the predominant place in Britain that they have memories of or an affiliation with. While that is understandable, it has placed enormous strain on local services and on the local area. The campaign launched by Joanna Lumley secured for Gurkhas who had served four years or more and had retired before 1 July 1997 the right to settle in the United Kingdom. That was granted by the previous Labour Government, entitling some 25,000 predominantly elderly ex-soldiers to enter the UK with their wives and dependants. It is important to understand that that involves upwards of 100,000 people. As a direct result, my constituency of Aldershot has seen a very significant change in its population. In 2011, Rushmoor borough council estimated that of the 90,000 citizens of Rushmoor, which is the local authority area covering Aldershot and Farnborough, up to 10,000 are Nepalese.
I hope that right hon. and hon. Members will recognise the huge challenge that that sudden and significant change has created in my constituency. The problem does not lie with the younger, recently retired ex-Gurkhas who speak good English and are very entrepreneurial; indeed, they are natural Conservatives. Many of them find work in the private security industry or start their own businesses. The problem arises with the older former Gurkhas—it is they who are presenting the challenges to my constituency. Generally unable to speak English, with virtually no job prospects, unfamiliar with our customs, and often with failing health, inevitably, because they are elderly, these new arrivals present a sad picture.
Major Tikendra Dewan, who is a good friend and chairman of the British Gurkha Welfare Society, which does a fantastic job in the constituency, has said:
“If you just take a ride around Aldershot, you can see so many Gurkhas just walking around like lost souls.”
Those words will certainly be echoed not only by my constituents but by any visitor to Aldershot. A visit to local surgeries—one GP practice has 3,000 Nepalese on its books—reveals waiting areas full of these elderly folk, as will a visit to the offices of Rushmoor borough council in Farnborough. This has been a tragic consequence of Miss Lumley’s campaign, which was based purely on emotion and not on the hard truths with which we politicians have to deal on a day-to-day basis. She and her campaign have done a major disservice to these elderly people and to the indigenous population, who have seen the character of Aldershot change massively. It is not fair on these elderly Nepalese and it is not fair on the locals, many of whom have also put their lives on the line for our country.
When I started to express concern about this matter, I received some disgusting e-mails from around the country asking how I could possibly say such things about the Gurkhas and saying how fantastic they are and how they put their lives on the line for their country. My hon. Friend the Member for Folkestone and Hythe made the same point, but thousands of my indigenous constituents have also put their lives on the line for the country. Aldershot is the home of the British Army and they are concerned about the way in which their town has changed. I cannot accept any extension to the right to settlement, which would only exacerbate an already serious problem.
Jackie Doyle-Price
This is an important issue and we need to make it clear to the community that people are being misled and encouraged to come to this country through false promises that they will be able to bring their families with them. Will my hon. Friend join me in condemning people such as immigration lawyers who continue to take money from these people to make appeals that will never be satisfied?
Sir Gerald Howarth
I am extremely grateful to my hon. Friend for making a very important point. Research ought to be done into the activities of some of these middlemen, who undoubtedly are in it for the money. It is they who have benefited from visiting on these people a misery they do not deserve and from which they should have been spared. I could not agree more with my hon. Friend.
In view of all the serious changes in my constituency, I had a meeting with the Prime Minister in 2011 to ask for further funding to enable the local authority and others to provide the badly needed additional support generated by the number of new Nepalese in the area. I managed to secure £1.5 million in total, which was provided by three Departments: the Ministry of Defence, the Foreign Office and the Department for International Development. Of that, about £1 million went to Rushmoor borough council.
As I have mentioned before, many of these elderly Nepalese struggle with ill health. What people might not realise is that, as well as the significant increase in the number of elderly people requiring health care at local GP surgeries, there is a huge need for Nepali-to-English translators to help explain to the doctors the needs of their patients. One doctor asked me, “How can I deal with a female patient with gynaecological problems who speaks no English and whose 12-year-old son has to translate for her?” That is wrong. Of course, this has resulted in longer patient time, so the indigenous population are having to wait longer to see their general practitioner. These are practical problems that have presented themselves, and I hope the House will recognise that that is but one of a number of hidden extra costs.
Let me turn specifically to the issue of Gurkha pensions. Until 1 July 1997, the Brigade of Gurkhas was regarded as an overseas force and its home base was in the far east; prior to Hong Kong, it had been in Singapore and Malaysia. In accordance with the tripartite agreement of 1947 between the Government of Nepal, the Government of India and the British Government, commonality was provided with respect to key service conditions such as pay and pensions, irrespective of whether they were enlisted in British or Indian armies—it is, of course, important to remember that the bulk of Nepalese recruited to the flag went to the Indian army, not the British Army.
As my hon. Friend the Member for Thurrock has said, most would serve for 15 years, following which they would be paid an immediate pension designed to provide a comfortable living in Nepal, which is where they were expected to—and virtually always did—return. Furthermore, as young men they were clearly able to take up new careers upon leaving the Army. By contrast, their British counterparts had to serve 22 years before being eligible for a pension, which became payable only at the age of 60, rather than upon immediate retirement. Thus, the Gurkhas returned to Nepal often in possession of a pension more than 25 years before their British counterparts. Over the course of a retirement, most Gurkha soldiers will receive equivalent or better value than their British counterparts as a result of being paid their pensions so much earlier. Moreover, the Ministry of Defence contributes more than £1 million a year to the Gurkha Welfare Trust in Nepal, which enables the trust to use its funds to care for the needy.
Following the return of Hong Kong to China, the Brigade of Gurkhas had to leave, naturally, and, apart from those stationed in Brunei, where the Sultan himself funds the Gurkha battalion, they moved to the United Kingdom, together with their families, meaning that their children were brought up in English schools. Thus, from 2004, those with four years or more service became entitled to apply for settlement in the United Kingdom. By 2007, those serving in the British Army were paid exactly the same as their British counter- parts.
In 2009, in response to the Lumley campaign, the then Home Secretary announced a change in policy on Gurkha settlement rights for those who had retired before 1 July 1997 and had completed four years’ service. They would have the right to settle in the UK with their spouses and dependent children. However, it is important to remember that there had been an agreement among the parties to the discussions that there was no direct read-across to policy on pensions. The then Home Secretary, Jacqui Smith, said that
“the question of equalising Gurkha pensions should not and need not be conflated with the debate about settlement”.—[Official Report, 21 May 2009; Vol. 492, c. 1650.]
The then Minister for veterans, the hon. Member for North Durham (Mr Jones)—in order to embarrass him I will place on the record that we are very good friends; that should do his career some damage, and as he is not here I can freely say that—said in a written answer that the
“estimate of the capitalised cost of providing retired Gurkhas with Armed Forces Pension Scheme (AFPS) equivalent pension benefits for all pensionable service before 1 July 1997”—[Official Report, 8 July 2009; Vol. 495, c. 789W.]
was a whopping £1.5 billion.
It is important to underline that these pension arrangements have withstood no less than three major legal challenges in the past nine years. The three judicial reviews found the pension arrangements for Gurkhas to be fair and reasonable.
There has been much debate and controversy over the decision to build the changes around the date of 1 July 1997. However, given that was the date the UK became the home base for the Gurkhas, together with changes to immigration rules, which were updated to 1 July 1997, there was an increasing probability that Gurkhas would seek to retire to the UK on discharge. Up until that point, it was accepted that Gurkhas would be recruited in Nepal as Nepalese citizens, serve as Nepalese citizens and be discharged as Nepalese citizens in Nepal. However, given the change in their home base from Hong Kong to the UK, that could no longer be fairly assumed to be the case.
In his judgment of 2008, Mr Justice Ouseley said:
“A line was drawn; that was in itself reasonable, and the particular dates chosen for its drawing are reasonable too. The difference reflects not age in reality but the number of years of service based in the Far East or in the UK. If there was indirect discrimination on the grounds of age of ‘other status’, it was justified and proportionate.”
The Court of Appeal upheld the January 2010 ruling, which comprehensively rejected the argument that Gurkha pension arrangements were irrational, unfair or discriminatory. However, the legal process continues and the judgment remains the subject of an appeal to the European Court of Human Rights.
I have every sympathy with the British Gurkha Welfare Society. It is a vibrant organisation and is well led by my friend, Major Tikendra Dewan, but as a former Defence Minister and having considered the matter carefully, I cannot support this campaign. The guys at BGWS are doing a great job. They are entrepreneurial and have their own energy company—I hope to sign up to their energy provision—whose new office will be officially inaugurated by the new Minister, the Under-Secretary of State for Energy and Climate Change, my hon. Friend the Member for Hastings and Rye (Amber Rudd). They also have a radio station. They are a great organisation. Like my hon. Friend the Member for Thurrock, however, I do not think that there can be a retrospective change, and I salute her for having the courage and honesty to say so. The Ministry of Defence does not have £1.5 billion to pay up. No doubt the Minister will nod.
