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Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
1. When the Joint Ministerial Committee next plans to meet; and what will be discussed at that meeting.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
The Joint Ministerial Committee is an important mechanism for the UK Government and the devolved Administrations to discuss shared priorities and matters of mutual interest. The European session of the JMC met on Monday 13 October.
Cathy Jamieson
Given that all parties now want to see further devolution to Scotland, does he agree that it is time for a review of how that Committee operates and how we can strengthen the way in which the Scottish Parliament, the UK Parliament, the Scottish Government and the UK Government work together in the best interests of the people of Scotland?
David Mundell
I absolutely agree with the hon. Lady. I hope that discussion about the relationship between Scotland’s two Governments will be part of the outcome of the Smith commission’s work; if not, I am sure it will form part of future debate in this House and elsewhere.
Guy Opperman (Hexham) (Con)
Surely the key question for the Committee to take to the Scottish National party Government is that no means no?
David Mundell
I certainly hope that it is now clear that the decisive result of the referendum is respected and that we move forward on behalf of all of Scotland to deliver the new devolved Scotland that everyone wants to see.
Mr Frank Roy (Motherwell and Wishaw) (Lab)
The Minister may be aware that in the past hour or so Tata Steel has announced its intention to sell the long products division—more or less, the plate mills in Scunthorpe, Workington, Teesside, Cambuslang and Motherwell—of its company. Throughout the United Kingdom, workers will be affected by this potential sale. Will the Minister ensure that he and other Ministers in both Governments intervene in this national issue for the sake of the workers and for the sake of the construction and manufacturing industry and the infrastructure of the United Kingdom?
David Mundell
This is a serious issue for both Governments. In the past it has been demonstrated that the Scottish Government and the UK Government can work together on serious issues that affect employment in Scotland, such as Grangemouth. I assure the hon. Gentleman that we will follow exactly the same approach. The Secretary of State and I will raise this issue with ministerial colleagues and do everything we can to work with the Scottish Government, North Lanarkshire council and other interested parties.
Angus Robertson (Moray) (SNP)
It has been officially confirmed today that Nicola Sturgeon will become the next leader of the Scottish National party and Scotland’s first female First Minister. I would like to extend congratulations to her. She will be outstanding in those roles. Will the Minister be discussing the vow signed by the three UK leaders and the extensive new powers that it promises? What extensive new powers does the Minister especially support being devolved to Scotland?
David Mundell
I join the hon. Gentleman in congratulating Nicola Sturgeon on emulating Margaret Thatcher and becoming the female leader of her party. I most certainly look forward to working with her as the first female First Minister of Scotland. My previous experience of Nicola Sturgeon is that she has adopted a constructive approach to discussions with the UK Government.
The hon. Gentleman will be aware that the Smith commission has been established. All the political parties in Scotland have submitted their proposals. I particularly welcome the fact that the SNP will be part of that process. He will know that my leader in Scotland, Ruth Davidson, has made it quite clear that we see the Strathclyde commission proposals from the Conservative party as a floor and not a ceiling to those discussions.
Angus Robertson
I am sure the Minister would not be wanting to create a false impression. There is absolutely no comparison between Nicola Sturgeon and Margaret Thatcher. Nicola Sturgeon will be leading the most popular political party in Scotland. Margaret Thatcher destroyed the Tory party, and he is the living proof of its having only one seat in Scotland.
I am sure that most people in Scotland think that extensive new powers would help the economy grow, create jobs and deliver greater social fairness, so let me give the Minister another opportunity to outline which ones he is in favour of. Will he please, at the Dispatch Box, outline which extensive new powers he is in favour of devolving to Scotland?
David Mundell
I am very disappointed that the hon. Gentleman has not read the Conservative submission to the Smith commission, which clearly sets out, for example, our support for the devolution of 100% of income tax powers to the Scottish Parliament. I welcome the comment from the hon. Member for Glasgow East (Margaret Curran) that she is open to those discussions. We have made it clear that the Conservative position is one of flexibility, and we welcome the fact that the Scottish National party is taking part in the discussions. However, the place for those discussions is the Smith commission, so rather than constantly trying to portray the vow or other commitments as having been broken, let the SNP put its time and energy into the Smith commission process.
Margaret Curran (Glasgow East) (Lab)
May I begin by paying tribute to the great Scottish journalist Angus Macleod, who died recently? On behalf of the Opposition, I send condolences to his family.
During the referendum campaign, many voters expressed their deep desire for change in our politics and society. Does the Minister believe that the Joint Ministerial Committee should address the figures published today that show growing poverty across Scotland? That one in three children in Glasgow now live in poverty should not just shock us, but shake us into immediate action. What are the Government doing to give greater priority to the fight against poverty in Scotland? Does the Minister believe that Labour’s policy of increasing the minimum wage to £8 would help in that fight?
David Mundell
I certainly agree that the people of Scotland are fed up with the politicking they see on a range of issues. Nobody in Scotland wants to see child poverty. The people of Scotland want politicians to work together to deal with these issues. The Scottish Parliament already has extensive powers that have not necessarily been used while we have been distracted by the referendum process. I hope that a new First Minister in Scotland will be less divisive and that there will be less politicking on these issues, and that we can all work together to reduce levels of child poverty in Scotland.
Neil Carmichael (Stroud) (Con)
2. What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
3. What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland.
Graeme Morrice (Livingston) (Lab)
7. What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland.
Fiona Bruce (Congleton) (Con)
8. What assessment he has made of the implications for Government policy of the outcome of the referendum on independence for Scotland.
The Secretary of State for Scotland (Mr Alistair Carmichael)
I wish to echo the words of the hon. Member for Glasgow East (Margaret Curran), the shadow Secretary of State, about the sad passing of Angus Macleod. He was a true highland gentleman and a thorough professional, and our political and public life in Scotland will be much the poorer without him.
The referendum result ensures that Scotland remains part of our United Kingdom. I welcome the fact that all parties have chosen to participate in cross-party talks chaired by Lord Smith to deliver further devolution. On Monday, the Government published a Command Paper. Following receipt of Lord Smith’s report, we will publish draft clauses before Burns night.
Neil Carmichael
I, too, welcome the convincing outcome of the Scottish referendum.
Does the Secretary of State agree that in transferring further powers to the Scottish Parliament, we should have commensurate changes for England, and English votes for English laws?
Mr Alistair Carmichael
This matter was dealt with at length yesterday in the House. I have always been of the view that completing the job of devolution will unlock the door to further constitutional reform across the United Kingdom. I caution the hon. Gentleman, however, that in seeking to devolve within Parliament without devolving within the Executive, we could be replacing one messy system with another.
Michael Connarty
I call on the Government to stop the clock on decisions on fracking for ethane in Scotland under the present reserved powers for the UK. It is quite clear that the matter should now lie with the Scottish people in the Scottish Parliament. I am calling for that to be devolved as a policy response to the referendum decision.
Mr Carmichael
I look forward to reading the hon. Gentleman’s full submission, making that case, to Lord Smith’s commission. The hon. Gentleman will be mindful, however, that significant powers have already been given to the Scottish Parliament and Government through control of planning law, which would have a significant effect on the issue that he raises.
Graeme Morrice
In June, the Prime Minister signed a joint statement with the Deputy Prime Minister and the Leader of the Opposition, committing himself to “full representation” for Scotland in the House of Commons. Did the Prime Minister’s commitment extend only to the first UKIP win?
Mr Carmichael
I assure the hon. Gentleman that the Prime Minister remains committed to the level of Scottish representation on which he had previously given an undertaking.
Fiona Bruce
In light of the high level of public engagement in the referendum—97% registered to vote, 85% voted, and there was an electrified public debate that debunked the view that people are not interested in politics, particularly in the future of the UK—will the Secretary of State confirm that the Smith commission will engage not only with all parties but fully with the public across the UK before putting forward its recommendations?
Mr Carmichael
I can certainly confirm that. That has been hard-wired into the remit that the Government gave to Lord Smith to undertake his work. It is a very important part of how, over the years, we have built consensus in Scotland about constitutional change. This is too important to be left to the political parties. We must have—I am confident that we will—the voice of business, trade unions, churches and wider civic Scotland.
Stewart Hosie (Dundee East) (SNP)
The UK Government’s devolution policy was outlined in this week’s published Command Paper, which sought to devolve, in a number of ways, about a third of Scotland’s revenue base or less than half of the funding requirements of the Scottish Parliament. Given that this is not the unprecedented devolution of major powers promised by the Prime Minister, will the Secretary of State confirm that the Smith commission will not be restricted in any way by the contents of the Command Paper?
Mr Carmichael
If I may correct the hon. Gentleman, the purpose of the Command Paper was to bring together and to outline the proposals of the three parties. It is not a statement of Government policy. As I said when I launched the paper in a statement on Monday—I cannot remember whether the hon. Gentleman was here or not; I suspect not—it is clear that the publication and the content of the Command Paper are without prejudice and do not seek to limit or prescribe in any way the work that we have given to Lord Smith to undertake.
Mr Alan Reid (Argyll and Bute) (LD)
When the Secretary of State goes to the population summit in Dunoon, will he remind the Scottish Government that devolution should be not just from Westminster to Holyrood, but from Holyrood to local communities in Scotland? Will he tell the SNP Government that they should reverse policies such as centralising the police and fire services and closing local courts, which are taking people and jobs away from rural Scotland and into the central belt?
Mr Carmichael
I am very much looking forward to joining my hon. Friend, leaders of his local council and Ministers from the Scottish Government in Dunoon. What he says is very much the message that Ministers from the Scottish Government will hear. It is a message that they get throughout the highlands and islands. Seven years of SNP Government in Edinburgh have given Scotland the most centralised system of government in western Europe. That has got to change.
Margaret Curran (Glasgow East) (Lab)
As the Secretary of State knows, extensive new powers for Scotland are being proposed by the Smith commission. As he also knows, a number of substantial changes to income tax in Scotland have already been legislated for by this Parliament. A document that I have obtained from the UK Government indicates a number of risks to implementation—notably, that of a decision from the Scottish Government being delayed around the time of a referendum. Will the Secretary of State update us on any delays that are taking place and on what plans he has to begin to communicate with taxpayers in Scotland about imminent changes to the income tax proposals?
Mr Carmichael
I do not know the document to which the hon. Lady refers. If she sends it to me, I will be more than happy to consider it, if I have not already seen it. I can tell her that discussions between Treasury Ministers and Ministers of the Scottish Government about the fine details of the transfer of income tax powers are ongoing. Once those are nailed down, a joint effort by both Governments to communicate what it will mean to Scotland’s taxpayers will obviously be of prime importance.
Mr Andrew Robathan (South Leicestershire) (Con)
4. What assessment he has made of allegations of intimidation during the recent referendum campaign.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
I hope that we can all agree that the referendum campaign was carried out in a democratic and open way, giving Scotland the debate it deserved. Given that the people of Scotland voted decisively to remain part of the United Kingdom, what matters now is respecting the result and working together to secure the new devolution settlement.
Mr Robathan
Elections and voting in the United Kingdom have traditionally been viewed as free and fair, and free from intimidation, but only yesterday the hon. Member for Glasgow South West (Mr Davidson) described being called a traitor and a Judas. A former Deputy Leader of the Scottish National party was reported as saying that there will be a day of reckoning for those opposed to separation. There has been graffiti stating that those who voted no will be shot. That is disgraceful and a shame on those responsible. Notwithstanding the devolution of justice, will the Minister ask the Advocate-General for Scotland, Lord Wallace, to see whether further action should be taken and whether there was any criminal activity during the referendum campaign?
David Mundell
It is evident that there was some appalling behaviour during the referendum, not least towards people such as J.K. Rowling, when they expressed their views. However, I think we must regard the referendum overall as a triumph of the democratic process. After all, 85% of the Scottish population voted, and voted decisively to keep Scotland in the United Kingdom.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
It is clear that there was intimidation during the referendum, but a more important question for the Minister is: when does he see the possibility of another referendum? The last thing we need to get in the way of politicians’ day business is another referendum in a generation.
David Mundell
I absolutely agree. It is disappointing that in the days before the referendum the First Minister of Scotland was able to say that he did not foresee another referendum in his lifetime; then he said a generation; and now he is saying a few months. That is totally unacceptable. The sovereign will of the Scottish people is that Scotland should remain part of the United Kingdom. We should all come together to forge the new devolution settlement.
Sir Malcolm Bruce (Gordon) (LD)
On the Tuesday before the referendum, I was present in Inverurie when a small group of Better Together supporters who had been manning a street stall day was suddenly surrounded by a flash mob of 150 nationalists waving banners, shouting, playing music and creating an intimidating atmosphere. The Better Together supporters stood their ground sufficiently to ensure that the people of Gordon rejected independence by a majority of nearly 2:1.
David Mundell
The right hon. Gentleman is absolutely right to highlight the fact that such intimidatory and bad behaviour in the street and on the internet did nothing to further the cause of Yes Scotland. If demonstrators had not been outside the BBC but had been knocking on doors on the Sunday before the referendum, the result might have been closer.
Pete Wishart (Perth and North Perthshire) (SNP)
May I tell the Minister what intimidation feels like? Banks threatened to leave Scotland; supermarkets threatened to put up prices; big business threatened to relocate to London; No campaigners told pensioners they would lose their pensions. The premise of “Project Fear” was built, designed and packaged to scare Scottish voters from voting for independence.
David Mundell
It disappoints me that the hon. Gentleman has so little faith and confidence in the voters of Scotland. I believe they were quite capable of seeing through bluff and bluster from any campaign. They voted in the way they wanted, which was to keep Scotland as part of the United Kingdom.
Ian Lucas (Wrexham) (Lab)
5. What the Government’s timetable is for constitutional reform in Scotland.
The Secretary of State for Scotland (Mr Alistair Carmichael)
Lord Smith of Kelvin has agreed to oversee the process to take forward devolution commitments to Scotland. Lord Smith will publish his proposals by the end of November. The Government will publish draft clauses by 25 January 2015.
Mr Carmichael
I can confirm that absolutely for the umpteenth time from this Dispatch Box. There will be no delay while the rest of the UK catches up with Scotland.
Sir Bob Russell (Colchester) (LD)
When the Government look at the timetable for constitutional reform in Scotland, will they take account of the fact that more people live in Essex than voted yes in the referendum and that if United Kingdom residents are to be treated fairly and equally, what is good enough for Scotland is good enough for East Anglia.
Mr Carmichael
I can only repeat to my hon. Friend that the timetable that we have given to Scotland will be met. Let me add, however, that the distinction between Scotland and England is that we already have a well-established consensus. The main thing that was apparent to me from yesterday’s debate in the House was that the people of England still have some way to go in building that consensus, and I wish them the best of luck.
Ian Murray (Edinburgh South) (Lab)
The Secretary of State at the Dispatch Box and many Opposition Members continue to repeat that the timetable is on track, but the nationalists keep putting it about that it has been broken. Why does the Secretary of State think that is, and what does he think we can do about it?
Mr Carmichael
I confess that that timetable has been broken, because the Command Paper that was published on Monday was published two and a half weeks before the deadline that had been set for publication. The nationalists will have to speak for themselves, but every time they seek to undermine the work of Lord Smith and his commission, it raises a suspicion in my mind, and among a growing number of people in Scotland, that although they are part of the process, they are not acting in good faith. [Interruption.]
Mr Speaker
Order. There is excessive noise in the Chamber. However, I feel sure that there will now be an atmosphere of hushed anticipation for Sir William Cash.
Sir William Cash (Stone) (Con)
Given what the Secretary of State has just said, and given what he said yesterday in regard to the issue of English laws for English voters, how does he reconcile his statement from the Dispatch Box with collective responsibility in this Government? In the light of that question, is it not time that the coalition was brought to an end?
Mr Carmichael
No. I am confident that the coalition will continue until the end of this Parliament. As my hon. Friend will know, the Prime Minister has set up a Cabinet Committee, chaired by my right hon. Friend the Leader of the House, which is intended to establish Government policy on this issue if that is at all possible.
Gordon Banks (Ochil and South Perthshire) (Lab)
In 2010, the Secretary of State called for a citizens’ convention on the constitution. Yesterday, at the Dispatch Box, he said that the constitutional convention should not be seen as kicking devolution into the long grass. Does he still stand by what he stood for in 2010 in his manifesto, and what he said in the House yesterday?
Mr Carmichael
I think there are lessons that the rest of the United Kingdom can learn from the way in which we have gone about building consensus to achieve constitutional reform throughout the United Kingdom. Bringing together not just the political parties but the other interested voices is absolutely essential. It is the best way in which to proceed, and I hope very much that the rest of the United Kingdom will take a leaf out of Scotland’s book.
David Mowat (Warrington South) (Con)
6. What further plans he has for a Scottish constitutional settlement.
The Secretary of State for Scotland (Mr Alistair Carmichael)
Lord Smith of Kelvin has agreed to oversee the process to take forward devolution commitments to Scotland. He will publish his proposals by the end of November, and the Government will publish draft clauses by 25 January.
David Mowat
My constituents are very much in favour of the direction of the settlement, but they fear that it may enshrine the £1,600 per annum public sector differential between England and Scotland. Can the Secretary of State assure us that that will be reviewed as part of the process?
Mr Carmichael
One of the express elements in the vow that was delivered to the people of Scotland was an assurance that there would be no change in the Barnett formula. I should add, however, that once we have delivered the extra tax-raising powers that I believe will go to the Scottish Parliament, the formula will obviously account for a lesser proportion of the Scottish Government’s income than is currently the case.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
Does the Secretary of State accept that if fundraising powers such as the power to tax income are transferred to the Scottish Parliament to a greater extent, adjustments will have to be made to the Barnett formula to take account of fluctuations, just as account will have to be taken of fluctuations in the oil price?
Mr Carmichael
Adjustments will certainly have to be made to the way in which the Barnett formula operates in detail. That is already being undertaken by Treasury officials and Ministers in relation to the powers that are going to Scotland under the Scotland Act 2012.
Anas Sarwar (Glasgow Central) (Lab)
Any future constitutional settlement must make it easier to build a fairer society in Scotland. According to a report published by Oxfam, inequality should be measured in terms of welfare, housing, health, education, justice, and employability. Five out of those six have already been devolved to Scotland. Does that not demonstrate that we have two Governments who are failing the people of Scotland?
Mr Carmichael
What it shows is that these are complex problems that will require close working by Scotland’s two Governments in order to tackle them. I very much hope that, now we have got the referendum behind us, we will be able to see the cross-party and cross-government working that the people of Scotland need and demand.
Joan Walley (Stoke-on-Trent North) (Lab)
Q1. If he will list his official engagements for Wednesday 15 October.
The Prime Minister (Mr David Cameron)
This morning I had meetings with ministerial colleagues and others and, in addition to my duties in the House, I shall have further such meetings later today.
Joan Walley
Everyone in Stoke-on-Trent is finally breathing a sigh of relief that the Government have at last committed extra money to fund the merged hospital services in mid and north Staffordshire, but will he now listen to the widespread local public concern and commit to reversing his Government’s £1.2 billion privatisation of cancer care in Staffordshire?
The Prime Minister
I welcome the hon. Lady’s welcome for the fact that money is being put forward to help what the University Hospital of North Staffordshire NHS Trust is doing. A £256 million investment, including £80 million of capital funding, is going into making sure that this project can work well. I have been following the situation in Staffordshire very closely, and I will continue to do so. On cancer, I would say to her that the number of people being referred for cancer treatment under this Government is up 50%. We inherited some of the worst cancer survival rates anywhere in Europe, but in this country they are now at record levels.
Mr Stewart Jackson (Peterborough) (Con)
Does my right hon. Friend agree with the opinion of at least one Member of this House sitting on the Opposition Benches—he knows who he is—that the only way to get an EU referendum is to vote Conservative with my right hon. Friend as Prime Minister? Will he commend such eminently sound judgment?
The Prime Minister
I cannot think who my hon. Friend is referring to, but it is certainly true to say that if we are not satisfied—as I am not satisfied—with the way the EU is working at the moment and if we want change, reform, renegotiation and, crucially, an in/out referendum—not for us to decide, but for the British public to decide—there is only one choice, and that is to vote Conservative.
Edward Miliband (Doncaster North) (Lab)
I should say at the outset that I am speaking through a sore throat, but I would not have missed this meeting with the Prime Minister for the world. Today’s fall in unemployment is welcome. Every time someone gets a job, it is good for them and for their family. Will the right hon. Gentleman confirm, however, that the latest figures show that wages are still failing to keep pace with inflation and that he is presiding over the longest fall in living standards for a century?
The Prime Minister
Let me say to the right hon. Gentleman that I am sure the whole House will want his sore throat to get better soon. I hope that, if he gets a doctor’s appointment, he will not forget it. He must make sure he turns up on time.
I am glad that he has asked me about unemployment, because the figures out today show that our long-term plan is working. We see unemployment now below 2 million, we see the claimant count below 1 million and we have just seen the biggest annual fall in unemployment since records began. Long-term unemployment, youth unemployment, long-term youth unemployment and women’s unemployment are all down, but there is absolutely no complacency. To answer his question directly: yes of course we have seen slow wage growth, but that is because we are recovering from the longest and deepest recession in this country’s history. Let me remind him what the Institute for Fiscal Studies said:
“We’ve had a great big recession. We had the biggest recession we’ve had in 100 years. It will be astonishing if household incomes haven’t fallen and earnings haven’t fallen”.
Of course that has happened, and we know who is responsible.
Edward Miliband
The right hon. Gentleman obviously noticed that I lost a couple of paragraphs in my speech. I have noticed that since we last met he has lost a couple of his Members of Parliament. Let us talk about what he said at conference. Before the last election he lectured the Tory party and said this:
“you can’t talk about tax reduction unless you can show how it is paid for, the public aren’t stupid”.
So when he announced his £7 billion unfunded tax cut he must have had a secret plan to pay for it. What is it: cutting public services or raising VAT?
The Prime Minister
People do not have to look in the crystal ball with us; they can read the book. We have cut taxes for 26 million people in our country; we have taken 3 million people out of income tax altogether; and we have raised the personal allowance to £10,000, so that if someone is on the minimum wage, we have cut their income tax bill by two thirds. But we have been able to do that only because we remembered something important: you have got to have a long-term economic plan and you have got to cut the deficit. We do have a plan, the deficit is down by a third, and the International Monetary Fund says that we are the fastest-growing economy in the G7. With a record like that, we can afford tax cuts—that people deserve.
Edward Miliband
We can see the record: higher VAT; cuts to tax credits; hitting working families; and the bedroom tax. That is the record of this Prime Minister. He cannot be straight about his tax plans, so perhaps he can be straight about his plans for tax credits. Can he confirm that as a result of his plans a one-earner family with two children on £25,000 a year will lose almost £500 a year?
The Prime Minister
The best way to help people is to take them out of income tax altogether. Next year, people will be able to earn £10,500 before they pay any income tax. We think it is better not to take money off people in the first place, but the right hon. Gentleman wants to compare records. After all, this is the Labour party, so let us look at the record on labour. Here it is: women’s unemployment up 26% under Labour, down 11% under this Government; and youth unemployment up 44% under Labour, down 22% under this Government. The fact is that the economy is growing, the deficit is coming down and we are getting Britain back to work. The long-term plan is working, but the one thing that could wreck it is a Labour Government.
Edward Miliband
The right hon. Gentleman did not answer the question or confirm the figures. Let me just tell him that they are the Chancellor’s own figures showing that people will be £500 a year worse off, and the Prime Minister cannot even admit that. Let me ask him about a very specific issue about disabled people and the minimum wage, which goes to the issue of living standards. In response to a question at the Conservative party conference, Lord Freud, the welfare reform Minister, said:
“You make a really good point about the disabled…There is a group…where actually as you say they’re not worth the full wage.”
Is that the Prime Minister’s view?
The Prime Minister
No, absolutely not. Of course disabled people should be paid the minimum wage, and the minimum wage under this Government is going up, and going up in real terms. It is now at £6.50, and we will be presenting our evidence to the Low Pay Commission calling for another real-terms increase in the minimum wage. The right hon. Gentleman talked about the Chancellor’s figures, so let me give him the Chancellor’s figures: inflation is at 1.2%—a five-year low; we have had the biggest annual fall in unemployment since records began; we have the fastest-growing economy in the G7; and next year pensioners will be getting an extra £150 a year. Those are the Chancellor’s figures, those are the Government’s figures, and we know that we just get mayhem from Labour.
Edward Miliband
We need to be clear about what the welfare reform Minister said, because it is very serious. He did not just say that disabled people were “not worth” the minimum wage. He went further and said that he was looking at
“whether there is something we can do…if someone wants to work for £2 an hour.”
Surely someone holding those views cannot possibly stay in the right hon. Gentleman’s Government?
The Prime Minister
Those are not the views of the Government. They are not the views of anyone in the Government. The minimum wage is paid to everybody, disabled people included. [Interruption.]
Mr Speaker
Order. Passions are running high but the answer from the Prime Minister must be heard, and I want to hear it.
The Prime Minister
Let me tell you that I do not need lectures from anyone about looking after disabled people, so I do not want to hear any more of that. We pay the minimum wage, we are reforming disability benefits, we want to help disabled people in our country and we want to help more of them into work. Instead of casting aspersions, why does not the right hon. Gentleman get back to talking about the economy?
Edward Miliband
If the Prime Minister wants to protect the rights of disabled people, I suggest that he reads very carefully what his welfare reform Minister has said, because they are not the words of someone who should be in charge of policy relating to disabled people. In the dog days of this Government, the Conservative party is going back to its worst instincts: unfunded tax cuts, hitting the poorest hardest and now undermining the minimum wage. The nasty party is back.
The Prime Minister
I can tell the right hon. Gentleman what is happening under this Government: inflation is down, unemployment is down, the economy is growing and the deficit is coming down. We have faced some tough and difficult times in our country, but we have a Government who are on the side of hard-working people. He came here and told us about the forgotten paragraphs in his speech—I have a copy of them with me. They came under the heading “Hard truths”. Well, I have a hard truth for him: he is not remotely up to the job.
Mark Hunter (Cheadle) (LD)
Hundreds of thousands of people across the United Kingdom have their privacy invaded every day of the week by the menace of nuisance phone calls. Those unwanted and intrusive calls blight the lives of far too many of our citizens. Does the Prime Minister think that the Government have done enough to tackle the problem, and will he support stronger action against the perpetrators?
The Prime Minister
I am happy to look at what my hon. Friend says. We do have the Telephone Preference Service that helps people to avoid a lot of those calls, but I have had pressure for more to be done, and I am happy to look at what he says.
Kerry McCarthy (Bristol East) (Lab)
Q2. A survey I did of GPs in Bristol this summer showed that they are at breaking point: their workloads have doubled, they cannot recruit and surgeries are at serious risk of closure. It was said this week that the Prime Minister did not have a clue about the NHS reforms. Will he at least acknowledge that it is now harder to be a GP and to see a GP on his watch?
The Prime Minister
Of course there are pressures on our NHS; everybody knows that. We made some big decisions on becoming the Government, which were to go on spending on the NHS—we put £12.7 billion more in—and to cut the bureaucracy so that there are 20,000 fewer administrators and 6,000 more doctors, including, crucially, 1,000 more GPs. We need to go on to ensure that the reform plus the money eases the pressure on our health service so that we can continue to see the sort of success that we have in our NHS today.
Mr David Davis (Haltemprice and Howden) (Con)
Q3. As the Conservative party and only the Conservative party will deliver a referendum and a renegotiation on Europe, will the Prime Minister tell us his intentions of bringing to this House the red line issues that will feature in his renegotiations, and can he give us a preview of some of those issues today?
The Prime Minister
I have set out some of the things that need to change. They include safeguards for the single market, the ability to block new regulation, ensuring that Britain comes out of ever-closer union and, crucially, as I said in my conference speech, addressing the issue of immigration. I am looking forward to addressing all of those issues in the months ahead.
Mr Nigel Dodds (Belfast North) (DUP)
Given the very serious spread of the Ebola virus worldwide, with reports that there could be up to 10,000 new cases per week in two months’ time, will the Prime Minister, as part of his meetings later today and in Cobra, ensure that he liaises very closely with the authorities in Northern Ireland, which shares a land frontier with another jurisdiction, in relation to checks on people coming into the UK? It is a very serious issue for Northern Ireland and potentially a very serious issue for the rest of the United Kingdom.
The Prime Minister
The right hon. Gentleman is absolutely right. There will be another Cobra meeting chaired today by the Foreign Secretary. I will be chairing one tomorrow. We are looking at all these issues about where people are arriving, and co-operating properly with all the devolved authorities. It is worth stressing that there are no direct flights from Liberia, Sierra Leone or Guinea into the United Kingdom, so we are talking about people who come here indirectly, which is why it is so important that we put in place the screening processes, starting at Heathrow but to be rolled out more as the days go by. I am absolutely convinced that we will do everything we can to keep this country safe. I will ensure that proper liaison takes place not only with Northern Ireland but with the Republic.
Robert Halfon (Harlow) (Con)
Q4. Is my right hon. Friend aware that over the past couple of years in Harlow youth unemployment has been cut by 53% and general unemployment by 43%, the number of apprentices has gone up by 82% and there have been tax cuts for thousands of low earners? Does that not show that we are the true workers party now and the modern trade union movement for hard-working people?
The Prime Minister
I congratulate my hon. Friend on all the work he does locally to help promote jobs, apprenticeships and training. He is absolutely right, and there has been a 56% decline in unemployment in his constituency, but let me stress that there is still more work to be done. We have got to stick to our long-term economic plan. We are not immune from pressures, including the problems in the eurozone, so we need to stick to the plan and do everything we can to get even more people back to work.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Q5. In the light of the National Audit Office’s estimate of a £750 million cost to the taxpayer of the sale of Royal Mail, what measures will the Government take to ensure that when they sell Eurostar, the City gravy train will not take the taxpayer for a ride yet again?
The Prime Minister
Let me say to the hon. Gentleman that there was not a cost to the taxpayer of the sale of Royal Mail. There was a benefit to the taxpayer, because for the first time we had a receipt in for the sale and no longer had, as we did in the Labour years, loss after loss after loss. We are looking at expressions of interest for the business that he mentions and we will make sure that we get value for money for the taxpayer if we look to involve the private sector.
Richard Graham (Gloucester) (Con)
The 1984 joint declaration committed Britain and China together to preserve the freedoms and stability of, and a high degree of autonomy for, Hong Kong for 50 years. Recent large demonstrations there show that the people of Hong Kong have real concerns over proposals for the election of their next Chief Executive. Does my right hon. Friend agree that we should do everything possible to encourage the Governments of Hong Kong and China to find ways to provide the widest possible choice in that important election and that that is vital to the stability of Hong Kong and the interests of both Britain and China?
The Prime Minister
I agree with my hon. Friend that it is important that democracy involves real choices. I also think that we should be very clear about the importance we attach to the 1984 joint declaration, which makes it very clear that the current social and economic systems in Hong Kong will remain unchanged, including lifestyle. It talks about:
“Rights and freedoms, including those of the person, of speech, of the press, of assembly, of association, of travel, of movement, of correspondence”
and, indeed, “of strike”. Those are important freedoms jointly guaranteed through that joint declaration and it is that, most of all, that we should stand up for.
Graham Jones (Hyndburn) (Lab)
Q6. Proposed cuts to GP funding, the proposed closure of a walk-in centre in Accrington, proposed cuts to the GP practice in Accrington Victoria hospital, accident and emergency in special measures, the police taking constituents to A and E at Blackburn Royal hospital in police cars: the NHS in my constituency is in crisis. What can the Prime Minister ever do, considering the broken promises he has given, to assure my constituents that the NHS is safe?
The Prime Minister
We are not cutting spending on the NHS, which is what those on the hon. Gentleman’s Front Bench recommended at the beginning of this Parliament. We are spending £12.7 billion more on the NHS, and if we look at his own clinical commissioning group in East Lancashire, we can see that the funding this year of £490 million is going up by 2.14%. That is an increase of more than inflation. That is our policy and that is not the policy of the Labour party.
Mr David Ward (Bradford East) (LD)
Q7. The Palestinian ambassador, Mr Hassassian, has described Monday’s vote on the recognition of the Palestinian state as “a momentous vote”. Indeed it was. He has also said:“Now is the time for the UK government to listen to its democratically elected parliament and to take decisive political action by recognising the State of Palestine and upholding its historical, moral and legal responsibility towards Palestine”.Does the Prime Minister agree?
The Prime Minister
Of course, I look forward to the day when Britain will recognise the state of Palestine, but it should be part of the negotiations that bring about a two-state solution. That is what we all want to see—a state of Israel living happily and peacefully alongside a state of Palestine—and that is when we should do the recognition.
Mrs Emma Lewell-Buck (South Shields) (Lab)
Q8. South Tyneside hospital in my constituency is facing an extra 30,000 visits a year because of the closure of the walk-in centre in nearby Jarrow. Is that acceptable?
The Prime Minister
As I have said, NHS funding is going up. If we look at South Tyneside clinical commissioning group, we see that this year its funding has increased by 2.14%. That is more money for the NHS, but obviously it is up to local commissioners to decide how to spend it. They have more money under this Government, whereas they would have had less money under Labour, which said that spending more money on the NHS was “irresponsible”.
Angie Bray (Ealing Central and Acton) (Con)
Does my right hon. Friend agree that far too many people who cannot be described as rich are finding themselves caught up in inheritance tax? Does he also agree that that is not only unfair, but not what the tax was originally intended for? Does he agree that we need to reform it as soon as possible?
The Prime Minister
I agree with my hon. Friend. It was a step forward when the threshold was effectively increased by allowing things to be passed between husband and wife, making it £650,000 rather than £350,000, which I think it was before. That only happened because of the pressure from the Conservative party when we were in opposition. Taxes, as they say, are a matter for the Chancellor in his Budget, but we all want to see a system—this might have to wait some time—in which only the very rich pay inheritance tax, not hard-working people.
Jenny Chapman (Darlington) (Lab)
Q9. This summer, mothers from Darlington marched 300 miles to show their anger at the this Government’s wasteful mismanagement of the health service. Darlington—I want to help the Prime Minister—is in the north-east of England, like the constituency of my hon. Friend the Member for South Shields (Mrs Lewell-Buck). Does he agree with the Darlington mums and, it seems, a member of his own Cabinet that spending £3 billion on reorganising the NHS was his biggest mistake?
The Prime Minister
What we did at the beginning of this Parliament was ensure that we cut the bureaucracy and put in the extra money. The only way to have a strong national health service is by having a strong economy. Let us look at the countries that ignored their deficits. Greece cut its NHS by 14%; Portugal cut its NHS by 17%. They have something in common with the hon. Lady’s leader: they all forgot the deficit.
Jeremy Lefroy (Stafford) (Con)
I welcome the £300 million investment in Stafford, Stoke, Cannock and Wolverhampton hospitals, but will my right hon. Friend recognise the substantial improvements at Stafford in recent years and the very hard work of its staff, and will he confirm when the NHS England-led review of consultant-led maternity services at Stafford will take place?
The Prime Minister
I am delighted to add to what my hon. Friend says about the hard work being done at Stafford hospital. The link-up with North Staffordshire and the extra money that has been put in gives an opportunity for a fresh start. Obviously, like him, I want to see as many services as possible maintained at Stafford hospital, and I know the importance that local people attach to maternity services. People who live in Stafford want to have their children in their local hospital, and I quite understand that.
Mr Steve Reed (Croydon North) (Lab)
Q10. Does the Prime Minister agree that the £11.5 million wasted on a botched and abandoned reorganisation of south-west London’s NHS services would have been better spent providing more GPs so that my constituents do not have to wait over two weeks to see a doctor?
The Prime Minister
The hon. Gentleman mentions waiting times, so let me remind him that when this Government came into office there were 18,000 people waiting longer than a year. That number is down to 500, and that is because we have run the health service and the economy effectively. The reorganisation that took place in the NHS was about getting rid of bureaucracy. There are now 20,000 fewer administrators, 6,000 more doctors and 3,000 more nurses. That is a record we can be proud of.
Lorely Burt (Solihull) (LD)
Q11. One in four beds in our hospitals is occupied by a patient with dementia. Being treated in ordinary wards can cause them distress and confusion, hampering their recovery and that of other patients. Does the Prime Minister agree with me, and with health practitioners in my local hospital in Solihull, that patients with dementia should be cared for by specially trained staff and, where necessary, in separate wards, and will he support my campaign to make it so across England?
The Prime Minister
In dementia, we face an enormous challenge in our country and, indeed, across the world, because so many people have this condition and so many people are likely to get it. This Government have increased massively the research that is going into dementia. We have trained over 1 million dementia friends so that we build more dementia-friendly communities, and we have trained over 100,000 NHS staff in how better to treat people with dementia. We are putting something like £50 million into hospitals to try to help them with the way that we treat dementia sufferers. But the hon. Lady is absolutely right: the more people who we can treat in the community and who we can maintain at home the better, because very often being in a hospital, particularly in A and E, is not the right answer for someone with dementia.
Barbara Keeley (Worsley and Eccles South) (Lab)
My constituent Alan Henning was brutally murdered by the self-styled Islamic State. In Eccles we have lost a local hero who ignored his own safety to take aid to children in need in Syria. People from across this country have told me that they believe that this noble sacrifice should be recognised in some way by a national honour and by support for his widow and children. Can the Prime Minister tell me if he supports these ideas and what we can do to progress them?
The Prime Minister
I will look very carefully at the suggestion that the hon. Lady makes, because she is absolutely right that Alan Henning was a hero. He went to serve others. He went with no thought of his own safety: it was about helping other people in their time of need. He was an entirely innocent man, and the fact that he was murdered in such a brutal fashion demonstrates the dreadfulness of the people who we are dealing with in ISIL. I know that people in Eccles and in Salford miss him greatly. I spoke to his wife; the family have been incredibly brave. The hon. Lady makes a very good suggestion which I will take away and look at.
Rehman Chishti (Gillingham and Rainham) (Con)
Q12. Will the Prime Minister join me in congratulating the excellent Conservative-run Medway council on securing nearly £30 million from the Government’s national growth fund, which will further help to improve economic regeneration in the local area? The fact that youth unemployment in the local area is down, unemployment overall is down, apprenticeships are up, business creation is up and jobs are up clearly shows that our long-term economic plan is working both locally in Medway and nationally across the country.
The Prime Minister
My hon. Friend is absolutely right. The claimant count in his constituency is down by 36%, which is a huge advance over recent years. He is right about the importance of the local growth deal. This is going to mean more transport links in and around Medway and investment in the growth hub. A total of £442 million of growth funding has gone into this deal. Like him, I have got a feeling I will be spending some time in the Medway towns in the months and years—in the weeks—to come.
Douglas Carswell (Clacton) (UKIP)
My hon. Friend the Member for Richmond Park (Zac Goldsmith) will be pressing amendments to ensure that the Recall of MPs Bill makes MPs meaningfully accountable to their constituents—real recall. Will the Prime Minister now support these amendments in order to honour the promises on which he sought office in 2010?
The Prime Minister
We made it very clear that we wanted to see a recall Bill come in front of Parliament and be voted on, and I am delighted that we are keeping that promise; the Second Reading of the recall Bill will be happening very soon in this House. I will look very carefully at all amendments that come forward because, frankly, in getting this Bill together we have come up with the minimum acceptable for recall, but I think there are a lot of very good arguments to be had about how we can go further, and I look forward to having them in the House of Commons.
Richard Harrington (Watford) (Con)
Q13. Since 2010 there has been £50 million-worth of investment in schools in Watford. Only last week, we had the announcement about St John’s Church of England primary school, under Father David Stevenson. Can my right hon. Friend assure me that this situation of massive investment in schools will continue, because it is hugely benefiting my constituents and their children?
The Prime Minister
We are spending £18 billion in this Parliament on school buildings—that is more than Labour spent in their first two terms in office combined—and I want to see that continue. What we are seeing in our schools is not just this important building work but a massive change in culture and leadership as we see standards rise and we see school after school really transformed through their results. I know that is happening in Watford, as elsewhere, and so what we must do is carry on with this programme, carry on with our reforms, and make sure we give more young people the chance of a good start in life.
Nic Dakin (Scunthorpe) (Lab)
Today, Tata has announced that it hopes to sell its long products business, including the integrated steel site in Scunthorpe. People are understandably concerned about that. Will the Prime Minister meet me and a cross-party group of MPs whose communities are affected by the decision, in order to make sure there is a bright future for long product steel in the UK, which underpins so much of British manufacturing?
The Prime Minister
I am very happy to meet the hon. Gentleman and other north Lincolnshire MPs to discuss this vital issue. Over the past four years we have seen some good developments in the steel industry, not least with the reopening of Redcar and what has happened in Port Talbot. I want to see a strong future for steel making in Scunthorpe. I know how important this issue is. We are engaging with both Tata Steel and the company that is looking to buy, and we look forward to those discussions. The hon. Gentleman will also know that we took action in the Budget to try to ease the burden on energy-intensive users. We have seen a recovery of manufacturing in this country, particularly through the car industry, and obviously we want to see the steel industry as part of that.
Duncan Hames (Chippenham) (LD)
As the economy gets stronger, we on the Government Benches will not forget the deficit, but if the Prime Minister can afford his tax cuts, will he also commit to continuing the protection of school budgets that we have achieved under this coalition, or must tax cuts for high earners and those inheriting estates come first?