Sir Gerald Howarth
For the sake of the record, the Minister has nodded. Such treatment would not be fair, as the Forces Pension Society has a number of other claims for the correction of past anomalies that the Ministry of Defence has consistently resisted. The Department has been subjected to no fewer than three legal challenges, all of which have been rejected, so it has neither been capricious nor discriminatory.
Those who took advantage of the right to settle here knew very well the terms on which the offer was made. If they were misled, as my hon. Friend the Member for Thurrock suggested—and I think that she is right—that was not the fault of the British Government. Furthermore, although they receive no uplift in their pensions, they receive a range of benefits designed to help them, as she said. They also have access to the best free health care facilities and support from a range of organisations.
Of course, as my hon. Friend said, there is an argument that as such welfare benefit costs are themselves substantial, why not therefore just increase the pensions, because the overall cost to the British Government would not change? That may or may not be true, but it would undoubtedly be a magnet for further migration, and without a policy of dispersing new arrivals, the burden would unquestionably fall on Aldershot. If any measure is to be taken, perhaps our bloated overseas aid budget could come to the rescue and be used to provide new health facilities in Nepal. My hon. Friend’s idea of an endowment for the Gurkha Welfare Trust is a good one. She has come up with some very practical suggestions, for which I salute her.
I want to end on a positive note. The changes inflicted on my constituency have been massive, but thanks in part to the Prime Minister’s intervention, which resulted in the additional £1.5 million of funding, and in large measure to the unremitting efforts of Conservative Rushmoor borough council—so ably led by its leader, Councillor Peter Moyle, and by its remarkable chief executive, Andrew Lloyd—early problems have been addressed by a raft of initiatives aimed at securing social cohesion.
Although there were undoubtedly problems initially, particularly among the younger, newly arrived Nepalese—not, of course, those who served in the Army—we have seen Nepali groups and white groups playing football, and a fantastic effort has been made across Rushmoor to integrate; and it is working, and has done well. This is my plea: those who have come here are, of course, welcome and we will do what we can for them, but I cannot in all conscience stand in the way of my constituents, some of whom have chosen to leave Aldershot because they are distressed at how their town has changed, or do other than to stand up for them. However, the good news is that the initiatives taken have resulted in a much greater degree of social cohesion, and I hope that we will continue to move in that direction of travel.
Roger Williams (Brecon and Radnorshire) (LD)
I, too, thank the Backbench Business Committee for allowing time on the Floor of the House to debate this important subject. I pay tribute to my hon. Friend the Member for Thurrock (Jackie Doyle-Price) for the extraordinary work she and her office did—and, I understand, that of my hon. Friend the Member for Folkestone and Hythe (Damian Collins)—in organising the inquiry. The logistics of organising it were quite immense. I guess that more than 200 people attended some of the hearings. It was a magnificent sight to see serving and veteran Gurkhas in the Committee Rooms on the floor above the Chamber.
Many of the subjects addressed by the inquiry report have already been mentioned in hon. Members’ contributions, but what brings together many of our interests is that we have Gurkhas in our constituencies. In Brecon and Radnor, based around the old garrison town of Brecon, we have the Mandalay company of Gurkhas, which is a demonstration unit for the training of senior non-commissioned officers in the British Army. Much of the training takes place in Sennybridge or up on the Epynt ranges. The Gurkha soldiers act both as forces to be commanded by the senior NCOs, or as attack forces so that the senior NCOs can organise defences. The Gurkhas play a very valuable role in ensuring that our NCOs in the British Army are of the highest calibre and quality.
My hon. Friend the Member for Aldershot (Sir Gerald Howarth) mentioned the consequences of resettlement, and we certainly have some of the same consequences in Brecon, although not on the same scale. Seeing elderly Gurkhas walking around the streets of Brecon, unable to understand where they are or to communicate with the rest of the community, is quite distressing. The Gurkhas are in general very welcome in Brecon, and their children are certainly very welcome in our schools. If I may put it this way, Brecon and Radnorshire does not have a very ethnically diverse community, so having Gurkha children in school is a real advantage to our schoolchildren.
The Gurkhas have been given the freedom of the borough of Brecon. Every year they march through Brecon in a wonderful ceremony, in which they bear arms—they are allowed to do so, having been given the freedom of the borough—and afterwards we are entertained by a display of dancing by Gurkha soldiers and children, which provides a real element of cohesion.
The more elderly Gurkhas who come to Brecon, without the ability to speak English, certainly have great difficulty in dealing with benefits and such issues, and that can be quite distressing. I have tried, although not with my hon. Friend’s success, to get extra funds for a support officer for the Gurkhas.
Sir Gerald Howarth
My hon. Friend is making a very important point. The £1.5 million that came to Rushmoor was not exclusively for Rushmoor. The council, particularly its chief executive, Andrew Lloyd, has done a huge amount of work to try to use some of the money to help other councils that are similarly affected. I cannot promise anything, but if my hon. Friend would like to write me a note, I will see what I can do.
Roger Williams
That is most helpful. I dare not mention the Barnett formula in this debate, but I was wondering whether such money might flow into Wales. I thank my hon. Friend for his very kind offer.
The major subject of the report was the equalisation of pensions. There is no point trying to skate around it: like other hon. Members, I find it very difficult to recommend a move towards equalising pensions, because it is very hard retrospectively to alter pension arrangements that were entered into voluntarily by people when they were recruited into the Gurkha regiments.
The report mentioned a number of difficult issues, which are obviously of real concern to Gurkha veterans, that I think the Government could do something about. If the veterans were funded by some of the LIBOR money that is meant to be used to support the work of the military covenant, that would be very well received by the Gurkhas. Let me run quickly through such issues.
Damian Collins
Does my hon. Friend agree that the inquiry highlighted a number of terms and conditions that seem extremely archaic? For example, it was not until the 1990s that Gurkhas were allowed to marry non-Gurkhas.
Roger Williams
My hon. Friend is quite right. That is a point that I was going to come on to. Not only were Gurkhas not allowed to marry non-Gurkha women; if they did, they were discharged from the Army and, as a result, had no pension at all. That affects some of the Gurkha veterans that my hon. Friend the Member for Thurrock mentioned.
We have an arrangement with the Sultan of Brunei, who runs a very light-touch taxation system. Our Gurkha soldiers, being based in Brunei, were not liable to tax, but the Ministry of Defence took some money off their pay in management fees. That was equivalent to a tax. The MOD could look at that again, because it was iniquitous. Gurkhas serving in this country were given dummy national insurance numbers, but they did not get the benefits that a national insurance number and paying national insurance in this country should generate.
Another issue is health care in Nepal. Although the pension of the Gurkhas in Nepal was increased to address that issue, they have to pay for their health care. As I understand it, Gurkhas in the Indian army do not have to pay for their health care. The Ministry of Defence could look at that issue as well.
During the evidence to the inquiry, there was criticism of the Gurkha Welfare Trust and its work in Nepal. I have talked to a constituent who was quite senior in the trust, but he said that he was out of touch with what was going on at the moment and referred me to somebody else. However, I have not had time to talk to that gentleman yet. The criticism was made that the funds of the Gurkha Welfare Trust were not used entirely for the benefit of Gurkha soldiers in Nepal and their families. A review of the work of the Gurkha Welfare Trust would perhaps not be inappropriate.
Gurkhas were encouraged to invest in Equitable Life to increase their pensions. I wonder whether the Gurkhas who did invest in Equitable Life have received the benefits that the Government have given to other people who invested in it to compensate them for their losses, especially if they were advised by the MOD or some other organisation to save through that route.
Once again, we come back to the main grievance of the Gurkha people, which is the equalisation of pensions. There are some quite young Gurkha retirees in Brecon who are in good employment, as the hon. Member for Aldershot described. They tell me that they were senior NCOs or warrant officers in the Gurkha regiment, but because only part of their service was after 1997, the pensions that they receive are a lot lower than the pensions of people who were in British regiments. They are really aggrieved about that, as one can understand. They put their lives on the line for this country, yet they are not getting the same rewards as many of their fellow soldiers.
It is difficult for the inquiry or the MOD to make a move at the moment because there is an appeal to the European Court of Human Rights. As far as I am concerned, the matter is in limbo and it would be difficult for anybody to come to a conclusion. There is much in the report and the work that we have done that will be welcomed by the Gurkhas, but their great concern is that there will be no move to equalise pensions.