The Prime Minister
As my hon. Friend knows, the truth about all these things is that we can afford a strong school system and a strong health system only if we maintain a strong economy. That is why he is absolutely right to say that we must not forget about the deficit, as the Leader of the Opposition did. We have to make sure that we keep getting the deficit down and keep getting the country back to work. The truth is that, as we stand here today, the British economy is growing and more people are getting into work. We are making good progress on all our economic plans, but there is no complacency, because we face real challenges in terms of what is happening in the rest of the world. The biggest threats to the British economy are sitting a few feet away from me—people who have learned absolutely nothing. They would borrow more, tax more and spend more. They would take us right back to the start.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The people of Kobane in northern Syria are desperately fighting off attack from ISIS. The United Nations Secretary-General has asked for immediate action to tackle it and support the beleaguered civilian population. What are the UK Government doing to try to make sure that massacre is prevented in Kobane?
The Prime Minister
Of course, we are taking action in the skies over Iraq, but we fully support the action that America and other states, including Arab states, are taking in the skies over Syria, which has had some effect on the town of which the hon. Lady speaks. I think there is a case for Britain doing more, but I recognise that what we have to focus on right now is the air power over Iraq and the training of an effective Syrian national opposition, because in time the right answer for Syria is the same as the right answer for Iraq: a Government who can represent all of their people and armed services that can fight on behalf of all of their people. Britain should play its role in making sure that happens.
Nigel Adams (Selby and Ainsty) (Con)
Will the Prime Minister join me in thanking the 45 companies and organisations that attended my fourth jobs fair last week? Will he also thank Selby college for putting on the event and the staff at Selby Jobcentre Plus, and welcome the fact that unemployment in Selby and Ainsty is now down by more than half since the last election?
The Prime Minister
I congratulate my hon. Friend on holding those jobs fairs, which have been a very effective way of helping people who are looking for work to get jobs. If we look at Yorkshire and Humberside overall, we see that across the year there has been a 46,000 reduction in unemployment. That demonstrates that unemployment is coming down right across our country, but we have to stick to the long-term economic plan that is delivering that.
Mr Speaker
Mr Skinner will, I am sure, be in his place next week and probably several times before then.
Mental Health Act 1983 (Amendment)
(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Speaker
Colleagues who are perambulating around will no doubt leave the Chamber swiftly so that we can move on to the ten-minute rule motion.
Sir Paul Beresford (Mole Valley) (Con)
I beg to move,
That leave be given to bring in a Bill to amend section 136 of the Mental Health Act 1983; and for connected purposes.
Thank you for clearing my line of vision through to you, Mr Speaker. As you are well aware, the useful advantage of the ten-minute rule Bill mechanism is that it can, if a Member so wishes, be used to introduce small changes that cannot easily be fitted into the flow of legislation through the House. My Bill would make a tiny amendment, and I wish it to be supported as a classic example of such a Bill.
I am sure that you are aware of the police parliamentary scheme, Mr Speaker. I highly recommend it to any Member who would appreciate seeing how the police act in the field under existing legislation. It is a great opportunity to be made aware of small changes in legislation that would assist the police in their duties. I am currently part of the way through the course.
A few weeks ago, I joined two young uniformed police officers based in Wandsworth in their police response car. The first call was a blue-light-and-siren dash to a Wandsworth council residential tower block. As it was a Wandsworth property, the lift was clean and fully functioning. We progressed to the source of the emergency call, which was a flat on the 14th floor. The mother of the household nervously let in one of the two officers to see her daughter, aged 22, who was standing on the window ledge and threatening to jump. It was quickly elucidated that she had a short history of having made a previous attempt to commit suicide, but I am not sure if that was by the same means.
The appearance of the uniformed officers did little to ease the problem; but fortunately, we were backed up by two plain-clothes officers, and the young female officer seemed to be acceptable to the young lady on the window sill. With great expertise, she after some time persuaded the lady to come down off the window sill and, eventually, to sit on the bed beside her, as they calmly discussed the problem. The police officer suggested that she might wish to go to a place of safety for medical and psychiatric help. This was refused, and was followed by agitation and more threats to dive out the window.
As all that was being played out, the officers outside the flat had contacted St George’s hospital psychiatric unit to obtain assistance. After a couple of hours, such an individual arrived with an ambulance and a crew of two. Their introduction to the young lady required more re-calming, and we went through the whole procedure all over again. Offers of help, particularly of psychiatric help, caused more alarm and more rejection. The NHS gentleman who had arrived with the ambulance then indicated to the police that the young lady really needed to be taken in for care. The fact that that was glaringly obvious is of course beside the point. A struggle ensued, which required some of the officers to hold her, and in due course she was transported to St George’s hospital as the designated place of safety.
This whole pantomime had occupied up to five police officers and three NHS staff, and it had taken three to four hours to sort out. It was quite obvious from the very beginning that the young lady needed help. It appeared to me that the police officers managed the situation well, and that they could themselves have taken the young lady in for care well within the 45 minutes during which they expeditiously persuaded her. That would have reduced not only police officer and NHS manpower hours, but the time taken and the risk of the young lady dashing back to the window and leaping out.
From discussions with the officers, I found, first, that this kind of situation is far from unusual, and secondly—this surprised me—that if this incident had occurred in a public place, the police would have been able to act immediately. I fail to see why the fact that it happened in a private place meant that they were unable to do so. I therefore wish to make some small changes to the legislation.
I should like section 136 of the Mental Health Act 1983 to be amended as follows. First, the heading, “Mentally disordered persons found in public places”, should be changed to, “Mentally disordered persons found by the police in the course of their duties”. Secondly, the words
“in a place to which the public have access”,
should be changed to, “in the course of carrying out his duties”. That is a small change, but it demonstrates that at the moment we are prepared to place our trust in the police in a public place, but apparently not in a private place. I think that that small change would be very effective, as the example that I have portrayed demonstrates.
I usually call Paul Goggins to present such Bills with me but, regretfully, he cannot do so, so I am doing it on my own.
Question put and agreed to.
Ordered,
That Sir Paul Beresford present the Bill.
Sir Paul Beresford accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 24 October, and to be printed (Bill 98).
Opposition Day
(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
National Minimum Wage
(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:00 - The House divided: - Ayes: 228 / Noes: 303 - Question accordingly negatived.
Mr Chuka Umunna (Streatham) (Lab)
I beg to move,
That this House notes that the value of the National Minimum Wage has been eroded since 2010 as working people have been hit by the cost-of-living crisis and are on average £1,600 a year worse off; recognises that the fall in the real value of the minimum wage since 2010 is now costing the public purse £270 million a year in additional benefit and tax credit payments; further notes that the Chancellor of the Exchequer cruelly misled working people by saying he wanted to see a minimum wage of £7 while the Government has no plans to reach this goal; calls on the Government to set an ambitious target for the National Minimum Wage to significantly increase to 58 per cent of median average earnings, putting it on course to reach £8 before the end of the next Parliament; supports action to help and encourage more firms to pay a living wage through “make work pay” contracts to boost living standards and restore the link between hard work and fair pay so that everyone shares in the UK’s wealth, not just a few at the top; and further calls on the Government to set a national goal of halving the number of people on low pay by 2025.
We are a great country with some of the most hard-working and creative people in the world, but there are challenges and problems that must be addressed. We are the sixth largest economy in the world, yet too many people do not have secure, fulfilling jobs that provide dignity, respect and a wage that they can live on. Most people who are living in poverty in this country have a job. If people do the right thing, play by the rules and work hard, day in, day out, they should not have to live in poverty in this country; but the reality in 2014 is that they do. More than 5 million people do not earn a decent wage.
We can see the economic data and, yes, on paper, GDP growth is better than it was two years ago, but the reality of people’s lived experience suggests otherwise. Just in the past fortnight, the much respected Resolution Foundation has produced research that paints a different picture. Tens of thousands of people are trapped in low-paid jobs with little hope of a pay rise. Among those minimum wage employees who have been employed for at least five years, a record one in four has failed to progress off the minimum wage for the entirety of that period. That compares with just one in 10 minimum wage workers a decade ago.
That is the background to our motion. What each party says it will do to address that situation and to make work pay will provide the context in which the next general election is fought. Before I set out what the Labour party would do if elected next year, I will remind people what we have already done. I have said it before and I will say it again: in 2010, this party left the country in an immeasurably better state than we found it in 1997. [Interruption.] If the Minister waits, he will get his time in a moment. One of the many reasons for that was our utter determination to end the outrage of people being exploited at work, which led to our establishment of the national minimum wage in the face of opposition from Conservative Members.
In 1997, the current Secretary of State for Work and Pensions—I note that he is not here—told the House that if we introduced the national minimum wage, it would
“negatively affect, not hundreds of thousands but millions of people.”—[Official Report, 4 July 1997; Vol. 315, c. 526.]
In the same year, the current Defence Secretary told the House that the Conservative party had “always resisted” the minimum wage and that he thought there were “other better solutions” to extreme low pay. Then, of course, there was the Conservative party leader—now the Leader of the House—who said that a minimum wage would be
“either so low as to be utterly irrelevant or so high that it would price people out of work.”—[Official Report, 17 March 1997; Vol. 308, c. 618.]
They and their Conservative colleagues made those claims and arguments to justify inaction at a time when some people in this country were earning as little as £1 an hour.
We had the good sense to ignore the Conservatives, and in my view establishing a national minimum wage was one of our greatest ever achievements. As a consequence, between 1997 and 2001 extreme low pay fell from 6.9% to 1.5% of the work force, and we are proud of that. All the evidence shows that the minimum wage boosted earnings considerably, without causing the unemployment that we were told would follow. So when people say that we are all the same, I point to the establishment of the minimum wage to illustrate our very different instincts as parties, our different approaches and the kind of difference that a Labour Government make when in office.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I served on the Committee that considered the National Minimum Wage Bill, and the only other person in the Chamber who did that is you, Mr Speaker. We spent many long hours through the night—
Mr Umunna
I thank my hon. Friend; that is interesting and I look forward to hearing his comments on who took what position at that time.
Yesterday, I revisited an interview with the great Sir Ian McCartney, a former Member of this House, who was the Minister at the Department of Trade and Industry and pushed the National Minimum Wage Bill through the House. He said that he would have “died in the ditch” to ensure that we got it through, and—my hon. Friend the Member for Dumfries and Galloway (Mr Brown) will remember this—we had a record sitting of the House to get the national minimum wage through in the face of resistance from Conservative Members.
I distinctly remember Sir Ian McCartney at a press conference with the Westminster lobby, explaining why we were doing what we were doing. He was a former kitchen worker and earned poverty wages. I remember seeing the news report of him weeping at that press conference, explaining how he was paid something like 1p or 2p per potato that he put in a bag in that kitchen, and asking the lobbying journalists, “How can you defend that in our country in this day and age?”
As I said, Labour Members are rightly proud of the national minimum wage, and we make no apologies for reminding people of the resistance that we met when we introduced it, and of the difference that a Labour Government make to people’s lives.
Andy Sawford (Corby) (Lab/Co-op)
My hon. Friend is right to highlight the stark choice around fairness that people faced in this country all those years ago in 1997, and the different positions that the Labour and Conservative parties took on the minimum wage. Does he agree that today that choice is perhaps best symbolised by the support of Conservative Members for the bedroom tax, which makes me think that they have learned nothing from their opposition to the minimum wage?
Mr Umunna
I completely agree with my hon. Friend, and in my constituency I have seen the stress, upset and angst caused by the bedroom tax, causing people to have to leave an area in which many of them have grown up and love so much. My hon. Friend is right: the bedroom tax shows the instincts of our different parties.
Although we are, of course, proud to have established the national minimum wage, which helped to end exploitation and extreme low pay, it did not end low pay per se. Under this Government working people have experienced their wages dropping by an average of more than £1,600 a year. The 1 October rise in the minimum wage is the first real-terms increase during this Parliament, and it is still 4.1% below its 2008 peak and just 2p above its equivalent value in 2005. Therefore, if we are elected next year, our goal will be to halve the number of people on low pay in our country. To achieve that, we need the minimum wage to evolve to address the broader problem of low pay, which is the purpose of the motion.
Andrew Gwynne (Denton and Reddish) (Lab)
We need that proposal, but we also need effective enforcement of the national minimum wage. Is my hon. Friend appalled, as I am, to learn that as many as 300,000 people in this country are still being paid below the national minimum wage and yet, in the past four years, there have been only two prosecutions?
Mr Umunna
I am appalled by that. My hon. Friend is right to mention enforcement. I will come to that, but I pay tribute to his work—I have been to his constituency—on ensuring that those who work hard get a decent day’s pay, in addition to his work on training and apprenticeships, which he has talked about a lot.
Mrs Anne Main (St Albans) (Con)
In the interests of fair pay for a fair day’s work, does the hon. Gentleman share my concern that so many right hon. and hon. Members, including many Opposition Members, pay absolutely nothing to some of the young people who work in this place? He should campaign to ensure that all hon. Members pay a fair wage for a fair day’s work.
Mr Umunna
I do not know to whom the hon. Lady refers, but in my experience, my Labour colleagues have always sought to ensure that those who work for them are paid a decent wage. I am sure that she, like others, might occasionally, as I do in my constituency office, have sixth-formers who are work experience students. Their situation is different from those whom hon. Members employ, but if hon. Members employ somebody to work for them, they should be paid a decent wage.
I spoke of the evolution of the national minimum wage and what Labour wants to do. With that in mind, we asked the former deputy chair of KPMG, Alan Buckle, to consult business, trade unions and others on how we can strengthen the minimum wage and restore its value. In so doing, Mr Buckle consulted many companies extensively. There is a growing body of opinion that the value of the minimum wage should rise. Sir Ian Cheshire, chief executive of Kingfisher, Jeremy Bennett, chief executive officer for Europe for Nomura, and Steve Marshall, the executive chairman of Balfour Beatty, are among those who are calling, as the economy recovers, for the minimum wage to increase faster than it has in the recent past. They say that that will benefit businesses and improve the public finances—the fall in the real value of the minimum wage since 2010 now costs the Exchequer £270 million a year in additional benefit and tax credit payments, a point that my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Work and Pensions Secretary, will build on later.
Guy Opperman (Hexham) (Con)
Does the hon. Gentleman accept that the minimum wage has risen, both by reason of the Government’s increase and the increase in the tax threshold, whereby the tax take from the minimum wage earner has decreased, and that the Government’s projections show that the minimum wage will rise to £8.06 by 2020?
Mr Umunna
I will address precisely all three points the hon. Gentleman makes, which I have read and heard the Minister make in the media, but the issue is how we evolve what we have to tackle the fact that, despite the minimum wage, more than 5 million people are in low pay. When we introduced the minimum wage and when, as I have said, the hon. Gentleman’s Conservative colleagues opposed its introduction, people were earning as little as £1 an hour in some parts of the economy. We helped to do away with extreme low pay—[Interruption.] I will come to tax if the hon. Gentleman is patient. We now want to move things to address the bigger, broader issue of the large body of people in our country who are in low pay.
Mr Frank Field (Birkenhead) (Lab)
When the Opposition are developing policy, we should consider that there are clearly some sectors of industry that could pay substantially above the national minimum wage. When we go into the election, should we not only advocate an increase in the national minimum wage, but encourage those sectors that could pay higher wages without unemployment effects to do so?
Mr Umunna
I will come to my right hon. Friend’s point on different sectors if he bears with me for a moment.
How will Labour improve on the current arrangements? When the Labour Government established the national minimum wage, we tasked the Low Pay Commission with the discrete and technical job of setting the minimum wage within existing economic parameters. My right hon. Friend was one of the Ministers involved in its introduction. The Low Pay Commission’s job was to play the hand it was dealt, not to attempt to change the game. Over the years, it has played its hand well, but it has remained relatively hands-off. In that sense, those who say that it is more akin to a minimum wage commission as opposed to a Low Pay Commission are right.
Labour wants to transform the Low Pay Commission into a proper, official low pay watchdog, setting out what it believes we need to do tackle low pay, monitoring progress and making recommendations on how to boost productivity and make a higher minimum wage possible in different sectors. My vision for the Low Pay Commission is for it to be far more active. If we give it a bigger, more active role, it can not only challenge the Government more, but challenge different sectors. I would like it to have a much bigger standing in the national consciousness. Currently, I believe that it has around six to seven staff, who are mainly focused on statistical analysis, but I can see it becoming a big, low pay watchdog, playing a big part in the national conversation.
Mr Field
I rise merely to say how much I welcome that statement, because it relates to the work of the shadow Work and Pensions Secretary and other Opposition Front Benchers. If we are to control the welfare bill in a civilised way, making people who could pay higher minimum wages pay their due, rather than relying on taxpayers, is a crucial part of the strategy.
Mr Umunna
My right hon. Friend is absolutely right. I could not agree more with him.
My second point is that, up to now, the minimum wage has been set with a view to its short-term impact over the coming year. The Low Pay Commission is asked to describe the labour market as it is when it sets the rate, six months before the rate comes into force. It sets the context and gives the rate, but it does not give any guidance on how a higher level can be reached. Therefore, a Labour Government will set a target to increase the minimum wage from its current level of 54% of median earnings to 58% of median earnings by 2020, to be implemented by the Low Pay Commission during the next Parliament.
Forecasts show that that will take the minimum wage from £6.50 this year to £8.00 in October 2019—I can see the hon. Member for Hexham (Guy Opperman) looking up at me, but I will come to his point on the forecasts of £8.06. That long-term target will give businesses time to plan and to adapt their business models to boost productivity to support the higher level. The international evidence shows that countries can support minimum wages with such a measure, which could give us a similar level to that in Australia and other EU countries.
Mr Umunna
I will give way to the hon. Gentleman after I have addressed his point, which, as I have said, has been raised in the media by the Minister. I read in The Sun earlier this month some nonsense from him. He suggested that the minimum wage was on course to be more than £8 by 2020 in any event, as the hon. Member for Hexham said, and therefore that Labour’s commitment to get the minimum wage to £8 by the end of the next Parliament would mean cutting it. That is desperate stuff. Let me be clear that, under the Labour’s plans, there would be nothing to stop the Low Pay Commission from setting the rate beyond £8. In any event, The Sun pointed out that the Treasury estimates on which the story was based relied on a significant recovery of earnings growth. Not many subscribe to those estimates. My point is that Labour Members are not prepared to sit on our hands and just hope for that earnings growth to come about. We are determined to do what we can to ensure it happens by setting that target.
Guy Opperman
I took good note of what the hon. Gentleman said, and if I understood him correctly, he said his plan is predicated upon raising median earnings from 54% to 58%. Surely that is only possible by having a strong economy, for which, of course, he would need a long-term economic plan. Surely that means he agrees with us.
Mr Umunna
I think the hon. Gentleman will probably have to wait for the reshuffle. [Interruption.] He gets the prize for mentioning the long-term economic sham, which is his party’s plan. I do not disagree, however, with the point he—[Interruption.] The hon. Gentleman keeps shouting at me. If he will let me reply, I will engage with his point. Is the national minimum wage on its own a panacea for ensuring that people can earn a wage they can live off and have security? No, it is not a panacea, but it is a very important part of the equation. Of course a strong economy is important in this respect, however. I would not disagree with him about that. Anyway, he has got in a reference to the long-term economic plan that he wanted to mention, and I am sure the Whip present, the hon. Member for Croydon Central (Gavin Barwell), will have taken note of that.
Mr William Bain (Glasgow North East) (Lab)
Is my hon. Friend aware that in my constituency 38% of children are now growing up in poverty? Their parents are working harder, but have a lot less to show for it. Does that not demonstrate that the Low Pay Commission needs to take a long-term view and have an ambitious target to raise low pay, and does he regret the Government’s failure to adopt one?
Mr Umunna
That is right. On that 38% figure, I must say that I have a similar situation in parts of my constituency. I agree with my hon. Friend but I would add that I think so much of our economic debate takes part around the GDP figures, statistics and data, and of course that is right—we should look at the data—but the question is the lived experience of people in this country: do they think they have never had it so good? When we listen to the rhetoric from Government Members, that is often what we would be led to believe.
Ms Karen Buck (Westminster North) (Lab)
Has the Conservative party not got it completely the wrong way round? Is not strong economic growth dependent upon strong earnings growth, which in turn will help us to make sure we have a sustainable recovery that is shared among all the people?
Mr Umunna
I could not have put it better myself; I completely agree with my hon. Friend. We know we have a productivity issue in this country. If people are earning more—if they get better pay—they are more productive. All the research shows that.
I wanted to add a point in respect of our target. Of course the economy might be subject to economic shocks—we had the crash in 2008-09—and the LPC might therefore take the view that the target cannot be met without risk to the economy, and we will build flexibility into the system to account for that.
Mr Dennis Skinner (Bolsover) (Lab)
Is it not the plan to get rid of evil zero-hours contracts as well, like those in my constituency—at Sports Direct, Mike Ashley? If that happens, it will considerably add to the wages of more than 1 million people in Britain, and that figure is growing as the unemployment statistics supposedly fall. All that put together makes it an even better package.
Mr Umunna
I completely agree with my hon. Friend, and the point he makes about zero-hours contracts shows that, in some respects, the big difference between the two sides of the House is that—[Interruption.] The Minister will have his time in a moment. From our point of view, of course people having work is the absolute priority, and having a job is of course better than not having a job, but we have got to be more ambitious than that given the nature of the work that so many people in our economy are doing.
Mr Iain McKenzie (Inverclyde) (Lab)
What does my hon. Friend think of this Government’s lacklustre approach to, and lack of enthusiasm for, naming and shaming employers who pay under the living wage?
Mrs Main
I can accept that there are some abuses of zero-hours contracts but, as someone who formerly worked as a supply teacher I would caution against getting rid of all zero-hours contracts. Our health and education services rely on people picking up casual contracts—if that is how the hon. Gentleman wants to put it—so that we fill in the gaps when there are shortfalls. It is not always a demon policy to have zero-hours contracts.
Mr Umunna
I hear what the hon. Lady says about some zero-hours contracts—if memory serves me correctly, I may have been on one myself when I was a student—but the point is that we are seeing far too many exploitative zero-hours contracts. That is the problem, and we are not going to sit on our hands when we are faced with that situation.
John Glen (Salisbury) (Con)
Is it not very important that Government take seriously the failure by employers to act responsibly, and that is why the hon. Gentleman should welcome this Government’s move to increase fourfold the fines on employers who are paying below the minimum wage? That did not happen under the previous Labour Administration. We take those breaches very seriously. What does he have to say about that?
Mr Umunna
As I was saying earlier, there would have been no national minimum wage or any fines if it were not for the last Labour Administration, but I take the hon. Gentleman’s point that fines need to be increased, and I will come to that very shortly as he makes a good point there.
Sheila Gilmore (Edinburgh East) (Lab)
Will my hon. Friend comment on the experience of my constituent whose fixed-hours part-time job, which fitted in with school hours, was changed recently by a very respectable employer—a large department store, not some unscrupulous employer—to a zero-hours contract in order to make her terms more flexible? She had to stop work because she could not find the child care to help her. That is surely the sort of contract we must do something about.
Mr Umunna
Well, that is it, and that is precisely why we will introduce a far tougher package than the sole measure we have seen on zero-hours contracts from the Government, which is basically just a do-away with exclusivity on those contracts. That is simply insufficient given the story that my hon. Friend has just told—and I would be very interested to know who the employer was.
The third point I want to make on the changes we need is that, when the minimum wage was introduced, the hope was that it would have a ripple-effect causing wages to rise up the income scale, but that has not turned out to be the case. Frankly, it is becoming the going rate in some sectors, as my right hon. Friend the Member for Birkenhead (Mr Field) alluded to. This explains why 1.2 million employees currently just earn the legal minimum. That is up from just over 600,000 in April 1999, so we have seen a considerable increase in the number of people on the minimum. Therefore, in its beefed up role, we will ask the LPC to advise on what sectors of the economy could afford to pay more than the minimum wage and how that could be achieved.
Finally, enforcement has been mentioned, and much more needs to be done on that, as the hon. Member for Salisbury (John Glen) said. There has in some respects been a systematic failure in the way the minimum wage has been policed. To address that, we will give local authorities, working alongside Her Majesty’s Revenue and Customs, powers to enforce the law, and we will increase the fines tenfold for rogue companies that do not meet their obligations. In this way, we will evolve the national minimum wage so that it moves beyond the narrow task of setting a minimum wage to avoid extreme low pay to a broader mission to reduce low pay in Britain. As far as the Minister’s party is concerned, I discern no desire to move beyond the status quo and the current arrangements.
Andy Sawford
On my hon. Friend’s point about where the Government stand, I had an assurance from the Prime Minister in February that they would name and shame those employers who had been found out and fined for not paying the minimum wage in my constituency. They still have not done that. Does that not show there is no real commitment on this from the Conservative party?
Mr Umunna
My hon. Friend’s remarks illustrate a point I have been making.
The Minister has said he would like to see the minimum wage strengthened, but his party has set out no plans whatsoever on how it will make that happen. It is all very well picking holes in, and raising issues with, the suggestions we have put forward, but I do not see any coming from Government Members. All we have seen—as the Minister’s boss the Secretary of State, who I know is away in India, said in June—is the Chancellor, in talking about the minimum wage increasing to £7 earlier this year, simply explaining the arithmetic of what would happen if a real minimum wage were restored; commentary from the Chancellor, but no action.
Mr Gregory Campbell (East Londonderry) (DUP)
The hon. Gentleman talks about how we best deal with the scourge of low pay. Does he not agree that a combination of raising the minimum wage, which he has alluded to, and raising the thresholds at which people begin to pay tax is the answer, so that the people earning £200 or £250 a week retain all of that as their take-home pay?
Mr David Winnick (Walsall North) (Lab)
Is it not a fact that it is often said that the House of Commons is rather remote from the lives of many people outside? Surely one of the ways we can combat the idea that MPs do not care is to do everything possible to overcome the poverty that so many people, and certainly many of my constituents, suffer week after week because of low wages. Of course, had it not been for a Labour Government, as my hon. Friend says, there would have been no national minimum wage.
Mr Umunna
My hon. Friend makes a very good point and it makes me reflect on the 2010 general election. In the polling districts covering the most deprived estates in the two most deprived wards in my constituency—Brixton Hill and Tulse Hill, which were most impacted by our introduction of the national minimum wage—the turnout was more than 70%, and sometimes 80%. That is because the people on estates such as the Tulse Hill estate had been directly impacted by our introduction of the national minimum wage: it helped to reduce poverty in those areas. My hon. Friend is absolutely right.
The hon. Member for East Londonderry (Mr Campbell) talked about tax and thresholds. The Minister has said that, in addition to thinking about the national minimum wage, we should consider the impact of tax on the low- paid. I agree. That is why we will introduce a starting rate of tax of 10%, paid for by abolishing the Government’s ill-conceived married couples allowance.
The Minister will no doubt refer to the increases to the personal allowance—[Interruption.] I thought that might provoke a reaction. I will give way to the hon. Member for Elmet and Rothwell (Alec Shelbrooke) in a moment. I am sure the Minister will no doubt refer to the increases in this Parliament to the personal allowance to seek to show that he “gets it”, as my hon. Friend the Member for Walsall North (Mr Winnick) mentioned. I doubt, however, that the Minister will mention the fact that any benefit the low paid derived from the increase in the personal allowance was wiped out by the Government’s hike in VAT and the benefit and tax reductions that we have seen for working people in this Parliament.
Alec Shelbrooke (Elmet and Rothwell) (Con)
Will the hon. Gentleman clarify the thresholds at which the 10% rate and the 20% rate would be paid?
Mr Umunna
We will set out in detail the plans we have on the 10% rate nearer to the general election. I cannot give the hon. Gentleman the exact thresholds right now, but I am sure that the Whip will have noticed that he asked the question.
On enforcement, I am sure the Minister will refer to their so-called “name and shame” policy, which the Government announced. [Interruption.] The Whips have already noticed that the hon. Member for Hexham (Guy Opperman) has mentioned the long-term economic plan, so he can quieten down. [Interruption.] I will take no lectures from any Government Member on tax rates, or anything else, when they have made a £7.5 billion unfunded tax commitment. I will take no lectures from them whatsoever. I will return to the point I was making about their “name and shame” policy. Only 25 firms have been named, and even that will be worthless unless Ministers beef up enforcement.
I agree with the Minister on the points I have heard him make about productivity. Increasing productivity enables companies to pay more. As I said before, it is key that we invest in human capital to increase productivity, and that means more investment in skills and training.
Before I wrap up, I just want to say something about the living wage. My hon. Friend the Member for Walsall North talked about what people think of Parliament. We should, on all sides of this House, be proud that the parliamentary estate pays everybody who works here, including contractors, a London living wage. It is very important that we set an example in that respect, and I am pleased to hear that that is happening here.
Mr Winnick
There was a campaign on that in the previous Parliament and I am glad if the issue has been rectified. Cleaners who were not in regular employment but contracted from outside were certainly not getting the same wage as those who were in regular employment in the House of Commons. If that has been rectified, Mr Speaker, I am pleased. The conditions and circumstances in which cleaners worked here in the Palace of Westminster were absolutely disgraceful. They reminded one of Charles Dickens’s times. I hope all that has been rectified.
Mr Umunna
I do, too. No doubt Mr Speaker will be able to give us more details. I can only talk about my understanding of the London living wage. It is very important that we set an example in this House on paying a living wage. I also think it is very good that this House has set an example in not using zero-hours contracts for people working on the estate.
Mr Umunna
I am just going to make a little more progress, because I sense that I have been going on for a while.
The minimum wage is set by reference to economic factors, including growth levels, the labour market, economic forecasts and so on. The living wage is calculated by looking at the basic cost of living and the salary needed for an individual to meet their own or their family’s basic day-to-day needs, including housing, food, clothing and so on. We recognise it is very challenging for employers to pay a living wage, so we would not impose it on them by having a statutory living wage. Instead, a future Labour Government will encourage employers to pay the living wage through new “make work pay” contracts. Firms that sign up to becoming living wage employers in the first year of the next Parliament will benefit from a 12-month tax rebate of up to £1,000, and an average of £445, for every low-paid worker who gets a pay rise. This will help firms towards a higher-productivity, higher-wage model. The measure will be funded entirely from the increased tax and national insurance revenue received by the Treasury when employees receive higher wages. Additional savings in lower tax credits and benefit payments, as well as increased tax revenues in future years, will cut social security bills and help pay down the deficit. Not just ensuring people are in work but that they get a decent salary when they are working, is the most effective way to reduce the social security bill.
In conclusion, I would like to go back to where I started. This area—what people are paid at work and the nature of the work they do—will be a key battleground at the next general election. That is why we have come out with the most detailed proposals, both in respect of wages and security at work, that will make a difference to people’s lives. Instead of mocking us, and instead of coming forward with proposals of their own, we see Government Members sitting on their hands while we carry on in the situation in which too many people who work hard do not earn a wage that they can live on. Ultimately, that is why the only way to do anything about this is to elect a Labour Government next year. I commend this motion to the House.
The Minister for Business and Enterprise (Matthew Hancock)
You would not have believed it from the speech the hon. Member for Streatham (Mr Umunna) has just made, Mr Speaker, but a fortnight ago those of us on the Government side of the House put up the national minimum wage in real terms for the first time since Labour’s great recession. The national minimum wage is now at its highest level ever in terms of average earnings. Enforcement of the national minimum wage is stronger and because of the recovery the national minimum wage is set to rise. For the last half hour, the Opposition have talked about the past and the glory days of 1997, but I want to talk about the future.
Sheila Gilmore
Is the Minister suggesting, yet again, that the recession in Europe, the United States and throughout the world was Labour’s recession?
Matthew Hancock
I am certainly suggesting that we had one of the deepest recessions in the world because of the failure of the last Labour Government to regulate the banks properly and to mend the public finances in the run-up to the recession. That youth unemployment had risen by 40% even before the crash shows the failure of Labour’s economic policy. That is a theme to which I shall warm in my speech.
Matthew Hancock
I will come later to progress on raising the national minimum wage, but the central point, which Labour Members do not understand, is that we cannot have a strong national minimum wage without a strong economy.
Alec Shelbrooke
Does my right hon. Friend agree that the interventions we have heard from Labour Members show that the Opposition have learned nothing from their time in government?
Matthew Hancock
I could not have put it better myself.
The rise in the national minimum wage comes against a background of record job creation, the biggest fall in unemployment since records began—before I or my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) were born—falling youth unemployment, falling long-term unemployment, unemployment of fewer than 2 million and a claimant count of fewer than 1 million; and that is all part of our plan to build from the ruins of the past an economy that works for everybody.
Steve Rotheram (Liverpool, Walton) (Lab)
Will the Minister confirm whether, before the worldwide financial crash, he was asking for more or less regulation? Certainly his Chancellor was asking for a lighter-touch regulatory framework, not what, with hindsight, the Minister now claims.
Matthew Hancock
In 1998, when the Labour Government removed the requirement to regulate levels of leverage in the City, the Conservative party complained, and it was that removal which led to the crash being bigger in the UK. It was the result of poor regulation of the financial sector. Labour did not fix the roof when the sun was shining, but instead spent money they did not have even before the crash.
Instead of forgetting about the deficit, as Labour does, and ignoring Britain’s economic challenges, we know that a strong recovery underpins a strong society and that we cannot have a strong minimum wage without a strong economy.
Julie Hilling (Bolton West) (Lab)
I love the way the right hon. Gentleman is rewriting history. Will he explain why we had three years of a flat-lining economy and why it only started to recover when the Chancellor went to plan B and started to invest in infrastructure?
Matthew Hancock
The hon. Lady needs to look at the economic statistics: there was no double-dip recession and ours is the fastest-growing economy in the G7. Economic growth has been strong, the number of jobs is growing at a record rate, our economy is turning around and we have the fastest growth in the G7. Labour might want to deny it, but we want to support the plan and, crucially, ensure that economic growth reaches all parts of the country and that all can benefit. That is why we support and are strengthening the minimum wage. We know that the only route to higher living standards is not through more borrowing, more taxes and more debt, but through fair pay for a job well done.
Today was another test of Labour’s economic credibility, and yet again it was found wanting. Instead, the true supporters of the national minimum wage now reside on the Government Benches. First and foremost, a strong minimum wage requires a strong economy.
Matthew Hancock
I will give the hon. Gentleman a couple of examples. We have increased the budget for enforcement by 15%, while the Small Business, Enterprise and Employment Bill, which I am leading through the House, backs up those resources with tougher penalties for those who break the law. While we are at it, we are also tackling the scourge of zero-hours contracts—something Labour failed to do after 13 years in office.
If anybody has ever queried the idea that the plight of the low-paid is linked to the health of the economy, all they have to do is study what happened as a consequence of the great recession. When the economy shrank after 2008, the incomes of the lowest-paid took a hit, through jobs lost, hours cut and wages frozen, and our nation’s finances shrank by 6%, which inevitably had a profound impact on people’s incomes—after all, national income is merely the aggregate of individuals’ incomes. The need to turn that around is why our long-term economic plan is so vital.
The evidence shows that the plan is working. Record numbers of jobs have not been created by accident, but because the economy is growing, but we are keenly aware of the risks that remain and the costs that would be paid, especially by the low-paid, if we abandoned the plan. Those who truly support the minimum wage also support the plan to tackle the deficit and repair the health of the economy, and that is why Government Members are the true supporters of the national minimum wage.
Guy Opperman
Is not the most crucial point, as well as raising the minimum wage, the need to address and examine the issue of tax? This coalition Government have raised the minimum threshold and actually given people on the minimum wage more money in their pockets. Will he set out in detail the effect it will have when we elect a Conservative Government and introduce a £12,500 tax threshold?
Matthew Hancock
Of course, it is post-tax income that matters to families. Having raised the threshold to £10,500, we are proposing to raise it to £12,500, meaning that no one working full time on the national minimum wage would pay any income tax at all. That is the sort of action we can get only if we have the grit to deal with public spending and leave more money in people’s pockets, thereby supporting the low-paid.
True supporters of the minimum wage also know that it is a partnership with business.
Richard Fuller (Bedford) (Con)
My right hon. Friend has rightly talked about post-tax income, but for people on low incomes, what matters is post-tax and post-benefit take-home disposable income. The shadow Secretary of State did not say what his policies would be on tax credits. Does he agree that that is an important part of the debate about how we improve living standards?
Matthew Hancock
The shadow Secretary of State could not even explain his own tax policy when he was asked by my hon. Friend the Member for Elmet and Rothwell. On the other hand, we are clear about ours—[Interruption.]—and I am delighted every time the Opposition complain about it. They should put it on their leaflets. We will increase the threshold to £12,500 so that anybody on the minimum wage doing 30 hours a week will not pay a penny in income tax.
Alec Shelbrooke
Labour Members chunter about VAT, but does my right hon. Friend find it surprising that Labour increased VAT by 2.5% and doubled taxes on the lowest-paid workers while, by comparison, we have put VAT up by 2.5% and raised the tax threshold?
Matthew Hancock
We know what would be most damaging for the low-paid—if we lost control of the economy and had another great recession like the last time Labour was in office.
Julie Hilling
I want to return to the Minister’s point about the number of new jobs being created. I asked him once about this matter and got the following reply:
“Information regarding the number of jobs created is not available. As an alternative…estimates relating to the net change in the number of people in employment are available… Unfortunately the requested information on duration of employment is not available”.—[Official Report, 12 November 2013; Vol. 570, c. 578-9W.]
The Government continue to talk about the number of jobs created, but they do not have the evidence to back it up.
Matthew Hancock
The evidence was published at 9.30 this morning. It showed that record numbers of jobs had been created and that in the hon. Lady’s constituency the number of unemployment claimants fell by 32% in the last year. If I were her, I would look at the statistics before complaining about our record on jobs.
True supporters of the national minimum wage know that it is a partnership with business. Jobs cannot be created without job creators. Business is a force for social good, not only because it creates jobs, but because business prospers by finding solutions to other people’s problems. It is something for something, and it is what the British people mean by fairness. After all, the Low Pay Commission was set up because the minimum wage relies on consensus to keep the support of both employers and employees. In fact, the hon. Member for Streatham made that point in his speech, but then sadly undermined it with a policy that I think was probably pushed on him by his leader.
Mr Bain
On the issue of fairness, does the Minister agree that people should be treated equally under the minimum wage legislation? Will he take this opportunity personally to disown the distasteful comments made by his ministerial colleague, Lord Freud—that some disabled people were not worth the full rate? Is that not an outrage; should not the Government apologise?
Matthew Hancock
Yes, of course, everybody who is in work should be paid the minimum wage.
Mr Umunna
I must say that the comments to which my hon. Friend the Member for Glasgow North East (Mr Bain) referred were absolutely disgraceful and that Minister must answer for them. The Minister talked about how the Low Pay Commission does things and how it works through the tripartite model and we absolutely want to see that go forward into the future. The Minister did not say it, so I will: the issue that some people worry about is the possible politicisation of the Low Pay Commission. I think that can be avoided, in much the same way that having a 2% target for the Monetary Policy Committee did not lead to the politicisation of that process.
Matthew Hancock
Unfortunately, the hon. Gentleman says one thing and his party then proposes something quite different. The Low Pay Commission was set up to support that consensus, to ensure that the minimum wage has the support of both employers and employees and to ensure that the low paid are not priced out of work. When politicians such as the hon. Gentleman’s boss get on a soapbox and undermine the Low Pay Commission consensus by clearly stating an amount that should be achieved by 2020, they undermine the very people they claim to support. As the Federation of Small Businesses says—the hon. Gentleman can address this when I give way to him,
“the decision on what the rate is should be set only after consultation with the Low Pay Commission.”
Labour’s proposal, according to the FSB, “does the opposite”.
Mr Umunna
As I said, I believe it is possible to move towards a new framework without leading to politicisation and to address the concerns that some have raised. I am taken aback when the Minister says that the Leader of the Opposition’s talk about achieving a certain rate for the national minimum wage undermines the Low Pay Commission, when that is precisely what the Chancellor of the Exchequer did when he talked about a £7 rate.
Matthew Hancock
No, because every year the Government present evidence to the Low Pay Commission of what level of pay the economy can support. In fact, I can go further. Today, we are publishing the economic evidence that is going in to the Low Pay Commission. It shows what level of pay the Government believe can be supported. It shows that the recovering economy is creating jobs, with unemployment falling faster than any country in the G7. Indeed, the Low Pay Commission has said that it can raise the national minimum wage in real terms this year only because of that recovering economy. Government analysis underpinning today’s evidence projects that on the Office for Budget Responsibility’s economic earnings forecast, the minimum wage is set to reach £8.06 by 2020—only because of the recovering economy.
Mrs Main
Did the Minister note—I am sure he did—that the shadow Secretary of State said that there would be some “flexibility” in the plans, but without saying what that flexibility entails? It seems to me that this is a fudge; there is not really any particular figure that he is looking towards.
Matthew Hancock
I was going to come on to that. The hon. Member for Streatham made an important admission today. I think it is the first time that Labour has admitted that if the £8 target was going to damage the economy, there would be “flexibility”, as my hon. Friend said. Within a month the hon. Gentleman has completely undone the promise that was made with such loud cymbals at the party conference. It was a promise made for a party conference by a desperate party leader who is struggling to get his message across. Today, it has been completely undermined by the man who wants to replace him as party leader after Labour loses the next election.