Mr Rob Wilson (Reading East) (Con)
It is a pleasure to follow the hon. Member for Brecon and Radnorshire (Roger Williams) and the other Members who made powerful speeches.
I am delighted to speak in this debate. I have taken a keen interest in the campaigns that have been undertaken by the Gurkhas for a number of years. I am pleased to hear that the inquiry is making good progress under the excellent stewardship of my hon. Friend the Member for Thurrock (Jackie Doyle-Price). I look forward to reading the full report and recommendations very soon. I congratulate my hon. Friend and the Backbench Business Committee on holding this debate, which comes one year shy of the 200th anniversary of the Gurkhas first serving in the British Army.
Any mention of the Gurkhas would not be complete without paying tribute to their service and their bravery. From Sierra Leone to Kosovo, the Gurkhas have been a fixture of the British armed forces. Their skill and bravery have been widely praised again this afternoon. The Gurkhas have served in every major conflict in which Britain has been involved since the Falklands. If any group of people are deserving of this House’s time and attention, it is these brave soldiers and veterans.
Because of their history and record, the Gurkhas command widespread public support. There is a great strength of feeling that they should receive fair treatment from the Ministry of Defence and the British Government. The treatment of the Gurkhas should not have been reliant on a campaign led by Joanna Lumley, although her dedication and tireless zeal were admirable. This issue holds the attention of the wider public. That is certainly the case in my constituency, where there is a significant Nepalese community. It is estimated that between 1,500 and 2,000 Gurkhas live in the Reading area. It is not just the Nepalese community that feels strongly about the treatment of the Gurkhas: at the height of the campaign for residency in 2009, people from all backgrounds asked me to intervene and support the campaign. Perhaps with hindsight one can say that those people did not all fully understand the consequences of the changes that were made.
The Gurkhas in my local community are supported by a number of fantastically hard-working local charities, such as the Reading Ex-British Gurkha Association and the Gurkha veteran centre. Those organisations provide much needed practical support and a sense of community and friendship for Gurkhas.
I fear that I am personally responsible for some of the work load of my hon. Friend the Member for Thurrock on this issue. Indeed, this morning I received a handwritten note from her:
“Do hope you can join the debate on Thursday—you got me into this!”
I am afraid I plead guilty, although it was actually my constituent Gyanraj Rai, who was on hunger strike last year in Downing street. He is a friend and someone I campaigned alongside for years, so it was very distressing to see him literally fading away, and I wanted to stop him taking his life. With the support of my hon. Friend, I managed to broker a deal that led to the Gurkha welfare all-party group inquiry, which I hope will lead to a more congenial relationship between Gurkhas and the MOD in future.
I do not regret getting my hon. Friend into this. She has done an outstanding job so far and should have all our thanks and congratulations. However, I stand by the view I gave at the time that the tactic of hunger striking was misguided, and in a democracy that cannot be the way to conduct or resolve an honest debate. The Government are put in the invidious position that if they give in there will be a procession of other hunger strikers outside Downing street who think they will be successful. Even more importantly, it put huge strain on the local community, and even more so on the family of Gyanraj Rai. I remember when it was over that Mr Rai’s wife sought me out in the crowd, embraced me, broke down in tears and thanked me for helping to end the hunger strike. I think we both knew that he would have gone through to the bitter end. With the establishment of the inquiry, I am hopeful that a real discussion can be triggered about the Gurkhas’ wider grievances and concerns, not just pensions but health care, education and other issues that have affected the community.
Jackie Doyle-Price
Having been reminded of the events around the hunger strike, I wish to put it on the record—I would welcome my hon. Friend’s feedback on this—just how positive it has been to see all the Gurkha groups positively engage with the institutions of our democracy. As my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) said, we had upwards of 200 Gurkhas at each of the meetings. Let us go ahead in the spirit of that mature dialogue.
Mr Wilson
My hon. Friend makes an excellent point. From this point onwards it is important to keep that type of engagement going, and I hope to say a little more about that.
We are talking not just about pensions but about wider issues of health care, education and so on. I worry that in the past Governments did not truly listen to the Gurkha community, but as a consequence of my hon. Friend’s inquiry that cannot continue to be the case. I wish to draw the House’s attention to two parts of the evidence given to the inquiry that I feel are particularly noteworthy, and I hope Ministers will take time to respond to them comprehensively.
The first is the evidence given by my friend and constituent Gyanraj Rai. His description of poverty in Nepal was moving and should throw into sharp focus the importance of the subject under discussion. As my hon. Friend the Member for Aldershot (Sir Gerald Howarth) said, there is perhaps a bigger role for the Department for International Development in Nepal, with the UK giving more assistance to health services and education to veterans. Education and trade are ways we can build a better future for Nepal, but it will take time and a lot of effort. I hope we can reflect some of that in the report.
Mr Gray
My hon. Friend mentioned Nepal, and one point we have not touched on is the downside in Nepal of the Gurkhas being resettled in the United Kingdom, which is significant. I visited a number of DFID bases in Nepal and they do fantastic work, particularly in educating women in Nepal. We should pay tribute to DFID for the huge contribution that Britain makes to some of those efforts in that country.
Mr Wilson
I thank my hon. Friend for that intervention. Some hon. Friends and colleagues from across the House are visiting Nepal, and it would be useful to get their feedback on what is happening on the ground. A lot of people have left Nepal to come to the UK, and one worries that there is a hollowing out of the community and society there because of that.
Gyanraj gave an account of his experience of what he described as a punitive approach to discipline, leading to some Gurkhas losing their pensions. If that has been the case, and evidence is provided for it, I hope that the Ministry of Defence will look into the matter carefully and respond accordingly.
I was also interested to read the Government’s response to the inquiry’s questions, which I felt for the first time put many of the Gurkhas’ questions properly on the record in one place. I thank the Ministers responsible for their work. I feel that many of their arguments are persuasive, especially with regard to the general principle of not having retrospective changes. However, more must be done to ensure that the community is engaged with the MOD’s reasoning, as that would encourage an improved relationship with parts of the Gurkha community.
I fear that the complexity of the pension issue is the greatest stumbling block we face, because whatever accommodation is reached is likely to cause further anomalies and exclude someone or some group. The situation with pre and post-1997 pensions is far from ideal, but we must ensure that any recommendations and changes do not make the situation worse. I await the final report with interest and hope that Ministers respond comprehensively in due course. I also hope the opinions of hon. Members that we have heard today are taken into account.
It is likely that we will be unable to deliver on every proposal or grievance that the inquiry hears, as doing so may incur an unsustainable financial cost. My hope is that the inquiry deals fairly with the long-standing Gurkha grievances. I hope it finds a way for more Gurkhas to remain in Nepal and to have a successful and fulfilled life there without feeling the financial pull of coming to the UK. I further hope that the bad feeling that has developed between the MOD and Gurkha representatives over many years can be cleared up, so that reasonable dialogue can take place in future.
We are entering a crucial time for the Gurkhas and their grievances. It is important that we openly engage in sensible and honest dialogue on solutions. We owe the Gurkhas a serious, independent and honest report. I have no doubt that my hon. Friend the Member for Thurrock will deliver just that.
Tracey Crouch (Chatham and Aylesford) (Con)
It is a pleasure to speak in this incredibly important debate, and I thank the Backbench Business Committee for allowing it. I congratulate my hon. Friend the Member for Thurrock (Jackie Doyle-Price), who has been a champion of Gurkha welfare. The campaign she has run, both individually and as part of the all-party group, has been a master-class in getting an issue to the forefront of Ministers’ minds. She made a brilliant speech, and I will not repeat the points that she or other hon. Members have made in this interesting debate.
I pay tribute to the Gurkha veterans who live in my constituency. Mr Bhutia, Mr Rai, Mr Garong and Mr Thapa have been to see me several times to explain their concerns in detail. I pay tribute to Tashi Bhutia, whom I am proud to call a friend. He was the first Conservative Gurkha councillor, which makes the point mentioned by my hon. Friend the Member for Aldershot (Sir Gerald Howarth). He is standing again for the council in next year’s elections. He has made a valuable contribution to the community, not only as an elected politician, but as a local family man who represents the Gurkha community, and as a much-valued employee of BAE Rochester. He has integrated very well into the community—he and his family have lived in this country for more than 20 years—and acts as a major conduit between other members of the Gurkha community and elected politicians such as me.