Mr Umunna
I have to say that this is really desperate stuff from a desperate Minister. In the same way as there is flexibility for the Monetary Policy Committee in setting the interest rate target, there would be flexibility in our system. The Minister talks as if this were some new revelation. What I have said is absolutely no different from what the Leader of the Opposition has said. The Minister can pick holes in what we have suggested, but he has come forward with no proposals whatever to evolve or move on the national minimum wage—none.
Matthew Hancock
I certainly can pick holes in what the hon. Gentleman said, and I intend to do exactly that. I would say that today’s admission that there is no £8 target from the Labour party because there will be “flexibility” around it shows that Labour has nothing to say on low pay, just as it has nothing to say on any other area of economic policy. The grin of the hon. Member for Streatham as he came to the Dispatch Box after the discussion about who will be the leader of the Labour party after the next election demonstrates, I think, that undermining his leader was part of his job today—and he has done it brilliantly.
Andy Sawford
Clearly, the Opposition have initiated this debate on the minimum wage, so it is quite bizarre to suggest that we do not have anything to say about low pay when we put it on the agenda. However, perhaps one of the Minister’s colleagues has had too much to say about the minimum wage by suggesting that disabled people are not worth it. Can the hon. Gentleman confirm whether Lord Freud is still a Government Minister? How can his position be tenable?
Matthew Hancock
I have said that everybody should be paid the minimum wage. That has been our policy throughout the whole period of this Government and it will continue. In fact, we are strengthening it—an issue I want to come on to. We have rejected the Opposition’s advice that the national minimum wage should be limited to £8 by 2020, not least because, on the central projection from the OBR’s earning figures as reported in The Sun, the national minimum wage will, under the Government’s plans, reach £8.06 by 2020—but only so long as we continue the economic recovery and not if we put that recovery at risk by adopting Labour’s plans.
Mr Umunna
I am grateful to the Minister for giving way, which provides me with the opportunity to remind him of what I said earlier, which is that the claim he made in The Sun was complete and utter nonsense. He should have rewritten his speech before delivering that passage.
Matthew Hancock
On the contrary, Government analysis underpinning today’s evidence projects that, on the OBR’s earnings forecasts, the minimum wage is set to reach £8.06 by 2020.
Alec Shelbrooke
I am sure that we all want the facts to be right when we have a debate, so let me quote directly what the Leader of the Opposition said as reported in the Sunday Mirror:
“I am delighted to be able to tell Sunday Mirror readers that we are going to raise the minimum wage–if we win the election–in the next Parliament to over £8 an hour.”
There was no qualification in that statement.
Matthew Hancock
Absolutely. I concur strongly with what my hon. Friend says. Today’s Labour U-turn on low pay policy shows that ours is the only party and this is the only coalition Government strongly supporting the national minimum wage. We are the ones who are raising the minimum wage, putting it up in real terms at record levels when compared with average earnings, while at the same time reducing taxes. It is those on the Government Benches who support the minimum wage, and it is particularly the Conservative party that is the party of the low-paid.
Mr Iain McKenzie (Inverclyde) (Lab)
I would like to tempt the Minister to say more about our proposal for “make work pay” contracts and partnership with the Government and business. Does he not think that business would embrace such contracts in order to promote investment in their employees’ skills, providing not just jobs but a career for their employees?
Matthew Hancock
It is absolutely true that the long-term and fundamental way to support the increase in productivity is to ensure more rigorous education and more skills, which is why we increased the number of apprenticeships. We are on track to have 2 million apprenticeships started in this Parliament, and we are clear that we will deliver 3 million in the next Parliament. The hon. Gentleman is absolutely right that education and skills underpin the long-term advance of prosperity for everyone in this country. I suggest that he would support the Government’s policies to strengthen education if he was truly interested in supporting a long-term increase in productivity.
We have discussed enforcement, the increase in the budget for enforcement and the Small Business, Enterprise and Employment Bill. We have quadrupled the maximum penalty to £20,000—per worker, not per firm. As a result, the amount from enforcement has increased from £2.6 million in 2003 to £4.6 million today. We know that a strong minimum wage must be properly enforced.
My third and final point is that the true champions of the low-paid know that the minimum wage is only one tool among many. We are reforming welfare so that it supports people into work rather than trapping them in poverty, and we are letting people keep more of what they earn. Thanks to our rise in the tax threshold, a typical taxpayer already pays £700 less income tax than in 2010. The tax bill of someone working a 30-hour week on the minimum wage has been cut by two thirds. In the next Parliament, we will abolish income tax for those working full time on the minimum wage. We can do that only because we are prepared to make difficult decisions on spending.
It seems that the Labour party does not want to make those difficult decisions. Perhaps the shadow Minister will explain why all we have heard from it is taxes on jobs, taxes on business, taxes on homes, pensions, investments, taxes on driving and now even taxes on death.
Mr Russell Brown
Does the Minister recognise that the economic recovery he talks about is not being witnessed in many parts of the country? He talks about people coming out of the tax bracket, but the reality is that in many parts of the country less than half the work force works anywhere near enough hours to pay tax.
Matthew Hancock
Absolutely. I recognise that as we get the recovery moving we must ensure that it benefits all parts of our country. That is why we are ensuring that the jobs recovery is spread throughout the country. This morning’s jobs data show that unemployment is falling in all regions, and in the hon. Gentleman’s constituency it has fallen by 28% in the last year. Instead of pointing fingers, he should congratulate the Government on that effort.
The Labour party forgets that we do not support the incomes of those at the bottom by making the whole country poorer. Tax cuts and welfare reform are both essential, but ultimately must go hand in hand with strengthening education and skills.
The Government support work and our record shows that we deliver work. We have a plan that will work. A strong minimum wage is possible only with a strong economy. We passionately support the minimum wage, not for a headline, but for the benefit of those who rely on it. It is just one part of our long-term plan to restore the health of the British economy from the ruins of the past. Instead of that past, we will build an economy that works for all and secures a brighter future for Britain.
Jack Dromey (Birmingham, Erdington) (Lab)
In the spring, my hon. Friend the Member for Leeds West (Rachel Reeves) and my right hon. Friend the Leader of the Opposition visited a remarkable woman, Rachel, on the Castle Vale estate in my constituency. She is a proud, working-class woman trying to bring up her child. She lost her job with the council as a consequence of the huge cuts that the Government are imposing on our city. She found a new job but she was on the minimum wage. She broke down in tears when she explained how difficult life is for her trying to bring up her kid with dignity and to pay her bills. She is a salt-of-the-earth working-class woman who works hard to get on. Sadly, she is typical of 30,000 people in Birmingham on the minimum wage.
I remember sitting down at the food bank run by the Baptist church on Erdington high street with three of the working poor. Two of them said exactly the same as Rachel, explaining in graphic detail what it was like to count every penny and to have their kids come home from school asking whether they could have something, only to be given an excuse for why it was not possible. One of them said—I will never forget her words—“Jack, I exist. For me this is no life.”
Before I came to this place, I was proud to serve the Transport and General Workers Union and then Unite. In the world of work, work forces showed me wage slips of £1.50, £2 and £2.50 an hour. A linen supply company in west London was supplying the swankiest hotels and restaurants and charging an arm and a leg for its services, but paying its workers £2 an hour. We unashamedly sought to organise an upward drive in pay and to end working poverty, and I remember the Conservative party’s bitter resistance to any serious steps to tackle low pay, particularly the notion that somehow the minimum wage would fundamentally undermine economic success in our country.
The national minimum wage is a landmark achievement and Labour’s legacy, but it is not good enough. The working poor are ambitious, and so are we. First, we want a much higher minimum wage and, secondly, its vigorous enforcement. When I was deputy general secretary of the Transport and General Workers Union, I chaired a coalition, which had all-party support across the House, that took the Gangmasters (Licensing) Bill into law. It was a remarkable coalition from plough to plate—from the National Farmers Union to the supermarkets. Even then, after the introduction of the minimum wage, when the Gangmasters Licensing Authority was up and running—it was a highly effective organisation—a company employing 1,500 strawberry pickers paid them, after deductions and charges, £20 or £25 a week for a 60 or 70-hour week. That is why vigorous enforcement of a higher minimum wage is crucial.
On the living wage, we are more ambitious than just wanting a minimum wage. We need a minimum wage for underpinning, but we are more ambitious, which is why we have championed the living wage. I am proud that I was a founder member of the drive for the living wage in London. I ran the union’s organising department. We had 100 organisers, 10 of whom were cleaners. With the East London Communities Organisation and London Citizens, we successfully mounted that campaign, which included 4,000 cleaners in Canary Wharf and the City of London. It was obscene to sit down with good men and women and to hear their stories about how they cleaned the toilets and boardrooms of bankers who were sometimes earning millions when they were on the national minimum wage. We won a living wage for them.
I am also proud that I led the first strike in the history of the House of Commons when we organised the cleaners here to achieve the living wage. To this day, I have their manifesto in my office. Good men and women were being paid a shameful wage in this mother of Parliaments.
Richard Fuller
It is a pleasure, Mr Deputy Speaker, to listen to the hon. Member for Birmingham, Erdington (Jack Dromey). I have never led a strike—at least not since school. Does he agree that one concern is that those on both Front Benches are too timid about raising wages and that they do not have the passion he had when he led his trade union to do more? The issue is not fiddling about with the figure of £8 or £8.50, or whether we hit it naturally, but the courage that those on both Front Benches should have to address the real problem of people throughout the country working for low wages.
Jack Dromey
The hon. Gentleman speaks in good faith. All that I will say is that timidity is the preserve of his party’s Front Bench, whereas passion and determination characterise our side of the House.
As the Member of Parliament for Birmingham, Erdington, I am proud to say that Birmingham has been taking a lead in driving the living wage, first for those directly employed by the council, then for those working in schools, and now—it is the first time that any council in Britain has done this—for those employed in all future care contracts. Birmingham is working with a range of good employers, who are coming together and saying “We believe that the success of our city can be best achieved if workers are paid properly and treated fairly.”
Mr McKenzie
We should pay tribute to the numerous Labour-controlled councils all over the country—and I speak for Scotland in particular—who have led the way in securing a living wage for their employees.
Jack Dromey
I agree. Labour councils throughout Britain are taking the lead.
Experience tells me that a much higher minimum wage, and a living wage, are good. They are good for workers and for their dignity. I remember, during a dispute here at the House of Commons, meeting one excellent African cleaner. We were going to do a photo-call outside, but he said to me “I would prefer not to, Jack.” I asked “Why not?” He replied “I do not want anyone to know that I am a minimum-wage cleaner.”
A higher minimum wage is good for the family. I also remember sitting down with a group of men and women—along with Emmanuel, one of our organisers at Canary Wharf—to talk about what it was like to have to do two, three or four jobs at once in order to survive. One of them said “Jack, I sleep on the bus from one job to the other. I never see my family.” A higher minimum wage is good for employers, because all the evidence suggests—and KPMG and others have done some excellent work on this—that it contributes to higher productivity and reductions in turnover. It is good for the economy, because if low-paid workers get more money in their wage packets, they will not salt it away in the Cayman islands; they will go out and spend it in local shops and clubs, buying goods and services. It is also good for the welfare bill, because if the low-paid are paid more, they will rely on welfare support less. It is absolutely wrong for us in our country to be subsidising, on a grand scale, employers who pay low wages.
We should be thinking about what kind of country we want to be. The International Monetary Fund recently conducted a fascinating study of the problems that are inherent in unequal societies and what they mean in terms of social cohesion, but there is more to it than that. A successful modern economy cannot be based on low pay and low productivity. That is why Opposition Members argue, unashamedly and with passion, that we must espouse the cause of fair pay for every worker, so that no worker needs to live in working poverty any longer.
Government Members must hear about this in their constituencies; Opposition Members hear about it all the time. I remember one Stockland Green mum saying to me, “Jack, I keep being told that everything is fine. Recovery? What recovery? Do them up there understand what life is like for us down here?” For us, this is a noble cause. Of course it is about work, family, good workers succeeding, the economy and bringing down welfare bills, but, dare I say it, it is a moral cause as well.
Alec Shelbrooke (Elmet and Rothwell) (Con)
It is a genuine honour to follow the hon. Member for Birmingham, Erdington (Jack Dromey), who has a long history of supporting the lowest-paid in our society, and a long history of defending workers’ rights. When he speaks, he speaks not just with passion but with experience. That is in stark contrast to the synthetic arguments that we have heard from the Opposition Front Bench so far. I hope that today’s debate will reach a different level, because what we have observed so far is a lot of complacency about what Members think people want to hear when they are electioneering.
For me, this is not just an issue of party politics. I can agree with most of what the hon. Member for Birmingham, Erdington has just said—as, indeed, can most of my colleagues, especially those who are members of the new generation of Conservatives and Liberal Democrats on the Government Benches. We have been in those jobs at the bottom. We have seen what it is like to be on short-term contracts, and what it is like to work as a sole trader. I was a kitchen and bathroom fitter. When the contracts that I had in the university of Leeds were short-lived, I had to plug the gaps. That, in many ways, was a zero-hours contract. I have a great deal of respect for what was said by the hon. Member for Edinburgh East (Sheila Gilmore) about zero-hours contracts. I wish that she would stand up and name the company concerned, and I offer her the opportunity to do so now if she wishes.
Alec Shelbrooke
I am delighted that the hon. Lady has named that company, because there can be no excuse, in our society, for forcing people into a position at work in which the employer says, effectively, “Do as I say, and you cannot do anything else.” That is wrong, as the Prime Minister said in his conference speech. Zero-hours contracts have their place—they can work for people—but it is absolutely wrong and immoral to say to someone “We will tell you when you can work, and if you dare to work for anyone else, you will not be paid.”
Mr McKenzie
The hon. Gentleman rightly says that there is disgust over zero-hours contracts. Has he impressed on his colleagues in the Government the need for a Bill that would enable us to end such contracts?
Alec Shelbrooke
The hon. Gentleman has made the mistake of believing that zero-hours contracts are wrong in themselves. They offer flexibility to people. What is wrong and unacceptable is the abuse of zero-hours contracts, when an employer says “You cannot work for anyone else.” That is what is wrong. The hon. Gentleman needs to take a close look at Members in his own party who have people on zero-hours contracts. That is the problem. We must not mix up the arguments along the way, because there is positivity in some instances. The abuse is what the Government need to crack down on.
Sheila Gilmore
The exclusivity of zero-hours contracts is one issue, but it is not the only way in which they exploit people. A constituent of mine is a care worker who has to wait for a weekly text message telling her what hours she will be working at the end of that week. She has no choice either. The arrangement is causing severe problems in terms of her personal cash flow and her ability to obtain benefits and pay her rent, and, of course, it is also having a severe effect on the quality of the care that is being provided.
Alec Shelbrooke
I do not disagree with a single word of what the hon. Lady has just said. It is absolutely true, and that is why it falls to this place to start looking at the way in which employers have been abusing a flexibility which does work for certain people.
When I was between contracts and doing manual labour, did I want to be wondering whether I would have a kitchen or bathroom to fit in the following week, or did I want a constant supply of work? The fact is that I could not demand that the work would be there. I could not say, “Sorry, Mr Shelbrooke, you will be on a permanent contract whether the work is there or not.” There must be flexibility, but what we must legislate for is stopping the abuse. That is what my party is trying to do now, and my hon. Friend the Minister is working to address these very issues in his Small Business, Enterprise and Employment Bill.
Let me now deal with the minimum wage, which, after all, is what the debate is mostly about. I want to go further than our £12,500 tax threshold. My hon. Friend said that people in full-time work who are paid the minimum wage would not pay tax, but I want to maximise the benefit. If anything, I am a politician of aspiration. I want to make sure that someone who wants to work 42 hours a week, 52 weeks a year, will not have to pay any tax. That gives us a figure of £14,196 at today’s minimum wage rate, and that is my ambition. It is not a new policy. We have seen members of a newly formed political party leap up and say that they want the threshold to be raised to that level. Let me remind them that, back in the 1980s, Nigel Lawson said that no one should be taxed until their income had reached the rate at which it was not necessary to give the money back to them. That is the really important point when we are talking about how we can empower people. We must ensure that they have not only the motivation to go to work but the ability to keep the money they earn. If we have a minimum wage, surely we have to have minimum taxation. That taxation should not start until people start to earn more than the minimum wage full time. That is my ambition for this Government. Yes, I am delighted with our policy regarding £12,500 but I personally would like to go further.
The Opposition Front-Bench spokesman, the hon. Member for Streatham (Mr Umunna), said that there was not enough certainty in our policies. He made a good, considered opening speech but when he was pushed on the detail of where the 10% tax threshold would come in, he had no answer. That worries me. I worry that the policy of increasing the threshold from £10,500 to £12,500 would involve people paying 10% tax. We do not know whether that is the case; the policy is not there. I accept his argument that he cannot answer the question today, but this worries me none the less. I am worried about what these policies on wages for the lowest-paid workers actually mean. I worry that these policies could be inflationary if they are not carefully considered.
Alec Shelbrooke
The Chancellor of the Exchequer and the Prime Minister made it perfectly clear in their speeches that there would be more reductions in certain areas of public spending. We are looking at a 0.3% further reduction, which can be found. The point that the Opposition do not understand is that if we grow an economy by building on solid foundations, we end up with a growth rate that far outstrips those of the EU or the USA. More importantly, this is in stark contrast to the economy of France, whose policies the Opposition were telling us only three years ago we should be adopting. Their plan B was to follow the French President’s economic proposals, yet that country’s economy is now collapsing round its ears and dragging a lot of the EU down with it. This is simple: we must grow the economy healthily, and the hard-working people of this country who help to grow the economy do not deserve to come home after a day’s work to discover that the Government are taking more of their money. We need to ensure that increases in the minimum wage do not simply involve people doing more work for the same money.
The living wage is an important development. I have gone on record in this Chamber as saying that I do not support a statutory living wage. If we try to chase a living wage simply by upping wages by statute, we will increase inflation, thereby putting the living wage out of reach. The figure for a living wage has gone up since we last had this debate, but the way to reach it is to grow the minimum wage by cutting taxes on business and growing the economy. We cannot do it by imposing stealth taxes on business. We should be saying to employers, “Don’t give the money to the Government so that we can do all the things we want to do. Instead, give it directly to the people who are creating the wealth.” That is a policy that we should be proud of, and that everyone on these Benches will get behind. We want the highest wage figures that we can get in this country, and we want to ensure that people are not being exploited. When new phenomena such as the exploitation of zero-hours contracts are created, it is important that we legislate on them in a way that still allows flexibility for people who are trying to put together a living.
I am worried that Opposition day debates are often simply about electioneering. That is the wrong thing to do in this Chamber. The Opposition have talked about taking things seriously and being the party that truly represents the lowest-paid workers in society, but I must remind the House that they opposed my ten-minute rule Bill to outlaw unpaid internships. The Division was called by Opposition Members. I am still a strong believer that nobody in this country should work for more than four weeks without pay. Work experience has its place, but employing people for months at a time with no pay, claiming that they are gaining experience as interns, is morally wrong. That is why I introduced my Bill.
In that context, we have to look at what we are really discussing. We need to ensure that the poorest in society—those who are working at the bottom and in the most economically sustainable way—see their wages increase without having to give the money back to the Government just so that they can be grateful when the Government then give it back to them. We need to ensure that a good day’s work is properly rewarded. As we grow the economy, we need to ensure that businesses give the money to the people doing the work and not to the Government. When we discuss the minimum wage, we must ensure that we have in place a strong economy and strong policies, and that we are willing to legislate against those who abuse workers in this country. We must ensure that we represent everybody; that is what a one-nation party is all about.
Robert Halfon (Harlow) (Con)
On a point of order, Mr Deputy Speaker. On the “Daily Politics” programme today, the shadow Education Secretary said that I had made the case for not paying disabled people the minimum wage. I have campaigned strongly for increases in the minimum wage, very much along the lines set out by my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) a moment ago, so I find that assertion quite incredible. While I have been sitting here, I have seen a text from the shadow Education Secretary acknowledging that it was not me who said that, but the problem is that millions of people will have seen what he said on television. I am a passionate supporter of the minimum wage, especially for disabled people. Mr Deputy Speaker, will you ask the shadow Education Secretary to come to the Chamber to correct what he said, and to apologise for it? Otherwise, the people who watched that programme, including my constituents, will believe that I hold those abhorrent views.
Mr Deputy Speaker (Mr Lindsay Hoyle)
That is not a point of order for the Chair, as the hon. Gentleman will be well aware. However, his comments are on record for everyone to read, and everyone in the Chamber has heard them. He has also told everyone that he has received an apology. He has certainly ensured that his position as a supporter of the minimum wage for disabled people has been maintained.
Ms Karen Buck (Westminster North) (Lab)
Three important pieces of news frame our debate on the minimum wage today. First, we heard the good news about the continuing fall in unemployment. Our politics, like those of most hon. Members, are motivated by wanting to see people in work, and any fall in unemployment is therefore extremely welcome. However, we also heard that the squeeze on incomes is continuing. Alongside that, we saw the data released by the End Child Poverty campaign, which mapped child poverty figures in every constituency in Britain. The figure for my central London constituency of Westminster North—of all places—confirms that 43% of all children there are now living in poverty.
Those three pieces of news are all connected. They show us what happens when people’s housing, energy and travel costs, along with all their other costs, go up but their incomes do not. Pay has been squeezed for years at every level in this country, except the boardroom. Only last week we also heard that FTSE chief executives enjoyed a 21% increase in their incomes over the past year, at the same time as the average increase in all pay and bonuses was a mere 0.7%. I do not begrudge those of great skill and entrepreneurial talent a good reward for their labours—I really do not. However, I do not see how it is possible to justify a 21% increase at the top end of the earnings scale when in my borough we had to fight to get recognition for carers—people carrying out the most intimate and personal care and support—of elderly and disabled people. These carers were not even guaranteed the minimum wage for their labours because, unfortunately, their travel time between care appointments was not counted in their earnings and therefore they were not able to enjoy the basic statutory protection for low wages. That is truly shocking.
The big story of events in the past few years is the shift to working poverty, which is when a job simply does not pay enough to lift someone over the poverty line. Some 6.7 million people who are in poverty, or half of all those in poverty, live in a family where at least one person is working. Scandalously, that figure rose by half a million in the past year. The proportion of jobs that are low paid also rose and although it is popularly supposed that that burden falls on the young—and they have had a particularly hard time in recent years—60% of all low-paid people are over 30. This is not just a phenomenon affecting the young.
Richard Fuller
Many of the employees on those low incomes are obtaining tax credits, which increases the amount of money they have at their disposal, with the companies therefore benefiting from the subsidy those tax credits provide. What is Labour’s policy on tax credits?
Ms Buck
I will talk about tax credits in a moment, because they are extremely important, but, as we have heard from Labour Members, there is no excuse for tax credits being a substitute for employers paying a decent wage.
The number of people paid below the living wage rose in the past year from 4.6 million to 5 million, so we have seen that problem getting worse. I want to talk a little about London, because this vastly successful city, which includes a massive concentration of wealth and some of the best paid people in the country, has a scandalous problem with low pay, and it has been getting worse. Almost one in five jobs in London are low paid and the number of low-paid jobs—those below the London living wage—increased by 45,000 last year to 600,000. The number of low-paid people in London has increased from a total of 420,000 just before the global economic crisis. In 2013, almost one in five London jobs were low paid. That figure has risen from 12% in 2009, so we have a worsening problem of low pay in London.
That problem is not spread equally across people or across all sectors. We know there is a particular problem in the retail and wholesale sector and that one in five low-paid jobs are in the hospitality sector—in hotels and restaurants. Together those two sectors account for nearly half of all low-paid jobs in London—again, that proportion has risen since 2010. We know that low pay particularly affects those working part-time, particularly women. The number of women working part-time on low pay in London has increased by 67,000 since 2009-10. Women are particularly at risk of being trapped in low pay.
Worryingly, we know that there is a particular crisis of low pay affecting black and minority ethnic communities. The Bangladeshi and Pakistani communities are at particular risk of being low paid, and that is also true of black African workers in the capital. We also know that low pay has spread from inner London, which has historically had some of the worst concentrations of poverty, out into the suburbs. They have seen the fastest increase in low pay, with the proportion of low-paid jobs being highest in boroughs such as Harrow and Bexley. They were traditionally regarded as among the more affluent communities in London, so the whole pattern is changing and, unfortunately, in the past few years it has not been changing in a good way.
What does all this actually mean? It means three things, one of which is that people are worse off. We know that, on average, working people are worse off by £1,600 a year. Paul Gregg, of Bath university’s institute for policy research, said in a report that the wages of Britain’s working people are almost 20% lower than they would have been had trend wage continued at its level before the global economic crisis hit us.
Mr McKenzie
My hon. Friend makes a good point about the £1,600 that people find themselves down each year in real-terms pay. That £1,600 would be spent in the local economy, thus promoting more jobs and sustaining more business.
Ms Buck
My hon. Friend is absolutely right about that. We know that the £1,600 fall in income in cash terms and the fact that wages are 20% lower than they would have been if wage growth had been consistent with its level before the global economic crash—before 2008-09 and beyond–—means several things for the wider economy. Obviously, low-paid people invest their money in the local economy; they spend it, and that has a beneficial effect on the shops, services and communities where they live. It also means that some of those people who would have been paying tax are no longer doing so, which has a beneficial effect for low-paid people coming out of tax but means that total tax revenues are undershooting dramatically, as the Office for Budget Responsibility has confirmed. Indeed, the problem of low pay and tax revenues is a contributing factor to not being able to reduce the deficit, which of course the Conservative party told us would be completed by the next financial year. That has been a complete public policy failure, with a reduction of only a third compared with a target of almost total elimination.
Other issues arise from low pay. It damages work incentives, and we hear a great deal from the Conservative party about those. It is as if it were the party that discovered the idea of work incentives and making work pay. In fact, we all want to see work pay and for that to be an incentive for people going into work. Let us accept that that is universally shared. The trouble is that the worsening scandal of low pay, including in cities such as London, means that work simply does not necessarily guarantee a route out of poverty and it traps people on benefits. That is partly because wages have fallen, as we have heard, but also because they have fallen, particularly in places such as London, relative to soaring housing costs and rising rents. The rise in rents in London means that many households simply cannot work enough hours at the kind of pay that is being offered to get free of benefit tapers. That is particularly true for lone parents and couples with children.
Let me return to the question I was asked by the hon. Member for Bedford (Richard Fuller) about tax credits. It is very important to put on the record just how crucial they are, because whatever one does about the tax threshold and taking people out of tax completely, it simply will not be enough to make sure that people with children are earning enough to make ends meet. The tax credit policy is not a substitute for tax thresholds; it is an essential complement to them, particularly for parents.
Richard Fuller
The hon. Lady rightly says that tax credits are a necessary policy addition to tax thresholds We are clear what the Government’s policy is on tax credits, but can she tell us what Labour’s policy is on them for the next five years?
Ms Buck
We heard from the Chancellor at the Tory party conference about what he wanted to do in that area. We are yet to have any specific proposals brought to this House and we will consider them when they are put in front of us. When we were asked to vote in favour of a freeze on tax credits—[Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Members for Bedford (Richard Fuller) and for Streatham (Mr Umunna) should listen to the hon. Lady.
Ms Buck
When we were asked to consider what the Government’s freeze on tax credits was going to do in the earlier part of this year, we drew attention to exactly that fact and opposed the Government on that particular freeze for this year because we knew it would hit working people. We hear all the rhetoric from the Conservatives about work incentives, but we do not hear what impact that has on low-income working people.
Richard Fuller
I am trying to try to find some common ground. Does the hon. Lady agree that when we are talking about what to do with incomes for the low-paid, it is important that we do not try to sell them this idea that an increase in their wage will necessarily lead to an increase in their full income unless we are clear about what the policy will be on tax credits?
Ms Buck
I think I understand the point. We will consider, and make a decision on, those proposals that are put in front of us. They will not necessarily be the proposals that have been put in front of us by a Conservative party conference. It is extremely important to look at tax credits in the round as well as at other changes to the tax system to ensure that we are helping not just those on low incomes through tax thresholds but those who have children so that they have a chance of a decent standard of living too.
Another related point is that low pay has caught people in in-work benefits and added to the benefit bill. The low-wage economy has led to an enormous increase not only in the number of working people claiming in-work benefits such as housing benefit, but in the total expenditure. For example, we have seen a £4 billion increase in housing benefit— that is despite the fact that the Government have made cuts to the total level of housing benefit—as more people are forced into making claims to make ends meet. Indeed, the number of working households needing housing benefit has already increased by 22% and is expected to double over the coming years.
To ensure that we have a sustained recovery and that we tackle the cost of living crisis, help people on low pay and cut the benefits bill, we need to do something about low pay. That is why I so warmly welcome what my hon. Friends on the Front Bench have said about tackling the minimum wage, delivering the “make work pay” contracts, and helping and supporting employers to pay the London living wage, which was set at £8.80 in 2013-14. That will ensure that Londoners can enjoy the full fruits of economic growth as it now belatedly returns.
Where possible—we know that this will not apply to every single sector of the economy—employers should be able to pass on the benefits of the recovery to employees, and in so doing ensure that the additional costs of in-work benefits are offset, so that we can make a contribution to the Treasury. We know that the minimum wage is only one component in a package that will do something to end the cost of living crisis. I welcome the proposals that will ensure rent stability for London renters who have been dealing with this enormous burden of increased housing costs, and the measures to tackle energy costs that have so burdened low-income households over the past few years. The minimum wage may be only one component of the package, but it is a vital one. I very much welcome today’s motion and look forward to voting for it.
Heather Wheeler (South Derbyshire) (Con)
It was really interesting to hear the hon. Member for Westminster North (Ms Buck) deliver the last bit of her speech, as it was the most promising and uplifting part of the whole thing. The tone of this Opposition debate has been so downbeat. As usual, it is about doom and gloom. The only way out, say the Opposition, is through regulation and for a would-be Labour Government to layer more and more costs on business. Life is not like that. Labour has not learned its lesson. I find it utterly fascinating that, four years into this parliamentary term, we have this synthetic anger and calls for regulation and layering costs on business, not to do the things that our communities need. We need to lift horizons, especially with regard to education.
One of the things that I am most proud about is the fact that we now have a college in South Derbyshire. We have never ever had one before. It was normal for people to leave school at 14. The boys went down the pits and the girls went into the potteries; that is what they did. Well, it is not like that any more, and it must not be like that. If I can get a college in South Derbyshire, surely to goodness, Labour MPs can think about lifting the horizons for their communities. They should think about how people can get better jobs, because they now have better education. We have 1.3% unemployment in South Derbyshire. When the mines shut, we had 25% unemployment. That is a huge change around in the economy of my constituency.
Julie Hilling
I get extremely frustrated with this mantra that people should get better jobs. Actually, the precious jobs in our economy include caring, nursing, sweeping our streets and making sure our communities are safe. The people in those essential jobs are frequently on really low pay. We must drive up the amount of money that employers pay them. We should not just say, “Go and get a better job.” Those jobs are essential to our economy.
Heather Wheeler
I completely agree with the hon. Lady. All work should be worth doing and worth paying. There is no difference between us on that. How depressing would it be if ever, God forbid, Labour got into power? That is what its mantra is about. Ours is not about that; ours is about sunny uplands.
Ms Buck
Does the hon. Lady not accept the fact that the number and proportion of people in low pay has increased since her party has been in government? It is all very well telling people to lift their horizons, but in fact the crisis of low pay has intensified over the past four and a half years.
Heather Wheeler
I will have some difficulty in accepting that. The point is that 1 million fewer people are unemployed. There are more people in employment now than ever before. There are more women employed than ever before. I want people to understand that getting a job and looking after their family is their No.1 priority, and that is happening.
Obviously, I have looked at the statistics for South Derbyshire. Fewer than 7% of workers in South Derbyshire are on the minimum wage. That is because we have made a real effort to get manufacturing in South Derbyshire and to get a supply chain for the manufacturers. We have made a real effort to get apprenticeship training schools in South Derbyshire. We have worked like—let me find a nice phrase for this. We have worked very hard to ensure that people do not just say, “Do you know what, I do that because my dad and my grandfather used to do that.” It is about lifting horizons.
I totally agree that we need all our public services to ensure that we have clean streets, bins that are emptied and street lights that stay on. People should understand the value of working. I find it so depressing that all we ever get from Labour is this business of layering on regulation and doom and gloom. The right ideas that we heard at conference include raising the tax threshold to £12,500. The horizon of my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) is to raise it to more than £14,000. We are not talking about people being grateful that we are only going to tax them at 10%. We want everybody lifted up out of that level. It is outrageous that people should even contemplate that that might be in a Labour manifesto.
Mr Russell Brown
I know I am about to make a contribution after the hon. Lady, but let me make this point. There are people who are not working enough hours to come anywhere close to paying income tax. The people who really benefit from what the coalition Government are doing are she and I and everyone else on high salaries. We benefit from increasing the personal allowance. Some people do not even earn half of that personal allowance a month.
Heather Wheeler
I completely accept the hon. Gentleman’s point of view and it is completely fair to say that people who were unemployed are now working a few hours, but I remember the great outcry about changing working hours from 16 to 20. There was massive outcry and we were told that it would never happen, but I have not had a single constituent come to me to tell me that they are worse off because they are now working 20 hours or because they are working towards those 20 hours. I think that things have changed.
Alec Shelbrooke
In relation to the comment from the hon. Member for Dumfries and Galloway (Mr Brown), which I am sure we can all agree with, does my hon. Friend agree that the best way to try to get people working more hours is to cut the tax on business and get businesses to give the money to the people doing the work, rather than raising more taxes on business?
Heather Wheeler
My hon. Friend raises a superb point. Our aspiration to take corporation tax, which is already among the lowest in the G8 and the G20 at 23%, down to 20% is fantastic. The money should stay in the businesses, so that they can afford to pay their employees.
I have two superb employers, among many, in my constituency that make a point of ensuring that I am aware of what is going on. Nobody earns less than £7 an hour at Nestlé and there will be nearly 1,000 workers there. The second company, Faccenda, which is a turkey processing plant, has 400 employees. Nobody there earns less than £7 an hour and most earn far more than that. Companies realise that they do very well if they pay their employees well, but they can only do that if they do not have layers of regulation, layers of red tape and layers of “the Labour party knows best”. That is the old days. That is the ’70s.
Andy Sawford
It is sometimes said that my constituency neighbour, the hon. Member for Wellingborough (Mr Bone), is the meanest boss in Britain. As a former employee of the hon. Lady, who was a trustee of the charity that I ran, I can say that she certainly was not one of the meanest bosses in Britain. We would agree that it is important to pay people well and I know that that is something that she stands by, but I am not quite sure about her point about regulation. The proposals are to continue to seek to increase the minimum wage. Surely, she supports the minimum wage, so I cannot quite see why she thinks this will be a burdensome new regulation.
Heather Wheeler
The difficulty that the hon. Gentleman slightly skates around is the fact that this would be such a burden for companies that are not doing well. That is where we have the problem. We need our companies not to have regulation, to have aspiration and to have 20% corporation tax, so that they can pay their employees well.
Heather Wheeler
I want to turn the whole argument the other way around. I feel that companies need to understand that we expect them to look after their employees. We need only to think about what has happened with the taking on of pensions. It has been a huge success. Again, all the naysayers said that nobody would take it up and it would not work, but it has been one of the best successes because good employers have loyal employees who stay and work for them. That is what I want to see in the future for our country. Goodness forbid that Labour get in next May. I do not want that to happen because I feel that the economy is just turning around, as people are understanding that we are manufacturing so much more than we ever used to and that that is the way forward. It is about aspiration, education, apprenticeships, good living and good wages. I see all of that in South Derbyshire and I do not want it to be put under threat.
Mr Russell Brown (Dumfries and Galloway) (Lab)
It is a pleasure to follow the hon. Member for South Derbyshire (Heather Wheeler), who is, dare I say, one of the jovial characters in this place. She speaks much sense. She speaks about doom and gloom among Labour Members, and I try as best I can to be upbeat, but I am sure that she would recognise that the economic recovery that Government Members talk about is not being seen across the country. I have said it time and again, and I hate to say it, but I will not let people forget that 13 or 14 months ago the average wage in my constituency in rural south-west Scotland was 24% beneath the UK average. Thankfully, that has improved and it is now at about 17% or 18%, but people are struggling.
Across the country, working people have seen their wages fall by an average of £1,600 a year, because under what I—and my colleagues, I am sure—see as the Government’s failing plan, the recovery is benefiting a privileged few and most families are not seeing the green shoots of any kind of economic recovery. The real value of the national minimum wage has fallen and one in five employees are low paid. That impacts not only on low-paid workers but on their families, their communities and the local economy. It piles up across the country as more people in work have to rely, as has been said this afternoon, on the social security system to make ends meet.
My hon. Friend the Member for Westminster North (Ms Buck) mentioned the Campaign to End Child Poverty and the work done by the centre for research and social policy at Loughborough university. The figures out today for my area are soul destroying. The figure for the number of children living in poverty is now 23.2%. Those figures include more than 3,000 children affected by in-work poverty, whereas 1,200 are affected by out-of-work poverty. A massive shift is going on and we are seeing more and more families affected—families with children. We should all be saying that we are going to do something about that together to get children out of poverty. The situation is pretty desperate in some areas, and I recognise that my hon. Friend cited even higher figures from her London constituency.
The hon. Member for South Derbyshire mentioned colleges. I have to tell her that the college system and the further and higher education systems are different north of the border. I have a new college in my constituency that is only two or three years old, but the budget has been cut by the Scottish Government. Over the years, about 30% of the young students going into that college have had no formal qualifications whatsoever. The formal education system has failed them, but the college offers them a second chance that many of them have seized. However, the budget for our further education colleges is being cut—that is not the fault of Government Members, because it is a devolved issue—and so courses are being cut. That means that young people who need that second chance are being deprived of the opportunity.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
Does the hon. Gentleman accept that the number of apprenticeships in Scotland is at a record level and that targeting funding at policies that will get young people into work, rather than at an endless cycle of college courses that do not lead to work, is a better use of scarce public money at a time when the block grant has been cut and when public finances are under immense pressure?
Mr Brown
I recognise that finances are under pressure, but I would say the same to the hon. Lady as I said to the hon. Member for South Derbyshire. The situation is not the same across the entire country. Youth unemployment in my area sits at some 5.3% whereas the Scottish average is 4.8% and the UK average is 3.8%, as there are so few job opportunities. When young academically inclined people in my area manage to get off to college or university, 90% never come back because the quality jobs that the hon. Member for South Derbyshire has spoken about are simply not there. It is a rural economy—tourism is the other major employer—but the growing job market is in the care sector as people come to the area to retire. We have a vastly different economy to other places, although similar economies exist.
I want to move on to the issue of the national minimum wage. I said in an intervention on my hon. Friend the Member for Streatham (Mr Umunna), the shadow Secretary of State, that I served on the Committee for the National Minimum Wage Bill. As I said at the time, the only other person who served on the Committee who was in the Chamber at the time at which I made the intervention was Mr Speaker. There were some long nights. Indeed, I remember two particularly lengthy sittings: one that started at 4.30 on a Tuesday afternoon and ended at 1 o’clock the following afternoon, and another that started at 4.30 on a Thursday afternoon and finished at 6.30 the following morning. But it was really worth it. I remember campaigning in Lockerbie when the figure of £3.60 an hour was announced, and one guy I met on the doorstep asked, “Is this figure of £3.60 right?” I said yes and asked whether it would affect him. “Of course it will,” he said. He was working the best part of 50 hours a week in the forests—heavy, dirty and dangerous work—but taking home only about £112 a week.
Andy McDonald (Middlesbrough) (Lab)
I just want to congratulate my hon. Friend on the work he did to introduce the national minimum wage, because I remember that there were adverts in my local press for security guards, and they read, “£1 an hour. Bring your own dog.”
Mr Brown
I thank my hon. Friend. Yes, we have moved on, but the fear among Opposition Members is that we are starting to slip back. In those days it was women, in particular, who were having to hold down two or three jobs in order to make ends meet. I see the same thing returning but, more worryingly, it is not only women, but men who are having to hold down two or three jobs.
Mr Brown
Yes, this is about the whole employment method. We cannot deal with this just with a stand-alone national minimum wage. When we came to office we had the windfall levy on the privatised utilities, which allowed us to introduce the new deal programme for young unemployed people, the long-term unemployed, the disabled and lone parents, and then we introduced the tax credits system. It was about pulling together two or three strands to make things work, and that led to a step change in people’s standards of living.
Ian Swales (Redcar) (LD)
I certainly support the work that the hon. Gentleman’s Government did on the national minimum wage, but does he not regret the fact that when they left office people earning the minimum wage were paying £1,000 a year in tax? By April they will have seen that figure cut by £800 through the work of the Liberal Democrats. [Interruption.]
Mr Brown
I refer to the coalition Government in that regard—credit where credit is due—and I will come to that point later.
With regard to the reduced levels of unemployment, we need to look at the figures from the Office for National Statistics for the weekly average number of hours worked across the country and compare them with the number of people working over the past 12 to 18 months. Although more people are working, we have not seen an increase in the number of hours being worked on a pro-rata basis. What we are seeing—this relates to the point about zero-hours contracts—is that more people are in part-time work or working shorter hours. Some people are desperate to grab four or six hours in order to supplement a job they are doing elsewhere. The unemployment figures might be falling, but the overall number of hours being worked across the country is not increasing at the level we would have expected for the number of people now in employment.
People need job security, but we are seeing a scale of job insecurity in this country that we have not seen for many years, so I challenge Government Members to say that we have not gone backwards in some respects. I hate to say it, but there are some unscrupulous employers who are prepared to exploit zero-hours contracts and short-term working for people who are prepared to do a hard day’s work if given the chance. I also want to mention migrant workers, because I was talking about that with three or four guys I met five or six weeks ago. They were very angry, and not about the migrant workers they were working with, but about the fact that their employer was exploiting the situation in order to keep wages low, with local indigenous workers paying the price.
I want to mention the personal tax allowance again, because it is a big issue. I applaud the aim of taking people out of tax. I have challenged Treasury Ministers on this, as has my hon. Friend the Member for Edinburgh East (Sheila Gilmore), because many people are not working enough hours to come anywhere close to paying tax. The fact is that it is the rich, or those in well-paid jobs, who reap the benefits of the personal allowance changes. I also recognise that there is always a narrow band of people who benefit, and if we shift or change tax bands and tax rates, some people will be more heavily penalised than others.
Mr Donohoe
This is an increasingly important subject. We must also consider the fact that north of the border, as my hon. Friend will know, many local authorities are talking about not only a minimum wage, but a living wage, because of the problems associated with the minimum wage. Does he agree?
Mr Brown
Yes, I think that it is about a step change. We need to recognise that we should do whatever we can to increase the quality of life and lessen the impact of the cost of living on households. My local authority will be looking long and hard at that issue and imploring the businesses it offers contracts to—we know that we cannot demand it—to pay a living wage.
In 1997, we were told that we would lose millions of pounds as a result of a national minimum wage, but my party had clearly done our homework while in opposition, because the figures showed that when we give £1 million to the lowest-paid people in any community, they will go out and spend it, which creates 35 to 40 jobs in the community. That is what we saw. Some people in my area saw businesses shedding jobs, because the type of work they were doing was coming to the end of its life, and they could not understand why unemployment levels were still low. Unemployment was falling simply because we were putting money into the local economy.
I will return to a point that was made when we were discussing the benefits increase earlier this year. The figures clearly show that freezing benefits for the lowest-paid people over a three-year period took £6 billion out of the local economy. Giving some of the poorest paid extra money stimulates the local economy.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The hon. Gentleman is making a good speech. I agree with his point about the economic multiplier effect of a minimum wage, and indeed of increasing benefits. The economist Paul Krugman makes the economic argument that increasing benefits adds to the economy by creating demand among the people who are likely to spend.
Mr Brown
Absolutely. As my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said earlier, low-paid workers do not salt the money away but go out and spend it, and that is what we need. I honestly believe that that is where the coalition Government, to a certain extent, have failed. They have taken money away from some of the poorest communities and households, and there is no doubt that if we had left money in their hands, it would have been spent.
Mr Brown
Mr Deputy Speaker is looking at me and I want to draw to a conclusion.
I want to mention “make work pay” contracts. In November last year, the Leader of the Opposition announced
“that a future Labour government would encourage employers to pay the living wage through new ‘Make Work Pay’ contracts.
Firms which sign up to become Living Wage employers in the first year of the next Parliament will benefit from a 12-month tax rebate of up to £1,000—and an average of £445—for every low paid worker who gets a pay rise.
This measure will be entirely funded from the increased tax and National Insurance revenue received by the Treasury when employees receive higher wages. Additional savings in lower tax credits and benefit payments, as well as increased tax revenues in future years, will cut social security bills and help pay down the deficit”—
as we all want to do. That, without a shadow of a doubt, is a commitment that an incoming Government would make the desperate moves that have to be made to reduce the deficit.
Mr Brown
I am going to finish now.
I am proud that when I came into this House I was one of a team of people who took forward the National Minimum Wage Bill. I have always said that even if I do nothing else in life, I can say that I played that part in what that Labour Government did. With no doubt whatsoever, I will be supporting our motion. I would like to think that one or two Government Members who have spoken will support us too.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Let me just say that if Members stick to 10 minutes each, I will get all five speakers in, because I want to bring in the Front Benchers at 20 minutes to 4.
Mrs Anne Main (St Albans) (Con)
I am truly grateful, Mr Deputy Speaker, that you took the point of order from my hon. Friend the Member for Harlow (Robert Halfon), because the fact that he has been maligned by the shadow Secretary of State for Education so publicly on the media means that he will probably now be touring the media studios having to explain that he did not make the comments attributed to him. I seriously hope that the Member who made those allegations comes here as quickly as possible to explain in the public domain, not just by sending a text, that my hon. Friend did not make those comments, from which I am sure that many of us would dissociate ourselves.
I am glad that I heard all the previous speeches, but particularly that I heard about the flexibility that the hon. Member for Streatham (Mr Umunna) is building into his plans. One of the things I have learned about being bendy in life is that it allows one to do U-turns. We now know that Labour does not have a firm promise, as was said at the party conference, to deliver a “greater than £8 an hour” minimum wage, and there is flexibility about that. That means, of course, that in reality, with a poor and failing economy like the one we inherited from it, Labour will deliver less than the £8.06 an hour that is projected by us. This debate has revealed the fact that the shadow Secretary of State is distancing himself from that commitment. Today Labour has illustrated the fact that it is prepared to be flexible about having £8 an hour while we desire to have a greater amount of £8.06 an hour.
I am sorry that my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) is not still here; he has probably had to pop out for something very important. As I said in an intervention, I completely agree with what he said about his ten-minute rule Bill on the payment of interns. We are talking about the minimum wage in this very privileged place. Many of us are glad to be here, but many of us have had to take second jobs, or whatever, to make sure that we could afford to be here, while some people here are very wealthy and can afford to be here. It is appalling that once we have got here we seem to forget that a lot of young people would like to work for us, but then they read on the “Working for an MP” website that interns are paid only expenses. That means that they are not being paid the minimum wage. I can see the hon. Member for Leeds West (Rachel Reeves) looking at me at this point.
I believe that we should set an example in this place. The hon. Member for Streatham, who has now left, said that I was talking about work experience of a few weeks for sixth-formers, but no, I am not. All of us may have people with us doing work experience. I encourage that from those of any political persuasion in my constituency, and I do have young people coming in for a few days or a week. However, that is not what I am talking about. I am talking about the fact that MPs, with the expense accounts accorded to us to make sure that we can pay our staff proper rates in accordance with the Independent Parliamentary Standards Authority guidance, will still consider having people doing long hours in important jobs for expenses only, which often fall far below the level of the minimum wage.
The hon. Member for Leeds West might want to intervene on me, but I believe that she has had a series of interns who have not been paid the minimum wage. There is a website in operation that says whether an MP will pay for an internship. I do not believe that anyone should work for free or for very little, and that applies in this place and outside this place. If we cannot uphold the principle here, it is very hard to make the argument to employers outside.
I look forward to a revisiting, I hope, of what interns can expect should they come to work for Members in this House. Otherwise we will perpetuate the fact that this is a place of privilege and so people need to be able to have the bank of mum and dad to pay their bills in order to come here and work for a pittance for an MP. That is wrong, and it should go now. We should guarantee at least the minimum wage to anyone who comes to work in this place. The hon. Member for Birmingham, Erdington (Jack Dromey) said that he had joined a strike of members of staff here so that they could have the living wage. Good on him, but let us remember the interns who come through this place, often on short-term six-month contracts, who cannot strike and cannot have the same rights accorded to them. We as Members should think about those people, many of whom are young and aspirational.
Andy Sawford
Last year I had a person, Vincent Torr, working with me on the Speaker’s scheme, which was properly funded. That was a fantastic scheme for which we should pay tribute to Mr Speaker and my right hon. Friend the Member for Salford and Eccles (Hazel Blears), who supported it. Does the hon. Lady agree that that shows us the way?
Andy McDonald
Is the hon. Lady not aware of the Conservative party auctioning internships to serve with J. P. Morgan? How does that sort of attitude, whereby people are purchasing places with companies like that, fit in?
Mrs Main
I think I have made myself very clear. I have never had an intern work for me whom I have not paid, and I will not do so. Sometimes I am constrained as to the numbers of staff I can have, and I budget accordingly. Unless the hon. Gentleman condemns any Labour Member who does not do the same, I am not interested in auctioning internships. I believe I have made it very clear that young people should be paid if they work for Members of the House of Commons.
I should like to turn to zero-hours contracts. Other Members have said that zero-hours contracts should be abolished because they are awful and appalling, and are sometimes not proper jobs. There are examples of all those things, but, as I said in an intervention, let us be aware that zero-hours contracts do not always provide a dreadful solution. They sometimes provide a very necessary solution for bank nurses, supply teachers, and other people filling gaps where suddenly there arises a vacancy. I speak as someone who has been in that situation myself. When my husband died and I was a single parent, I was glad to work as a supply teacher so that I could work around the needs of my young children—for example, sometimes they were ill and could not go to school. Opposition Members condemn all zero-hours contracts, but if we were to get rid of them, our health and education services, to name but two, would probably grind to a halt within a few days or weeks. It is very necessary to have contracts that give flexibility in the delivery of these services.
The most crucial thing that will come out of this Opposition day debate is the fact that Labour has declared that it does not have a promise or a guarantee of a greater than £8 an hour minimum wage but a flexible target of £8 an hour that can be abandoned at any moment. I hope that the electorate out there will take note of that when its leaflets come through their doors.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I very much welcome today’s debate on the minimum wage, because it affects millions of people across the UK, including thousands in my own rural constituency, and I think that it, more than any other policy, has the potential to tackle poverty.
In-work poverty is perhaps the most stark symptom of the deep income inequality that is increasingly the hallmark of British society, but people in low-paid jobs have been badly let down by successive Governments, who have failed to ensure that the minimum wage keeps pace with the cost of living. We need to recognise that that failure has had a huge impact on people in low-wage jobs and ask ourselves how we can change the minimum wage into a living wage.
If the minimum wage had kept pace with inflation, those in low-paid jobs would be more than £600 a year better off now: they would be earning £7.48 an hour. That is still short of the living wage, which is currently calculated at £7.65 an hour, but it is a lot closer and makes the gap between a minimum wage and a living wage a lot more bridgeable.
I intend to support the Labour motion because any commitment to increase the minimum wage is a step in the right direction, but it is important to put the proposal in perspective and acknowledge that it will not be a living wage. If we use existing forecasts of inflation, we will see that the living wage is projected to rise to £8.57 an hour by 2020, so what is being proposed today falls well short of a wage that someone can actually live on. I would also urge a note of caution: we have no means at all of knowing whether those forecasts are right. They might be higher or lower—the Office for Budget Responsibility does not have much of a track record in accurate forecasting to date—so we have absolutely no way of knowing what a phased increase of the minimum wage to £8 an hour by 2020 will mean in real terms.
Ian Swales
Does the hon. Lady recognise that the living wage is based on a net figure, because it is a net figure that people actually spend, and will she join the Living Wage Foundation in welcoming what this Government have done with regard to the tax threshold, which has helped to narrow the gap between the minimum wage and the living wage?
Dr Whiteford
The hon. Gentleman makes an important point, but in fact the Government have not gone nearly far enough, because inequality in this country is growing, not reducing. There have been vast increases in income at the top end of the income spectrum, while increasing pressure is being put on people at the lower and middle parts of the spectrum. The gap between the richest and poorest in our society is widening and that is not in any way sustainable.
It is important to understand that if the minimum wage were linked to inflation, it would have a much better chance of keeping pace with the actual cost of living. That would help avoid the current situation, whereby the minimum wage is well below the cost of living and forces people to be dependent on in-work benefits. It would also help address Labour’s prescriptive proposal, which limits us to the increases on the table without knowing what the economy is going to do between now and 2020. Anyone with a crystal ball would be well advised to be cautious in their predictions.
Yesterday and earlier today the House discussed the promise of extensive new powers for the Scottish Parliament, which are now being considered by the Smith commission. The minimum wage is a prime example of a policy that I would like to see devolved, and I am pleased that the Scottish National party’s submission to the Smith commission has set out the benefits of that, particularly the ability to link the minimum wage to inflation, which would immediately improve the position of low-paid workers and, over time, reduce reliance on in-work benefits.
The Scottish Government’s expert group on welfare reform has also considered the issue and recommended that the minimum wage should begin to rise, in phased stages, to the level of the living wage. Like others who have spoken, however, I do not think it is possible to divorce the issue of the minimum wage from the wider tax and benefits system.
Given that a very high proportion of people in low-paid work are in receipt of in-work benefits, we need to look at the design of the welfare system. One of the greatest failures of the UK’s welfare model has been the disincentives it has created for part-time workers in particular to increase their working hours, because of clear financial disadvantages and risks associated with doing so. For instance, for a couple with children and one parent in work, increasing working hours from 50% to full-time work results in 82% of the extra earned income being lost through tax and loss of benefits, which radically undermines the perception of work as a route out of poverty. A redesigned model would have the potential to address those high withdrawal rates and tackle the existing disincentives so that lower-income households could keep a greater proportion of the increases in earned income.
I echo the point made by the hon. Member for Dumfries and Galloway (Mr Brown). The people who are getting the biggest and fullest benefit from changes to the tax system and the lowest rate of tax are those on the highest incomes. The changes are benefiting those at the top end of the income spectrum and having a fairly marginal impact on those at the lower end, because what they gain in tax they lose in benefit. The net impact in many cases has been to reduce their income, particularly in relation to average income in the country as a whole.
A redesigned model would be especially important for families and those with dependent children. In a week when we have seen very sharp increases in child poverty—this has been referred to by the hon. Member for Dumfries and Galloway—it is really important to make the point that most of the children in poverty in Scotland are children in working families. They are the children of working parents, and the changes to the tax and benefits system have pushed them into an even harder position than they were in previously. They have been hitting the headlines for all the wrong reasons. I want to challenge the view that having one in five children living in poverty is inevitable, because that is simply not acceptable. We could change that if we put our minds to it. We need to get our priorities straight.
When the minimum wage was introduced in the 1990s, I remember fears of Armageddon being expressed from some quarters and apocalyptic warnings that jobs would be lost and that the economy would go to hell in a handcart. Of course, that is not what happened, because when people had a bit more money in their pockets they spent it. The higher costs to businesses, which we all take seriously, were more than outweighed in economic terms by the benefits to businesses, including job creation, and in social terms by the huge benefits and improvements to the standard of living for people in low-income households.
There are also potential fiscal benefits from an improved minimum wage in savings to the benefits bill, and potential for increased tax receipts. We need to recognise that and not pretend that it is simply a cost. It is actually a way of getting people into work and improving the standard of living for many people throughout our society—not just the people in those jobs, but those who depend on them, such as their children and other dependants.
Mr MacNeil
My hon. Friend is making a fine speech. What she is saying could be summed up by the economists Krugman and Stieglitz, who say that one person’s spending is another person’s earning. When we put money in people’s pockets, it has a very good economic effect all around.
Dr Whiteford
My hon. Friend makes a valuable point.
I want to touch on another issue that has been mentioned by others, namely the disproportionate number of disabled workers and minority ethnic workers in minimum wage jobs. We have already heard about Lord Freud’s disgraceful comments and I hope the Government will step back from what was an outrageous thing to say about people who are already disadvantaged in the labour market.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. For the sake of accuracy, the hon. Member for St Albans (Mrs Main) made that point earlier and it has been dealt with. The hon. Member for Harlow (Robert Halfon) certainly did not say that.
Dr Whiteford
Thank you for that clarification, Mr Deputy Speaker. The first I heard of those outrageous slurs on the hon. Member for Harlow was today, but I hope that the record has been put straight and that he will continue to put it straight. I would feel much happier, however, if Government Members would dissociate themselves more firmly from what Lord Freud has said.
Richard Fuller
On a point of order, Mr Deputy Speaker. This is my first point of order so please give me some forbearance. At what point is it orderly to refer to comments that have not been made in this House and at what point is it not orderly to do so? Comments have been made about one Minister in one location, and other comments have been made about a Member of Parliament in another location. Which is orderly and which is disorderly to refer to here?
Mr Deputy Speaker
First, we are not going to worry about the Chair’s decision. My decision—I will be quite clear—is that a peer from another place has been mentioned, but I do not want to get into a debate about something that has been over the airwaves relating to two Members. That issue has been clarified in this Chamber and by another Member. I do not want the debate to centre on that. This is a debate, as we know, about the minimum wage and support for people.
Dr Whiteford
I want to dwell on equality, because we must remember that the vast majority of people in minimum wage jobs are women. Issues of ethnicity and disability often compound those of gender inequality. Minimum wage jobs are overwhelmingly done by women who are in part-time positions because of their caring responsibilities. Such women are often in sectors with far too much gender occupational segregation, such as cleaning, catering and cashiering. They often have temporary and insecure jobs, and they often work antisocial hours. Other Members have mentioned the problems of exploitative zero-hours contracts.
We cannot separate from this debate the huge impact of gender inequality on wages in this country or dissociate it from child poverty and its long-term impact on our society, which was discussed earlier. We know that children who grow up in deprivation are likely to need the heath service more, to have lower educational attainment and to have much worse job prospects in the long term. Unless we are prepared to recognise that people deserve a living wage to support their families, we cannot begin to tackle the inequality that so dogs our society.
I want to touch on the difficulties of enforcing the minimum wage, which other Members have mentioned. This year, the Low Pay Commission has taken evidence in my constituency, where a significant number of people are in low-paid jobs. Although unemployment is very low in Banff and Buchan—about 1%—a very high proportion of people earn less than the living wage. The vast majority of employers respect employment law and pay at least the minimum wage, but people have nevertheless brought me reports of being paid less than the minimum wage. That issue is extremely difficult to address.
I have been made aware of cases of people involved in the so-called informal economy, as well as in the service sector. They may not have a contract and may not have received pay slips. They know that they are being short-changed and that, in relation to national insurance, they could be losing out on their pensions in the longer term. They are also short-changing Her Majesty’s Revenue and Customs and the rest of us. However, they are reluctant to put their heads above the parapet because they need their job and do not want to jeopardise what little income they have. In a close-knit rural community, they also do not want to be labelled a troublemaker.
Beefing up local authorities’ powers might help, but that is not a real solution. In theory, employees who are being paid less than the minimum wage can pursue legal action against their employer or take them to a tribunal with every likelihood of success, but the reality is that somebody paid less than £6.50 an hour is very unlikely to have the financial means to access the tribunal service or take on the associated legal costs. That is wholly unrealistic, and I hope that the Minister will address that issue and suggest ways round it when she responds, particularly given the changes that the Government have introduced.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I just want to say that any constituent of the hon. Lady, or indeed of any other Member, who finds themselves in such a situation should ring the pay and work rights helpline on 0800 917 2368. They do not need to access the tribunal system; HMRC enforces the national minimum wage on behalf of workers.
Dr Whiteford
I am grateful to the Minister—it is very helpful to have that phone number on the record—but my experience, having helped constituents in such a way, is that nothing changes. The Government need to do more on this to make people feel confident about asserting their rights.
I want to wind up quickly by saying that we have reached a situation in the UK where people in low-paid work—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. May I just help the hon. Lady? I have been very patient. She has now spoken for 14 minutes. To be serious, I do not think that that is doing justice to other Members. I am very patient, but she needs to get to the end.
Dr Whiteford
I was just bringing my remarks to a close, Mr Deputy Speaker, but it is important to say that the minimum wage has the potential to lift people out of poverty. I hope that this Government and whoever the next Government are will take such an opportunity.
Richard Fuller (Bedford) (Con)
The motion recognises that there is a series of extremely important issues, but it fails on at least three fronts: in my view, it is too timid in its prescription; it lacks honesty in addressing the issue of how to meet competing ambitions; and, above all, the public have no confidence whatever in the ability of the shadow Treasury team and the leader of the party who tabled it to manage the country’s economy.
These issues are important because people want a pay rise. They want a pay rise because for many years now they have suffered from the consequences of the previous Labour Government’s debt-fuelled policies, which came crashing down in the economic collapse of 2007. That was seven long years ago, and we are still suffering the consequences of their failures. People understand that it takes time for the economy to be repaired. They are pleased to see that the Government have a long-term economic plan and are making progress in addressing the fundamental weaknesses of the economy. They understand that a stronger economy means stronger businesses, that stronger businesses mean more jobs and that an increase in employment will result in higher wages. However, they are impatient to feel that in their own pockets.
There is a lack of ambition in the proposals before us. There are several reasons why the motion and policy prescriptions from both sides of the House are too limited to meet the challenges that the economy faces. The first reason is that we are living through an era of massive corporate welfare. Vast sums of taxpayers’ money are funnelled into our private sector—or so-called private sector—companies year in, year out. One of the most substantial amounts of corporate welfare each year is paid out in the form of tax credits. I am not at all saying that we should scrap tax credits, but I think we need to be clear about how much taxpayers’ money can be paid to corporations to subsidise wages or provide other subsidies for what are otherwise private sector, free market activities.
The second reason is the conundrum that those of us in free economies do not value valuable work. We have heard comments from Members on both sides of the House about this, but if we asked the public to rate how important they think certain jobs are and what should be paid for such jobs, we would end up with substantially different outcomes from those that now exist. For a start, every Member of the House would be paid a whole lot less and bankers would not gain the millions of pounds that they achieve, but our nurses would earn more and, most importantly, our care workers would earn substantially more. In free economies, there is a conundrum: how do we get to a point somewhere between what the market delivers and the remuneration that people expect to be given for the work put in? There is no question but that the moves under the previous Labour Government in both introducing the national minimum wage and providing working tax credits—I might have concerns about the latter going too far—were steps in the right direction of trying to find solutions to that problem, which still persists.
The third major reason why today’s prescriptions are too timid is that there is a substantial underlying issue of demand in western economies. If we look at the risks faced by this country—it is a tremendous accomplishment that the UK economy is growing so strongly, despite the international headwinds—we still have to conclude that one of the most substantial risks is the insufficient demand in the real economy. There is quite a lot of demand in the financial products area, but there is not enough demand in the real economy. Providing a boost to real wages would address the issue of the absence of demand perhaps even more effectively than quantitative easing has managed to do over the past five years.
As I have said, the motion fails because it lacks honesty in tackling the existence of competing ambitions. Let me give an example in relation to the first issue. One sector with low pay is care, but a route out of that is to have transparency in commissioning. This week, I was very pleased to meet Citizens UK, which has been at the forefront of efforts on the living wage. It will have a manifesto for each of us as Members of Parliament or candidates at the next election to consider. It has looked at commissioning, and wants transparency in commissioning to show that care workers’ pay can be at or above the minimum wage or at or above the living wage. It says that that can be accomplished by providing a floor on commission pricing. If we are to be honest, we have to address the consequence of that. In an era of limited public expenditure, when it is necessary to bring the deficit down, what will we do when the average cost of care goes up? Will we expand the amount of care that is provided and expand the budget for it or will we reduce the amount of care to keep the expenditure the same? The Government and the Opposition need to be honest about what their proposals are on that.
The second issue, which I ask Opposition Members to address, is that in a number of the scenarios for increasing pay from the minimum wage to the living wage, the increase is offset nearly 100% by reductions in benefits. What are the proposals of the Opposition and the Government on that? They say to the public, “We will increase your pay and that will be a good thing,” but when tax and national insurance are taken away and the working tax credits, child tax credits, housing benefit and council tax benefit are added, are people actually going to be better off? If it is not possible for parties to demonstrate that there will be an increase in pay at that point, we are in danger of misleading people by saying that we are doing something that will make them better off in their pockets. That is compounded when Opposition Members say that they can achieve an increase in wages at the same time as reducing the deficit. The same pound cannot be spent in two different places. In her closing remarks, perhaps the shadow Secretary of State for Work and Pensions might provide some light—it might be too early to be too explicit—on how she sees that conflict playing out.
The third issue is directed more at my own party. I believe strongly that we need a strategy for wages. However, I understand that that will have consequences for employment. The Government have done a remarkable job of increasing employment during the country’s worst recession since the war. We now need to look at how we will balance that policy over the next few years with increasing wages.
May I make three suggestions? First, we should continue the work that the Department for Business, Innovation and Skills is doing to look at the national minimum wage. Secondly, we should consider whether there should be a cross-party agreement to peg the minimum wage to a percentage of average wages. That could become a norm within the Low Pay Commission’s role and responsibilities. Thirdly, we should promote the living wage through greater transparency requirements in all local government contracts, so that local authorities cannot parade the fact that they are doing the right thing by paying their own employees the living wage unless it is transparent that people in the private sector companies and charities that are commissioned to provide their services are being paid the living wage as well.
Andy Sawford (Corby) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Bedford (Richard Fuller). He made some important points. I will return to some of them, such as the one about procurement and the supply chain.
My constituency has been fighting for better wages for more than a century. I dare say that the struggle goes back even further. In 1905, Raunds boot and shoe workers marched to London. [Interruption.] The hon. Gentleman is smiling because he knows Raunds well. The workers might even have gone through his constituency. They marched to London to demand a fair rate of pay from the War Office, because they were making boots for the British Army. They rallied in Parliament square and then came into the Strangers Gallery of the House of Commons, where they caused a disturbance, such was the strength of feeling that they needed to be heard. They then marched up to the War Office, where they had a meeting. The War Office agreed to pay a fair rate. It accepted the principle that people should be treated with dignity and respect, and should be paid a wage that is commensurate with the work that they do and that enables them to exist and to have decent lives.
People in my constituency have campaigned long and hard for better wages. People in the steel industry, which used to be a major employer alongside the boot and shoe industry, campaigned for better wages and good jobs. They were incredibly let down in 1980 when the Government closed the steelworks, leaving many people out of work. That has shaped the story of my constituency, which is one of hard-working people, of a great spirit of enterprise and of some very good employment opportunities and good employers. However, there is a darker side to our local labour market.
Today, many people in my constituency have very insecure employment. Many people work through employment agencies, have zero-hours contracts and are paid at the minimum wage. Indeed, some people, as the Minister is well aware, have been paid below the minimum wage. I will come on to that later. The combination of low pay, contracts that lock in insecurity and the role of agencies in our local labour market means that, although people who work for the better employers, such as Tata Steel and RS Components, have good lives, many people struggle to lead the lives that they should be able to lead, given the work that they do, day in, day out, when they have the opportunity to work.
There has been a conversion on zero-hours contracts from the Government. They now seem to accept that they are a problem. For a time, they denied that they caused a difficulty in our local labour market. I campaigned on the issue, as did many others, and persuaded the Office for National Statistics to revise the way in which it surveys employers to identify whether people are being employed on zero-hours contracts. Its revised figures show that almost 1 million people are employed on zero-hours contracts.
The Conservative party has made the argument that some people want to be on zero-hours contracts. In the end, this issue is about economics and power. There are different kinds of casual employment where there are no fixed hours. For a long time, my local authority swimming pool has offered seasonal work. It often suits students to be employed during the summer months on a fair rate of pay and not to have a long-term contract or fixed hours. It is common to combine working in the Co-operative funeral business with being a retained firefighter. There is a long-standing tradition of that. Again, it might suit such individuals not to have fixed hours and not to be on a permanent contract. There are also examples among higher paid jobs. There are hospital consultants and lawyers who do not have fixed hours or permanent contracts, and that might suit them. That is their choice.
However, when I talk about zero-hours exploitation, I am talking about people who would much rather have a proper contract of employment; know where, from week to week, their money will come from; know what hours they are able to work so that they can plan; and, frankly, be in a stronger position with their employer to demand fairness and respect in return for the work that they do. That exploitation is not just characterised by the narrow issue of exclusivity that the Government have belatedly said they will tackle. We have not seen the legislation on that and I hope that the Minister will tell us how urgently the Government will act. Such exploitation is also about employees being required to be available for work when there is no guarantee of work, and being employed on such contracts on a long-term basis.
Others might say that people can move about in the labour market and look for better opportunities. However, if my constituents cannot get a loan to buy a car to get further afield in the area of the country that has the lowest public subsidy for public transport, how can they break out of the trap? I come across young people who cannot get into the housing market. They cannot get a rental contract, let alone a mortgage. People therefore cannot lead the life that they want, such as starting a family, because they are trapped on zero-hours contracts.
This is therefore a much bigger issue than the Government acknowledge. They have been dragged into beginning to accept that there is a problem, but they have only a very partial, narrow understanding of it. I hope that they will legislate soon. If they do not, I will support the steps that my hon. Friend the Member for Streatham (Mr Umunna) said the next Labour Government will take to address the scandal of zero-hours contracts. There is also the problem of employment agencies. My constituency has the highest concentration of employment agencies anywhere in the country. There is a legacy back to the 1980s and the make-up pay that was offered to the then steelworkers, and to the types of industries that located in Corby. To some extent, those were labour-intensive industries where the work could not be shipped abroad. That is why we have a strength in the food sector, with perishables. The work is still labour intensive and it needs to be done in the UK.
Agencies are keeping people in insecure employment on a long-term basis. Some are better than others, and some have signed our local agency code of conduct. The hon. Member for South Derbyshire (Heather Wheeler) entreated us to be positive about what we can do, and we have sought to take a local initiative and to work with the local authority and some of the best employers and agencies. We have got them to sign up to a code so that if, for example, a permanent job opportunity becomes available, they will offer that job to an agency worker who has proven themselves over time. They will, of course, always follow the law and make known to employees the law on, for example, not charging for personal protective equipment, and they will not tell people that they have to attend unpaid training as a pre-condition for work; that is illegal, but it often happens in the labour market.
I am grateful for the support that the Minister has given locally to that initiative. She met me and other local representatives, including the council leader, and helped to initiate a series of inspections by HMRC in our local area. We found that more than £100,000 was owing to local workers in fines, and as I understand, those fines have been agreed with some employers. In February the Prime Minister promised me that he would name and shame those employers, despite some Treasury objections. I hope that the Minister will name and shame them today, or if not, that she will tell me when they will be named and shamed. We have heard repeated assurances and local people want to hear those companies named and shamed.
Jo Swinson
On that specific point, the new naming and shaming policy, which is much more comprehensive, came into being for investigations that began from 1 October 2013 onwards. It may be that the investigations the hon. Gentleman mentions were under the previous scheme, which was obviously not adequate and that is why we have changed it. That may explain the challenge.
Andy Sawford
That is the kind of bureaucracy that does not work for working people, and which the hon. Member for South Derbyshire deplored. The Prime Minister gave me a personal commitment at the Dispatch Box that those companies would be named and shamed. He is Prime Minister of the United Kingdom and I do not believe that he does not have the power to do that. It would set a real example.
I support the motion. I am looking forward to hearing my hon. Friend the Member for Bolton West (Julie Hilling) so I will draw my remarks to a close by saying that there are good ideas across the Chamber and good will on this issue. It is absolutely clear, however, that we need a Labour Government again to continue the work of the Raunds strikers in 1905, and of those Labour Members who pushed the minimum wage through in 1997.
Julie Hilling (Bolton West) (Lab)
There have been more measured speakers since the Minister spoke, but listening to him was rather like listening to the Comedy Store at times, given the amazing claims he made. It would be funny if it was not so tragic for the many millions of people who are suffering under the policies of this Government. According to the Minister, everything in the garden is rosy. Well, tell that to the million people who have accessed a food bank this year—to my constituent, Neil, an ex-serviceman paid at the national minimum wage who could not afford to buy nappies and needed to rely on a food bank; or to the one in four apprentices who do not even get paid the paltry £2.73 an hour apprenticeship rate, a rate that has increased by only 23p since 2010.
The national minimum wage was a great achievement by the previous Labour Government, and I pay tribute not only to my hon. Friends who are still in this place, but to a great Wigan MP, Ian McCartney, who steered the minimum wage through Parliament in the teeth of opposition from the Conservative party. I wish I could believe the Minister when he says that the Tory party has had a damascene conversion, but the hon. Member for South Northamptonshire (Andrea Leadsom) told us previously that businesses with three or fewer employees should be exempt from the minimum wage, as well as from maternity and paternity rights. The hon. Member for Esher and Walton (Mr Raab) called for the minimum wage to be suspended for 16 to 21-year-olds, and the hon. Member for Shipley (Philip Davies) said that disabled people should be allowed to work for less than the minimum wage. One could argue that those were just renegade Back Benchers, but this afternoon we heard about the disgraceful comments of Lord Freud, the Minister who said that some people “aren’t worth” the full national minimum wage, and that if people want to work for £2 an hour, they should be allowed to.
Another six MPs—including the new UKIP MP—signed a Bill in 2010 calling for employees to be able to opt out of the minimum wage. While I mention UKIP, a week or so ago I had the misfortune of turning on the TV and I found myself listening to a delegate from its conference calling for the abolition of the national minimum wage and the living wage, to resounding cheers from the audience. The hon. Member for Clacton (Douglas Carswell) has already made his views clear, as has UKIP’s business spokesman who said that the national minimum wage was in a long list of workers’ rights that make it impossible to employ people.
Alec Shelbrooke
Will the hon. Lady let the House know whether she deplores the use of unpaid interns for more than four weeks of free work?
Julie Hilling
I am not going to spend a great deal of time talking about interns. Of course we should be able to pay interns, and we have a real difficulty with people who are on workfare and who are working in different ways. We must work towards ensuring that we can pay interns in some way. I have volunteers—I do not call them interns—and I have no money in my budget to pay them. I will not be purer than pure when talking about this issue.
Even businesses are now calling for a rise in the minimum wage, and a raft of business leaders, including the chief executives of Kingfisher and Nomura, have signed a letter calling for the minimum wage to rise faster. It was signed by Sir George Bain, the former chair of the Low Pay Commission, and Alan Buckle, former deputy chair of KPMG, as well as leaders from household names such as the Findus Group, Stobart Group, Balfour Beatty, and Hewlett-Packard.
I recently held an event for faith leaders in Bolton West. They believe that people at the bottom are not paid enough and that we need to work towards a living wage, not just raise the minimum wage. They also reported a large increase in people turning to churches for help with food, clothing and other support. Not only are people £1,600 a year worse off on average, but the loss of the real value of the minimum wage since 2010 has cost an additional £270 million in extra public spending on in-work benefits and tax credits in the last year alone.
Every time an employer does not pay his or her employee enough to live on, it costs every taxpayer money. I appreciate that some small businesses struggle to pay the minimum wage, but many employers are raking in large profits and not paying their workers the living wage they could afford. That is why we need a Labour Government committed to driving up wages, and who will reward employers who pay a living wage through a reduction in tax. Unlike the Government, we have costed that pledge and know how we will pay for it.
We also need strong action to enforce the minimum wage. The Government have announced their name and shame policy four times, but have named only 25 firms. Last year, the Centre for London found that only two employers in four years had been prosecuted for paying below the national minimum wage, despite more than 300,000 people earning less than that.
On the abuse of the national minimum wage, we are told many stories of employers who will employ migrant labour and make vast deductions for accommodation, food and other things. On paper, they are paying the minimum wage, but in reality they pay far less. That not only exploits those workers, but leads to great damage to community cohesion.
As ever, I want to mention my favourite subject: the abuse of care workers who are paid only for the amount of time they are with a client—they are paid a token amount for travel that does not cover their time, and are usually on zero-hours contracts. That needs to be tackled as a matter of urgency. They do an amazing, precious job. Every day, people such as me entrust the care of our loved ones to those exploited workers. That exploitation leads to instability in the work force. I have previously told the House about the 20 different carers my mum had in less than a month because of workers leaving. That leads to mistakes and a great deal of distress for the cared-for person. Imagine if a person had to tell four different people a day how to care for them.
Many of my constituents from all over Bolton West have come to me with the problems of poverty because of low pay, zero-hours contracts, part-time and insecure work, and agency work. I hope the House supports the motion and that the Government will do better than mere rhetoric.
Rachel Reeves (Leeds West) (Lab)
This has been a valuable and instructive debate. At a time when too many people in the country feel left behind by our economy and left out of our politics, it is important that the House of Commons devotes its attention to the issues faced by millions of people in our country who work just as hard as everyone else, doing jobs that are vital to our economy and country—as Members, including my hon. Friend the Member for Bolton West (Julie Hilling) have pointed out—but who are not getting a fair share of the prosperity that they help to create.
Millions of people put in the shifts and clock up the hours, sometimes in two jobs or more, often when the rest of us are still asleep in the morning or when we have already gone to bed at night, yet when they get their payslip at the end of the month, their pay is not enough to cover the bills or the rent, or to buy simple things that anyone should be able to afford for themselves and their family. Those people think that something has gone seriously wrong with our economy and our country, and they are right. That is why we need a plan to put it right. That is what the debate is about.
I am proud that the Labour party has called the debate. Our party is founded on our belief in the dignity of work, born of the earliest struggles of working people against extreme exploitation, as my hon. Friend the Member for Corby (Andy Sawford) has said. We are proud of the part that we have always played in improving working conditions and winning for working people a fairer reward for their effort and contribution.
A minimum wage was the aim of our movement for more than a century. I pay tribute to my predecessor as Member of Parliament for Leeds West, who, in 1988, laid before the House a Bill calling for a statutory minimum wage. John Battle noted that, at that time, a primary cause of poverty was
“the persistence, even in what is heralded by the Government as a booming economy, of low pay.”
He told the House of jobs advertised in Bramley in my constituency, including a catering assistant post at £2.10 an hour, five cleaning jobs with hourly rates starting at £1.70 an hour, and a security guard job at £1.50 an hour working for 60 hours a week. He said:
“To generate a low-wage economy for a large minority in our society alongside the current economic boom for the rest of us is grossly unjust. It is pricing people into work at the expense of their families.”
He concluded:
“Without a commitment to a national minimum wage, we perpetuate the conditions that manufacture poverty in our society alongside the wealth of others… The way to prevent poverty is to pay decent wages and not force families into the benefit system.”—[Official Report, 18 May 1988; Vol. 133, c. 951-2.]
Needless to say, the Tory Government of the time did not support my predecessor’s Bill; but 10 years later, the Labour Government and the Department of Trade and Industry, in which he served alongside the former Member for Makerfield, Sir Ian McCartney, to whom others have rightly paid tribute in the debate, established the Low Pay Commission and legislated for a national minimum wage, one of the greatest achievements of Labour’s period in office, and now widely accepted as an essential institution of our economic life. It has made a huge difference to millions of working people—two thirds of them are women—with no negative impact on employment, despite the dark warnings we heard at the time from members of the Conservative party.
Even today, some Conservative Members want to turn the clock back and, rather than strengthen the minimum wage, undermine it. We learned today that that reaches into the heart of the Government, with a serving Minister in the Department for Work and Pensions questioning whether some disabled people are worth paying the minimum wage. He even suggested that it should be possible to pay them £2 an hour. Like the rest of us, disabled people deserve a floor below which their wages cannot fall. They should not be paid £2 an hour. They should be paid the minimum wage, and the minimum wage should increase. Disabled people who heard what the Minister said will be horrified. Labour Members, too, are shocked and disappointed. He should not be serving in the Government, and least of all in a Department that is responsible for work and policies for disabled people. Apparently, he has apologised this afternoon, but he says one thing to the Tory party conference and Tory party members, and another thing in public. That is not acceptable and he should not be in his job.
We have heard excellent speeches in the debate from hon. Members on both sides of the House about the cost of living crisis faced by people at the hardest end of the labour market and about the damage that that does to our economy and our society. We heard from my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) about his work campaigning with cleaners in our Houses of Parliament to get the living wage paid to them.
We heard from my hon. Friend the Member for Westminster North (Ms Buck) about people in work in poverty, and particular problems both in London—not just in inner-city London, but growing into the suburbs—and faced by black and minority ethnic communities, especially the Bangladeshi community, as well as the growing problem of low pay and the pressure that puts on in-work benefits.
We heard from my hon. Friend the Member for Dumfries and Galloway (Mr Brown) about the economic recovery not being felt by everybody across the country, and he is right. I pay tribute to him for his work on the Bill Committee that considered the national minimum wage. He spoke about the Bill Committee sitting from 4.30 pm on a Tuesday until 1 pm the next day, and then on the Thursday from 4.30 until 6.30 the next day; but, as he said, it was really worth it, because the minimum wage was set then at £3.60 an hour and has been rising until today, and will rise again, I hope, under a Labour Government in the future. He spoke about a man in Lockerbie working 50 hours a week but taking home just £112 a week—just over £2 an hour. That is the difference a Labour Government made for such men and women across our country.
My hon. Friend the Member for Middlesbrough (Andy McDonald) spoke about a security guard in his constituency working before the introduction of the minimum wage who, as well as not being paid a wage that he could afford to live on, was told that he had to bring his own dog to work.
The hon. Member for Banff and Buchan (Dr Whiteford) spoke about businesses’ worries about the costs of the minimum wage, but pointed out the huge benefits to the economy and to society, as well as the fiscal benefits of a minimum wage.