The Gurkha community has a clear association with Kent and Medway. As my hon. Friend the Member for Folkestone and Hythe (Damian Collins) said—Hythe is my home town—many Gurkhas have settled in the area around the coastal barracks of Shorncliffe. It was right that the military parade before the unveiling of the Step Short memorial arch by His Royal Highness Prince Harry in Folkestone on 4 August—my hon. Friend was chairman of the committee—was led by the band of the Brigade of Gurkhas. That was incredibly appreciated by the local community throughout the county. It was well respected as a consequence.
Other hon. Members have made it clear that the Gurkhas have served this nation with great pride and loyalty. Many sacrificed their lives for our nation’s freedom and democracy. Nobody underestimates that. We all have sympathy with the fact that all they ask is to be valued equally to their British and Commonwealth counterparts. I hear hon. Members’ concerns about whether terms and conditions can be rewritten, but I think there is a gap that needs to be addressed, and I will come to that shortly.
Like my hon. Friend the Member for Folkestone and Hythe, I supported the Joanna Lumley campaign. I appreciate the concerns of my hon. Friend the Member for Aldershot—I am not in the same position, as a constituency MP, but people should respect his standing up for his wider constituency in outlining possible unintended consequences of the resettlement campaign. Nevertheless, I think it was the right campaign and the right outcome.
Sir Gerald Howarth
I am grateful to my hon. Friend for being so understanding, because it is important that people realise that Aldershot is particularly affected. I must put it on the record, however, that many of my constituents feel extremely aggrieved that Joanna Lumley, having run that very emotional campaign, has been nowhere near Aldershot ever since, as far as I am aware.
Tracey Crouch
It is important that my hon. Friend does that, but the issue of resettlement was an emotional one; everybody in the nation got caught up in the campaign, one way or another. As my hon. Friend the Member for Reading East (Mr Wilson) made clear, it was a good campaign at the time. It might have had unintended consequences, but goodness—if we thought only about the possible unintended consequences of what we do in the House and of campaigns we run, we would do nothing. It is fair to say, however, that the vast numbers forecast to flood into the UK did not appear, and many who came now live in poverty—an unfortunate and unforeseen consequence of the resettlement campaign.
My constituents tell me they want to live a life of dignity, not live on charity handouts from the Ministry of Defence and others, but unfortunately that is happening, and in many respects that is the nub of the issue. I congratulate the British Gurkha Welfare Society on its ongoing campaign. It is important to recognise that much progress has been made on the welfare of Gurkhas in the UK. We have mentioned the settlement rights, but much progress has also been made on visas and access to rehabilitation, as I have seen in my constituency with a horrifically injured Gurkha being cared for by the Royal British Legion Industries in Aylesford—a site that has been a rehabilitation centre since the beginning of the first world war. Progress has also been made regarding the financial support for those settling in the UK.
Furthermore, the Department for International Development has spent, and continues to spend, a lot of money supporting programmes to improve access to quality health services in Nepal. As was mentioned, the Nepal health sector programme provides £72 million on increasing access to those services, which, taken alongside the Government’s £1.5 million fund to help Gurkhas settle in the UK, represents an incredibly important financial investment.
I want to address the thorny issue of pensions. The British Gurkha Welfare Society states on its website that,
“Gurkhas receive a pension of only £2,150 per year with the many that relocate to the UK being reliant on pension tax credits and State benefits to survive. A pension of £5,000 per year would enable these veterans to live out their lives in comfort and without reliance on charity”.
My hon. Friend the Member for Thurrock made that point incredibly well. If we address some of the gap between what they currently receive and what they should receive—not, I appreciate, as part of their terms and conditions, but perhaps in the spirit that my hon. Friend the Member for Folkestone and Hythe mentioned —ironically we could end up saving the state money, because it would reduce their reliance on state benefits.
That said, I recognise that this issue is before the European Court, so I would not encourage the Minister to make any further statement or commitment today, but we need to think about how and why people joined the British Army and how they have been treated since their service. The point made by my hon. Friend the Member for Thurrock and others about the 7,000 Gurkhas who get nothing at all is one that we need to look at—and thoroughly. When the report from the inquiry is published, I am sure that that will be a key aspect of it.
Sir Gerald Howarth
It is kind of my hon. Friend to give way yet again. Yes, these are hard cases, but I was a shadow Minister for veterans and I was made acutely aware of the range of existing anomalies for British ex-service personnel, not least the post-retirement marriage issue. It is all very well to say that we must give way here, but there will be a real outcry from many other former service personnel who have also served our country and feel that they have a grievance. If this one is addressed before their grievances, my hon. Friend will get a few letters.
Tracey Crouch
I am glad to have given way to my hon. Friend, who raises an incredibly valid point. The Minister is aware that she has letters on her desk, awaiting signature, in reply to me on this very matter. I am not suggesting that one grievance should take priority over another; I am simply saying that this one must be addressed. There certainly is an anomaly; there is a gap, and it is only right and fair to have a look at it. The proposal by my hon. Friend the Member for Thurrock on LIBOR is an excellent idea. If that can somehow help to reduce some of the burden and the gap, I think it would be the right way forward.
We should be—I think most of us generally are—very proud of how the nation views and respects our armed forces: both those serving now and those who have served. I do not believe that anyone thinks there should be any discrimination within that. The report from the inquiry will be essential. As many have pointed out, with the 200th anniversary coming up next year, now is the right time to address these outstanding issues. I look forward to reading the report. Once again, I congratulate all those involved. My interest in the issue is not just one of emotion. I want to represent my constituents who have fought and served this country abroad while serving within the Brigade of Gurkhas. I am proud to call many of them my friends, and I hope that we will be able to address this matter within acceptable time scales.
Alison Seabeck (Plymouth, Moor View) (Lab)
I would like to record my thanks to the Backbench Business Committee for its excellent work in facilitating debates such as this one today. I congratulate the hon. Member for Thurrock (Jackie Doyle-Price) on securing the debate on Gurkha pensions and terms of employment. The topic has been discussed at length here before but, as I would have expected, she gave an extremely thoughtful and well balanced speech. We have heard knowledgeable and passionate speeches from other Members, highlighting very specific concerns, including the issue of dismissals and Hawaii. I shall not get involved in those; I am sure the Minister will consider all those detailed and specific points.
I thank the hon. Member for Thurrock for the hard work that she and her colleagues do in the all-party group. Many people and organisations have given up their time—we have heard about the huge number of attendees—in connection with it. Having walked down the Committee corridor on a number of occasions when events were taking place, I know that the hon. Lady has had an interesting and, I suspect, at times quite difficult-to-manage task. She deserves the plaudits she was given, particularly from the hon. Member for Aldershot (Sir Gerald Howarth); they were entirely justified.
Members will understand why so many colleagues have been absent from today’s debate, but the defence of the United Kingdom and the Union is a paramount concern. Scotland plays an important role in the overall defence of our realm. A yes vote, which would leave the Scots unable to respond to incidents, without intelligence cover and losing jobs is not, I think, something that any Member in the Chamber would want to see, so I am grateful to the hon. Member for Aldershot for his comments. As he said, many Members whose constituencies contain significant Gurkha and Nepalese communities have gone to fight for the Union today.
The hon. Member for Thurrock set out some of the initial findings, and highlighted some of the key issues that had been raised with the all-party group. I am pleased that she sought to obtain this debate in order to listen to the views of Members, and—here I return to the fact that so many Members have not been able to participate in it because of their commitments elsewhere—I hope that she will pursue the issue. I hope that she will give all Members a copy of the report of the debate, and seek their views further to ensure that she has all bases covered. I am sure that others will want to read what has been said here today.
Members in all parts of the House recognise the enormous contribution made by the Gurkha soldiers to Britain. The Gurkhas are held in much public affection and esteem by the British public, and rightly so. They have represented and protected our nation gallantly for well over 100 years—indeed, as we heard from the hon. Member for Reading East (Mr Wilson), for approaching 200 years. They fought alongside British troops before and during the first and second world wars, and continue that tradition in present-day operations. I was interested to hear what was said by the hon. Member for Brecon and Radnorshire (Roger Williams) about the Mandalay company’s involvement in training in his constituency. That, I think, illustrates just how important the Gurkhas are currently to the British armed services.
The last Government, appreciating the contribution and service of the Gurkhas, made a commitment to honour the Gurkha regiments, first by eliminating differences between their terms and conditions of service and those of their British counterparts, and later by delivering the first ever rights of settlement for Gurkhas, their spouses and their dependent children. We are proud of the work that we did in government in enhancing the lives of Gurkha soldiers and their families. I understand, however, that although there have been significant developments in recent years in relation to the pay and conditions of Gurkha soldiers and the extension of their right to settle in the UK, some outstanding grievances remain. We heard about a number of them during the debate, and of course we have also heard from Gurkhas and organisations that represent them, such as the Gurkha Welfare Trust.