I also pay tribute to the hon. Member for Bedford (Richard Fuller) who spoke powerfully about the importance of the minimum wage and the importance of it rising. I hope that he will support the motion, because, as he argued and as we put in our motion, the national minimum wage should be pegged to average earnings, so that it increases and regains its value. He also spoke about the importance of the living wage in local government contracts, and I pay tribute to the local authorities—the Labour local authorities—that are now living wage employers, and not just for their directly employed staff, but also for their contracted-out staff. [Interruption.] If the Minister would like to mention the Tory councils that pay a living wage and also pay all their contracted staff a living wage, I look forward to hearing from him.
My hon. Friend the Member for Bolton West (Julie Hilling) also paid tribute to Sir Ian McCartney, as well as talking about the importance of enforcing the minimum wage, particularly for migrant workers and carers, who are so often exploited.
The lesson we should draw from that success of the national minimum wage is not to rest satisfied, but to raise our ambitions higher, because today we face new challenges that require a new plan. This Government have presided over an historic squeeze on wages that has been a key cause of the cost of living crisis our country faces today. Workers are on average £1,600 a year worse off than when the Prime Minister took office in 2010.
Today’s labour market figures confirmed that wages are still losing ground compared with prices, with wages rising by just 0.7% and inflation running at 1.2%. One in five British workers are low paid according to standard international definitions. That is one of the highest proportions in the developed world, placing us 25th in an OECD league table of 30. That is not good enough, and that is why this motion today is so important.
Today, half of people in poverty, and two thirds of children in poverty, live in working households. We need to do more to make work pay by increasing the value of the minimum wage, to ensure we all benefit as the economy grows. It is a damning indictment of an economy that is not working for working people where the link between hard work and reward urgently needs to be repaired.
Change cannot come soon enough for all the people my hon. Friends mentioned in this debate, and it cannot come soon enough either for my constituent, Alice. She works three shifts a day as a cleaner to support her family, but ended up trying to survive on rolled over payday loans and had to come to me to ask for food vouchers because she had to wait months for the tax credits she was entitled to. Our welfare state was built to protect working people who fell on hard times, not to provide a permanent subsidy to profitable companies paying poverty wages. That is why the minimum wage—and increasing it—is so important.
As shadow Secretary of State for Work and Pensions, I know that this simply is not sustainable, with the loss in the real value of the minimum wage since 2010, taxpayers are now paying out an extra £170 million a year in tax credits, an extra £60 million a year in housing benefit and another £40 million a year in other means-tested benefits because of the fall in the real value of the minimum wage since 2010.
Unless the value of the minimum wage increases, there will be further pressure on our social security system. We need to tackle the root causes of the rising social security bill by building homes, ending exploitative zero-hours contracts and increasing the value of the minimum wage.
That is why Labour has set a goal to halve the number of people on low pay by 2025. We have the plans to deliver it. A key plank of that plan is our target to raise the value of the minimum wage over five years to 58% of median earnings from the current 54%, which would bring it to £8 before the end of the next Parliament. We will also get more workers paid a living wage by sharing the savings that the taxpayer makes from reduced social security expenditure. Every pound employers pay in increasing the value of the wages paid to the lowest-paid saves the Treasury 32p in higher tax revenues and national insurance contributions and 17p in lower social security payments. We would allow employers to claim back as a tax rebate 32p in extra tax revenue for the first year only to help their businesses shift to models to make investments in their staff. These measures form part of a comprehensive plan to build a stronger economy that works for all working people: strengthening vocational education, taking tough action on youth and long-term unemployment with our compulsory jobs guarantee and ending the exploitative use of zero-hours contracts.
The House has a clear proposal before it this afternoon: a plan to raise the national minimum wage and to get it properly enforced; a plan to get more people paid the living wage; a plan to halve the number of those on low pay; and a plan to ensure that work pays, so that everyone in our country, not just a privileged few, benefits from the economic prosperity that we all help to create. That is the choice before us this afternoon—a choice that I hope Members on both sides of the House will support. If they do not, that will be the choice that the country faces at the general election next year.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
We have had a good debate. There has been a lot more agreement than the political to and fro or the very politicised wording of the motion might suggest. The hon. Member for Dumfries and Galloway (Mr Brown) gave us a welcome reminder of the history of the national minimum wage and his experience on the Bill Committee, which had two overnighters to make the legislation happen. When he was doing that in 1997, I was working in McDonald’s on £2.70 an hour. I was fortunate, however: one of my friends was working in a local greengrocer on £1.90 an hour. The National Minimum Wage Act 1998 was a landmark piece of legislation. I congratulate the hon. Gentleman on his role, and I congratulate the previous Government on introducing it.
Incidentally, it has been suggested in some quarters that the Liberal Democrats did not support the Bill. I would like to correct the record. Hansard shows clearly that Liberal Democrat MPs voted in favour, with not a single one voting against. Indeed, the Secretary of State for Business, Innovation and Skills, who became our spokesperson on the issue shortly afterwards, has made it clear that he supported it throughout.
This month, the national minimum wage for adults rose to £6.50 an hour—a 3% rise and an above-inflation rise. To people working full-time on the national minimum wage, that means an extra £355 each year. That is a significant increase and one that is very welcome. There is, rightly and understandably, enthusiasm for more from both sides of the House, which is why my right hon. Friend the Business Secretary has asked the Low Pay Commission for forward guidance to consider how we can further increase the national minimum wage. In response, the LPC has said clearly that we are coming into a period when there will be faster real increases in the national minimum wage.
The hon. Member for Bolton West (Julie Hilling) and others referred to the apprentice rate of the national minimum wage, which is only £2.73 an hour. In the evidence to the LPC that we publish today, we have made clear our intention to increase apprentice pay rates by £1 an hour to align them with the 16 to 17-year-old rate. We are putting that suggestion to the LPC and look forward to its response.
Various Members have put forward views and made understandable points about the living wage. Indeed, my hon. Friend the Member for South Derbyshire (Heather Wheeler) made a very good case, pointing out that companies do well if they pay their employees well. That is an important point to remember.
My hon. Friend the Member for Redcar (Ian Swales) reminded us that much depends on take-home pay and that therefore the interrelationship between the minimum wage and the tax threshold is also important. As he pointed out, at the beginning of this Parliament, people on the minimum wage were paying £1,000 a year in income tax, and we have reduced that by £800. They say that imitation is the sincerest form of flattery, so I am delighted that my Conservative colleagues now agree with Nick that we should raise the tax threshold further.
Andy Sawford
If imitation is the sincerest form of flattery, will the Minister imitate me in saying that Lord Freud should be sacked for his disgusting comments?
Jo Swinson
I will come to those remarks in a minute. I understand the very real concern that has been expressed.
The hon. Member for Birmingham, Erdington (Jack Dromey) talked about the money the Government spend to support people on the national minimum wage and suggested that a higher minimum wage could reduce that expenditure. The Institute for Fiscal Studies has analysed that suggestion and is not sure that that would be the result. Nevertheless, he made a powerful and passionate contribution, particularly given his experience over many years dealing with these issues. His point at the end was perhaps the most important: this is about the moral cause of ensuring people are properly rewarded for their work.
Members on both sides of the House have been understandably shocked by Lord Freud’s remarks, which, I stress, absolutely do not reflect the Government’s position and are clearly offensive and unacceptable. I am glad he has issued a full apology. Of course, my hon. Friend the Member for Harlow (Robert Halfon) rightly expressed his dismay that the shadow Education Secretary mistakenly accused him on television of supporting a lower minimum wage for disabled people. I hope that my hon. Friend’s intervention will have helped to correct the record, not just here, but more widely.
The hon. Members for Westminster North (Ms Buck) and for Bolton West and my hon. Friend the Member for Bedford (Richard Fuller) raised the issue of travel time in the social care sector, and it is important—[Interruption.]
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. There are too many private conversations going on in the Chamber, and it is disrupting my ability to hear clearly what the Minister is saying. If Members are in the Chamber, they are here to listen to the Minister. If they want to have a private conversation, they could step outside to continue it.
Jo Swinson
Thank you, Madam Deputy Speaker.
Travel times are a genuine issue. If somebody is expected to travel—during the day as part of their work, rather than to and from work—that time should be included for minimum wage calculation purposes. I shall repeat the number for the pay and work rights helpline, which investigates these complaints: 0800 917 2368.
HMRC did a major piece of work on the social care sector and found that of the 224 employers investigated between 2011 and 2013, 104 were not paying the minimum wage properly, and identified £1.2 million of arrears for more than 6,300 workers. So there is a way that people can get what they are due, but we need to look at the wider issues as well, which is why the Department of Health recently consulted on statutory guidance for local authorities to make that crystal clear. The final guidance is expected soon. It is vital that we have proper enforcement, which is why we have increased the enforcement budget by 15% to £9.2 million. The extra money will help to employ extra compliance officers to ensure that complaints can be properly investigated and proactive work undertaken to investigate non-compliance. Indeed, just last year, 22,600 workers were paid back arrears of £4.6 million as a result of HMRC’s work.
The hon. Members for St Albans (Mrs Main) and for Elmet and Rothwell (Alec Shelbrooke) mentioned interns. On this point, we already have clear rules: if somebody is expected to turn up and undertake specific tasks, they should be getting the national minimum wage, whether they are in the House of Commons or anywhere else. It is right that somebody highlighted the excellent Speaker’s parliamentary placement scheme, set up by the right hon. Member for Salford and Eccles (Hazel Blears), along with my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw). I was involved in making that happen before I became a Minister. It is a good scheme and one that I hope will continue to be successful.
Zero-hours contracts will be discussed in more detail in the Small Business, Enterprise and Employment Bill, but the Government are taking action, through a code of practice, to ban exclusivity and improve standards for people working on such contracts.
In conclusion, the Government support the national minimum wage setting minimum standards in the labour market and encourage employers to pay more. We do not agree with the Opposition’s flawed prescription on the best way to achieve this, and we do not support the motion, but we will continue to support the national minimum wage and protect the most vulnerable people, making sure that we have more jobs in the economy and lower taxes, so that people can keep the benefit of their hard work.
Question put.
NHS Services (Access)
(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 222 / Noes: 300 - Question accordingly negatived.
Andy Burnham (Leigh) (Lab)
I beg to move,
That this House notes comments from leading experts that the NHS and social care services are at breaking point; believes that this is linked to the Government’s decision to reorganise the NHS; further notes that one senior Cabinet minister has said that reorganising the NHS was the Government’s biggest mistake; further believes that the NHS reorganisation has wasted money which could have been spent on frontline care; further believes that access to NHS services is now deteriorating and that staff numbers are not keeping pace with demand; notes the report by the Nuffield Trust, entitled Cause for Concern: Quality Watch annual statement 2014, published in October 2014, which found that it is now becoming harder to access care in many settings, with some people facing extreme waits; calls on the Government to act swiftly to reverse the deterioration in accident and emergency, cancer and referral to treatment waiting times; further calls on the Government to publish its independent evidence on the costs of reorganising the NHS; and further calls on the Government to match the Labour Party’s plans to raise an extra £2.5 billion to invest in building the NHS workforce of the future.
Back in 1997, people were waiting months and years, and even dying, on NHS waiting lists. The last Labour Government brought that scandal to an end. Following the Wanless report we increased investment in the NHS, although that was opposed at the time by the Tories. Slowly, over the course of the past decade, the NHS rose up the international league table to the point where, in June 2010, it was judged by the Commonwealth Fund to be one of the best—if not the best—health services in the world. Of course it was not perfect, and there were terrible failings at Mid-Staffs, but the legacy inherited by this Government included the lowest ever waiting lists and the highest ever public satisfaction. That was Labour’s record: a massive turnaround in the fortunes of the NHS from the crumbling service that we inherited.
So where, after four and a half years of the coalition Government, does the NHS stand in 2014? It is at “breaking point”—[Interruption.] Hon. Members laugh, but those are not my words but those of the seven medical royal colleges and trusted organisations, including the Royal National Institute of Blind People, the Multiple Sclerosis Society, Anthony Nolan and the Alzheimer’s Society, which wrote an open letter last week to all the political parties. They said that
“staff feel undervalued and demoralised…things cannot go on like this.”
David Morris (Morecambe and Lunesdale) (Con)
Will the right hon. Gentleman give way?
Andy Burnham
I want to make some progress.
The letter identifies six areas of major concern, and I shall focus on three of them today. The first is GP services. The letter states:
“A shortage of GPs means that patients are struggling to get an appointment to see their doctor.”
Paul Turner-Mitchell got in touch with me today to say that getting a GP appointment is now like trying to get sought-after concert tickets with the phone stuck on redial. I am sure that a lot of people watching this debate today will know exactly what he means. It is becoming the norm for people to ring the surgery early in the morning only to be told that there is nothing available for days. This year, 13 million people have either waited a week or more for a GP appointment or could not get one at all. That figure has gone up by 2.5 million since 2011.
Why is this happening? It is happening because the GP budget has been repeatedly cut under this Government, because Labour’s 48-hour appointment guarantee has been axed and because the Government—in the words of their own GP taskforce—have presided over a “GP workforce crisis”. The number of GPs per 100,000 population increased from 54 in 1995 to 62 in 2009. However, the figure has now gone back down to 59.5.
At Prime Minister’s questions today, the Prime Minister tried to claim that there were 1,000 more GPs in the NHS than under the last Government. This is simply not true. I wonder what we can do about it, Madam Deputy Speaker. We have a Prime Minister who regularly abuses statistics at that Dispatch Box, and even when he has been found out, as he has on many occasions—
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. I am going to request that the right hon. Gentleman rephrases the point he just made about the use of the statistics, as he made an accusation against the Prime Minister and I do not think it is acceptable for him to say that. Will he rephrase it, please?
Andy Burnham
I will rephrase it, Madam Deputy Speaker, but we have had rulings from the Office for National Statistics in respect of these things. I shall say that the Prime Minister has misused statistics at that Dispatch Box and there is plentiful evidence that that is the case. Statistics have been misused, and I wish to give this example from today. Figures from the 2009-10 census—this was the final year of the previous Government —show that there were 32,426 GPs then. The most recent figures report 32,201 GPs, which is 226 fewer. So let us get some facts on the record.
The second area highlighted by the letter is accident and emergency, the classic barometer of the whole health and care system. The letter states:
“Major accident and emergency departments in England have failed to meet their waiting times targets for an entire year.”
An entire year! What have Ministers been doing? In fact, it is longer than a year, as the target has been missed for 63 weeks running. We must remember that we are talking about this Government’s own, lowered A and E target. Before the Secretary of State says that that is not the figure for the whole NHS because it excludes minor injury units and walk-in centres, I can tell the House that the NHS as a whole has missed the A and E waiting time target for five out of the past six weeks. Almost 95,000 people waited longer than four hours in A and E in September 2014, which compares with 70,000 in September 2013. So there has been a dramatic deterioration. A and E performance over the past six weeks has been worse than it was last winter. Loud alarm bells should be ringing in the Department about this coming winter, but instead of having a plan it seems that Ministers have given up on ever meeting their own target again. The annual winter A and E crisis is now a permanent spring, summer and autumn crisis, too.
Helen Jones (Warrington North) (Lab)
My right hon. Friend is rightly outlining this Government’s failures on health. Is he aware that towns such as Warrington face a triple whammy, whereby the number of full-time equivalent GPs is down, ambulance response times are up and yet while this Government last year gave £10 million to Cheshire West and Chester to deal with winter pressures, they gave absolutely nothing to the hospital in my constituency? Does he think that decision was politically rather than health based?
Andy Burnham
Many questions are raised by that decision. Areas of the country where services were being run well would say that they did not get money and instead the money was given to areas where things were not working properly. The situation my hon. Friend describes is what is happening across the NHS in England. The Government have cut the GP budget, the mental health budget and the social care budget, and all that has led to increased pressure on hospitals. There are too many people in hospitals right now in England. The wards are full and people cannot be sent back home because the social care is not there. So the wards do not become free, and A and E cannot admit people to the wards because no beds are available. A and E therefore becomes blocked. Ambulances cannot hand patients over to A and E so they end up queuing outside, meaning that ambulance response times get worse. That is the knock-on effect of the Government’s policies across the NHS, and the deteriorations she is seeing for her constituents are mirrored right across the country.
Helen Goodman (Bishop Auckland) (Lab)
My right hon. Friend describes it brilliantly. Does he agree that he is describing a system that shows exactly why privatisation and competition is completely inappropriate in the NHS?
Andy Burnham
All the evidence from around the world tells us that more market-based health systems cost more than systems such as the NHS, and are more complex and fragmented. The clear conclusion I draw is that the market is not the answer to 21st-century health and care. The Government believe it is, which is why they must be defeated if we are to protect our national health service.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
I hear what the right hon. Gentleman is saying. If he is concerned about other providers in the health service, will he explain why the previous Labour Government were happy to pay private sector providers 11% more than NHS providers for providing NHS services?
Andy Burnham (Leigh) (Lab)
We brought in other providers in a supporting role to add capacity to bring down NHS waiting lists to the lowest ever level. That is what the previous Government did. By contrast, this Government are doing something different. It is mandating tendering on GP commissioners, requiring people to compete, wasting money on running tenders and privatising the national health service, which is why they must be stopped.
Andrew George (St Ives) (LD)
It is fair to say that the previous Labour Government did introduce the private sector to many areas of the NHS. They also introduced a requirement for the tendering of many NHS services. If we follow the logic of Lord Warner, who is setting out the general direction of Labour party policy, we will find that that is clearly where the heart of Labour party policy has been and probably will go.
Andy Burnham
May I remind the hon. Gentleman, for whom I have a lot of respect, that I, as Health Secretary in 2009, introduced to the national health service a policy of NHS preferred provider? That is because I am not neutral about the NHS. I believe in the public NHS and what it represents, which is people before profits. Any policy that I develop will always be based on that principle. I was attacked at the time by the Conservative party for introducing such a policy, but I make no apology for it. We used the private sector in a supporting role, but the Government want to use it in a replacement role, and there is a very big difference between the two things. If they were continuing what we had done, why did they need a 300-page Bill to rewrite the whole legal basis of the national health service?
Steve Rotheram (Liverpool, Walton) (Lab)
Is my right hon. Friend aware that even the Chancellor agrees that the disastrous top-down reorganisation of the NHS was a huge strategic error? Does he agree that those on the Government Benches, including the hon. Member for St Ives (Andrew George), should apologise—I include in that the newly elected hon. Member for Clacton (Douglas Carswell) who has somehow found his way on to the front Bench on the Opposition side, but hopefully not for long—and support the private Member’s Bill of my hon. Friend the Member for Eltham (Clive Efford) when it comes before the House on 21 November?
Andy Burnham
I am interested to see this new friendship that my hon. Friend has struck up with the hon. Member for Clacton (Douglas Carswell) on the Front Bench. My hon. Friend is absolutely right. The promise was that there would be no top-down reorganisation. We told the Government that it would be a major mistake to break that promise. They broke that promise and now they are admitting it in private to newspapers. I will come to that point a bit later.
Barbara Keeley (Worsley and Eccles South) (Lab)
It is worth saying to my right hon. Friend and to the hon. Member for St Ives (Andrew George) that all of us on the Health Committee were very concerned yesterday when we spoke to people in Staffordshire and Stoke, because they were talking about what seemed to be the privatisation of cancer and end-of-life care services. That seems to be going on much to the consternation of clinicians and radiologists who were not consulted; much to the consternation of NHS staff and of an awful lot of patients and people who live in that area. It is very concerning indeed that we find ourselves in that situation. That could be one of the biggest mistakes that is made in the NHS.
Andy Burnham
I am glad that my hon. Friend raised that point, as again it highlights the major difference between us and the Government. They were saying that we brought in private providers. Yes, that is true, but that was to bring down waiting lists for planned operations, such as hip and knee operations. As she has just rightly said, the Government are putting out to tender cancer services. That is a very different thing. The Government are presiding over a major increase in private ambulances providing blue light 999 services. That is a massively different policy from the one they inherited, which is why the points they have made simply do not hold water.
David T. C. Davies (Monmouth) (Con)
The right hon. Gentleman is making some emotional points here. Does he support the policies of his colleagues in Wales, and does he endorse the way in which they have dealt with the NHS in Wales?
Andy Burnham
I do get emotional about the NHS, because I believe in it, unlike the hon. Gentleman. That is fine, I do not mind—it does animate me. Let us have a look at Wales and, as I am about to come on to cancer care. In England, only 84% of patients receive treatment within 62 days. That is not good enough, and Wales has better figures on cancer care. The analysis of the four home nations’ health care systems found that there is good and bad in all of them and this Tory attack on the national health service in Wales has to stop.
I will move on to cancer and I will go back to the letter that I was quoting. It said:
“Thousands of patients are facing longer and even unacceptable waits to find out whether or not they have cancer, because services are under extreme pressure and referral targets are being missed.”
In 2014, 10,000 people in England had to wait longer than the recommended 62 days to start their cancer treatment. The number of patients waiting longer than six weeks for diagnostic tests has doubled in the past year—doubled, for cancer tests. That is simply not acceptable. We need to hear today what the Secretary of State is going to do about it and may I suggest that the very first thing he should do is stop the cuts to cancer care? A parliamentary question shows that expenditure on cancer services has fallen by £800 million in real terms since 2009-10; the information comes from his Department and I will send it to him. That is why the NHS has missed the cancer treatment target for two quarters running, the first time that it has ever done that.
The evidence is indisputable. The NHS has gone downhill on this Government’s watch and the question follows of what they are doing to bring GP, A and E and cancer services back up to national standards. That is what our motion and, more importantly, patients demand to know from the Secretary of State today, but they will also want to know why the NHS has gone from being a successful service four years ago to being at breaking point today. The front page of The Times on Monday offered us an answer. It quoted a senior Cabinet Minister who said:
“We’ve made three mistakes that I regret, the first being restructuring the NHS. The rest are minor.”
The Secretary of State is conveniently looking down and avoiding my eye at this point, but I am sure he has found out who that was. I am sure he knows. I know that he is avoiding looking at me, but is he prepared to tell us who it was or is he going to carry on with his head buried and avoiding—[Interruption.] He is blushing. I see that he has the good grace to do that, at least. It is an embarrassing comment, it really is, from a senior Cabinet Minister, but what use is it to people now, when people such as the hon. Member for St Ives (Andrew George) and I were pleading with the Government to stop the process, to admit that it was all a mistake? It is an embarrassing situation for the Secretary of State to deal with, but at least we have from the very top of this arrogant Government the first admission that their reorganisation was a major mistake.
The article goes on to quote an ally of the Chancellor, who says:
“George kicks himself for not having spotted it and stopped it.”
Not having spotted it? This was famously the reorganisation so big we could see it from space. Not spotted it? What planet was the Chancellor living on? The truth is that the Government could have and should have stopped the reorganisation for the simple reason that they were elected on a promise of no top-down reorganisation and did not have the permission of a single person in this land to carry it out. That is why Thursday 7 May 2015 will be their day of reckoning on the national health service.
If this private apology now is designed to bring people back on board, it will not work. Doctors and nurses lined up to plead with the Government to call the reorganisation off, but they ploughed on. In the words of Mark Porter, chairman of the British Medical Association:
“The damage done to the NHS has been profound and intense”.
Let me focus on just one example of that damage, staffing costs, as the Secretary of State was talking about them this week. The staff census shows very clearly that in the early years of this Parliament, when spending on back-office restructuring was at its peak, front-line nursing posts were cut by about 7,000. At the same time, the reorganisation threw nurse training into chaos. Training places were cut and have never recovered, down from 21,000 a year to 18,000 today.
The NHS has been recruiting more staff in the wake of the Francis report, but this is where the damage done by the reorganisation is hitting NHS trusts. They are being forced to recruit overseas or to turn to agency staff because there are simply not enough nurses coming through the training system.
I have been contacted by a whistleblower from a trust in Liverpool who says that it is now common for staff to receive text messages from agencies such as Pulse offering huge fees—up to £1,000—to work weekends in London or the north-east, with all travel and accommodation costs paid. That is now the norm, and it is happening on this Secretary of State’s watch. Some nurses are literally taking off one uniform on a Friday night and putting on another for the weekend. That is why the agency bill is out of control, and it is happening on his watch.
In 2013-14 the NHS spent £2.6 billion on agency staff. For foundation trusts that is a staggering 162% over what was planned. That helps to explain why trust deficits are mounting. Does not this mismanagement of the staffing budget explain why the Government are now reneging on their promise to pay nurses a meagre 1% pay rise? Is not that the real reason? I wonder how the Secretary of State thinks those nurses will feel when they read this week that senior mangers’ pay has increased by 13.8% on this Government’s watch, while their pay has gone up by only 5%. I am told that he has refused to meet the unions even to discuss it. It is not good enough. He should get to the negotiating table tomorrow and start treating the staff of our national health service with the respect they deserve.
Andy Burnham
I will not.
The Secretary of State now claims that his reorganisation is saving £1 billion a year, but the truth is that that is a fantasy figure. The reorganisation, which cost £3 billion and counting, turned the 163 NHS organisations into 440 separate administrations with their own running costs. It introduced a new competition regime that is eating up tens of millions of pounds of NHS money. Perhaps that is why Kieran Walshe, professor of health policy at Manchester business school, said:
“I haven’t found anybody who thinks that this reorganisation has made the NHS more efficient and more productive… and I don’t think you find many people who think that the new system costs any less to run.”
The Secretary of State needs to clear this up today. Either he publishes the independent analysis that he claims supports his figure of £1 billion, or he stops making a claim that is simply not credible.
James Morris (Halesowen and Rowley Regis) (Con)
I thought that this debate was about access to services. One thing that the right hon. Gentleman has not mentioned is mental health services. One of this Government’s achievements is that 100,000 more people are getting access to psychological therapies than under the previous Government, and last week the Government announced for the first time access standards and waiting time targets for mental health services, which were never in place in the 13 years of the Labour Government.
Andy Burnham
I am afraid that the hon. Gentleman is wrong, because I mentioned the cuts to mental health services earlier in answer to my hon. Friend the Member for Warrington North (Helen Jones). The talking therapies he mentioned were introduced by the previous Government —indeed by me—and in some places they are not being cut, which I am pleased about, but in others they are. The letter I referred to from the royal colleges and other organisations talked about a crisis in mental health. They say that people are being ferried hundreds of miles to find emergency beds. That is the reality on this Government’s watch. I think that a little less complacency and a little more focus on these problems would not go amiss.
Mr Kevan Jones (North Durham) (Lab)
My right hon. Friend should be congratulated, along with my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), who brought in the IAPT—improving access to psychological therapies—programme. It was a revolutionary system for dealing with access to mental health services. Is not it the case that this Government, even though they obviously think that there are votes in championing mental health, are cutting not only the number of in-patient beds, but the mental health budget across the country?
Andy Burnham
My hon. Friend is right. We heard the commitment that the Deputy Prime Minister gave last week, and I am sure that he means it, but people will ask why they have not done anything about it in this Parliament. It is lip service. We introduced talking therapies and many other things. The key point is that they cut it faster than they cut the rest of the NHS. Worse still, they introduced a tariff decision this year that will cut it even further and make the problems even worse. It was Labour that proposed parity of esteem between mental and physical health in law. The Government accepted it, but they have done absolutely nothing about it.
Lilian Greenwood (Nottingham South) (Lab)
One of the groups most affected by cuts to mental health services is children. On this Government’s watch we have seen increasing numbers of children with mental health difficulties treated on adult psychiatric wards. Is that not completely unacceptable?
Andy Burnham
My hon. Friend puts it very well. If mental health is the poor relation of the NHS, then child and adolescent mental health services are the poor relation of the poor relation. How can that be the case when we are talking about children who need the best possible support—the most vulnerable children—being denied the services that they need? My hon. Friend the Member for Leicester West (Liz Kendall) discussed at a shadow health team meeting a constituency case where a family were trying to find a bed for a child who was in a crisis and not one bed was available for that child in the whole country—not one bed. She is nodding. That is the reality. I wish that Government Members would focus on that rather than making complacent statements.
No amount of spin from the Government can disguise the fact that the NHS is heading for the rocks and urgently needs turning around, so the question is how we get it back on track. I have two positive proposals to put before the House on policy direction and on funding. Let me take each in turn. Instead of just admitting privately that the reorganisation was a mistake, the Government should be actively working with us to begin to put it right—and they will soon have a chance to do so. In five weeks, my hon. Friend the Member for Eltham (Clive Efford) will bring a Bill before this House to repeal the worst aspects of the Health and Social Care Act 2012. When the Government’s reorganisation was going through, their mantra was “Doctors will decide.” The Prime Minister repeated this in his “Today” programme interview during the Conservative party conference when he said:
“there’s nothing we’ve done which makes it more likely there’ll be private provision in the NHS”.
Andy Burnham
The Secretary of State says that it is true, but that is not how people see it in the real world. Doctor after doctor tells me that their legal advice under section 75 of the Act mandates them to run open tenders for services. Today we see the evidence of how the NHS is changing under that regime. The BBC reports that more than half of contracts awarded by clinical commissioning groups are going outside the NHS. Why is this a problem? Because it is wasting NHS resources on tenders and leading to fragmentation of care when the future demands integration. We need Government Members to tell us today whether they will vote with us on 21 November to repeal mandatory tendering and thus be true to what they originally said they wanted to do, which was to let doctors decide how services are provided.
Nigel Adams (Selby and Ainsty) (Con)
I want to take the shadow Health Secretary back to his words earlier when he seemed to be concerned that private operators are in danger of putting profits before patients. Why, when he was Health Secretary, did he personally sign off on a private-only shortlist for the Hinchingbrooke hospital franchise?
Andy Burnham
That is inaccurate, because it was not a private-only shortlist—there was an NHS bidder in the frame at the time. The hon. Gentleman needs to keep his facts straight. As I said earlier, I introduced the NHS preferred provider principle, and that is my policy. [Interruption.] If he wants to dispute that, then the facts will speak for themselves. The shortlist had public and private on it.
Nicola Blackwood
The shadow Secretary of State is being very generous, and I hope that he will respond to me in a non-partisan way. I speak as the daughter of two NHS workers and as somebody who has recently had a very close family member survive an emergency operation for a life-threatening illness. Will he clarify Labour’s position on what it would do in government about a reorganisation, because the difference between a restructuring and a reorganisation is not clear to me? The British Medical Association and GP leaders have been very concerned about exactly what the policy is and what it would mean, so will he make that clear? He has been criticising certain policies, and I would like to understand what his policy would be.
Andy Burnham
I am glad that the hon. Lady asked that—it is a very fair question. I imagine that a reorganisation is the last thing that people in the NHS would want right now. My definition of a structural reorganisation is where we stand down a whole set of organisations and then create a whole set of new ones. I have been very clear that I will not do what the right hon. Member for South Cambridgeshire (Mr Lansley) did. I will work with the organisations that I inherit. I will work with CCGs, and with health and wellbeing boards, in particular. Health and wellbeing boards were one of the few good things that came out of the Act, because they are a partnership between local government and the NHS, and that is something I can work with. She asked a fair question and I hope I have given her a fair answer. A structural reorganisation where we make everybody redundant again and recreate organisations will not help anybody. In fact, if the Government wanted GP-led commissioning, they should simply have put doctors in charge of the old primary care trusts. If they had done that, they would have saved a lot of money and a lot of heartache in the process.
I am going to finish on NHS funding. The letter I mentioned at the beginning called for a long-term spending plan for the NHS. The NHS Confederation has put that at £2 billion a year. At the Conservative party conference, the Prime Minister committed to maintaining the ring fence for health in the next Parliament, but experts are clear that that will not be enough to prevent the NHS from tipping into a full-blown crisis. Indeed, the Chair of the Health Committee, the hon. Member for Totnes (Dr Wollaston), has said:
“Maintaining the ring-fence on health spending is not enough.”
I am sure the hon. Lady is right, but her problem—and the problem for everyone on the Conservative Benches—is that they have chosen a different spending priority. They have given a commitment to tax cuts for higher earners, which will cost an unfunded £7 billion. What that means in reality is that if the Tories get back in, any spare money will go towards filling that black hole and there will be nothing left for the NHS, so the outlook for the NHS under the Tories in the next Parliament is very bleak indeed. Given current policy direction on competition and the funding plans they have announced, the NHS is looking at a toxic combination of cuts and privatisation under a re-elected Tory Government.
By contrast, Labour’s priority is not tax cuts for some, but a strong NHS for all. We have found an extra £2.5 billion a year—that is not spin; it is money we have committed to—to build the NHS of the future, and the question before the House tonight is whether it should call on the Government to match it.
Labour’s plan is for a national health and care service—full integration of health and social care, starting in the home and building one team around the person. We will do that by recruiting 20,000 more nurses, 3,000 more midwives, 8,000 more GPs and 5,000 extra home care workers by the end of the next Parliament—a new generation work force in the NHS, working from home to hospital, transforming the delivery of care. Social care is prevention, and by uniting it with the NHS we can turn the financial tide around and place the system on a path towards financial sustainability.
Labour has a credible plan for the NHS and the money to back it up. This House needs to decide tonight whether it agrees and whether it is prepared to match the money needed to turn the NHS around. The decision we make tonight will clarify the decision before the country next May. Will our top priority be, as the PM used to say, those three letters: NHS? Or will it be tax cuts for some, but an NHS crisis for all? That is the choice. We have made ours and our choice is the NHS.
The Secretary of State for Health (Mr Jeremy Hunt)
I do not think I have ever heard such a misuse of statistics and facts in this House as we have heard today.
I am delighted to debate the NHS, which has been independently rated—[Interruption.] Labour Members do not like to hear this. The NHS has been independently rated by the Commonwealth Fund this year as having become, under this Government, the best out of 11 industrialised countries. It is a better health care system than those in France, Germany and Australia. [Interruption.] Labour Members do not like to hear this, but the independent experts in Washington have said that the NHS has become the best in the world under this Government. The most uncomfortable thing of all for the Labour party is that the NHS has become better than it ever was under the previous Labour Government, when the right hon. Member for Leigh (Andy Burnham) was Health Secretary.
If the right hon. Gentleman wants to talk about Government mistakes, we will do so, but he will find that, on Mid Staffs, the private finance initiative, botched IT projects, a disastrous GP contract, unsafe hospitals, low cancer survival rates and little action on dementia, it is the Labour party, not this Government, that must be held accountable for mistakes in running the NHS. Indeed, after years of mismanagement it is this Government who are finally putting high-quality patient care back at the heart of what the NHS stands for.
Mr Hunt
I will give way in a moment, but I want to make some progress.
I want to go through the arguments of the right hon. Member for Leigh in detail, but let me start with the elephant in the room: the massive financial pressure facing the NHS if it is to meet our expectations in the face of an ageing population. There are now nearly 1 million more people over 65 than when this Government came to office. Our economy then was nearly bankrupt. Despite those extraordinary challenges, this Government have been able to increase spending on our NHS—including on Leigh infirmary in the right hon. Gentleman’s constituency—because of our difficult decisions, which were opposed at every stage by the Labour party. Government Members know one simple truth: a strong NHS needs a strong economy.
On the day that unemployment fell below 2 million and the claimant count fell below 1 million, there was nothing in the right hon. Gentleman’s speech about the need for a strong economy to support our NHS and nothing about learning from the Labour Government’s disastrous mistakes, which were so bad that they were in fact planning to cut the NHS budget had they won the election. We should remember that countries that forgot about the deficit ended up cutting their health budgets—Greece by 14% and Portugal by 17%. [Interruption.] Well, these are the facts. We must never again in this country allow the poor economic decisions that have been the hallmark of every Labour Government in history.
Barbara Keeley
It is interesting that the Secretary of State is claiming credit for things where the data are based on Labour’s achievements with the NHS, while anything else is our fault. He talked about older people and the demographics of an ageing population, but what good does he think he is doing to that section of the population with £3.7 billion of cuts to social care? Particularly as we move to integration, how does he think that will help those people? In my local area, 1,000 people will lose their care package this year. How does he think that will help the NHS in Salford?
Mr Hunt
I will tell the hon. Lady what we are doing: we are integrating the health and social care systems through the Better Care fund—a £3.9 billion programme—which is something that Labour could have done in 13 years in office but failed to do. That will make a massive difference to the social care system. Let us move on to some of the detailed arguments.
Andy Burnham
This is the most important part of the debate. The Secretary of State is right about the elephant in the room. This is the thing that people in the NHS will pay most attention to today. He has gone through his record in this Parliament, but the problems in the next Parliament will be large, as I am sure he would agree. He needs to say today whether he thinks the ring fence will be sufficient, or does he think that the NHS will need more money over and above the ring fence if it is to avoid crisis in the next Parliament?
Mr Hunt
First, let me just correct for the record what the right hon. Gentleman has said. The Prime Minister’s commitment was not just a continuation of the ring fence; he has committed to continue to increase funding in real terms for the NHS. If the right hon. Gentleman looks at the record of this Government, he will see that we have increased spending on the NHS by more, in real terms, than Labour’s promises at its conference. The point about promises is whether the people making them are credible. Which party will deliver the strong economy that can fund the NHS?
David T. C. Davies
Will my right hon. Friend confirm that this Government have increased spending on the NHS in real terms by 3%? In Wales, where Labour is in control, there has been an 8% cut in real terms. How can we possibly trust a word Labour says on funding for the NHS?
Mr Hunt
That is the point. We get all sorts of rhetoric from Labour, but when we look at its record of running the NHS—whether its disastrous record in England previously, or its disastrous record in Wales today—we see the real face of Labour policies on the NHS, and no one should ever be allowed to forget it.
There has been a lot of discussion about reorganisation. The right hon. Gentleman criticised reorganisation as if it were the last thing in the world that a Labour Government would do, but the previous Labour Government had nine reorganisations in just 13 years. Following the conference season, we know that Labour wants to have yet another one by effectively abolishing clinical commissioning groups in all but name and making GPs work for hospitals. There is widespread opposition to that policy across the NHS.
The right hon. Gentleman has repeatedly claimed that the reforms have cost £3 billion, but the audited accounts show that the reforms will save nearly £5 billion in this Parliament and £1.5 billion a year thereafter. These are the words of the National Audit Office—[Interruption.] He should listen to this, because this is about an independent audit that relates to a key part of his case. These are the words of the National Audit Office in its 2013 report:
“The estimated administration cost savings outweigh the costs of the reforms, and are contributing to the efficiency savings that the NHS needs to make.”
Will he publicly correct the record and accept what the National Audit Office has said, which is that the reforms saved money? The man who is never short of a word is suddenly silent. I have the National Audit Office report here, so he can see for himself. The reforms saved money.
If the right hon. Gentleman wants to talk about wasting money, I am happy to do so. The management pay bill doubled under Labour, compared with a 16% drop under this Government. The private finance initiative schemes left the NHS with £79 billion of debt. The IT fiasco wasted £12 billion. We will take no lectures on wasting money from the party that was so good at wasting it that it nearly bankrupted the country, let alone the NHS.
Mr Hunt
I will make some progress.
The right hon. Gentleman said that the reforms have made it harder to access NHS services. The opposite is true. Scrapping the primary care trusts and strategic health authorities meant the introduction of clinical leadership, which he wants to abolish, and allowed the NHS to hire 6,100 more doctors and 3,300 more nurses. Those members of staff are helping the NHS to do 850,000 more operations every single year compared with when he was in office. How can he possibly stand before the House and say that access to NHS services is getting worse, when nearly 1 million more people are getting operations every year compared with when he was Health Secretary?
John Glen (Salisbury) (Con)
What is more, the evidence from Labour’s last years in office shows that the number of managers was increasing at three times the recruitment rate for nurses. What does that say about Labour’s priorities in office?
Mr Hunt
My hon. Friend is absolutely right. That is why the management pay bill doubled under Labour and why we took the difficult decision, which the Opposition bitterly opposed, to get rid of 19,000 administrators and managers so that we could recruit the extra doctors and nurses. I notice that Opposition Front Benchers are very quiet on that point because they cannot answer the simple question of how they would pay for those extra doctors and nurses if the Health and Social Care Act 2012 was reversed. [Interruption.] Ah! They would pay for the extra doctors and nurses by bringing in new taxes that the country is not paying at the moment.
The right hon. Gentleman talked about structural reforms. We ought to discuss the structural reforms that he chose not to talk about, such as making the Care Quality Commission independent, with new chief inspectors for hospitals, adult social care and general practice. He tried to vote down that legislation in this House. So far—[Interruption.] I know that this is uncomfortable for Labour Members, but they should listen, because the new inspection regime has put 18 hospitals into special measures. Five of them have been turned around completely and have exited special measures, and important improvements are being made at the others.
The motion talks about Government mistakes, so will the right hon. Gentleman finally accept the catastrophic mistakes that he made as Health Secretary, such as failing to sort out the problems at those hospitals, even though there were warning signs at every single one of them? Does he accept that because Labour ignored those warning signs, patients were harmed and lives lost? Will he finally apologise to the relatives of patients at Mid Staffs whom he made wait outside in the cold because he refused to meet them and hear their concerns? Will he make that apology now? He has not apologised and it is clear that he does not want to do so today.
The right hon. Gentleman talked about A and E. Just as when he was Health Secretary, there have been weeks when the target has not been met. What he did not tell the House is that, thanks to our reforms, we have 800 more A and E doctors than four years ago and nearly 2,000 more people are being treated within four hours every single day than when he was Health Secretary.
As the motion refers to Government mistakes, perhaps the right hon. Gentleman might like to acknowledge some of his own mistakes on A and E, such as the 2004 GP contract that removed personal responsibility for patients from GPs, making it more likely that people would end up in A and E, or the failure over 13 years to integrate the health and social care systems, meaning that many vulnerable older people continue to end up in A and E unnecessarily—something that we are putting right through the Better Care programme.
When the right hon. Gentleman spoke about NHS performance, he talked repeatedly about missed targets. That is a really important issue and is perhaps the biggest dividing line between his approach to the NHS and mine. Of course targets matter in any large organisation, but not targets at any cost. That is why the Government have been careful to ensure that in the new inspection regime, waiting time targets are assessed not on their own, but alongside the quality and safety of care.
Andy Burnham
The Secretary of State makes an important point, and as Health Secretary, I said that over-reliance on targets was not right. I accept that point, but he now needs to answer a question of mine. He has not removed our targets for A and E or for cancer. Does he consider it acceptable that the NHS is missing the national cancer target? If not, what will he say to reassure families that that will get better soon?
Mr Hunt
The right hon. Gentleman may want to forget that, when he left office, we had the worst cancer survival rate in western Europe, but why did we have that? We had the worst cancer survival rate in western Europe because we were not diagnosing cancers quickly enough. Under this Government—this is the inconvenient truth for the Labour party—we have treated for cancer nearly three quarters of a million more people than in the last Parliament. We have done that because, as the Prime Minister said, we are referring 50% more people. Access to cancer care has dramatically improved under this Government, and we are starting to climb back up the European league tables.
Mr Hunt
Let me finish my point about targets because it is important. The NHS over which the right hon. Gentleman’s Government presided was, as the former NHS chief executive Sir David Nicholson said, an NHS where
“patients were not the centre of the way the system operated.”
Labour’s NHS was obsessed with targets, and we have still not had an apology for the policy mistakes that led to Mid Staffs. We have got rid of a number of targets; we are happy to keep a few benchmark targets, but we will not be obsessed with targets at any cost.
May I gently suggest that the Labour party re-read the Francis report? These are Sir Robert’s words about the culture during the Mid Staffs period, when the right hon. Gentleman was a Minister. He described an
“insidious negative culture involving a tolerance of poor standards”
resulting from
“a focus on reaching national access targets”.
If the right hon. Gentleman does not want to listen to Sir Robert, will he listen to families who suffered in Mid Staffs, Morecambe Bay, Basildon and countless other hospitals, all of whom are simply incredulous that Labour wants to put him back in charge of the NHS, while he refuses to acknowledge the terrible problems caused by Labour’s NHS target culture?
The right hon. Gentleman also talked about privatisation. That may hit the spot for his trade union supporters, but it does not stand up to scrutiny. He knows that the use of the private sector for secondary care has grown more slowly under this Government than it grew under Labour. He knows that the biggest single privatisation decision in NHS history—the decision to contract out a whole district general hospital to the private sector—was allowed not by me, but by him when he was Heath Secretary. Let us set the record straight, because he tried to give the impression to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) that that decision was not taken—[Interruption.] Let me make my point, and then I will give way. The right hon. Gentleman approved a shortlist for Hinchingbrooke hospital, which had on it two private sector providers and an NHS provider. He did not tell my hon. Friend that the NHS provider then pulled out, and that he accepted the continuation of that process with an all-private shortlist—[Interruption.] That is what happened, and if he wants to deny it, I will give way to him now.
Andy Burnham
The question is: when was that contract signed? Will the Secretary of State answer that question?
Mr Hunt
Actually, the question is: when did it become an all-private shortlist, and why did the right hon. Gentleman allow that to happen if he is now saying that the privatised running of hospitals is such a bad thing? I think that we have found him out, and he will want to correct the record and the impression that he gave to my hon. Friend the Member for Selby and Ainsty.
Mr Simon Burns (Chelmsford) (Con)
Will my right hon. Friend confirm that in March 2010, when the right hon. Member for Leigh (Andy Burnham) was Secretary of State, the number of bidders for Hinchingbrooke hospital—a process that took place under legislation passed by the previous Labour Government—went from five to three? Two of those bidders were private companies; the third bidder was a private company in conjunction with an NHS trust, but at a later stage as the process developed—as my right hon. Friend said—it went down to one bidder. The right hon. Gentleman said in response to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) that there was a preferred bidder and that it was not a private company but the NHS. It was not the NHS; it was an NHS trust in conjunction with a private company.
Andy Burnham
The right hon. Member for Chelmsford (Mr Burns) has contradicted the Secretary of State. The right hon. Gentleman said that the bidder withdrew at a later stage, but the Secretary of State said that the bidder withdrew earlier. The Secretary of State cannot have it both ways. The right hon. Gentleman flatly contradicts him.
Mr Hunt
The right hon. Gentleman is quite wrong. My right hon. Friend said that there was a list of three providers, all with private provision involved. When the right hon. Gentleman was Health Secretary, he accepted that all-private shortlist for the Hinchingbrooke decision. In other words, the biggest privatisation in NHS history happened because of a decision taken by the shadow Health Secretary.
Government Members are not ideological. We believe there are times when we can learn from the independent sector, but, normally, people use the private sector when they are looking for innovation or better value. Only a Labour Government would sign deals with the private sector, paying 11% more than the NHS rate, and ending up paying more than £200 million for operations that never happened. What a shocking waste of money. When the right hon. Gentleman next talks about privatisation, instead of inventing a privatisation agenda that does not exist, will he apologise for a botched one that existed when Labour was in office?
Finally, there is a comparison that Labour never wants to make when talking about NHS performance: what happens over the border in Wales. That is where the policies that the right hon. Gentleman supports are put into practice. Let us see the difference. A record one in every seven Welsh people find themselves sitting on an NHS waiting list, compared with just one in 17 people in England. The urgent cancer waiting time target has not been met once since 2008 in Wales, but it has been missed in England in only two quarters in the whole period. A and E waiting times have been met every year in England, but they have not been met since 2008 in Wales.
Mr Hunt
No, I will finish this point.
The British Medical Association, no friend of the Conservative party, described the NHS in Wales as being in a state of imminent meltdown. The point is that the NHS in England, like the NHS in Wales, faces huge pressure, but politicising operational problems in England, while denying much greater failings in Wales, is the worst kind of opportunism. For Labour Members, good headlines for Labour matter more than poor care on Labour’s watch. They are playing politics with our NHS. That not only scares people in England, but betrays people in Wales.
I shall conclude—
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The right hon. Gentleman is not giving way. He must be allowed to speak.
Mr Hunt
The Government are proud of our record on the NHS in England: more operations for more people; three quarters of a million more people getting the cancer treatment they need; record numbers being seen promptly in A and E; record numbers getting treatment for dementia; and the first ever introduction of maximum waiting times for mental health conditions. It is an NHS under pressure, yes, but it is an NHS preparing for the future, with higher-quality care in hospitals, integrated health and social care, and personal care driven by a much bigger role for GPs.
Some of those changes need money, and we have delivered that, but some of them need a change in culture, different ways of working, more transparency and a more patient-centred approach. That can mean challenging the system, which the right hon. Member for Leigh has never been prepared to do, but which this Government will always do if it is right for patients. We want an NHS building for the long term and an NHS with the confidence of a strong economy behind it. Under this Government, the NHS is independently rated as the best in the world. I oppose the motion.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The House will be aware that a great many hon. Members have indicated they wish to speak and that there is limited time available for their speeches. With my apologies for my inability to articulate—I did not catch my sore throat from the Leader of the Opposition—I have to set a time limit of six minutes.
Kevin Barron (Rother Valley) (Lab)
We are here in the Chamber today in a week when we have seen health service workers on the picket lines for the first time in 30 years, and we have seen midwives out on strike for the first time in their history—we have had midwives working in the health care system in this country for 150 years, I think—yet most of the spat we have listened to up until now this afternoon has been about who bid what for Hinchingbrooke hospital and so forth. I wonder what people outside—not just people who work in the health service, but those who rely on it and do not have the option to go elsewhere, into the private sector—think about this situation.
We have a Government—if they had been a different Government, I would probably be saying the same thing—where the case for the defence we heard from the Secretary of State this morning about how well our health service is doing comes from independent experts in Washington. I have never in my 30 years in here heard someone doing that. Philadelphia lawyers are presumably the people saying that; I thought it might be a reference to Washington, County Durham, but, no, I assume it is Washington in the USA where people are saying we have got a good health service, not the British Medical Association or the royal colleges of nurses, GPs and everything else who constantly e-mail Members on both sides of this House about the state of health care in this country and the demoralisation of the staff—hence the first picket lines for 30 years. Here we have a Secretary of State who seems to think he can find somebody to defend him who is an independent expert from Washington DC. I think that it is shameful that the Secretary of State comes to the Dispatch Box and uses arguments like that.
Let me tell the Secretary of State—although he is not listening; he is engaged in other things—that everybody knew what was going to happen when this Government came to office in 2010.
Kevin Barron
I will give way to the right hon. Gentleman in a bit, because I may mention him, as he was a Minister at the time. This Government came to office and passed a Bill through Parliament that was going to introduce competition into the national health service and mean a massive reorganisation, and billions of pounds were going to be spent in doing that—billions of pounds that could have been spent elsewhere—and the case for the defence is, “We’ll make a billion pounds a year in this Parliament.” Well, it is not there yet, Ministers.
It was not just the reorganisation of the national health service that was mentioned. The Government also told us at the same time that they had got to make efficiency savings of 4% a year, something that the health service had never done, and something the public sector had never done. Indeed, people said at the time that the private sector had never done it either.
That is the situation we had when that Bill went through Parliament. They were warned about the consequences of that not just by politicians in the House, but by people who gave evidence to the Public Bill Committee. I served on it. The Bill was stalled and came back in again. Evidence after evidence came in saying what has happened was going to happen.
We have had massive reorganisation. I just wonder if the Secretary of State—if he is prepared to listen—will tell us how many of the 4,000 NHS staff who were laid off and paid redundancy were then re-employed by the NHS, some of them on massive six-figure sums. How much did that cost the NHS? How much did that take away from mental health services or other services that our constituents rely on? None of this is in the debate at all, and Ministers all know perfectly well what the situation is.
Week after week, we hear these platitudes from Ministers. The Secretary of State said not too long ago, “When you go into hospital, you’ll get a named consultant,” but what does having a named consultant matter to most people? Are they going to work seven days a week, 24 hours a day so we can phone and say, “Can we come and see you?” No one has mentioned the latest one we have had, which I thought was wonderful—
Kevin Barron
The Secretary of State can come in in a minute. This latest one is a consequence of a speech made by the Prime Minister: we are going to be able to see GPs seven days a week. Well, the Royal College of GPs does not think so. I say this to the Secretary of State: “We could see a GP, not far from this place, seven days a week until you lot got in.” We could do so in the Victoria NHS walk-in centre, and I used to go in there, as my GP is elsewhere, but it closed years ago.
We put in walk-in centres—sometimes in the face of opposition from GPs, I have to say. A GP objected to them in my constituency, as I raised in the House at the time, so some of them were saying they did not want them. They gave seven days a week access to GPs.
I understand that my time is up, Madam Deputy Speaker, but I want to finish by saying this: whatever happened at Hinchingbrooke or anywhere else, we never ever had to have competition law on the statute book. We have now. Do not tell me or anybody else out there that the Secretary of State has not got plans to privatise properly the national health service, because I am convinced that he has.
Mr Gary Streeter (South West Devon) (Con)
Thank you, Madam Deputy Speaker. I love your husky voice.
In June, I spoke to a conference of orthopaedic surgeons from the south-west, including the NHS consultant who carried out my own hip replacement very successfully in 2012. They had asked me to speak about the future of the NHS and to be as bold and as honest as I could be. When we came to questions, I was amazed at how all the doctors said basically the same thing. It might be paraphrased thus: “When will you politicians realise that the NHS is creaking at the seams and come up with new, more radical policies and a brand-new model more suitable to the 21st century that is able to cope with the demands we now face?” They said they were grateful for the extra money this Government have put in and they recognised the competing pressures on the public purse, but they believed passionately that it was not just about money going in at the top. They wanted us to be more radical in addressing the problems now facing the NHS and, in particular, in finding new service delivery vehicles.
I explained that one of the weaknesses of modern-day politics is that as soon as anyone starts to grapple with innovation and change in the NHS, we hear the voices Opposition Members—we have just heard them—who immediately shriek privatisation, and the debate grinds to a halt, especially in the run-up to an election. I find it extremely disappointing that this has all happened again today. The audience of doctors recognised this depressing reality, but none the less urged us to be bolder in addressing the pressure under which they work day in, day out in an institution that was designed 70 years ago.
I listened to the shadow Secretary of State this evening and the complaint seems to be that doctors are now under an obligation, in their commissioning groups, to buy in the best services to provide the very best health care for our constituents. That is surely a good thing. The motion before us today is an example of this immature debate. It seeks to lay the blame for the pressure under which the NHS operates today on the reorganisation that took place earlier in this Parliament. That is an absurd claim. Let us look at some of the statistics.
Between 2009 and 2013, the number of general and acute in-patient admissions rose by more than 10%. In 2003, there were just over 77,000 hip operations. By 2013, these had increased by 43% to 110,000 hip operations, of which mine was one. In 2003, there were approximately 46,000 knee replacements. That number rose sharply by 71% by 2013 to more than 79,500 knee replacements. All this has to be funded. Total attendance at accident and emergency departments in 2013 was almost 22 million, representing an increase of 11% since 2003. There were around 9.1 million emergency calls in 2013, up from 4.9 million in 2003—an increase of 85% in just 10 years.
In Derriford hospital in Plymouth, every day 75% of the patients are over 65. In the 10 years between 2003 and 2013, the actual number of people over 75 who completed episodes of admitted patient care in NHS hospitals rose by 61%. Life expectancy in the UK is increasing significantly. One in three children born today is expected to celebrate their 100th birthday. The fact that people are living longer is a wonderful success story, but it is having a significant impact on the NHS. Average NHS spend on retired households is nearly double that for non-retired households.
As everybody in the country knows, the primary source of NHS pressure today is the demographic success we have seen in recent years of people living longer—more of us getting older and needing more health care. That is why we were right to ring-fence the health budget in 2010, which has resulted in an £12.7 billion extra pumped in in this Parliament. That is why it is right that the Prime Minister has committed the next Conservative Government to continuing to increase health spending over and above inflation every year for the next Parliament. I hope we will also be bold and find new models of delivering health care, still free at the point of use, to meet the demands of a growing and ageing population.
On the subject of new models and structures, I see signs that the new commissioning groups in my area are having a positive impact. My constituency is part of the West Devon clinical commissioning group, and my discussions with the GPs who serve on it give me great hope that they are beginning to improve the nature and scope of their commissioning, helping better to meet the health care needs of my constituents. It is right that doctors, not bureaucrats, be in charge of commissioning, and we were right to deconstruct the bloated PCTs. Our PCT in Plymouth was so cumbersome that I gave up attending the regular MP briefing meetings because I could not cope with the bureaucratic culture. I am glad it has been replaced by a more streamlined, doctor-led commissioning group. This is a step in the right direction. I do not suppose for a second that the reforms were perfect—nothing ever is that Governments do—but I can see progress in the commissioning of acute services.
I say one thing to my colleagues on the Front Bench: in the west country, it used to be extremely easy to recruit GPs, but it is getting tougher by the year. I hope in the winding-up speech to hear some reassurance that in places such as Devon—a splendid place to live and work—which are having difficulty recruiting GPs of the highest quality, steps and policies will be put in place to set this right over the next two years. Nevertheless, I support the reforms; the NHS is improving all the time.
Mr Kevan Jones (North Durham) (Lab)
I wish to discuss the crisis in the North East ambulance service. To do this, I will give some of the examples I have come across and others that have been backed up by the police and other agencies. But first I must pay tribute to the hard work of the staff of the ambulance service. It is not their fault they are under pressure; they are dedicated individuals who wish to do their best for my constituents and others in the north-east.
I wish to give two of many examples—other north-east parliamentary colleagues have complaints as well. The first comes from Carole Hampson, who lives in Quaking Houses, in my constituency. On 20 June, her son Christopher rang 111, the non-emergency number, because his 10-month-old son had drunk bleach. He was told, “No problem. We’ll get an ambulance to you straightaway. Don’t do anything.” An hour later, an ambulance had still not turned up. His mother then rang back and said, “Forget it. I’m taking him in a car.” The pressure and worry for both him and his grandmother must have been tremendous. Luckily, the youngster was fine. On 4 July, she again rang the ambulance service because her son was critically ill with a diabetes-related condition. She rang 999 and the operator said, “Is he still conscious?” She said, “Yes”. The operator said, “Okay, we’ll get there as soon as possible.” An hour and 20 minutes later, an ambulance turned up.
It is not just Carole Hampson’s family who have been affected. On 11 July, she was driving through Stanley in my constituency when she saw an old gentleman fall into the road and break his head on the pavement. The police arrived and she and other bystanders came by. She rang 999 for an ambulance. While they were waiting—for 30-odd minutes—blue light ambulances were going past. The police rang the ambulance service, but no response was forthcoming. In the end, the police took the old gentleman home, where an ambulance later attended. I have another constituent, who I will not name because I have not asked her permission, whose husband had an angina attack. She rang her GP, who recommended she ring 999. The operator said, “We’ll get a paramedic to you”, which she did, but three hours later the ambulance arrived to take him to hospital.
It is not just individual constituents saying there is a crisis in the North East ambulance service; there is evidence from the police. Over a six-month period this year, there were 675 incidents in which the police had to step in following the failure of ambulances to attend. I shall give just a few examples. On 2 September, the police attended a road traffic accident and asked for an ambulance to attend. Thirty minutes later, an ambulance arrived.
On 5 September, the police requested an ambulance because an individual had been assaulted and had waited 75 minutes for an ambulance to attend. On 7 September, the police transported to hospital a male patient with head injuries because the North East ambulance controller said that no ambulance was available and that there were 39 outstanding instances. On 19 September, the police requested an ambulance to attend a female patient with severe facial injuries; an hour and a half later an ambulance had not attended, so the family had to take care of the individual themselves. On 20 September, the ambulance controller told the local police that the ambulance service was in a critical situation. This needs sorting out.
There are two problems facing the NHS North East ambulance service. One is A and E. Ambulances are backing up at A and E. The other day, an ambulance driver told me that he had been directed from Chester-le-Street to Carlisle on the other side of the country. Then there is the 111 service brought in by this Government, which is failing. The system is not being managed by professionals with any background. It is a tick-box system that is leading to instances in which ambulances that are not needed have been sent out, clogging up the system. This service is in crisis, and what is the North East ambulance service that is responsible for it going to do? It is carrying out a review. It has appointed Deloitte to carry out a review into its operation, but my constituents do not want management consultants to sort it out.
Mike Kane (Wythenshawe and Sale East) (Lab)
I thank my hon. Friend for giving way and compliment him on his excellent contribution. Does he agree that this situation is being exacerbated where we are privatising ambulance services? That is what happened in Greater Manchester where in the last year alone, half the journeys failed to get patients to their appointments on time.
Mr Jones
That is right. This is what is picking up the slack.
My constituents do not want management consultants to sort the problems out; they want health care professionals to do so. If we in the north-east do not do something about this soon, people are going to die. Because of what is happening, people do not accept this system. The delays are causing a huge amount of angst to individuals and are putting huge pressure on other services such as the police and fire and rescue. In desperate situations, where people in road traffic and other accidents need urgent medical care, they are unable to get it. It is a failure in 2014 that my constituents and those of other north-east Members cannot get basic medical care.
I ask the Minister—I see he is busy talking at the moment and I would like him to pay attention—urgently to intervene in the North East ambulance service because it faces a critical situation. Management consultants are not the answer, and I have no faith in the management to sort this out, as has been said by other emergency services, local authorities and their own staff. Unless there is some central direction and intervention to put this right, people’s lives in the north-east of England will be lost.
David Tredinnick (Bosworth) (Con)
May I say how sorry I am to hear that you are suffering from a throat affliction, Madam Deputy Speaker, and how sorry I was to hear of the throat problems of the Leader of the Opposition during Question Time today. I was reflecting on whether, if he visited his doctor, he would be taking antibiotics. One of the great crises in health care at the moment, of course, is the increase in the use of antibiotics—an issue that the Science and Technology Committee, of which I am a member, has looked at. I hope that we will address this issue with great sincerity and seriousness. The 25% increase in recent years is quite terrifying.
I do not accept any of the arguments I heard from the shadow Health Secretary. I would like to share some experiences of the Hinkley and Bosworth health and wellbeing board, which has had a very positive impact in my area. The very fact that we have together in one room on a regular basis the clinical commissioning groups, NHS England, the borough council, healthwatch and the director of public health for Leicestershire has made a tremendous difference. We heard recently that NHS England was working with GPs to increase capacity in Barwell and Earl Shilton. The clinical commissioning group was discussing new links with paramedics to provide in-home care seven days a week and also about increased sports activity in the borough. Healthwatch is conducting surveys on patients’ concerns about A and E access, dental services and repeat prescriptions. It is perhaps not surprising that the West Leicestershire NHS team has been shortlisted in the primary care innovation category for a national award from the Health Service Journal, and everyone in our area can be proud of that.
I have always felt that the health reforms are only two legs of a stool. Health and social care were brought together in the massive Health and Social Care Act 2012, but allopathic medical services were not integrated with complementary and alternative medicine. My right hon. Friend the Secretary of State for Health should look at this with great care, because estimates I have received show that making greater use of acupuncture, herbal medicine, chiropractic and osteopathy reduce the cost of medical care by about 5%.
The Impact Integrated Medicine Partnership in Nottingham is a social enterprise that provides acupuncture, chiropractic and homeopathy in primary care settings. It combines the best of conventional and complementary medicine and has proved to be flexible, with lasting, sustainable improvements. Comprehensive evaluations of the service in 2006 and 2010 demonstrated the effectiveness of those interventions, and patients—I ask the Minister please to listen to this—who completed treatments subsequently visited their GP less often, reported taking less medication and had less need for referral to secondary care, thus saving NHS resources. The partnership is a shining example of what can be done if the complementary field is brought into the mainstream, reducing costs and burdens on doctors and providing a more efficient and more patient friendly health service.
Altogether Better, Wakefield has supported individuals in the community to become volunteer community health champions. It has trained 17,000 community health champions and a recent social return on investment study by York Health Economics Consortium showed a positive return of about £1 for every £1 invested. That is £1 more for the health service to spend.
There are many other examples, such as the Kensington and Chelsea beating back pain service and the Royal London Hospital for Integrated Medicine, which has 13 care pathways. They assist with the problems that doctors face with almost intractable conditions such as chronic fatigue syndrome, chronic low back pain, chronic headache, knee pain, hay fever, non-organic insomnia, perennial allergic rhinitis, irritable bowel syndrome and weight loss.
Finally, I am concerned about antibiotics. My right hon. Friend the Secretary of State should address this with the greatest possible speed and care.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Government argued that the current NHS reforms—their NHS reforms—would result in major savings to the NHS, making our system more “responsible, efficient and affordable.” I am sure that many Labour Members will agree that reforms under the Health and Social Care Act 2012 have failed to deliver a single one of these aims. The NHS is costing more and delivering less, the quality of care it provides has declined and hard-working staff, particularly GPs, nurses and staff in A and E, are bearing the brunt of the Government's misguided and irresponsible measures.
It seems that senior Cabinet Ministers may think the same as Opposition Members. As we have heard, The Times quoted one as having said:
“We’ve made three mistakes that I regret, the first being restructuring the NHS. The rest are minor.”
I think that it is about time Government Members owned up to their mistakes, and started to share their opinions openly with the House.
The reorganisation caused upheaval in every part of the NHS. Primary care trusts and strategic health authorities were abolished, and commissioning responsibility was transferred to NHS England as well as to clinical commissioning groups. The chair of a health and wellbeing board told me last Friday: “I am left more confused by the NHS England role than by anything I have seen over decades of involvement with the NHS.” More than 440 new organisations have been created, but all the evidence now shows that that has been done at a heavy economic and social cost. Some £3 billion has been wasted on altering the structure of the NHS rather than being spent on front-line patient care, and the reforms have consistently failed to be delivered within budget. In July last year, the National Audit Office stated that the cost of their implementation had been 15% more than originally expected.
Of course, we hear counter-claims from Ministers. When I tried to intervene on the Secretary of State, he would not take an intervention on the issue of management and reorganisation costs. It was interesting to hear what was said yesterday by Kieran Walshe, professor of health policy and management at Manchester business school, on Radio 4 about the savings claimed by the Secretary of State. He said that the Government had under-counted the costs of reorganisation, even to the extent of accepting nil returns from some strategic health authorities. Most tellingly, he said that the best way in which to test the facts was to talk to people in the NHS who had lived through the reorganisation. He said that he had not talked to anyone who thought that the reorganisation had made the NHS more efficient and more productive. He had not talked to anyone who thought that the trauma of total reorganisation and redesign was worth while. None of us understands why PCTs were replaced by CCGs, or why NHS England was created. He also said:
“I don’t think you will find anyone who thinks the new system costs less to run”.
We know that the financial difficulties of the NHS have worsened, not improved. For the first time, foundation trusts have found themselves in deficit, along with trusts that are not foundation trusts. Figures from Monitor showed that 86 out of 147 trusts were in the red, and that there had been a deficit of £167 million in the first quarter of 2014-2015. Alongside that, not surprisingly, we are seeing a decline in patient care. In all areas of the NHS, pressures are mounting and the quality of care is declining. The number of people waiting more than a week for an appointment with a GP is up. A survey of patients in Salford for our CCG showed that a third of the patients who responded had had to wait for days for an appointment, and one in seven Salford patients had had to wait for a week or more. That is better than the national picture, but it is not good enough. For the first time, the NHS has missed its cancer treatment target; and NHS workers have felt the need to go on strike—the largest strike of its kind in over 30 years. We have an NHS in crisis.
As we know, there are many challenges in addition to the damage that has been inflicted by the Health and Social Care Act 2012. We have heard about the mounting demographic pressure on health services. However, despite the increase in the number of people aged over 80, the Government have slashed local authorities’ budgets, causing them, in turn, to change eligibility for social care. I believe that that is one of the most serious failings. My city council in Salford has been subjected to savage cuts of £100 million, and—I mentioned this earlier, and I shall keep on mentioning it—1,000 people in Salford will either lose care packages or not qualify for care this year.
David T. C. Davies
Does the hon. Lady think that members of the public should vote against any members of any political party who have imposed a cut on the NHS anywhere in the United Kingdom?
Barbara Keeley
I am not going to answer hypothetical questions like that. I am talking about local authority budget cuts, and the parlous state in which social care will find itself after £3.7 billion has been taken away from it.
Constituents have told me about care staff working locally who have been allocated too little time to devote to the people in their care. That is a scandal. I have been told that a single care worker was sent out when two were needed to care safely. I have also been told about patients in nursing homes who have not been properly changed or helped to eat by care staff who are rushing to manage their work load. That is the reality, and it is not the way in which to create a sustainable health and social care system. I therefore wholeheartedly support Labour’s alternative plans. We must create an NHS with the time to care.
I agree with my right hon. Friend the Member for Leigh (Andy Burnham) that we must repeal the Health and Social Care Act 2012 before it causes any additional lasting damage to a health system of which people in this country are rightly proud, although they will not be for much longer. I shall be here on 21 November to vote for the private Member’s Bill. We must find ways of providing the resources to cope with the challenges that the NHS will face. As my right hon. Friend said, Labour has pledged to raise £2.5 billion for the NHS Time to Care fund, which will provide 20,000 new nurses, 8,000 more GPs, 5,000 new homecare workers and 3,000 more midwives. And do we need them? Yes we do.
We must also move towards an integrated model of health and social care. That integration in itself will not solve the financial problems the NHS faces, but moving to a model that allows for equal consideration of all a patient’s health and care needs can improve services and should reduce duplication. Above all, we must place patients and carers back where they belong, at the heart of a health and social care system that works for them and puts their needs before those of the providers and the ridiculous and convoluted commissioning structures that we have been arguing about in the debate today.
David T. C. Davies (Monmouth) (Con)
The Secretary of State and his Ministers will know that I have had cause to write to them, to e-mail them and even to meet them on numerous occasions to discuss the absolutely appalling second-rate NHS treatment that patients in my constituency are receiving. They are receiving such treatment from an NHS that is run entirely by the Labour party, which is enacting precisely the policies that Opposition Members wish to enact here. Those patients include Mariana Robinson, whom the Secretary of State was good enough to meet recently. She has waited months for diagnostic treatment for an illness that could well be cancer; she does not know what it is. She wants to be treated in England by the coalition-run national health service.
Those patients also include Mr Christmas in Abergavenny, a war veteran who is in his 80s. He had constant chronic pain in his tooth that was keeping him awake at night, but he was told that, despite his age and his war service, he would have to wait nine months for any form of treatment. In the end, he was forced to use his meagre savings to go private. Ann Wilkinson also wants to be treated in England. She has stated very publicly that she has cancer, but there is no cancer drugs fund in Wales and she wants to have access to Avastin. I believe that she will shortly present a petition in Parliament and in the Welsh Assembly demanding the same high standards in Wales that this coalition Government are already delivering in England.
Some Opposition Members, including the hon. Member for North Durham (Mr Jones), wanted to quote statistics.
Andy Burnham
The hon. Gentleman mentions access to cancer services. He might have heard me say earlier that the NHS here is missing its national cancer target, with more people waiting longer than 62 days. In England, only 84% of patients start to receive treatment within 62 days. Does he acknowledge that 90% of patients in Wales start their treatment within 62 days?
David T. C. Davies
When they have been diagnosed. The right hon. Gentleman has failed to point out that while only 2% of patients wait more than six weeks for diagnostic treatment in England, 33% of patients do so in Wales. That is absolutely disgraceful. If a situation in which 2% of patients are waiting more than six weeks is bad, what on earth are we to make of a situation in which 33%—one in three, or so—are waiting that long? I hope the hon. Gentleman would agree that that is a disgraceful situation.
The hon. Member for North Durham talked about ambulance response times and gave the House some interesting examples. However, the recent Nuffield report demonstrated that the worst ambulance response times in the United Kingdom were in Wales. We have accident and emergency targets, for those in Wales who are lucky enough make it into a hospital, but those targets have not been met since 2009. We have waiting list targets of 26 weeks, as opposed to the 18-week targets that apply in England. One in seven of the population in Wales is on a waiting list. That is what lies in store for people if they vote Labour at the next general election.
It was interesting that the hon. Member for Worsley and Eccles South (Barbara Keeley) was unwilling to say what she thought voters should do about people who wanted to cut NHS budgets. Despite all the Opposition rhetoric, this coalition Government have kept their promise and continued to fund the NHS. In real terms, we have increased its budget, whereas Labour—where it is in office—has cut NHS funding in real terms by about 8%. It cannot escape any of the blame for this. We heard about reorganisations earlier, and we have had several in Wales. We went from having five health boards to having 22 and then back to having seven. Not only has Labour been in power constantly, either completely or as the dominant party, ever since the Welsh Assembly was set up in 1999, but it has rammed those health boards full of Labour party supporters, failed parliamentary candidates, ex-Assembly Members, local councillors and the like. In one case, Labour put in a former general secretary of the TUC, who, I am guessing, is probably not a supporter of the Conservative party. Labour has politicised the health boards and it must therefore take complete responsibility for the shambles that has led to so many people wanting to be treated not in Wales but in England, by the coalition-run NHS.
No more damning example of all this can be given than the recent antics with the OECD, which is trying to carry out a comparison on NHS systems across the whole of the United Kingdom. The coalition Government are keen for that study to go ahead and are delighted with the opportunity to have themselves compared with Wales, and they should be; they have every reason to look forward to that. But of course the reaction in the Welsh Assembly has been one of absolute horror. I am told by very reliable sources that the Welsh Assembly Government cancelled the visit by OECD officials because they were so desperate to try to ensure that no report comes out before the general election. Of course, people watching this debate do not have to take the word of anyone in this room; they simply have to Google “Wales NHS waiting lists” or something similar to see story after story about people who have been badly treated by the NHS in Wales and want to be treated by the NHS run by the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), who is sitting on the Front Bench.
I could suggest much that would improve things. Ideally, I would like to see the power taken away from the Welsh Assembly, because it has simply made such a mess, but that is never going to happen. If Opposition Members are confident that they could do a good job with the NHS, they should support the OECD report, and get their colleagues in Wales to get behind it and bring it out as quickly as possible. They should allow funding to follow patients, so that where a patient from Wales wants to be treated in England, that should be able to happen, with the money simply deducted from the Welsh Assembly block grant. Of course, the same should apply vice versa; any patients from England who want to be treated in Wales should be allowed to have that chance—I do not see many doing that.
One of the more irritating bits of propaganda coming out of the Labour party is that it says that lots of people from England are being treated in Wales. That is true, as historically there have been people with Welsh GPs who have to be treated in Wales even though they live in England. However, these people have set up an action group called Action4OurCare and are trying to take legal action on this. These are normal patients, not party activists, who want to be treated by the coalition-run NHS.
About the only good thing that comes from all this is that Labour apparently wants to make the NHS one of the main planks of its election campaign. I say bring it on, because I cannot wait to debate the NHS with Labour party members all over the United Kingdom. I will ask them about Wales and the cuts to the budget, the lack of a cancer drugs fund, the long hospital waiting lists and the fact that its ambulance response times are the worst in the United Kingdom. I shall remind them that people are already voting with their feet—they are voting to get out of the Labour-run NHS in Wales and get into the coalition-run NHS in England. They will shortly have the opportunity to vote not with their feet but in the ballot, and I very much look forward to seeing them have the opportunity to do so.
Lilian Greenwood (Nottingham South) (Lab)
Earlier today, my hon. Friend the Member for Darlington (Jenny Chapman) asked the Prime Minister about the mothers from her constituency who marched 300 miles this summer to show their anger at this Government’s wasteful mismanagement of the health service. He dodged her question of course, because he has no answer to it. Is it reassuring that members of the Cabinet have finally realised what the rest of us have known for four years—that reorganising the NHS was a big mistake? I do not think so. There is disgust and anger out there, but not surprise. I was proud to walk alongside the Darlo Mums when their long march passed through Nottingham. The T-shirt I wore that day has a slogan on it. Sadly, I am not allowed to wear it here. It says, “Never trust a Tory with your NHS”. That is good advice.
We all remember what the Prime Minister promised before the election—no more top-down reorganisations. That promise did not last long. The reason I am angry is not just because that was not true, but because the reorganisation was the wrong policy at the worst possible time. We know that the finances are difficult. With both an ageing population and increasingly complex and expensive treatments available, the NHS faces unprecedented challenges. But instead of focusing on achieving the best possible outcomes for people with the resources available, the Prime Minister caused chaos: 4,000 staff were laid off and rehired; nurse numbers have not kept pace with demand; training places were cut; there are not enough GPs; training has been scaled back; hospitals are tied up in competition law; and savage cuts have been made to local authorities, leading to a crisis in social care and so pushing more and more elderly people into A and E when they should be getting the care they need at home. It is no wonder that morale is low when half of nurses say that their wards are dangerously understaffed; Ministers undermine the independent pay review body; and managers are being rehired after having six-figure pay-offs. But what makes me really angry is the impact that this wasteful reorganisation has had on my own constituents. I am proud of the NHS in Nottingham—whether in primary care, mental health services or our two acute hospitals. I know that we have great staff working incredibly hard for the people who need them, but at every level they face unbelievable pressure, and, in places, they are really struggling to cope.
The chief executive of Nottingham University Hospitals NHS Trust was very blunt when he met local MPs a couple of weeks ago. He told us that the trust faces the toughest ever cost-reduction plan, that this year he is planning for a deficit of £19.1 million—the first time the trust has been in that position—and that targets are being missed.
The accident and emergency department at Queen’s has missed the four-hour waiting target every month since August last year, and it reached its worst performance this June, in the middle of summer. I know our local hospital is planning for winter, but the crisis is already here. The reasons for the crisis are not simple, but it is clear that patient flow, both through and out of the hospital, is creating particular problems. Hundreds of patients who are well enough to be discharged or who should be receiving care and support at home or in residential care are still in hospital because their discharge is delayed. That is because, despite a commitment to joint working, social services cannot cope. The deep cuts to social care are having a real and direct impact on the NHS in Nottinghamshire and on my constituents.
NHS privatisation is now taking hold as commissioners are forced to put services out to the market. Let me tell the House about patient transport and my constituent, Jean. Jean is 84 years old and very unwell. She needs four hours of dialysis three times a week. Since a private company took over patient transport, she has been late for appointments, and had to wait for hours to be taken home. Such poor service has a knock-on impact on other patients in our city’s hospitals and the clinical commissioning group tells me that Jean’s experience is typical of feedback from other patients.
Last week, the chair of the hospitals trust described meeting a patient at 10 o’clock at night. That patient had been waiting since 10 o’clock in the morning to go home where his wife was waiting for him. Patients deserve so much better. Next May, they will have a chance to vote on the service, because Labour has a plan for the NHS. We will raise £2.5 billion for an NHS “time to care” fund. The money will come not from ordinary working people, but from ensuring that hedge funds and other tax avoiders play by the rules, and from asking those at the top to pay more and introducing fees on tobacco companies. The £2.5 billion will be used to employ enough doctors and nurses with the time to care for patients—20,000 more nurses to ensure that we get the basics right with safe staffing; 8,000 more GPs to help people stay healthy outside hospital; and 5,000 new home care workers and 3,000 more midwives. We will ensure better access and guarantee GP appointments in 48 hours or on the same day for those who need it. We will repeal the Tories’ NHS changes that put private profit before patients, so that our health service does the things that it should, such as care for patients and not argue about competition law. We will give patients and the public a real say over local services, and bring together physical health, mental health and social care into a single service to meet all of a person’s care needs —whole person care.
The message from the Darlo Mums to the Government was clear: hands off our NHS. It might not fit on a T-shirt, but my message today is equally clear. Labour built the NHS, Labour will save the NHS, and only Labour can transform it for the future.
Andrew George (St Ives) (LD)
It was in fact the Liberals who were the architects of the NHS, but perhaps that might be lost from history. The fact is that we have yet another occasion when the nation will be looking down and counting their shirt buttons as Members on the two Front Benches trade dodgy statistics and rewrite history. I am talking about the nature of the rather tribal debate that we had in the opening exchanges. My fear is that that is the biggest risk to the NHS—too much tribalism and not enough time spent addressing the serious issues of the NHS.
The right hon. Member for Leigh (Andy Burnham) is absolutely right that there are serious issues in the NHS that need to be addressed. What usually happens on these occasions is that the Secretary of State beats the right hon. Gentleman around the head with a report from Mid Staffs. I am pleased that on this occasion he did not, because that is often done in very bad taste and rather inappropriately.
Equally, I have to say to the right hon. Member for Leigh that, as the Secretary of State reasonably pointed out, he failed to acknowledge that Labour cannot ignore the fact that it ushered in and rolled out the red carpet for the private sector. The arrangements for the tendering for Hinchingbrooke hospital happened under a system set up by the then Labour Government. No matter at which stage various companies or NHS trusts fell out of or withdrew from the process, the course had been set by Labour. Unless he is telling us that he was going to preordain the outcome of a proper and open tendering process, which would of course be anti-competitive, he must have known that one of the options—this is what happened—was that a private company would take over the running of the hospital.
Andy Burnham
I am grateful to the hon. Gentleman for giving way, as I want him to be absolutely clear about how I operated that process. It followed the NHS preferred provider principle, which I introduced, and I began by asking the officials in the Department to see whether a local NHS trust was prepared to come in and take over. Addenbrooke’s was the trust I had in mind, but for some reason it was not prepared to do so at that point so we had to find a runner. I said that we had to go out more broadly, but my intention was clear: I wanted an NHS provider. That was where things had got to. The former Minister, the right hon. Member for Chelmsford (Mr Burns), mentioned March, but things were going into purdah at that point. That was where the process was when we left government and I want the hon. Gentleman to be clear on that point.
Andrew George
I am grateful to the right hon. Gentleman and, of course, he has now had the opportunity to put that point on the record. However, he must recognise that as others have said—indeed, I made this point when I intervened on him—the Labour Government rolled out the red carpet with the policy of independent treatment centres, walk-in centres and other services, where the taxpayer paid dearly for services that were not delivered.
The right hon. Gentleman knows that I did not support the Health and Social Care Act 2012. I saw it as a missed opportunity to address a large number of issues and it engaged in a top-down reorganisation that was not necessary. I fear that both the Conservative party and the Labour party appear to have been beguiled by a set of PowerPoint-wielding management consultants who have persuaded them that changing how the system works is an easy solution when, as a number of Members have mentioned, more than anything else the NHS needs much more integration of services—certainly not fragmentation—and for standards within it to be addressed.
The House knows that I always look to make a constructive contribution to such debates, so, as the Minister knows, I have been championing the case for safe staffing levels. The campaign of the Safe Staffing Alliance has argued for no more than eight acutely ill patients for every registered nurse, excluding the nurse in charge, on acute hospital wards. We need to establish a floor below which standards cannot fall, because services are often engaged in a race to the bottom because of financial pressures. That is very important. It is encouraging that that issue is now being taken seriously and I hope that the Government will consider the recommendations from other bodies to advance the cause.