Chief among those grievances is the issue relating to Gurkha pension arrangements for those who served prior to 1997. The last Government introduced a policy under which all who served after 1997 were able to transfer into the armed forces pension scheme and enjoy the same terms and conditions as their British equivalents. Of course, before 1997, Gurkha regiments were focused in the far east. Recruits came from Nepal, pay and other conditions reflected the terms available in the Indian army and it was assumed that Gurkhas would retire not in the UK, but in their home country of Nepal.
Following the transfer of the Brigade of Gurkhas to the United Kingdom in 1997, it seemed only right for the Gurkhas’ terms and conditions to be brought in line with those of British soldiers. As increasing numbers of Gurkhas were based here and began to put down roots in the UK, it became necessary to give them the right to settle with their families, a right that the last Government delivered. As for those who had served before 1997, and who were not part of the cohort of soldiers who moved with the base to the UK, it was still the expectation that they would settle in Nepal. They remained under the Gurkha pension scheme, which allows them to collect a pension after 15 years of service—far less than for a British soldier—and which provides them with an amount that can secure a good standard of living in Nepal.
I heard what the hon. Member for Thurrock said about the way in which that income is now spent, and what other Members said about the pressures on those living in Nepal. I shall be interested to read the evidence from the all-party review, particularly that relating to medical services. I am sure that the Minister will also be interested to read it when it is made public.
During a debate on this topic in 2009, my hon. Friend the Member for North Durham (Mr Jones) pointed out that the early payment of pensions for Gurkhas, after 15 years of service, actually means that most Gurkhas receive a significant pension before equivalent soldiers receive anything at all. A Gurkha soldier enrolled in the Gurkha pension scheme who enlisted at the age of 18 would have been able to retire at 33 and begin to collect his pension then. That has raised a number of issues; as I have said, I shall be interested to see the report. Members have posed further questions to the Minister today, including questions about the use of LIBOR funding and various other pots of money, and I am sure that she will give that some thought. I listened with interest, and I shall listen with great interest to the Minister’s response, although I suspect that she, like Opposition Members, will want to see the detail and consider it, because the devil is always in the detail when looking at such complex issues.
In contrast, those under the armed forces pension scheme 1975 cannot collect a pension until they are 60. By the time they reach 60 it is correct to say that the Gurkhas will receive lower monthly payments than their British counterparts, but they will have already benefited from 27 years of annual payments by that time, whereas the British soldier will have received none.
We should also remember, of course, that the Gurkha pension scheme cannot be separated from other pension schemes, including the current and previous schemes for our armed forces. It has been the policy of Governments across time that the terms and conditions of pension arrangements cannot be changed retrospectively after people leave public service. I know that a number of organisations are still seeking to make changes to the pension arrangements for those who served prior to 1997, and as Members have pointed out, there has been a series of legal challenges, to the High Court and Court of Appeal. The latter found, in relation to the pre-1997 pension arrangement, that the previous Government had acted fairly, especially given that the soldiers’ entire service was completed before the base was moved from Hong Kong, and at a time when the assumption and, importantly, the reality was retirement to a life in Nepal. We maintain that the policy introduced by the last Labour Government was reasonable, rational and lawful.
I should like to touch briefly on the emotional and complex issue of the changes sought to rules in relation to adult children. With regard to changes in the rules to allow adult children to settle in the UK, we must be clear that the UK Government’s policy has to be consistent and fair. What has been sought would not be in line with policy offered to other former servicemen from abroad and with wider UK immigration policy. This is a highly emotive area, but the Home Office has very clear rules about this, and those rules need to be acknowledged.
Jackie Doyle-Price
The hon. Lady is absolutely right that we must ensure that our application of our immigration laws is consistent. A number of Gurkhas are applying to get their families over on the basis of a right to family life, but ultimately anyone can apply under other visas—student visas or work visas—and does the hon. Lady agree that their adult families might use those routes, rather than the right to family life or any right that might arise from their veterans’ service?
Alison Seabeck
The hon. Lady makes an interesting point, although it would probably be better answered by a Home Office expert than me. This is complex, however. I have in my constituency a large number of Fijians who are based in Plymouth and in the Navy, and have a long-standing commitment. They could possibly equally argue that things need to be altered because of their degree and level of service. The rules must be clear, consistent and fair. If the hon. Lady’s report can give an indication that that would be the case, I am sure the Home Secretary would be interested to read it—and I, too, would be interested to read it—but at the moment, as the rules stand, there can be no specific exceptions.
This is not a day for tub-thumping party politics, but I make one small observation: the Gurkhas are being disproportionately affected by the Government’s handling of their proposed reform to the armed forces and the rationale behind the removal of 350 Gurkhas from service still needs some explanation—but I will go no further on that point in terms of the cuts to the regiments and the timing.
The welfare and well-being of our serving personnel and our veterans is a priority for this party, as I am sure it is for the Government parties. That is one reason why we pushed so hard to enshrine the principles of the armed forces covenant in law. It is also why we undertook to introduce equal pay and pension rights for Gurkhas and to provide them with the option to settle in the United Kingdom if they wished to.
We have heard from many hon. Members. The hon. Member for Folkestone and Hythe (Damian Collins) highlighted his constituency links to the Nepalese community in a very positive way. The hon. Member for Aldershot spoke of the pressures of resettlement on local councils and health services. The hon. Member for Chatham and Aylesford (Tracey Crouch) spoke of her constituent’s commitment to his community in being elected as a local councillor. None of us would want to suggest that the Gurkhas and other members of the Nepalese community are anything other than a positive benefit to the communities in which they settle, as long as the right support is in place for them. The Gurkhas play a vital role in our armed forces, and I hope that we can look forward to many more years of their dedicated, brave, committed and highly skilled service.
The Minister of State, Ministry of Defence (Anna Soubry)
I thank the Backbench Business Committee for ensuring that the debate has come into this place. I also want to pay particular tribute to my hon. Friend the Member for Thurrock (Jackie Doyle-Price). It is important that I set the record straight regarding certain comments by my hon. Friend the Member for Reading East (Mr Wilson), of whom I make no criticism. There might have been a suggestion, given the note from my hon. Friend the Member for Thurrock that he described, that she had been reluctant to take on this task, but that is not the case. As chair of the all-party parliamentary group on Gurkha welfare, she took on the task, with absolutely no support other than from fellow members of the group, knowing that it would be hugely complex and emotive. As has been mentioned, she has had support from my hon. Friend the Member for Folkestone and Hythe (Damian Collins) and other members of his team.
We have heard some great speeches this afternoon. During the debate—I hope Members will forgive me—I was talking to the Solicitor-General, my hon. and learned Friend the Member for South Swindon (Mr Buckland), and we were trying to recall whether an all-party group had ever taken on such a task without the support of any charity or industry. This might be a bit of a first. I do not know; it does not matter. The point is that they have done it, and we look forward to the report.
I do not hesitate to tell the House that I agree with almost everything that my hon. Friend—as she now is, on this point—the Member for Plymouth, Moor View (Alison Seabeck) said. She commented on the absence of Labour Members from the Chamber today; indeed, the same applies to my side of the Chamber to some extent. It is important for people to understand that that is not a reflection of any lack of interest in this important matter. Perhaps the public at large do not appreciate that Members of Parliament do not have to be in the Chamber to take a firm interest in a debate. They can watch it in their rooms, but in any event they will read it in Hansard, either electronically or on paper. I know that that will happen.
The biggest tribute that I want to pay today is to every member of the Gurkha community and, in particular, to all those who have served. They rightly deserve their reputation as being among the bravest and most fearless of soldiers. It was one of my great pleasures, honours and treats to go along to their regimental dinner earlier in the summer. I watched as they drilled and marched as the band played, and it was fabulous. I have never experienced anything like it. Those are perhaps the exterior things, the extra bits, but at the heart of the matter is their reputation for courage. It is often said that they are the most fearless of soldiers. Next year, the Gurkhas will celebrate 200 years of service to the Crown, and we look forward to the celebrations and commemorations. The United Kingdom—let us hope that it remains the United Kingdom—is proud of the Gurkhas, and we have always sought to meet the aspirations of successive generations of Gurkha soldiers and their families. I should like to put that into the context of the subject of the debate.