With regard to the integration of health and social care in the wider community, there has always been the mantra that we need fewer hospital beds, and that certainly happened under Labour. That has resulted in many of our acute hospitals being on red alert and unable to manage the situation, with patients on inappropriate wards or stuck in ambulances queuing outside. That was clearly predicted by many people, not least me, when the policy was being pursued.
What we need to do is front-load the system to ensure that we can discharge patients from hospitals safely. We do not have the facilities for that, either in the community or in primary care. Of course, having that system of discharge and avoiding unnecessary admissions depends on having adequate services at home. Ultimately, that falls on the shoulders of home care workers, who themselves face a race to the bottom, as they are often paid the minimum wage and their travel times and costs are not properly covered. We therefore need a new benchmark that puts a floor in the system by paying those workers a living wage, covering their travel times and expenses, and protecting them so that we do not end up with the race to the bottom that I fear we are seeing in the system.
We need to ensure that we have safe services. Ultimately, we need to address care standards in our hospital wards and press for, rather than simply talk about, the integration of health and social care in order to address the fundamental challenges that the NHS faces.
Andy Sawford (Corby) (Lab/Co-op)
In the time available, I want to make the case for fair funding for health services in my constituency. My right hon. Friend the Member for Leigh (Andy Burnham) set out powerfully the charge sheet against this Government: a costly reorganisation that nobody wanted; a push to privatisation that nobody wanted, except perhaps some of the Tory donors; and fragmentation where we need integration—nowhere more so than in health and social care, because of the massive cuts to care budgets.
In my constituency there are brilliant health care workers struggling to deliver the best possible care for patients against the backdrop of all this disruption and undermining of the NHS. I was elected on a promise to fight for our local hospital services. A project called “Healthier Together” proposed reducing the number of beds at Kettering general hospital by 500, taking away proper maternity and children’s provision and downgrading accident and emergency services. The Prime Minister claimed that the threat was not real, but when the evidence came into the public domain—the hon. Member for Kettering (Mr Hollobone) stood up to his own Whips and raised it on the Floor of the House—the proposals were ditched.
Some 6,000 people had signed my petition. We continued that cross-party working locally, with councillors from all parties, and the hon. Member for Kettering and I worked with commissioners in the hospital on a plan for major investment. A bid will soon be submitted. We met the partners last week and are seeking a meeting with the Minister soon. Our plan is to really develop the innovative integrated urgent and emergency care approach being pioneered in north Northamptonshire so that more people can be treated more quickly and effectively, whether in primary, urgent or emergency care.
I have to tell the Minister that although there is a real will and a proven ability to innovate and do the best they can with resources, our local health services are severely hampered by a lack of resources. The midwives I met this week told me that they are being asked to work harder for longer and with increasingly stretched resources. That is a pattern across the NHS work force. Ambulance workers trying to improve response times are working longer shifts with increasingly outdated equipment. I was out in a paramedic vehicle with East Midlands ambulance service workers over the summer—a car that had done 300,000 miles without a working phone. That is what our health care workers are struggling with.
Our community health services are struggling. Older people are suffering from the withdrawal of podiatry services. Mental health services have been slashed, with people waiting and waiting for the therapy and treatment they need. Mental health nurses in my area are being made redundant and vital voluntary organisations that have been supported by public funding, such as Safe Haven in Corby, have been severely cut. Children are being sent to the other end of the country because care is not available for them locally, despite their being particularly vulnerable. Doctors’ surgeries are struggling— some more than others, but particularly in our small towns and rural areas. When I met residents in Stanwick the other day, they told me of their concern that, with plans to continue the growth of their village, the doctor’s services simply will not be able to cope.
I recently surveyed hundreds of my constituents about local health services. They told me that they support our cross-party campaign but are deeply worried about access to out-of-hours services, the difficulties of finding a GP surgery appointment and the increased privatisation of services. Specifically, they wanted me to put on record their concerns about the transatlantic trade and investment partnership and the impact that it could have on our national health services.
All these issues are being addressed in a context where we have the worst-funded health service in the country. A report published in September by the National Audit Office bears this out. It is called “Funding healthcare: Making allocations to local areas”. The NAO says that Corby is the worst-funded area of England for health care, receiving £186 less per person per year than the allocation that the NHS says it needs. Each year, the Department of Health and NHS England make these allocations to local commissioning groups, aggregating funding for local primary care, hospital, community and mental health services. The NAO’s analysis suggests that in Corby we are 12.8% below the target that is needed to meet local health needs. That compares with £508 per person above target in the highest-funded area in west London. The head of the NAO, speaking about the report, said:
“Funding allocations have reflected, among other factors, a desire not to upset local health economies by taking funding away or even increasing it by less than inflation. This has significantly slowed progress towards a fair distribution where funding fully reflects needs across the country. The Department and NHS England need to consider carefully whether this approach is fast-moving enough to sustain hard-pressed local areas in the next few years.”
It is totally wrong that health services in Corby are being starved of funds. How can it be right that people in Chelsea or in Kensington are allocated £694 per person extra per year for health funding? Corby’s health care service is doing a good job of managing with these limited funds. The new urgent care centre, for example, is a beacon, but other services are having to be cut back. The NAO found that the unfair distribution is taking place because many decisions are based on individual civil service judgments instead of evidence. The report’s detail and recommendations really stand up to the charge that the Government’s policy is not based on evidence.
The NAO found that the problem is exacerbated because proper account is not taken of population growth. My area has the highest birth rate in England; it is one of the fastest-growing towns in the country. This creates a real double whammy for our local services. It is a basic question of fairness that Corby should be funded according to needs. Therefore, in the coming months, I will be asking local people to join my campaign for fair health funding. Together, we will demand that the Government listen and end the injustice of filling the coffers of health commissioners in wealthy areas of the country at the expense of my constituents in Corby.
David Morris (Morecambe and Lunesdale) (Con)
It is an absolute pleasure to serve under your guidance, Mr Speaker, in this debate about access to services.
I share one thing in common with the right hon. Member for Leigh (Andy Burnham), which is that I am from Leigh, as we both know. I am still under a specialist in Leigh, whom I have seen on many occasions. I have never had to wait and it has always been on time. I have seen specialists across at Tommy’s—St Thomas’s—without ever having to wait and always on time. I have also seen specialists in Lancaster without ever having to wait and always on time. I have heard all the stories about waiting lists and delays, but I personally have not experienced that. My family in the right hon. Gentleman’s constituency, where they still live, have not experienced it either. When my mother was leaving this world, shall we say, she had exemplary care from the local health trust. There was never any talk among the health professionals of cuts. They did not know who I was; I was just another person who was losing their mother.
I do not like to be tribal. The right hon. Gentleman and I have had terse words in the past, but I will say this on the record in the House: he is a good man and an honourable gentleman. I have friends who have voted for him. He is very well-regarded in his constituency. But what upsets me—I do not want to change the tone of this debate—is that in my constituency the Labour party is campaigning on the basis of an erroneous agenda of cuts, hospital closures and A and E closures that have never happened and are not going to happen. I received an e-mail today from a constituent who is absolutely terrified that the local Royal Lancaster infirmary is going to close, but it is not. There is no suggestion of it closing. In fact, I have spoken to the chief executive and she said, “I don’t know where this has come from.”
We are in the run-up to a general election and it is the silly season—that is evident to everyone inside and outside the Chamber—but it does no service to anybody in the political world, never mind the Opposition, if candidates up and down the country are going to fight about cuts and closures to the health service that are not even happening in certain areas. That will certainly not play into the hands of an incoming Government.
In my constituency of Morecambe and Lunesdale, £25 million has been spent recently on a new health centre. The Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) opened a walk-in centre recently. We have been allocated £150 million to improve the local trust, most of which will be spent on the Royal Lancaster infirmary, which has four new hospital wards, and we have just received £2 million for GP access at the weekend. Two weeks ago, I opened a new mental health facility in my constituency.
Morecambe and Lunesdale has never seen so much investment in the NHS, yet the Labour party in my area says that everything is going to hell in a handcart and the hospital is closing down, but that is wrong. The RLI is not going to close, and neither was the hospital serving Corby, which the hon. Member for Corby (Andy Sawford) campaigned on.
James Morris
My hon. Friend is making a powerful case. In my constituency, there has been millions of pounds of new investment in the Rowley Regis hospital, which was under threat under the previous Government when all its in-patient wards were closed. The recent sign-off on a £350 million new integrated hospital in Smethwick in Sandwell, one of the most deprived areas in the country, will substantially benefit the population’s health care and also help regenerate the economy.
David Morris
I thank my hon. Friend and namesake for making that point.
I am passionate about the NHS and I know that the Opposition and the right hon. Member for Leigh are also passionate about it, but we should get a grip on reality. Campaigns are saying that £25 million is being cut from the local trust when £150 million has been invested in it, so the maths do not stack up. As my hon. Friend the Member for St Ives (Andrew George) has said, we have been horse-trading figures, but we have to look at the reality of the situation. Scaremongering is not the way forward, because all it does is alienate the electorate, my constituents and the people we all live with across the nation and put fear into the services that we are trying to protect.
I am facing a third erroneous campaign on health cuts in my constituency, and my mail box is always full every time there is such a campaign. All it seeks to do is frighten the electorate, but it does not frighten me, because the electorate know the truth.
Mr David Ward (Bradford East) (LD)
I was not going to intervene on the hon. Gentleman, but I sympathise with him, because Labour activists in my area have been campaigning against the closure of a treatment centre when all that happened, in fact, was that the contract came to an end. Hard work is now going on to make sure that the provision continues in another form. The big campaign was that this was about cuts and closing a treatment centre, but it was never going to close.
David Morris
I share my hon. Friend’s sentiments.
My hospital in Lancaster, in my neighbouring constituency, is not going to close. Like everyone else in the Chamber, I care about the NHS, but I appeal not just to the Opposition, but to all political parties that have the honour to serve here and speak: let us get a grip on reality, stop scaremongering and work towards making a better NHS. It has been an absolute pleasure to speak in this debate.
Mr Andy Slaughter (Hammersmith) (Lab)
I make no apologies for addressing my comments to the latest developments in the “Shaping a healthier future” programme, the comprehensive reorganisation of health services that is affecting 2 million people in west and north-west London. It constitutes the biggest hospital services closure programme in the history of the NHS, and I believe that it will be the prototype for similarly draconian cuts if the current Government are, by some misfortune, re-elected.
The programme was two years in planning—in secret—and was announced in June 2012. It involves the closure of four of the nine accident and emergency departments in the area, and the closure, effectively, of two major hospitals. It affects both A and Es in my constituency and, indeed, the complete demolition of Charing Cross hospital, one of London’s major hospitals. At the time, all but 3% of the land on which that hospital stood was to be sold off.
There followed two years of confusion, phoney consultation, buck passing and false information, and decisions were taken by primary care trusts that were then abolished the following month. The original scheme was so incompetent that the business case was delayed for more than a year. It emerged last month, and now requires 50% of the Charing Cross land to be sold, as well as 50% of the land at St Mary’s, Paddington. However, it still requires £400 million of borrowing to be approved by the Treasury, despite the fact that the trust—Imperial College Healthcare NHS Trust—cannot manage its finances from one month to the next.
Exactly a year ago, the Secretary of State announced in the House that the Hammersmith hospital and Central Middlesex hospital A and Es should close as soon as was practicable, and that in fact happened on 10 September this year. Two A and E departments closed in one day, with people who attended them being told to go to Northwick Park and St Mary’s hospitals. Four days later, The Mail on Sunday reported in relation to Northwick Park:
“An accident and emergency unit criticised in an official report for being unsafe and unable to cope with demand is set to be swamped with thousands of extra patients—thanks to emergency department closures elsewhere. The Chief Inspector of Hospitals painted a picture of chaos at ‘very busy’ Northwick Park Hospital in Harrow, North-West London, after a recent visit. But its A&E will soon have to deal with at least 8,000 more patients a year due to the controversial closure of two London units last week.”
How that can be said to be a practicable and safe decision, I do not know. At the trust’s annual general meeting two weeks later, the chief executive—newly arrived from Australia—told people that they should not rely so much on A and E departments. Well, they do not have a great deal of choice in my constituency.
Is closing two neighbouring A and E departments enough? Clearly not, despite the fact that GP and community services are also being cut—I wish I had the time to go into that in more detail—because the closure of Charing Cross hospital A and E is being persisted with. That hospital is still due for demolition and downgrading. The current plan is for it to lose all but 24 of its 360 in-patient beds, its emergency surgery unit, its intensive therapy unit, its stroke unit and of course its A and E, which will leave only primary care treatment and day surgery on site.
Gavin Shuker (Luton South) (Lab/Co-op)
My hon. Friend, alongside his local party, has mounted a truly impressive campaign to protect those services. Government Members say that they are the defenders of the NHS. What action has been taken locally by other political parties to support him?
Mr Slaughter
The Conservative party fully supports the closures of the A and E departments. When it ran the local authority—fortunately, it no longer does so—it simply put out disinformation about whether the service closures would or would not take place. It is only because of the actions of local residents that my constituents know exactly what is happening.
Worse than that, on 15 May the Prime Minister came to my constituency for one purpose and one purpose only—to go into the basement of the Conservative party offices and give an interview to a local journalist, in which he said that Charing Cross hospital would retain its A and E and other services, and he then left. That was of course one week before the local elections. On 7 September, The Mail on Sunday, which I now regard as the paper of record on this issue and which has fought a strong campaign on behalf of A and E departments, reported the following:
“A casualty unit that David Cameron personally promised would stay open is due to be closed, The Mail on Sunday can reveal. Days before council elections in May, the Prime Minister visited Hammersmith in London and stated that Charing Cross Hospital in nearby Fulham ‘will retain its A&E and services’. But the organisation that runs the hospital intends to close the department and replace it with an ‘urgent care centre’, NHS papers show. Urgent care centres can be run by GPs and nurses rather than A&E consultants, and have far fewer facilities to care for the seriously ill or injured.”
I do not think that I need to explain that any more. The Prime Minister, for the purely party political reason of supporting a Conservative local authority that he has described as his favourite, did not say what was factually correct.
If they were not so disingenuous and incompetent, I might have some sympathy for those at the trust because, under instruction from their political masters, they have to argue against themselves. On 7 October, they came to answer questions from the scrutiny committee of the local council. They were asked about Charing Cross hospital and said that, in future, it will have
“emergency services appropriate for a local hospital”.
They were cross-examined on that issue and could not amplify their position, so we are none the wiser. However, we do know that a hospital that has only primary care and treatment services cannot sustain an A and E department. In the interests of safety, as well as honesty, it would be better if that was admitted to my constituents.
I will end with the beginning of a letter that is in the Evening Standard today. It is from Anne Drinkell, who is the admirable secretary of the “Save our hospitals” campaign in Hammersmith and a former community matron. She says:
“You highlight the pressures that closing A&Es at Hammersmith and Central Middlesex hospitals put on surrounding emergency departments. God help us if plans to close Charing Cross A&E go ahead. Imperial NHS Trust’s management seems in chaos, with leaked internal memos detailing cuts in acute beds and a mounting deficit. It has been unable to provide a clear description of what future ‘emergency’ care at these sites would look like. A notice on the back door at Hammersmith still advises patients to take sick kids to the now-closed Central Middlesex A&E”.
She ends by saying:
“We ask North West London NHS for a moratorium on closures until they consult on plans for change based on clinical need, not budget cuts.”
Is that an unreasonable request?
Chloe Smith (Norwich North) (Con)
I want to put on the record my view, which is shared by many in this House, that the NHS is an extraordinary, valuable, historic British institution. I pay tribute to its staff, who work particularly hard in the face of pressures. I also pay tribute to its many patients, who include my constituents and those of everybody else in this House. My substantive comments fall into two halves: those on the national pressures on the management of the NHS and those on the local issues that I wish to raise.
It is important to acknowledge that the NHS, however valuable, precious and emotive a subject it is, does not spring from nowhere. It springs from people’s money, which we collect in taxes to spend on their behalf. One of the most important decisions that the Government have taken was the decision at the beginning of the Parliament to ring-fence NHS spending. That has enabled me to communicate to my constituents the importance that we place on the NHS. I want that point to ring out from my contribution.
The other crucial thing that the Government have done is put the economy on a more secure footing at the same time. It is a strong economy that creates the means to have plans for any public services. I think that is a truth that we all acknowledge. By the way, I pay tribute to my hon. Friend the Member for Morecambe and Lunesdale (David Morris) for his very honourable speech in both tone and content about the honesty with which we should aspire to treat the NHS.
Of course, volumes are increasing in the NHS. The Secretary of State was honest in his opening speech in saying that there are pressures. Again, I applaud the staff on dealing with those pressures. Let me give a few examples of the increasing volumes in the NHS. Some 850,000 more operations are being delivered each year than in 2010; there are now 6.4 million more out-patient cases and 1.1 million more in-patient admissions; and more than 77,000 more people each year are being diagnosed with, and treated for, dementia. No wonder the NHS is under pressure when we see the demographic changes behind those figures, and the changes in demand. I applaud NHS staff for what they do, and note that the other key number this Government have delivered on is by having more than 13,500 more clinical staff, including more than 6,500 more doctors and 3,700 more nurses. That is something to praise.
My constituents know the value of a plan and the need to deal with pressures, and they know what they want out of a future NHS that stays within the budget available to it. Let me draw on three local points. The first is Norfolk and Norwich university hospital, and I am glad the Minister has agreed to visit Norwich and meet patients and staff, and to look at a few of the challenges we face. It has already been widely reported in our local press—it will not be strange news to him, a fellow East Anglian—that the Norfolk and Norwich university hospital faces pressures and a lack of beds. The point has been well made today that systemic pressures feed into the number of beds available at any one time, and I would like the Minister to support the NHS in Norwich, as I do as its local MP, and find a way through those pressures. The hospital did that last winter, and I am confident it can do so again.
Secondly, I wish to mention GP access—this is a debate about NHS services and access—and urge Norwich GPs to apply to the second access fund from next April. I understand that there were no applications from Norwich or Norfolk to the first access fund, and it is incredibly important to take every opportunity available in the system within which GPs work to make services more accessible to their patients. I regularly discuss with constituents the challenges they face in making an appointment with their GP, and one of the solutions to that problem is the access fund from this Government, which I applaud.
Thirdly, the Norwich walk-in centre is currently located in a shopping mall in the city centre. The landlord of those premises has terminated that contract which has, of course, created a need to change location. I have sought to be at the heart of those negotiations on behalf of my constituents because we need a quick solution to the problem. It is not acceptable for the NHS to fail to plan for what is needed for Norwich’s primary and urgent care, and I would welcome the Minister’s support for Norwich staff and patients.
Finally, I endorse the Conservatives’ proposed plan to continue to ring-fence and increase spending on the NHS in real terms. That will allow us to move to a 21st-century NHS, where, yes, there will be pressure, but we should fix that through a stronger economy, not through more borrowing and more debt.
Jim Shannon (Strangford) (DUP)
The motion is entitled “Access to NHS services” and I wish to comment on four categories of the NHS where services can be improved. Today we have heard one of the central themes of the next Westminster election on 7 May next year, because the battleground will clearly be the NHS. We have heard different opinions from both sides of the Chamber about the best way forward.
Parkinson’s disease is a progressive neurological condition that affects 127,000 people in the UK with an average age of 50 to 60. One person in every 500 has Parkinson’s disease, and there is no prospect of a person’s condition improving over time as there is currently no cure. Medication is the main treatment for the symptoms of Parkinson’s disease, and many people require multiple doses at specific times throughout the day. People with Parkinson’s who are admitted to hospitals are often prevented from managing their own medication, or are not given it in time. That leads to a deterioration in their condition, or even to permanent harm. It is clear that that costs the NHS some £20 million a year and that it is down to medication mismanagement in hospitals. It is a simple matter of receiving medication in time. What steps is the Minister taking to ensure that people with Parkinson’s always receive their medication on time in hospital, which in turn would mean that patients could return home sooner and that those costs could be greatly reduced? We talk about access to NHS services, but we need to know about funding, too.
Other hon. Members, including the hon. Member for Norwich North (Chloe Smith), have referred to Alzheimer’s. The numbers are horrific. Some 856,000 people in the UK have it: 720,000 in England; 45,000 in Wales; 70,000 in Scotland; and 21,000 in Northern Ireland. It will cost the UK £26 billion a year. Yet again, the question is: can access to NHS services happen? The costs are astronomical. How does the Minister plan to prepare for providing the necessary services in the years to come, perhaps at a reduced cost, and ever mindful of the access to the NHS services we all wish to have?
My third concern is diabetes. It is a great concern to many. It has been referred to in the Chamber and other places as a ticking time bomb that will cost the NHS the most money. It is also a question of access to services. I declare an interest as a type 2 diabetic—other hon. Members have the same problem. Diabetes UK says that, in this year alone, 280,000 people will be diagnosed with diabetes, which is the equivalent of the population of Newcastle—if we want to put the problem into perspective and relate it to a town or a city, that is the figure. The number of people living with type 1 and type 2 diabetes has increased throughout the UK: by 33% in Northern Ireland; by 25% in England; by 20% in Wales; and by 18% in Scotland. Some 738 people are diagnosed with type 2 diabetes per day.
The cost is significant. A report on diabetes in the NHS estimates a total cost of £3.5 billion per annum, or £9.6 million per day. An estimated 10% of the NHS budget is spent on diabetes, which is some £286 a second. The problem is funding and access to services. How do we ensure that people who are diabetic access NHS services?
A health survey in Northern Ireland—I am sure the figures are equivalent for the rest of the UK on the mainland—showed that some 62% of adults were classified as overweight or obese. The interesting thing that worries me a wee bit is children. Some 19% of children were reported to be overweight, and a further 6% were reported to be obese. When it comes to access to NHS treatment, what steps is the Minister taking to address childhood obesity and diet?
My final point is on cancer drugs. A central theme of the motion is cancer referrals and treatment waiting times. The problem impacts not only on those on the mainland, but on those of us in Northern Ireland and on our access to cancer drugs, despite Northern Ireland being an integral part of the United Kingdom and despite it being covered by the work of the National Institute for Health and Care Excellence, unlike Scotland, for example. Patients in Northern Ireland do not have access to 40 cancer drugs simply because of their postcodes.
In my discussions with Jim Wells, the Minister who has responsibility for health in Northern Ireland, he has referred to access in Northern Ireland to the individual funding request, whereby a consultant can submit an application for one of those 40 drugs on a patient’s behalf. However, there is a high hurdle, known as the “exceptionality test”, which is very hard to pass. Many consultants in Northern Ireland do not apply to use the IFR and know that the application will not pass. What discussions has the Minister had with the Minister in Northern Ireland on that? It is totally unfair. I am baffled and find it totally unacceptable that the access to treatments for my constituents who are diagnosed with cancer—they live in Northern Ireland and pay UK tax—is far more limited than it is for patients in the rest of the UK. With that in mind, I believe it is time for the provision of cancer drugs across the whole United Kingdom, and to the 331,487 people in the UK with cancer, irrespective of postcode.
Gavin Shuker (Luton South) (Lab/Co-op)
Many hon. Members on both sides of the House have talked about their personal experiences of the NHS, and movingly about the care that they and others have received. It might not have escaped the House’s notice, but I am statistically one of the least likely Members to access NHS services, being under the age of 40—[Interruption.] I hear disparaging remarks about my size coming from my left, but I will ignore them.
I was extremely grateful to receive incredible care for my wife and child when Ruby, my daughter, was born last year, and got to see, incredibly and movingly, the dedication of NHS midwives, doctors and other staff as well.
I am hugely moved as well by the fact that locally in the seat I represent in Luton we receive fantastic NHS care. We have Luton and Dunstable hospital, and we were pleased to welcome the Darlington mums who had marched down to Whitehall to protest about the changes to the NHS when they came through Luton. They made many of the points I want to make today. They, as members of the general public, were able to articulate what I do not believe many Members across this House could: the depth of passion people feel for the NHS.
I would just say this. A number of different contributors today have talked at length about statistics and churned out figures, but for me there is one stand-out statistic from this Parliament: the level of patient satisfaction in the NHS. We can talk until we are blue in the face about which target should be met and which target should be missed, but it speaks volumes to me that the highest ever level of patient satisfaction was in 2010 when this Government came to power and it has dropped since then. That should cause us to ask profound questions, because we understand that a new top-down reorganisation of the NHS can only do one thing, which is distract from patient care. That is the experience in this Parliament.
People forget that the NHS is not a series of services that can easily be bolted together. It is more a network or a system, and just as Beeching wielded his axe and chopped up different parts, compartmentalising and fragmenting the railways, so we must be aware of the lessons of history when it comes to fragmentation in our NHS system. It is the role of us in this Parliament not just to protect our own local services or seek to move forward with the amazing new treatments that exist now, but to protect the legacy of the NHS over the last 70 or 75 years.
Will this Government talk about the massive error that was the reorganisation of the NHS in this Parliament and allude to two others? The starvation of funds by the Tories in the ’80s and ’90s that had to be put right by a Labour Government in 1997, who saved the NHS, is the second, and opposing its creation in the first place was the Tories’ original sin on the NHS, but they seem not to have learned that lesson. They continue to make this mistake, and it has led to 440 new organisations in the NHS, tying up hospitals in competition law, with 4,000 staff laid off and then rehired. Is this not the waste we have talked about in our system—the waste that could be repurposed for better patient care, and a rise in patient satisfaction as well?
We need a clear plan for putting this system back on track, because of the many shortages and the rationing we have seen in the system. The first plank of that plan, advocated by my right hon. Friend the Member for Leigh (Andy Burnham), is to be clear about our plans to repeal this damaging Tory NHS Act that has done so much damage in this Parliament. I am glad to hear that in five weeks each of us in this Parliament will be asked to cast our votes for the repeal of the most damaging aspects of this legislation, and I pledge to my constituents that I will not be found wanting when that comes. We must also exempt the NHS from the transatlantic trade and investment partnership, make sure the extension of competition law that has led to a massive acceleration in privatisation is curbed, increase NHS spending by £2.5 billion a year in a sustainable way to make sure the NHS has time to care, and hire 36,000 new nurses, doctors and midwives.
That is the expectation that will fall to us in the next Parliament, but in this Parliament there is also something that needs to be done. Government Members must admit publicly, not just privately, their error in going about this reorganisation, and commit to the funding that is going to be required. We all accept that there are no easy solutions, and politicians can sometimes get wound up in all sorts of knots trying to defend services that should be reconfigured. I fully accept that. But, fundamentally, we are the custodians and the guardians of the greatest mechanism against social inequality and the greatest mechanism to attack health inequality head on. The national health service is an institution rightly held in high regard by the people who believe they own it, not those who are asked to be its custodians. It is the crowning achievement of the 1945 Labour Government. It needs to be rescued by successive Labour Governments after Tory Administrations. The NHS demands nothing less.
Liz Kendall (Leicester West) (Lab)
It is a pleasure to close today’s debate and to follow my hon. Friend the Member for Luton South (Gavin Shuker), who spoke very powerfully. In fact, hon. Members on both sides of the House have spoken with great passion and commitment about the NHS and the vital role it plays in their constituents’ lives and in their families’ lives. Many hon. Members, including the hon. Members for South West Devon (Mr Streeter), for Bosworth (David Tredinnick) and for Morecambe and Lunesdale (David Morris), have rightly praised NHS staff for working tirelessly to deliver good quality services despite all the challenges they face.
However, we have also heard countless examples of what the Alzheimer’s Society, the Multiple Sclerosis Society, the Royal College of Nursing, the Royal College of Midwives, the Royal College of General Practitioners, the Royal College of Physicians, the Royal College of Paediatrics and Child Health, the British Medical Association and many others said in their letter to The Independent last week. It stated that
“Signs of a system buckling...are everywhere…The NHS and our social care services are at breaking point and things cannot go on like this.”
We heard from my hon. Friends the Members for Corby (Andy Sawford) and for Worsley and Eccles South (Barbara Keeley) about how more and more people are struggling to get an appointment with their GP, with one in four waiting at least a week and thousands waiting more than two weeks.
Hon. Members, including my hon. Friend the Member for Nottingham South (Lilian Greenwood), spoke about how the huge cuts to local council care budgets mean half a million fewer older and disabled people, some of the most vulnerable people in society, are getting vital services, such as home care visits or home adaptations. This is leaving their families struggling to cope and to pick up the pieces.
Fewer services in the community mean that increasing numbers of frail, elderly people end up ringing 999, going to A and E and getting stuck in hospital when they do not need to be there, causing them and their families distress and costing the taxpayer far more. Ambulance services are under huge pressure, as my hon. Friend the Member for North Durham (Mr Jones) said. Hospital A and Es have now failed to meet the Government’s lower four-hour waiting target for 63 weeks in a row. A and E performance over the summer has been worse even than at the height of last winter. Delayed discharges from hospital are at a record high and cost more than £250 million in the last 12 months alone—money that could have paid for a year’s home care for 37,000 older or disabled people. Where on earth is the sense in that?
Rising emergency admissions and delayed hospital discharges mean planned operations are going backwards, too. More than 3 million people are now on the waiting list. The 18-week maximum wait target has been missed for the last two months in a row, and the NHS has missed the 62-day wait for vital cancer treatment—
Liz Kendall
I will not. [Interruption.] If the hon. Gentleman is going to talk about Wales, 90% of patients get their treatment within that target, compared with 84% here, so let me save him some time and bother.
The Government’s failure to keep people out of hospital and keep waiting lists under control, means the NHS is facing a looming financial crisis, too. Two-thirds of all acute hospitals are already in deficit to the tune of £500 million. They predict they will end the year £1 billion in the red, piling on the pressure for even greater service cuts and worse standards of care in future.
The tragedy is that it did not have to be this way. After 13 years of investment and reform, the previous Labour Government left the NHS with the highest ever patient satisfaction rates and the lowest ever patient treatment waits. But we were not complacent. We understood that the NHS had to face up to even bigger challenges: our ageing population, the increase in long-term conditions and huge medical advances, at a time when there is far less money around. For that reason, we had a plan in every region to reform front-line services, through Lord Ara Darzi’s NHS next stage review, by delivering some services in specialist centres so that patients got expert treatment 24/7 and by shifting other services out of hospitals and into the community. It was a move towards prevention joined up with social care to help people stay living at home. Instead of going ahead with our reforms, however, the Government scrapped them and forced through the biggest backroom reorganisation in the history of the NHS, wasting three years of time, effort and energy, and £3 billion of taxpayers’ money that should have gone on patient care.
The Health Secretary told the House today, and said on the “Today” programme, that the Government had saved £1 billion.
Liz Kendall
I actually picked up the copy of the report he left behind, and I found his highlight. It reads:
“The estimated administration cost savings outweigh the costs of the reforms”,
but it does not mention the £1 billion figure. In fact, paragraph 4.10, on the reliability of the Department of Health, states “we found…limited assurance” in the figures. It also states that
“strategic health authority staff did not verify the figures submitted to them by primary care trusts”
and that it
“saw no evidence that the”
Government
“challenged these figures.”
Far from being independently verified, as the Health Secretary claims, they have been made up on the back of an envelope. [Interruption.]
Government Members can complain, but we have constantly argued that the NHS reorganisation has been the single biggest mistake made by the Government, and now we find out that members of the Cabinet agree. An ally of the Chancellor told The Times:
“George kicks himself for not having spotted it or stopped it”.
A former No. 10 adviser says that
“no one apart from Lansley had a clue what he was really embarking on—certainly not the prime minister”.
So we have a Chancellor, who is meant to safeguard public money, failing to stop billions of pounds of waste and a Prime Minister who claimed the NHS was his top priority, but was too confused or complacent to bother to understand his own plans. The Conservative party still does not get it. One Downing street adviser is quoted as saying:
“A lot of work had gone into persuading people that David Cameron believed in the NHS, had personal experience and cared about it. Then the Conservatives came in and forgot all about reassurance. Lansley managed to alienate all the professional people in Britain who were trusted on the NHS.”
The Government’s NHS reorganisation was not just terrible politics; it is terrible in practice for patients, taxpayers and NHS staff. I remind hon. Members that the Health and Social Care Act 2012 did not just create 221 CCGs, 152 health and wellbeing boards, NHS England, Public Health England and Health Education England; it also created four regional NHS England teams, 27 local area NHS England teams, 16 specialist commissioning units—well, there were 19, but at least two have already been merged—and 10 specialist commissioning units. That is on top of Monitor and the Care Quality Commission. It is a system so chaotic and confusing that no one knows who is responsible or accountable for leading the changes patients want and taxpayers need.
And now, just when we thought it could not get any worse, another major new reorganisation is under way. NHS England was commissioning primary care and specialist services, but in May it announced it wanted to give primary and specialist commissioning back to CCGs to try and patch up the fragmentation created by the Government's own plans. How much will this second reorganisation cost patients and staff?
Patients, staff and taxpayers cannot afford another seven months, let alone another five years, of this Government. They need a clear plan to restore care standards and restore care services so that they are fit for the future. Opposition Members would use the savings from scrapping the cost of competition in the NHS to guarantee new rights for patients to see their GP at a time that is convenient for them. We would raise £2.5 billion from a mansion tax, clamping down on tax avoidance and a levy on the tobacco companies to fund more GPs, nurses, midwives and homecare workers to transform services, particularly in the community. We will support carers with new duties on the NHS to identify family carers, a single point of contact for information and services and ring-fenced funding for carers’ breaks. Our plan for whole-person care would ensure the full integration of physical and mental health and social care services into one service with one team to meet all of a person’s needs.
At the next election, there will be a real choice on the NHS: a choice between care going backwards and money wasted under the Conservatives or Labour’s plans to fully join up services to get the best results for patients and the best value for money. It will be a choice between the Conservatives who have broken their promises to protect the NHS, throwing the system into chaos and blaming staff, or Labour who will make the real reforms we need so that people get personalised care in the right place at the right time. It will be a choice between the Conservatives’ unfunded plans to cut taxes for the wealthiest or Labour’s fully funded plans to reform the NHS and care services on which we all rely. I commend the motion to the House.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
It is a pleasure to conclude this debate and to speak to the contributions of hon. Friends and hon. Members. It is a pity that when we have NHS debates, they sometimes become unnecessarily tribal and partisan. Some Labour Members often seek to talk down the local NHS rather than to stand up for their hard-working NHS staff who deliver high-quality services on the ground.
I want to talk about some of the successes this Government have delivered for our NHS and then I shall address some of the points raised in the debate. We know that even in these difficult economic times, this Government have protected our NHS budget with £12.7 billion more during this Parliament. That was something that the shadow Secretary of State, the right hon. Member for Leigh (Andy Burnham) called “irresponsible”, but it is not irresponsible to make sure that we continue to support and protect the NHS front line. We have stripped out over £5 billion-worth of bureaucracy and reinvested that money into front-line patient care. That has been audited by the National Audit Office, but the hon. Member for Leicester West (Liz Kendall) did not choose to highlight that point in her remarks. It has been confirmed and we know it is true.
I make no apology for the fact that we as a Government have focused ruthlessly on having a more efficient health service that frees up as much money as possible for front-line patient care. We have reduced the number of administrative staff by around 20,000, increased front-line clinical staff by over 12,500 and set up a cancer drugs fund that has helped 55,000 people who would not have received cancer drugs to receive them. There has been an unrelenting focus on promoting a more joined-up approach to care, to help deliver more care in the community for people with long-term medical conditions, particularly the frail elderly.
Let me deal with some of the comments and contributions to the debate. I would like to reassure my hon. Friend the Member for Morecambe and Lunesdale (David Morris) that the hospital in his constituency is, of course, not going to close and that any local scaremongering by the Labour party is wrong and misplaced. I would also like to reassure the hon. Member for North Durham (Mr Jones), who raised concerns about the north-east ambulance service, that the service has generally been performing well. In 2013-14, it met all its national targets. I urge the hon. Gentleman to write to me if he has any further concerns on behalf of local patients.
We heard strong contributions from my hon. Friend the Member for Norwich North (Chloe Smith), who made important remarks about the services delivered at the Norfolk and Norwich hospital, and I look forward to accepting her invitation to visit that hospital once again in the near future, and from my hon. Friend the Member for Bosworth (David Tredinnick) who made one of his regular pleas for more alternative medicine in the NHS. Importantly, he talked about the benefits of clinically driven commissioning. Under this Government, we have put doctors and nurses in charge of our NHS to make sure that services are delivered at local level. Patient services are run by doctors and nurses, not by bureaucrats, which has been a tremendous step forward. My hon. Friend the Member for St Ives (Andrew George) made a considered contribution about the previous Government’s record on encouraging private sector providers in the NHS—a point to which I shall return.
Lilian Greenwood
What does the Minister think about what happened to the clinical commissioning group in North Staffordshire, which decided not to allow people with mild to moderate hearing loss to have hearing aids, even though that was clearly not the view of the local health scrutiny committees or local patients? Is that not precisely putting in jeopardy preventive services, which would keep people in work and keep them active in the community rather than being isolated? It is stopping those people from participating.
Dr Poulter
If the hon. Lady has concerns about local commissioning decisions, she should take them up with local commissioners. Time forbids me from going into the rationing of services by the previous Labour Government. It is important that clinical services are now designed and delivered by front-line health care professionals, and if she is concerned about them, I am sure she will take that up with her local CCG.
The right hon. Member for Leigh (Andy Burnham) referred to a work force crisis in GP training. It is clear that under this Government 1,000 more GPs are now in training and working in the NHS than in 2010 when we came into government. If it is not accepted that that is good start, we have committed to training an extra 5,000 because we want more people working in general practice.
We have ensured that 1.3 million more people are being treated in A and E compared with the number in 2009-10. We have halved the time that people must wait to be assessed, and every day we are treating nearly 2,000 more people within the four-hour target compared with the number in 2010.
Competition was introduced into the NHS not by the Health and Social Care Act 2012 but by the previous Labour Government, of whom the right hon. Member for Leigh was a Minister. The Labour Government opened the door to private sector providers when they opened the first independent sector treatment centres in 2003. The Labour Government gave £250 million to private companies and independent sector treatment centres, regardless of whether they delivered that care. Labour was more concerned about giving money to the private centres than about ensuring that quality care was delivered. Labour paid independent private sector providers 11% more to provide the same care as NHS providers. That is Labour’s record on the private sector in the NHS—a record that shows that it is more committed to the private sector than any previous Conservative Government.
Kevin Barron
If that is the case, will the Minister—as a Back Bencher, he sat on the Health Committee—tell us why there were so many clauses in the Bill that introduced the Competition Commission and the Office of Fair Trading into our national health service?
Dr Poulter
The right hon. Member will be aware that Labour’s legislation, which gave the private sector the opportunity to tender for contracts, saw 5% of NHS activity—I believe that figure is correct—provided by the private sector at the end of the last Labour Government. In the Health and Social Care Bill, we wanted to stop the unregulated approach. We wanted greater emphasis on integration of health care services. It was not just about the private sector provider fixing someone’s hip and forgetting what sort of care was available when their hip had been repaired and they had gone home. It was about ensuring greater emphasis not just on competition and what was best for patients, but on integrated and joined-up services to ensure that people were properly looked after when they left a treatment centre. We stopped the cherry-picking of services that happened under Labour, and we are proud of that.
We will take no lessons from the Labour party on NHS finances. Labour was the party that crippled the finances of so many NHS trusts with PFI deals, and it was the party that during its final year in government saw the number of managers rise six times as fast as the number of nurses.
I am proud of this Government’s record on the NHS and I am proud of our record on integration. There will be a clear choice at the general election next year: a Conservative-led Government who have delivered for patients, a Conservative-led Government who have delivered on cancer services and a cancer drugs fund, and a Conservative-led Government who will continue to ensure better care for people with long-term medical conditions. We have a proud record on the NHS and I urge my right hon. and hon. Friends to oppose the motion.
Question put.
Business without Debate
(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Delegated Legislation
(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Madam Deputy Speaker (Mrs Eleanor Laing)
With the leave of the House, we shall take motions 3 and 4 together.
Motion made, and Question put forthwith (Standing Order No. 118(6))
Copyright
That the draft Copyright and Rights in Performances (Certain Permitted Uses of Orphan Works) Regulations 2014, which were laid before this House on 7 July, be approved.
That the draft Copyright and Rights in Performances (Licensing of Orphan Works) Regulations 2014, which were laid before this House on 7 July, be approved.—(John Penrose.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6))
Constitutional Law
That the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2014, which was laid before this House on 7 July, be approved.—(John Penrose.)
Question agreed to.
Public Sector Executive Pay and Governance
(9 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr David Amess (Southend West) (Con)
The Economic Secretary to the Treasury and I are both Members of Parliament and politicians, and, as such, we are under no illusion as to how politicians are regarded. We are blamed when things go wrong and, from time to time, we are praised when things go right, and we make no apology for any of that. As Members of Parliament, we are paid £67,060, and the pay for the Prime Minister is £142,500. Some people would say that that is a lot of money, and it is compared with the pay of all sorts of people, but the Minister and I are judged by the electorate every five years. If they do not like us, they can get rid of us, and if they do not like our party, we may pay the price for that too, so we are constantly judged.