In 2009, our appreciation of the Gurkhas culminated in Parliament’s decision to permit Gurkhas discharged before 1 July 1997 to settle here in the United Kingdom. Many retired Gurkhas have since done so, and many have received vital welfare support and medical treatment as a result. However, as we have heard today, those settling here also became aware of differences between Gurkha terms and conditions and those of the rest of our armed forces. In particular, as many speakers have mentioned, they have highlighted the difference between a Gurkha pension pre-1997 and that of their British counterparts. Suffice it to say, these are complex issues, rooted in a set of unique historical and political circumstances, but context is all and I am grateful for the opportunity to set out the Government’s position. Of course we welcome the report and I assure hon. Members that it will be read and analysed, and all points will be considered. Most importantly, my door will be open to my hon. Friend the Member for Thurrock and to other hon. Members who have served so well on her all-party group.
The Government’s view is that the Gurkha pension, established in 1947 by the tripartite agreement between the UK, Nepal and India, was fair for the time and did not disadvantage Gurkhas. There are three reasons why I say that. First, although the Gurkha pension was smaller, it was paid for a much longer period. Gurkhas received an immediate pension after 15 years’ service, typically in their early 30s. By contrast, British personnel who served less than 22 years prior to 1975 receive no pension. A calculation made in 2009 showed that a Gurkha rifleman who retired in 1994 will have received some £61,000 at 2009 prices by the age of 60—his British comparator will have received nothing at all.
Secondly, the Gurkha pension placed Gurkhas among Nepal’s highest earners as a result. Significantly, a retired Lieutenant—a Queen’s Gurkha officer—with 24 years of service receives a pension more generous than the salary of Nepal’s Prime Minister. Thirdly, over the years Gurkhas’ pensions evolved as they benefited from the flexibility built into their terms and conditions. That meant that we were able to enhance their pensions to suit changing circumstances. Initially, as we have heard, Gurkhas mainly served in the far east, but when they undertook temporary posting to the UK or other overseas locations they were entitled to a cost of living addition. From 1997, when Gurkhas were based in the UK, they received a universal addition regardless of where they then served. Since 2007 Gurkhas joining our armed forces have been placed on an equal footing with the rest of the Army.
The argument has been made by others, and it is the right argument, that all those who receive a pension are bound by the rules of the game. Those who did not serve the requisite period of time or who came to this country on a pre-1997 pension cannot expect their pension arrangements to change. I should add that it would be the same in the case of a British soldier. The legal principle that individuals receive benefits in accordance with the scheme rules is well founded. As we heard, retrospective changes are not good and cannot be right—as is the principle, upheld by successive Governments, that improvements to pensions schemes are not made retrospectively. There are many quotes on that from previous Ministers of State for the Armed Forces and Ministers in my position. All of them, whatever the colour of the Government, support that important principle.
However, decisions can be reviewed in circumstances where incorrect information was provided to individuals. We have heard about the ramifications of mixed marriage, which make for uncomfortable listening in our, happily, more enlightened age. I want to know more about any Gurkha who finds himself in that situation. I want to know the detail, to have those cases placed before me and to get those things sorted out. I find the fact that Gurkhas were given dummy national insurance numbers utterly bizarre, and my hon. and learned Friend the Solicitor-General and I were debating it. It is almost as if money were obtained by some deception, in that people were paying in money but they have had no benefit from it. Again, I make no promises, but that cannot be right and we need to sort that out. My door is open and I want to have proper discussions about how we can do that.
That brings me back to the first speech in this excellent debate. My hon. Friend the Member for Thurrock spoke about fairness. This is about fairness, but it is also about having a mature dialogue. I listened with great care to the points that she so ably advanced, and to the points that were taken up by others. I will, if I may, respond to some of them now.
My hon. Friends the Members for Aldershot (Sir Gerald Howarth) and for Thurrock talked about the role of some sort of middleman. I always shy away from making adverse comments about lawyers, as I was a lawyer in a previous life. In all seriousness, I am concerned that there might be individuals who seek to exploit Gurkhas, or ex-Gurkhas, in Nepal. I will ask my officials both in the United Kingdom and in the embassy in Nepal to explore that matter so that we do all we can to ensure that that those who wish to come to the United Kingdom are not only fully and properly informed but not in any way exploited.
My hon. Friend the Member for Reading East made a point about the Department for International Development, which was taken up by others. Let me just say this: DFID has been investing in the health sector in Nepal for nearly 17 years; it has contributed more than £19.7 million to the rural water and sanitation programme of the Gurkha welfare scheme since 1989. In addition, its operational plan commits up to £331 million of UK official development assistance during the period of 2011 to 2015. The DFID Nepal programme now totals around £90 million to £100 million per annum. I hope that my hon. Friend finds that helpful and useful.
My hon. Friend the Member for Folkestone and Hythe gave a well crafted speech, which made some very good points. The great work of the Gurkha Welfare Trust was mentioned. It was suggested that a boost in LIBOR funds could be a way to solve some of these feelings of injustice and unfairness and, most importantly, these feelings that a need is not being met.
I am grateful to all Members for their comments, including my hon. Friend the Member for Brecon and Radnorshire (Roger Williams). In relation to his point about funding, which my hon. Friend the Member for Aldershot says has benefited his constituency, I am helpfully advised by my officials and by my hon. and learned Friend the Solicitor-General that that £1.5 million funding is available for Gurkhas in his constituency. I would be more than happy to meet my hon. Friend the Member for Brecon and Radnorshire to talk about how we can ensure that his constituents benefit.
Joanna Lumley’s campaign has been mentioned. I am aware of the comments of my hon. Friends the Members for Aldershot and for Chatham and Aylesford (Tracey Crouch). Let me say this, if I may: Joanna Lumley’s campaign had the highest and most honourable of motives. It was welcomed and it was the right thing to do. None the less, I accept the comments of my hon. Friend the Member for Aldershot, who said that there have been some unintended consequences.
Sir Gerald Howarth
It is important that the House understands that those consequences were not entirely unforeseen. At the time, I suggested that there were potential consequences by virtue of the fact that Aldershot has an historic association with the Gurkha community. I would not like it to be thought that somehow this has all suddenly come upon us without any warning.
Anna Soubry
I am grateful to my hon. Friend for the comment, but I would counter it by saying that we are where we are. We have to deal with the reality of where we are and see whether we can make things considerably better for those who find themselves away from home, struggling to speak English and in the circumstances described, while ensuring that their welfare is an absolute priority. Those things must be done as we take these matters into consideration.
In conclusion, we believe that the terms and conditions of the Gurkhas were fair but, having said that, we also understand the concerns of those who, having fought for this country, settled here and subsequently found themselves in difficulty. That is why we are so grateful to all those who have participated in the inquiry and we look forward to the report’s conclusions. Its focus has been on resolving historical anomalies and that must be right.
Today’s Gurkhas, in terms of engagement, pay, allowances and pension matters, are regarded no differently from personnel in any other part of the Army. Again, I thank all who have taken part in the debate and in the inquiry and we look forward to the report.
Jackie Doyle-Price
I thank everyone who has contributed to the debate. There is an immense amount of unanimity on the desire to do right by the Gurkhas but to do so within the rule of law. That is why it is so important that we do not make more anomalies as we address these problems.
We need to address the outcomes of poverty that we have talked about and we will do that by showing imagination and being practical. I welcome the Minister’s attitude. The relationship between Gurkha veterans and the Ministry of Defence in previous years has not been characterised by mature dialogue and I think there is fault on both sides for that. I will put myself in the position of being the glue that brings the Gurkhas to the negotiating table if the Minister promises to keep her door open, and she has given us that indication.
Question put and agreed to.
Resolved,
That this House has considered Gurkha pensions and terms of employment.
Business Without Debate
(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Flood Protection (West Kent)
(10 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sir John Stanley (Tonbridge and Malling) (Con)
As the Member for Tonbridge and Malling, I am fortunate to represent one of the most beautiful, if not the most beautiful, constituencies within 30 miles of London. Environmentally, my constituency has one drawback, however, and that is its topography. It falls between the southern slopes of the north downs and goes on further south, going gradually downhill across the northern slope of the River Medway’s valley down to the River Medway. It therefore creates a natural flood risk area.
That has been known and has been a feature of the area over a long period. Indeed, I have seen many photographs in black and white, taken between the wars, of men suitably attired in bowler hats and cloth caps propelling themselves in rowing boats down Tonbridge High street when it was flooded. Since then, there have been significant improvements, the most significant of which took place shortly after I was elected in 1974, when the Southern Water Authority introduced the River Medway (Flood Relief) Act 1976. That created the Leigh flood storage barrier, upstream of Tonbridge. The barrier was created in association with an extensive flood storage area on which flood water was captured on agricultural land during periods of intense flooding and then, hopefully, held there and released in a controlled way down the River Medway.
Subsequently, under the previous Labour Government, there was significant expenditure on strengthening the Tonbridge flood defence wall. In addition, we had a new flood defence scheme to protect the village of East Peckham. Sadly, those measures did not prove enough to withstand the exceptional rainfall that occurred, at great intensity and over a short period, last Christmas. It had serious consequences in my constituency.
Individual constituents found themselves having to evacuate their homes and then return to clear up the awful mess that occurs when flood water penetrates. They have had to go through a long period of trying to dry out, repair and internally reconstruct their homes, replacing all the goods destroyed by the flood water. As if that were not enough, they have also had to face a double financial whammy: the terms of their flood insurance, if such insurance was still obtainable, were moved very severely against them and coupled with that was significant depreciation in the capital value of many properties.
The excellent leader of Tonbridge and Malling borough council, Councillor Nicolas Heslop, has just written to me with the latest position, which is that
“a total of 290 homes and 146 businesses were flooded in the Tonbridge and Malling Borough Council area alone over Christmas and the New Year. Even today, nearly 9 months after the flood event, 59 families in that area remain unable to return to their homes due to the huge scale of repair works.”
Tracey Crouch (Chatham and Aylesford) (Con)
I congratulate my right hon. Friend on securing this Adjournment debate. May I place on record my tribute to Tonbridge and Malling borough council, which does great work in defending many of my constituents, many of whom were once his constituents before boundary changes were made? Does he agree that while we continue to see increased climate change, it is important that local government, national Government and regional government assess and reflect on the threat to people’s houses posed by rising flood waters?
Sir John Stanley
I entirely agree with my hon. Friend. One point that all those concerned with the climate change debates need to recognise, whether they are fully supportive or among the sceptics, is that one characteristic of climate change, which is happening now, is greater transition between one extreme and another. That has serious implications with respect to rainfall and she has rightly drawn attention to that.
May I make it clear to the Minister that the figures from the leader of Tonbridge and Malling borough council that I cited relate only to part of my constituency, because another part of it is covered by the Sevenoaks district council area?
Against that background, what should the Government be doing as regards west Kent—in particular, if I may say so, my area of west Kent? I want to put three representations to the Minister. First, the present situation in trying to find out who is responsible for maintenance and repair of a great number of surface water channels is totally inadequate and insufficient. In my constituency, and similarly, I suspect, in a great many others across England, the flooding was created not merely by the River Medway bursting its banks but by all the water sources that flow towards the Medway—other watercourses that are not main rivers, such as streams, culverts and irrigation ditches. In many cases, the clearance of those watercourses and the maintenance of their banks and beds has been seriously deficient and inadequate.
Another issue relates to sub-surface water problems adding to flooding when highway drainage is insufficient and water bubbles out from the drainage system on to the surface. Even more serious is the problem of the foul water drainage system—the sewerage system—not being adequately maintained or having adequate capacity. I am afraid that in some roads in Tonbridge human excrement was forced up on to the surface as a result of the inadequacy of the sewerage drainage system.
In some areas, the responsibility for maintenance is very clear. For what are described as main rivers—the Medway is a main river—the responsibility lies clearly with the Environment Agency. For highway drainage, it lies clearly with the highways authority. For sewerage drainage, it lies clearly with the water companies. Beyond that, however, there is a totally unsatisfactory impenetrability as to where ownership and, in particular, maintenance responsibilities lie. For many watercourses, they may fall between the Environment Agency, the water company, the internal drainage board, a public landowner and a private landowner. When we, as MPs, try to find out on behalf of our constituents who has the responsibility for clearance, maintenance and repair at a given spot, it is incredibly difficult, if not impossible.
My proposal for the Minister is radical, but my goodness it is needed. I accept that it would need to be implemented over a period, but it would be an immense step forward in terms of transparency and accountability. We need to create a surface water equivalent of the land register so that people in flood risk areas—property owners, whether domestic or business, their professional advisers, and, indeed, Members of Parliament—could see at a glance, easily and electronically, and possibly with access to large-scale downloadable maps, where the responsibility for maintenance and repair lies at a particular location. I put it to the Minister that that is a critical and urgent necessity for flood risk areas.
The second point I want to put to the Minister relates to flood insurance. I welcome the Government’s establishment of the Flood Re insurance scheme. It is a very good step forward for domestic householders in flood risk areas who find that their properties are non-insurable against flood risk. I put it to the Minister, however, that the scheme needs to be extended to premises that provide very important community facilities. Such premises may be in the ownership of charities, provident societies or clubs.
I shall give the Minister two illustrations from my constituency. The first is the Tonbridge indoor bowls club, whose membership runs into hundreds and which provides a very important focal point of enjoyment and social and community cohesion for a significant group of people. The other is the Tonbridge Juddians rugby football club, which is a very important facility for the people and area of Tonbridge.
Both premises were seriously flooded over Christmas and the new year, and the clubs have been put in a parlous position as a result of the insurance companies questioning whether they can continue to insure the premises. If the serious flooding that both clubs experienced is repeated, the repair of the buildings and the future of the clubs will undoubtedly be called into question, because the repairs may not be financeable from the clubs’ own resources. I therefore strongly urge the Government to consider this relatively limited extension of the Flood Re insurance scheme.
My third and most important representation to the Minister relates to the Leigh flood storage barrier and the related storage area. It has undoubtedly been a great help since it was brought into operation in the early 1980s, but as the events of last Christmas demonstrated, its capacity is clearly seriously insufficient. That was acknowledged by Environment Agency officials at our public meeting with them in Tonbridge in February when, in response to our questions as to why, notwithstanding the existence of the barrier, such serious flooding occurred in Tonbridge and further downstream, they recounted precisely what had happened over the 72 hours before Christmas day. They recounted how the intense rainfall led to the flood storage area filling up very rapidly and how the water rose higher and higher until it reached the legal maximum height allowed against the flood storage barrier.
In those circumstances, when the whole of the barrier’s structural integrity was threatened, which would have had catastrophic consequences, the Environment Agency had no alternative but to let a much greater volume of water out through the barrier than it wished. The consequences were very severe, with serious flooding all the way downstream from the barrier—at Hildenborough, Tonbridge, Hadlow, East Peckham, Wateringbury and Yalding, where there was a lot of national publicity about the scale of the flooding, which is in the constituency of my hon. Friend the Member for Maidstone and The Weald (Mrs Grant).
Demonstrably, therefore, the capacity of the Leigh flood storage barrier is insufficient. The Environment Agency has costed increasing its capacity by a third at £11 million. The construction of the increased capacity is not a particularly sophisticated project, and the scheme only awaits Government approval. The former Secretary of State for Environment, Food and Rural Affairs, my right hon. Friend the Member for North Shropshire (Mr Paterson), wrote to me in July to say that the Government would announce in the autumn statement the flood protection projects that will be implemented in the next six years, from 2015 to 2021. As we now know, the autumn statement will be made on 3 December. That date will be of very great importance to me and many of my constituents, as we wait to hear the Government’s decision.
As I hope the Minister will know, I wrote on 31 July to the present Secretary of State. I will conclude by reading what I said at the end of that letter:
“I am writing to urge you in the strongest terms to include the scheme to increase the capacity of the Leigh Flood Storage Area in the Government’s flood protection projects to be given the go-ahead at the time of the Autumn Statement.
I cannot state too strongly how important it is to a significant number of my constituents that the Government gives its approval to the Leigh Flood Storage Area increased capacity scheme this Autumn.”
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)
I congratulate my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) on securing this debate, in which he has given us the benefit of his long-standing knowledge of this catchment and of the effects of its management during the time he has represented the area.
To have one’s home or business flooded is a devastating experience. I know that all of us in the House would want to extend our sympathy to all those who have previously been affected. I recognise the specific concerns that have been expressed in respect of west Kent.
I first want to thank the many people who have worked tirelessly in response to recent and previous flooding events, including those in west Kent, both during the flooding and through the process of recovery. As my right hon. Friend has pointed out, the process of recovery can be long and painful for those affected. Those who have participated in such efforts include the staff of the fire and rescue, ambulance, police and other services, as well as local authorities, the Environment Agency, the voluntary sector, the armed forces in various locations and, of course, the local communities that have been affected.
Last winter saw record levels of rainfall and the stormiest period for at least 20 years. The unprecedented weather events caused the flooding across the United Kingdom. We experienced a prolonged period of very unsettled weather over the winter. It was the wettest January in England and Wales since 1766. Central and south-east England received over 250% of the average rainfall figure. Met Office statistics suggest that it was one of the most exceptional periods for winter rainfall in south England in at least 248 years. Added to that, tidal surges caused by low pressure, strong winds and high tides led to record sea levels along many parts of the east coast. High spring tides brought coastal flooding to parts of the south and west coasts. River, surface water and groundwater flooding occurred in many areas.
Although it is not yet possible to attribute a single instance of extreme weather to climate change, last winter’s storminess is in line with what we expect to see under climate change scenarios. We expect an increase in the frequency and severity of such weather events. We already prioritise the need to adapt to our changing climate across Government and beyond, but we will look to learn any lessons from the recent extreme weather events.
In west Kent, homes and businesses in Tonbridge, Yalding, East Peckham and other smaller communities are at risk of flooding from the River Medway and its tributaries, as my right hon. Friend set out. There have been nine flood events in west Kent since 1960, with three in 2000 and the latest in the winter of 2013-14, when 847 homes were flooded, including those that he spoke about. The Leigh barrier was full on Christmas day in 2013 and the level was the highest that had been seen for some time. The reservoir level reached 1 metre below the emergency spillway. However, no problems were reported and the barrier operated as designed.
The Middle Medway strategy was updated in 2010 and sets out ways in which the risk could be managed. The options included enlarging the capacity of the Leigh flood storage area, which would improve the standard of protection to approximately 1,300 homes and businesses in Tonbridge. The strategy also considered a second flood storage area on the River Beult, a tributary of the Medway, which would reduce the risk of flooding to approximately 2,000 homes and businesses in Yalding and the surrounding communities. Those two flood storage areas are being planned as one scheme. Together they will reduce the risk of flooding to 3,302 properties, 2,060 of which are at significant risk. The scheme will safeguard existing economic development and there is the potential to improve 31 km of the River Beult site of special scientific interest.
All the local Members are aware of the scheme and its potential benefits, and have indicated their support, as my right hon. Friend set out in his letter to the Secretary of State. Meetings are taking place at all levels with beneficiary local authorities to seek support and funding. Since the floods in the winter of 2013-14, the Environment Agency has received a written commitment from Kent county council to match flood defence grant in aid to ensure that the scheme can proceed. The scheme is currently 50% funded by Kent county council and further contributions are being sought. Scheme development, including land negotiations, is expected to take three years. The completion of the scheme is anticipated in 2021-22.
The flooding events of last winter impacted on the homes, businesses and farms of people across the country. There was significant damage to sea and flood defences. The latest figures suggest that more than 8,300 homes were flooded and more than 4,300 commercial properties affected across England. However, the existing flood defences and improvements to the way in which we respond to incidents meant we protected about 1.4 million properties and more than 2,500 sq km of farmland from flooding.
We consider carefully what lessons can be learned from the various incidents that we experience. The many organisations that were involved in responding to the exceptional weather, including the Government, our agencies and all the other services, will look at those lessons in detail. While the response was generally effective, the Government acknowledged at the time that some aspects of the response and recovery could be improved. In response to the extreme weather, we made an extra £270 million available to repair, restore and maintain the most critical flood defences. Repair work at many of those sites started as soon as the weather conditions allowed and has continued throughout the summer. I visited some of the sites this week and was very impressed by the work that is being carried out.
At the local level, we are improving the way in which we engage with local communities to increase the awareness of river maintenance projects and reduce flood risk. Over the autumn, meetings are being held in every part of the country to explain the Environment Agency’s plans, which will give people an opportunity to contribute to and influence local maintenance programmes for the year ahead. We have great respect for local knowledge. My right hon. Friend mentioned the expertise of internal drainage boards and how they have worked with the Environment Agency on local catchments. We respect that expertise and want to take advantage of such information.
My right hon. Friend raised a number of specific questions that I would like to address. First, he spoke about the complicated issue of the ownership and maintenance of the different watercourses, drains and assets, which varies across the country.
The Flood and Water Management Act 2010 is clear about who has responsibility for what, and the right hon. Gentleman set out some examples of main rivers, highway drainage, and so on. He went further to suggest that there should be an official register of every asset, and we must ensure that any work we carry out in that area prioritises spending on the sorts of things that we want and that will minimise and address flood risk. I know that the agency is carrying out work into the sorts of questions he raised, so that we can make clearer for some of the smaller landowners or those who might have questions, where those responsibilities lie.
Sir John Stanley
Does the Minister recognise that in the internal maintenance of streams, watercourses and associated river banks, and the clearance of rubbish and things that get dumped in those watercourses, although those water flows may appear small, they build up and contribute to a flooding problem and can exacerbate a main river flooding problem substantially? Therefore, being able to identify who is responsible for the maintenance of a particular stretch of stream or watercourse—something that is virtually impossible now—is critical.
Dan Rogerson
I understand my right hon. Friend’s point. I was seeking to respond to his specific proposal about some sort of formal register, and to reassure him that work is being undertaken in that field. He is right to say that maintenance is important, but he will appreciate that the responsibilities for that maintenance lie with various agencies and with private landowners who have their own responsibilities and should be aware of them. We have published information to make clear to those in riparian ownership what their responsibilities are, and once the agency has completed its work into what might be helpful, that will be shared in the usual way. I would be happy to write to my right hon. Friend to update him on that specific area as soon as it is beneficial to do so.
My right hon. Friend’s second point was on flood insurance and some aspects of the Government’s new Flood Re scheme. I welcome his support for that scheme. The scheme will make a big difference to many homeowners across the country and those in all types of property who are able to get support and access to contents insurance that they would otherwise not be able to receive. He set out the problems for valued community assets such as sports clubs and associations in his constituency. I appreciate that this is a difficult period for such associations. Money was made available to help with the provision of sports grounds, and support was given through Government grants as part of the flood packages that were made available for extreme weather events.
On flood insurance, the Flood Re scheme is funded by a levy on domestic insurance bills. It would not be appropriate for us to take that levy from everyone else’s domestic insurance and use it to subsidise other forms of more commercial policy. However, colleagues across the Government will continue discussions with the Association of British Insurers, representatives of business organisations and other sectors, and consider the problems with more commercial policies. The advice from the ABI is that commercial policies are more flexible, and that brokers can help in accessing the cover that is available. However, we have asked for evidence from organisations such as the Federation of Small Businesses, the CBI, and others, on the need for a scheme to help with those commercial policies. Flood Re is not really the model for that, as it is focused on the domestic insurance market, where it will make a big difference. However, I hear my right hon. Friend’s contribution to the debate on what might be beneficial and help other forms of organisation.
My right hon. Friend referred to the Leigh flood storage barrier and aspirations for investment. I have sought to explain that the current assessment from the Environment Agency set out what might be available in grant in aid. I welcome the work that the agency, Kent county council and other local partners, including MPs, who are playing a leading role, are doing in putting together the package, which will make a difference by protecting even more properties to a higher degree, given the risk of more such extreme weather events in future.
I thank my right hon. Friend for setting out those specific local constituency issues. To reassure him, the Government will spend more than £3.2 billion in this Parliament on flood and erosion risk management. The Department for Environment, Food and Rural Affairs has successfully secured a protected, long-term, six-year capital settlement to improve flood management infrastructure. We will make record investment in capital improvement projects of more than £2.3 billion in a six-year period, with £370 million in 2015-16 and the same in real terms each year, rising to more than £400 million in 2020-21. The investment will reduce the risk of flooding for a further 300,000 households between April 2015 and March 2021. That is on top of the 165,000 that have been protected during the current spending round.
As my right hon. Friend has set out, we will publish the pipeline for flood defence improvement projects with the 2014 autumn statement. That will help to secure at least 10% efficiencies, which will be reinvested in more projects, and which will leverage at least 15% contributions from other sources. That partnership approach allows us to reach further with that significant investment to deliver more schemes than we would be able to deliver otherwise.
Despite the exceptional weather conditions last winter, the impacts were significantly less than from previous events of similar magnitude. For example, existing flood defences protected 1.4 million properties. That reinforces the importance of continuing our investment in flood defence schemes and in forecasting capability. We will never be able to stop flooding entirely. However, we have acted on the lessons learned last winter and put in place numerous measures to improve the response capability of both the Government and other front-line organisations. The process will continue, with further improvements set to be rolled out over the coming months.
I again express my sympathy to those who were and who continue to be affected by the severe weather. I am pleased with Kent county council’s commitment to match that flood defence grant in aid funding to ensure that the local schemes proceed. I look forward to hearing how the schemes develop to the benefit of the constituents of west Kent.
Question put and agreed to.