What I am increasingly angered by is the way public sector governance and executive pay are not working. I am sick to death of the relationship between chief executives and the chairmen of local authorities. There seems to be, in all sectors, a very cosy relationship, and there is no rigorous scrutiny whatever. The late Baroness Thatcher once famously stated:
“There is no such thing as public money; there is only taxpayers’ money.”
I called for this debate because there is, and has been under previous Governments, a huge problem with the ease with which taxpayers’ money is spent.
There are many hard-working people in the public sector, and I praise all of them, including those in the health service, the police and education, for doing a fantastic job under difficult circumstances. Thirty-one years ago, when I became a Member of Parliament, I did not think that I would be making this speech. I now think that the management of some public services is not up to scratch, and the salaries paid to the executive directors are in many cases absolutely outrageous and unjustifiable.
I have, of course, touched on this subject in previous debates, but I am sadly not sure that any action has been taken as a result of what I said. I have been looking very closely at how the management of my local public services function and to say that I have been unsatisfied with them would be an understatement. Of course, Madam Deputy Speaker, you are a fellow Essex Member and are proud to be so, and I am well aware that some of these organisations serve your constituency as well.
I have raised the issue of my local mental health trust, the South Essex Partnership University NHS Foundation Trust—or SEPT—my local hospital and probation services on many occasions in the House. Let me repeat once again that I will not let the matter drop when it comes to any of those services until I see a satisfactory and radical change of management.
This is not just about Essex and my constituency of Southend West. It is a nationwide issue. At 48.5% of our GDP, we have one of the highest public spending levels in the world. We spend more on public services than Germany, Japan, Canada, the USA, Brazil, Russia, Australia, Switzerland, South Africa or Singapore. Whereas I wholeheartedly support our hard-working medical staff and our wonderful police officers, taxpayers’ money could be managed much more efficiently and fairly.
Many aspects of our public expenditure need to be addressed. For instance, we contribute a net amount of €9.2 billion to the European Union—when the Prime Minister renegotiates things I know that that will be at the top of his agenda. We subsidise trade unions with the stunning amount of £113 million per annum, and lose 2.6% of total hours on sickness leave in the public sector, as opposed to just 1.6% in the private sector. However, I am going to concentrate more specifically on the problems that should be addressed in public sector governance and the salaries of public sector executives. When what I have to say is reported in Hansard, some of the individuals concerned will not like it.
My major concern about executive pay is not the amount of money directly paid to the director, but rather how in many cases it seems inversely proportional to the quality of service provided. We seem to be rewarding failure, which is absolutely and totally unacceptable. I have done some numerical comparisons of my own and the figures at which I have arrived are shocking. I attempted to compare the ratio of directors’ pay to the income from activities at various hospitals. For this reason, I compared my local NHS foundation trust’s management, with which I am very unhappy, and Salford Royal NHS Foundation Trust, which appears to provide exemplary service to patients and has displayed some excellent management.
It turns out that Salford hospital spends only 0.2% of its income from activities on directors’ pay, whereas SEPT spends 0.5% and Southend hospital 0.6% of their income from activities on directors’ pay. Let me reiterate: both SEPT and Southend hospital have management boards that are not suitable for their roles and yet they spend twice and three times as much respectively on rewarding their directors. That is absolutely unacceptable.
I want to provide some examples. The departing chief executive of Southend University Hospital NHS Foundation Trust—we do not know whether the individual has gone voluntarily or what has gone on, but we have been saddled with a huge amount of debt—took a pay rise of £20,000 in the last year. When I challenged the individual on that, because I had been told that it was £25,000, they said, “David, you’ve got it completely wrong. It’s £20,000.” That is absolutely ridiculous: a £20,000 pay increase, and the deputy took a £15,000 pay increase in the past year.
It gets worse. The commercial director at Southend university hospital trust, who is paid £112,500, took a pay rise of £40,000 last year. The former deputy chief executive, currently chief executive at SEPT, is on a salary of £167,500 plus £22,500 employers’ pension contribution. I know that my hon. Friend the Member for Colchester (Sir Bob Russell) is served by the same trust.
The former chief executive at SEPT—I have talked about the trust many times in the House—received a salary of £217,500. That is crazy. What on earth was the chairman of the board thinking? It gets worse, because they also received £32,500 in employers’ pension contributions. That is absolutely outrageous. While all that was going on, the then deputy got the job of chief executive.
The former executive director of strategy and business development at SEPT, who has a close relationship with the former chief executive—I believe that individual was hired in contempt of the non-fraternity policy and am following up the issue with Monitor—does a totally unnecessary middle-management job with a salary of £147,500 and £22,500 in employers’ pension contributions. Most shockingly of all, when that individual left SEPT—coincidentally with the chief executive—in October 2013, he received an exit package of £470,000. That is absolutely outrageous, and I will not shut up about it or allow a line to be drawn under the matter simply because it happened last year. I will keep going on about it until those responsible for this outrageous abuse of taxpayers’ money are held to account.
The executive chief finance officer at SEPT received a salary of £207,500 and £22,500 in employers’ pension contributions. It is marvellous that at the Liberal party conference we were guaranteed certain waiting times for mental health appointments and all that, but the reason I get so many complaints about mental health services from my constituents is the appalling mismanagement of SEPT.
The executive director of corporate affairs at SEPT, another unnecessary middle-management person—why the trust needs someone in that role, I do not know—received a salary of £132,500 and £17,500 in employers’ pension contributions. That is more or less the same as the Prime Minister. Whatever anyone thinks of the current or previous Prime Ministers, as far as I am concerned it is the toughest job in the public sector.
It is also outrageous that the chief executive of Essex county council receives a salary of £210,000 and total remuneration of £254,769—over £100,000 more than the Prime Minister. That is absolutely ridiculous and totally unacceptable. It is a matter that I think Essex county council should address pretty quickly.
The TaxPayers Alliance’s list of the highest-paid council employees ranks Essex as the place in England with the greatest number of council employees who earn more than £100,000—there are 30 such employees in Essex. That is crazy. Those officers might turn up to the House of Commons to brief us on an issue, yet they are earning a hell of a lot more than we are. The director-general of the BBC, which is publicly owned and, frankly, has not had a great record over the past years, is paid £450,000. That is absolutely ridiculous and totally unacceptable.
I am not going to name names, but Essex MPs were lobbied today by a number of individuals, and at one of those meetings three of those officials turned up, which I think was ridiculous, as one would have been quite sufficient. When I asked about their salaries, I found that one was on £140,000 and the other two were on £111,000. It is absolutely ridiculous. I have been in contact with the Royal College of Nursing, which is calling on all NHS senior managers to demonstrate the kind of pay restraint that nursing staff have been forced to accept in recent years.
I have identified a number of unnecessary jobs in the public sector, such as the overpaid “commercial director” position at Southend hospital and the “executive director of strategy and business development” at SEPT. However, this is just the tip of the iceberg, as lots of unnecessary, middle-management positions are created across the country in the public sector, and it is the taxpayer who pays for this arrogant self-indulgence.
The TaxPayers Alliance has tried to scrutinise public expenditure, and it has identified 1,129 unnecessary jobs in the NHS alone, costing £46 million. According to its report, taking the east of England as an example, there are 52 unnecessary public relations jobs in the NHS. Why we need to have all these public relations people, I do not know. If the organisation is doing such a marvellous job, I would have thought that the media would cover it in any case, and it would be self-evident. I should think it is more like having 52 apologists. There are also four unnecessary equality jobs, six green jobs, and three other unnecessary jobs.
Among other non-jobs in my constituency, the TaxPayers Alliance lists two “communications managers” and an “estate and environment manager” at SEPT, as well as an “equality and diversity manager” and “head of communications and engagement” at Southend hospital. I am sure we would agree that equality, diversity and the environment are all very important, but they should somehow be incorporated into the daily duties of the top management instead of creating a number of full-time, very well-paid managerial positions to deal specifically with such issues. This is all happening at a time when Southend hospital’s management is facing a £8.5 million deficit. How has this been allowed to happen? Where is the governance? It is absolutely outrageous. To make matters worse, Southend hospital is now hiring an external consultant and has the nerve to ask hospital staff for ideas on how the hospital should manage its own finances. That really is taking the mickey, frankly.
Governance in the public sector should be addressed. The general guidance provided to the public sector services—for instance, NHS trusts—is that boards of directors have responsibility for the quality of care and for the ongoing financial stability of their organisations. In NHS foundation trusts such as Southend hospital’s South Essex Partnership University NHS Foundation Trust—or SEPT—boards of directors are held to account by the council of governors, which is elected by the foundation trust’s membership of various stakeholders, including the local public, patients, carers and staff. The council of governors is led by the chairman. Whereas that form of governance appears reasonable in theory, in practice we encounter many problems on various levels in terms of whether the dog is wagging the tail or the other way round.
It is simply unbelievable that the chairman of SEPT remains in position—she has been there since 2008— having allowed a number of scandalous developments, which I have articulated this evening, to take place. Where was the governance there? It was under her leadership that the former chief executive appointed his partner to a very highly paid middle-management job, and under her leadership that the latter employee left with an exit package of nearly half a million pounds. If Monitor is worth anything, I want it to do something about it.
How it is possible that the chief executive of the former Essex probation service, currently Essex community rehabilitation company, is still in her position? I remember that 10 years ago the probation service was judged to be failing. She hung on to her job, and now she and the chap who had been chairman for two and a half years seem to be setting up another organisation, hoping to be one of the successful bidders.
I have serious concerns regarding chairmen’s independence from the chief executives, as illustrated by Southend hospital. The chair of the foundation trust is supposed to overlook the work of executive directors. In the case that I am concerned about, the individual seems impotent and unaware of what is happening at his hospital. Indeed, I was there with an Essex colleague who was meeting the hospital chairman for the first time and did not know who he was, even though he had been chairman for three years.
Problems and irregularities at the top management level are adversely affecting other members of staff. Morale was affected as a result of the £20,000 pay rise. Guidance was given that people paid more than £100,000 should receive no pay rise at all. At the same time, staff morale seems to be at an all-time low, as the management fails to retain and motivate the hard-working medical and non-medical staff.
It recently hit the headlines that the hospital faces a £8.5 million deficit, and it is justifiable to believe that a bulk of that sum is due to the fact that the hospital’s management fails to attract and hire permanent staff and instead relies heavily on agency staff. It is estimated that the hospital spent as much as £6.9 million in just five months on agency staff. There are a huge number of vacancies at the hospital. The situation is absolutely ridiculous. What is wrong with the recruitment?
The internal financial crisis at Southend hospital is serious, but it could have been avoided. Clear guidance needs to be provided to the public sector management to boost its knowledge of skilful management as well as its ethical approach to excessive pay.
The use of external consultants should be looked at very carefully. It is outrageous that Southend hospital has just hired an external consultant to look at its financial problems, despite already having a highly paid full-time director of finance. The services of the external consultant will come with a cost of hundreds of thousands of pounds to the taxpayer. If Southend hospital needs to resort to external financial advice, what is the point of having a full-time financial director?
I apologise to my hon. Friend the Economic Secretary for bombarding her with all these facts and figures, but she will realise that I am somewhat frustrated. This is not the first time that I have raised the matter in the House. I will end with what I said at the start: my hon. Friend and I are both politicians and we are blamed for most things, but I think we are being badly let down with regard to the matters under discussion. I know that I can rely on her to do her best to address those problems.
The Economic Secretary to the Treasury (Andrea Leadsom)
I sincerely congratulate my hon. Friend the Member for Southend West (Mr Amess) on securing this debate. He is clearly incredibly passionate about the subject and I agree with the quote he gave from Lady Thatcher at the start. In fact, I would add:
“The larger the slice taken by government, the smaller the cake available for everyone.”
My hon. Friend is right to highlight the important point that at a time of austerity the Government need to be committed to taking as small a slice as we can for ourselves.
As a Government we do, of course, greatly value the very important work that senior managers and executives perform in the public sector. I am sure my hon. Friend will agree that the rewards we give them should reflect the work they do, not least because we need talented individuals in those jobs. However, I am very sympathetic to his cause. The examples that he has given of high pay will lead many, including me, to question the fairness of so many in just one county earning as much or more than our own Prime Minister, who I am sure nobody in this House or, indeed, the country would argue does not do an extremely demanding job.
Of course, we live in difficult economic times. There are few households in the country that have not been affected by the financial crisis. Government absolutely cannot be profligate when our citizens are having to make difficult spending decisions themselves.
My hon. Friend has raised a number of important points, including pay in the public sector and its link to performance, especially in the NHS, and the excessive use of middle-management jobs and consultants. I want to address each of those, but before I do so, I want to say that I am aware that my hon. Friend has raised with Monitor, the regulator for health services in England, a number of issues relating to the South Essex Partnership University NHS Foundation Trust. I assure him that I will make sure that what he has said today is passed on to the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) to review. This Government take allegations of abuse of the system extremely seriously, so we will make sure that these matters are examined and that we get an answer.
Public sector pay restraint is one of the many difficult choices we had to make to help to put the UK’s public finances back on track. Of course, we expect senior public sector managers and executives to lead by example. For the senior civil service, pay is set by the Government within nationally determined pay scales following recommendations from the independent Review Body on Senior Salaries. Like all public sector workers, senior civil servants have therefore been subject to pay restraint. Their pay was frozen in 2010-11, 2011-12 and 2012-13, and it was subject to increases of just 1% in 2013-14 and 2014-15. The number of senior civil service bonuses has also been reduced by two thirds, cutting the bill by £15 million.
For all Departments and public bodies where appointments are made by Ministers, any salary over the Prime Minister’s salary of £142,500 and any bonus arrangement over £17,500 must be approved by the Chief Secretary to the Treasury. Those measures have reduced the number of individuals earning more than £150,000 from 372 in 2010 to 243 now, which is a 35% reduction. That has been accompanied by greater transparency, as the Government have increased public scrutiny of senior salaries. For executive pay in the wider public sector, the Review Body on Senior Salaries makes recommendations on the pay of judges, very senior managers in the NHS, senior members of the armed forces, and police and crime commissioners.
At this point, I will say a little more about NHS organisations. The position depends on whether such organisations are NHS or foundation trusts. NHS trusts are subject to supervision and performance management by the NHS Trust Development Authority, whose responsibilities include appointing chairmen and non-executive directors, agreeing their remuneration and influencing decisions on executive pay. Very senior managers in the Department of Health arm’s length bodies received no pay increase in 2014-15, and their pay will be frozen next year. NHS foundation trusts have greater autonomy over their affairs. They can make their own board appointments and determine their own pay, but they are expected to take full account of Treasury guidance, as well as the state of the trust and market pay for the role.
As part of its regulatory function, Monitor regularly assesses trusts’ governance and financial risk through its risk assessment framework. Where a foundation trust provides poor-quality care or fails to meet national waiting time requirements, it is likely to open an investigation into the trust. Specifically on pay, Monitor does not set executive or non-executive pay at foundation trusts—that is the role of the board remuneration committee—but it does have powers. For example, if it considers board remuneration to be excessive, the governors can remove the chair and/or the non-executive directors responsible. I understand that, to date, Monitor has yet to take serious action against any individual trust. I assure my hon. Friend that I will urge the health team to investigate exactly why that is, and that I will get an answer on that point.
Let me turn to the excessive use of middle-management jobs. Public service is an honourable activity—whether someone does it as a volunteer or a paid private sector employee, theirs is a high calling—but public service must at all times emphasise the service, not the bureaucracy, which means emphasising front-line staff, not the officials and managers. The Government have introduced significant reforms regarding the number of senior staff employed across the public sector and their pay. Since 2010, overall numbers of senior civil servants have been reduced by 13%, and the senior civil service pay bill has been reduced by 18.5%. Specifically, the NHS now has more than 7,400 fewer managers and more than 12,500 more clinicians than in 2010. All Members will be glad about that. The savings from administration costs arising from the reforms to the NHS from 2010-11 to 2014-15 are expected to free up at least £6.4 billion for patient care.
We have slashed the amount of money that is spent on central Government consultants from £1.2 billion in 2009-10 to £0.3 billion in 2013-14. At the same time, we have introduced a consultancy controls process, which ensures that any spend on a central Government consultant that exceeds £20,000 and lasts for longer than nine months is approved by the Minister for the Cabinet Office and the Chief Secretary to the Treasury. The amount of money that is spent on consultants in the NHS has also decreased during this Parliament from £636.9 million in 2009-10 to £584.7 million in 2013-14.
We are not complacent. I hope that I have illustrated to Members that we have taken enormous steps to improve the fiscal restraint among senior bodies. We have done what we can. The Government have in place effective controls over executive pay and governance. I hope that I have assured Members that we do not spend taxpayers’ money in an excessive or frivolous manner. Through our policies, we are ensuring that we protect taxpayers’ money, because we will never go back to the bad old days when money was no object.
Question put and agreed to.
Westminster Hall
(9 years, 6 months ago)
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Transport in the North-East
(9 years, 6 months ago)
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Bridget Phillipson (Houghton and Sunderland South) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton, and I am grateful for having secured this debate.
The north-east is a wonderful place for us to live, work and do business. However, too many of our constituents are struggling, and central Government are not giving us the support that we need. On so many economic measures, we are falling behind the rest of the country. From May to July 2014, the north-east had the highest UK unemployment rate; it stood at 9.9%, compared with the average of 6.2%. The north-east has some of the lowest-paid workers in the country, and the average salary was nearly £3,000 below the UK average in 2013. We have seen the slowest percentage increase in wage growth of anywhere in the UK. Since 2010, wages in the north-east have fallen by over £1,200 a year in real terms.
This is not because the north-east has less to offer; quite the opposite. We are the only English region with a trade surplus. We have world-class universities and global links through air and sea. It is important, however, that the north-east gets its fair share of funding. The economic challenges we face are tough, and it is clear that we need additional support from Government in tackling them, yet our councils have seen disproportionate cuts to their budgets, with funding shifted to more affluent areas. Improving transport is an important way of addressing some of the problems that we face. Lord Adonis’s review cited the World Bank demonstrating that infrastructure, including transport, is a key element of an enabling environment for economic growth. We can support growth and job creation if we have an efficient public transport system. Jobseekers need to be able to get to interviews and to work, and should not have to spend hours or even their hourly wage doing so. The north-east has the capacity to make a greater contribution to our economic recovery, but we need Government to work with us. Improvement and investment in our transport systems will help to deliver that contribution.
The north-east is a wonderfully diverse place, and my constituency is made up of the urban and the semi-rural—of towns, villages and estates. Given that diversity, the transport needs of constituents differ widely. However, the north-east receives the lowest level of Government funding for transport. Every region deserves excellent transport services, but our needs in the north-east are not reflected in the funding that we receive. Government figures show that public expenditure on transport in the north-east has decreased year on year since 2010. In 2012-13, £554 million was spent on transport in the north-east, compared with over £4.5 billion in London, and 2.9% of overall UK spend is in the north-east, compared with 24% in London.
The 2011 census shows that both London and the north-east have the lowest number of car owners in the country. Both regions are clearly full of people who rely on local transport services to get around, yet both regions do not enjoy the same high level of service. One reason for that is disproportionate funding. The Scottish referendum campaign reinforced a point that many of us have argued for years. We need to ensure that all parts of the United Kingdom benefit from, and contribute to, our economic recovery. Economic growth and value must not depend on London and the south-east. It is right that we continue to push for further investment outside London to grow the economy in a balanced and sustainable way.
Funding is not the only explanation for the difference in services between London and the north-east, however. In London, an accountable transport authority is able to make important decisions on fares and routes and to ensure that the transport needs of passengers and communities are met in the capital. In my constituency, we do not enjoy the benefit of a rail link or light-rail link. Many people are entirely dependent on local bus services, which is why I have been campaigning on the issue since my election. I have heard from many local people that they are concerned about high bus fares, poor timetables, and infrequent services. Older residents tell me how difficult it can be to get to hospital, and that they are cut off and isolated in the evenings as they are unable to leave their homes. That situation simply cannot continue.
Next week, the North East combined authority will decide whether to introduce a quality contract scheme in Tyne and Wear. I am calling on its members to press ahead and make the change that we need. The new system would have routes set by the transport authority, with bus operators bidding to run services in an open competition. Not only would we see real competition for the first time, but we would have a simple fare system with Oyster-style ticketing, under which average annual fare increases would be no more than the retail prices index. I am not opposed to bus operators making a profit, but I do question the excessive profits made by companies such as Stagecoach in the region. I want some of that profit to be reinvested in the region, and to go on subsidising services and ensuring that my constituents can get to work, hospital and their places of training and education.
Guy Opperman (Hexham) (Con)
I congratulate the hon. Lady on securing this important debate and endorse her comments about the bus contract. Does she agree that when the contract is negotiated, as it probably will be, it is important that it is not entirely focused on urban areas, and that the regional areas of County Durham and Northumberland are not affected, so that the citizens of west Northumberland or west County Durham have the rural bus services that they need?
Bridget Phillipson
I am grateful to the hon. Gentleman for raising an important point that I have sought assurance about. My constituency borders County Durham, and many services that run through it go to and from County Durham. I appreciate that it is an important area that does need addressing, but the benefits not only for Tyne and Wear, but for the wider region will be profound. I hope that the right decision is made.
Mr Kevan Jones (North Durham) (Lab)
I shall expand on this point if I am called to speak in the debate, but there is nothing in what is being proposed that guarantees or helps rural bus services in County Durham or Northumberland. The fact is that whether the leaders of Tyne and Wear or others like it or not, the profitable routes coming out of Tyne and Wear subsidise the rural bus networks in my constituency and that of the hon. Member for Hexham (Guy Opperman); those will be taken away if the proposal moves forward.
Bridget Phillipson
I understand my hon. Friend’s concern, but I do not share his conclusion. I am sure that he will make his case strongly to the leaders of the combined authority. I am confident that the proposal will secure the long-term future of our bus network in Tyne and Wear and in the wider region in the longer term. I understand my hon. Friend’s concerns and am sure that he will set them out in greater detail.
Profit cannot be the sole priority for a public bus service. Competition can be an important way to ensure low fares and improve services. However, the existing system of deregulated bus services is broken. An investigation in 2011 by the Competition Commission was highly critical of deregulated bus services. It found that there was limited competition between operators, which tended to result in higher prices and lower quality for passengers. The report also found that head-to-head competition for services was unlikely between dominant operators. There was heavy criticism because some bus companies were accused of colluding to avoid direct competition entirely, which resulted in geographic market segregation. As in the energy market, a small number of companies dominate the bus market in the region. A quality contract scheme would create a level playing field, allowing new entrants to break into the market. It would also deliver better value for taxpayers and passengers alike.
I constantly hear from local people who struggle to get to work easily, especially shift workers in places such as Doxford international business park, where many thousands are based. The recently announced Metro strategy 2030 set out ambitious plans to develop Tyne and Wear’s Metro system, with the potential to include Doxford park in the long term. Current predictions estimate 5.4 million passenger trips per annum by 2030 on the South Shields to Sunderland to Doxford line, but any extension would of course depend on government support. The plan recognises both the importance of the business hub to our local economy and the need for regular and high-quality transport links to and from work. The proposal forms part of a comprehensive plan to improve transport in our region. The Metro Strategy 2030 includes a proposal to bring part of the Leamside line back into use. The North East local enterprise partnership has commissioned a study into the business case for reopening the line, and has identified improving links within the region as one of its key priorities. Long-term investment is important, but next Tuesday one part of the solution to our transport needs is within our grasp.
I am grateful to EDF, based at Doxford, for recently conducting a staff survey on public transport. In the survey, 38% of respondents felt that services to Doxford park were either very poor or poor value for money, 40% felt that services had either very poor or poor frequency during the day, and a shocking 62% felt that frequency during the night was either very poor or poor. One respondent noted that bus prices were so high that it was cheaper to use a car, with another being forced to catch three buses to get home if their shift finished after 8 pm. I visited EE, which is also based at Doxford, and found that many of its staff face the same challenges. I heard that those whose shifts finish at 8 pm literally run out the door to catch the last bus, or face a long wait. Others must come to work far earlier than their shift start time, because unless they catch the hourly bus service, they risk the consequences of being late. Obviously, that risks impacting on staff retention. That is not good enough. Visitors and staff at Doxford Park make an important contribution to our local economy, and they should be able to expect a fair, reliable and efficient bus service.
In 2011, Government cuts meant that the 3½-mile Sunderland central route had to be scrapped. The scheme would have eased congestion and improved access to Rainton Bridge business park. The loss of the scheme was hugely disappointing, and was made all the worse by the lack of alternative transport options for the staff there. The scrapping of the route has had a significant effect on traffic in the surrounding area and on local residents who live nearby.
I have been continually disappointed by the bus companies’ attitude to improving services for their passengers. The voluntary agreement that the bus companies are supporting would result in severe cuts to publicly funded bus services and to support for non-statutory fares, therefore falling far short of what is necessary. Bus companies are refusing to listen to their customers’ concerns, choosing instead to redirect routes that customers rely on, make meaningless changes to route names and numbers and to bus branding, and embark on a systematic campaign of scaremongering. Bus companies appear more concerned with threatening legal action than dealing with cuts to services and rising fares.
Yesterday morning, I received an e-mail from Go North East seeking to acquaint me with what it sees as the facts on a quality contract scheme. Go North East claims that customer satisfaction, including with fares, is higher than in any of the metropolitan authorities, and higher than in London. However, it fails to address the declining use of buses. Between 2001 and 2011, the number of people using the bus to travel to work in Tyne and Wear fell by 13%; the number of adult fare-paying passengers has also declined. Furthermore, the survey used to support the claim does not take into account the view of people who no longer use the bus because there simply is not one to catch any more.
Go North East claims that the quality contract scheme aims to take funding out of the bus system. That is simply untrue. The quality contract scheme will avoid cuts to secured bus services and to support for discretionary concessionary fares. The voluntary agreement preferred by the bus companies, by contrast, will lead to significant cuts in secured services and discretionary concessions, even if local public support remains at the same level.
Go North East claims that the voluntary agreement can start two years earlier than the quality contract scheme can. Many aspects of the voluntary agreement, however, are unacceptable or incomplete as drafted. In addition, the main potential delay to introducing the quality contract scheme would be legal challenge by the bus operators. I hope that they decide to do the right thing: to prioritise customers and recognise the democratic decision of the combined authority.
There is an inherent conflict between the desire for the voluntary agreement to be certain, legally binding and enforceable, and the need for flexibility to avoid the arrangement breaking competition law. Therefore, the voluntary agreement relies on trusting each of the operators to abide by the spirit and the letter of the agreement. Even under the voluntary system, however, bus operators may make changes to services without approval of the partnership board. That does nothing to create stability in our local bus network. Services will continue to be assessed on their commercial returns, rather than on their usefulness to local communities.
Whatever operators might say, the voluntary agreement fails to deliver the Oyster-style ticketing system that is a major advantage of the quality contract scheme. It is clear from the persistent scaremongering, threats of legal action and negative campaigning that the bus operators are primarily concerned with protecting profit, rather than improving the service for passengers.
In a time of difficult decisions about spending, it is crucial that we get the best value for money. According to the House of Commons Library, the taxpayer subsidised bus services by approximately £2.3 billion in 2011-12. Those subsidies amounted to about 45% of all bus operator revenues. As we are all paying for bus services, it is time to ensure that the money that we invest goes back into our communities. Nexus estimates that the quality contract would provide £272 million in economic benefits to the region over a decade by reducing fares, providing better services and ensuring more bus passengers.
Similarly, the northern region TUC concluded that there was a strong business case for the quality contract. It will harness any revenue surplus for the benefit of passengers and communities, rather than for bus company shareholders. The proposal would provide a sustainable funding future for buses in our region to a greater extent than all other options.
Next Tuesday, the North East combined authority will decide whether to introduce a quality contract scheme. The process has been too long and drawn out. I am glad that we would legislate to give local authorities more powers to create better bus networks and to make it easier to implement quality contracts. At the core of the debate is local decisions to deliver a service that works, supporting businesses, growth and job creation. Local people must have the bus services that they deserve. Even the bus operators acknowledge that the status quo is no longer sustainable. This is our opportunity to lead the way, but it is an opportunity that will not come again.
Guy Opperman (Hexham) (Con)
I congratulate the hon. Member for Houghton and Sunderland South (Bridget Phillipson) on securing this important debate. I appreciate and accept that it is fundamentally about bus contracts; I understand that and take the point, but I must comment that what a passenger landing at Newcastle airport has to do to get across town is clearly wrong. They must take the Metro into town, then get across to the railway station; with no integrated transport system whatever, they need to get another ticket from the Newcastle station ticket office to go to Hexham or anywhere else, then attempt to move on from there. We all have to work four days a week in London, so we know the beauty of the Oyster card system. Clearly, longer term, such a system—
Mr Kevan Jones
I understand where the hon. Gentleman is coming from and I fully support the idea of an Oyster card system for the north-east, but I am sorry, the ticketing process is not as he says. I do not know how much he uses public transport in the north-east. Tyne and Wear has a very integrated ticket system, with transfers, and certainly in County Durham the bus companies work hard to ensure the interoperability of tickets and the lowest price.
Guy Opperman
Someone in Northumberland attempting to go from Hexham to the airport in effect has to change tickets three times. An integrated system with an Oyster card would unquestionably drive down prices.
The hon. Member for Houghton and Sunderland South and I are both concerned about the future of rural bus services. I take her point that customer satisfaction with buses is good at present, but my constituents are deeply unhappy with the quality of bus services west of Hexham. West Northumberland and areas north of Hexham have suffered tremendously from problems with the buses. I have spent a huge amount of time looking after constituents with genuine issues to do with the bus service in the western parts of Northumberland and in the northern reaches up towards Scotland. Without question, if I were to ask the citizens of Gilsland, Otterburn or places to the west whether they felt that the bus service could be improved, they would be robust in their view that it could be improved massively.
I take the point that the bus contract is a matter for the LA7—the seven local authorities—and surely that is entirely what the combined authority is about. For it to move on in such a way is a massive step forward, because it now has the ability to drive forward comprehensive changes that simply would not have been possible for individual authorities.
I want to touch briefly on trains. On 3 September, I raised the subject of transport infrastructure in Northumberland in a 30-minute Adjournment debate in the main Chamber. Many of the points that I made were set out in detail, so I will not repeat them today. One point that must be made, however, is that many of the things that we are discussing derive not only from the Adonis report but from the excellent “One North” report, which was a proposition for an interconnected north, published in July this year. I have a copy and I urge anyone who is interested in north-east transport infrastructure to read it in detail. “One North” talks about the way forward. The report is driven by the city leaders of our key cities, including Liverpool, Manchester, Sheffield and Newcastle. It certainly expresses strong views on the desirability of interconnectivity in rail and transport services.
I endorse earlier comments about the Leamside link, which clearly needs to be progressed. The reality of High Speed 2 is that without the Leamside link the prospects for us will be limited. I have no doubt that any Government post-2015 will make progress with that link. Indeed, Sir David Higgins, with whom we have had communications, said that it is inevitable that the Leamside link will be part of the development of HS2.
I refer to the speech given by the Chancellor on 5 August 2014 in Manchester to the city leaders who were the creators of the “One North” report. He gave the report a strong backing and set out the way forward. My only criticism of the report is that its diagram of interconnectivity in the north—I intend no disrespect—focuses on north-south links, with only one lateral movement between Liverpool, Manchester, Leeds and the Humber ports. I urge the Chancellor to consider the importance of an improved crosslink between Newcastle and Carlisle—I will certainly be making the case for that at the autumn statement. The A69 is dualled to Hexham, but thereafter it is effectively a single carriageway, which has a huge impact on business, transport, housing and the ability to commute, as well as on the train network. The Tyne Valley line has definitely improved; passenger numbers are up and improvements are being made by both Northern Rail and Network Rail. However, the two transport networks going from east to west, or west to east—however we look at it—have to be improved if the north as a whole is to be properly connected.
I do not dispute that this debate is about transport in the north-east, but the reality behind the “One North” argument—one that will have to be behind any Government’s consideration of northern infrastructure, skills and the like—is that in the past we have been too obsessed with the north-east and the north-west. Anybody can see that if we do not look at the north as a whole our ability to effect real change is limited—certainly I can see that, as my constituency is in the middle of the two regions, going to the border of the north-west, and indeed the border with Scotland. I urge the Minister to take the message to the Chancellor that connectivity has to be across the north and not just the north-east, north-west or Yorkshire. I believe that that point has got through, but my one criticism of the “One North” report and the northern powerhouse approach is that there is no east-west link at the top. That certainly needs to be considered.
I have a meeting planned with the electrification task force that has been set up by the Secretary of State for Transport to work on the electrification of the Tyne Valley line. The east coast and west coast lines are both electrified. The train network in northern England clearly needs to be improved.
I want to put on the record my support for Northumberland county council’s approach to the Ashington Blyth and Tyne railway. That is a clearly a big project that can be moved forward. My only plea is that the council needs to think not only of larger projects such as that one, but smaller projects such as the Gilsland station rebuild. Thinking again of connectivity, Gilsland is where the Pennine way meets Hadrian’s wall. There is a distinct lack of bus services—to give a nice Radio 2-style link back to the original theme of the debate—in the very west of the county. Gilsland station is where Cumbria starts and Northumberland ends.
I look forward to meeting the electrification task force to discuss the Tyne Valley line and to the meeting I have planned with the Highways Agency next month to discuss the A69. I urge Northumberland county council and the two local enterprise partnerships—not just the North East LEP but the Cumbria LEP for the north-west—to come together so that we have a genuinely connected transport system. That is something we can all get behind.
Julie Elliott (Sunderland Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson), my neighbouring MP, on securing this important and timely debate. I also want to place on the record my gratitude for her campaigning work on this issue, in the region and in the House.
Buses are how the majority of people outside London get around on public transport; according to the passenger transport executive group, outside the capital 80% of public transport trips in the UK take place by bus. Bus companies in Tyne and Wear receive tens of millions of pounds each year from taxpayers, yet we have little influence over the operations of our local bus services. That is why I join my hon. Friend in calling for quality contracts, which are the simplest and best way to ensure that the public, taxpayers and passengers have a voice in how our bus services operate.
I am old enough to remember when deregulation came in, in 1986. It was utter chaos in Tyne and Wear. The journey from the village where I lived to Newcastle went from taking 50 minutes to taking an hour and 20 minutes or an hour and 40 minutes, depending on which buses turned up. Far from moving things forward, deregulation moved them back very dramatically.
Quality contracts would replace deregulated markets with a franchising system, providing the transparency that the public deserve and require to trust the bus operators that work for them. A report to the Transport North East Committee—the combined authorities transport committee—has illustrated that if we do nothing, bus passenger numbers will continue to fall, bus services will continue to be cut, and local people, isolated people and vulnerable people will continue to be hit hardest. Although my constituency is urban and, compared with many, has good transport links, even within the city of Sunderland there are pockets where transport links are not good. The “do minimum” scenario set out in that report projects a loss of 66 million bus trips over a 10-year period as a result of above-inflation fare rises and the withdrawal of secured bus services and discretionary concessionary fares. The result will be that people simply will not travel.
Quality contracts are the simplest and most effective solution. Their benefits are multifold. They will lead to greater integration, meaning we could see an Oyster card-style system for the north-east—as the hon. Member for Hexham (Guy Opperman) said, all of us who come to London for three or four days a week know how wonderful the Oyster card system is. Such a system would rectify issues with tickets not working across different bus operators and ensure that passengers get the best possible price by capping fares, as is the case in London.
There would be no more chopping and changing of vital services to suit bus operators, but instead a stable bus network that serves local people, with changes taking place only after proper consultation and engagement. There would be higher emissions standards for all vehicles. Quality contracts would ensure that bus services serve isolated communities, and would include the ability to specify such routes as part of the bidding process. All those benefits would come about while ensuring that local authorities get maximum value for money from the contracts.
For many people, bus services are the only way for them to get to employment, school or the doctor, or just to see family and friends. The point of local bus services is to serve their local communities. Local buses provide a lifeline to so many people who would otherwise remain isolated. That point was made by the Transport Committee in its report, “Passenger transport in isolated communities”, published in July, which points out that it is not only rural communities that can be isolated. If a bus operator in a deregulated market can decide to cancel a route that someone relies on, people can be isolated in cities—including Sunderland, as I said. Problems experienced by elderly people being unable to leave their home or young people being unable to find employment because of a lack of public transport go beyond the remit of the Minister, or indeed that of the Department for Transport, but affect a wide range of Departments.
I agree with the hon. Member for Hexham about east-west transport links. Sunderland is a large city. Getting from there to Newcastle is, in the main, relatively easy, but getting from there to Durham is a nightmare. The distance is only two or three miles more, but in reality someone in Sunderland who relies on public transport cannot take up a job in Durham because they simply cannot get to work on time. I know that from personal experience: one of my daughters got a job there when she first came back from university, and had to leave the house at 6.30 am to get to Durham for 9 am. It is impossible.
If quality contracts are good enough for London, they are good enough for Tyne and Wear. I look forward to the decision of the combined authority next week and urge it to make the right decision for the people of Tyne and Wear and the wider north-east.
James Wharton (Stockton South) (Con)
It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate the hon. Member for Houghton and Sunderland South (Bridget Phillipson) on securing this important debate.
Much of the discussion so far has focused on buses, so I will start with a couple of comments to the Minister to ensure that the Government are aware of what has been happening with buses in Stockton. In the past two years the borough council has decided to remove the remaining subsidies for bus routes. The immediate decision taken by the bus companies was that we would lose a significant number of routes—in my constituency specifically, we lost those servicing Hartburn in west Stockton and some of the villages to the south-east of Stockton, including Hilton, Maltby and Kirklevington. That, of course, caused significant concern, and we had well-attended public meetings to discuss the impact. I must admit that my experience of dealing with the issue as a Member of Parliament was mixed. I was, and am, critical of the borough council’s decision to remove the subsidies entirely and in a very short time. When it is investing more than £30 million in Stockton high street—investment that is welcome—it is somewhat ironic that, by saving a few tens of thousands of pounds, it is actually stopping people visiting the high streets it wants to attract business to.
On Hartburn and West Stockton, we were able, with local councillors, to have a fruitful and positive discussion with bus operators. We were able to look at where routes could be changed and where profitability could be found and to retain bus services pretty much at the level they were at before. That was a good example of where a subsidy was removed and where a service, as a result of some intelligent thinking, was retained and improved for the residents who rely on it.
Sadly, that was much more difficult in the villages, and we have more or less lost a number of services to many of the villages I represent. What has happened in one half of one borough underlines some of the complexity of the challenge when it comes to providing one aspect of public transport—bus routes. We need different things in different areas; we need different solutions for different communities, and a one-size-fits-all approach invariably will not work.
I welcome talk of an Oyster card-style system. Those who do not always support what I say in politics have occasionally accused me of being a little Teessider. However, I would suggest that I am a big Teessider—I think we are a great place—and I think there could be great co-operation on this issue right across the north of England. The more broadly we can spread such a system, and the better and more convenient the services we can provide for our constituents, the better that will be. The initiative is very welcome, and I would support it. I hope, therefore, that the combined authority in the north-east is talking to the local enterprise partnership and the authorities in Teesside and the Tees valley. I hope the various bodies with interest in the issue can co-operate to deliver for all our constituents.
I would also like to touch on the issue of roads and to put on record—I have not yet had chance to do so in the House—my thanks to the Government for the investment we have secured in roads in Stockton South. Specifically, the link road between Thornaby road and the A174 is being dualled, following a significant grant from Government pinch point funding, which is contributing towards the cost. Parts of Ingleby way and Myton way, which are part of Ingleby Barwick, a large and growing private housing estate in my constituency, will be dualled to ease traffic flow. That will bring significant benefits not only in terms of access to, and egress from, the estate, but for constituents whose residential roads have been used as rat runs to skip queuing traffic in places such as The Rings in Ingleby Barwick, where there have been significant problems. Those problems will, I hope, be alleviated, thanks to investment from the local growth fund by our local enterprise partnership, which is doing a good job, and because of the decision taken by Ministers, who have recognised the needs that exist in the part of the north-east I represent.
Significant investment is also going into Eaglescliffe station in my constituency. Rail is, of course, an important link between the north-east and the rest of the country. Whenever possible, I take the train up and down the country. An open-access service run by Grand Central—now owned by Arriva—goes from the station and starts in Sunderland. The service is welcome, and it does a good job. Looking around the room, I see a number of colleagues who use the service as regularly as I do. Eaglescliffe station has never quite caught up to its new role, with its direct link to London, but investment is finally going in. We are getting a new waiting room and extended car parking facilities, and a lot of good work is being done.
If the Minister is in the north of England, I would encourage him to take the time to visit and to see what is being done. I would stress to Northern Rail that it is important that this work is done in a timely manner. As to the actual process of construction, I have never been able fully to understand how it takes six months to double the size of a relatively small car park, although I am going on a site visit to be convinced that it does take that long. In the meantime, however, the work causes my constituents significant inconvenience. That aside, I would welcome a visit from the Minister at some point so that he can see some of the investment that is going in and the great things we are doing with rail and other transport in my constituency, in Teesside and across the north-east.
We are talking broadly about north-east transport, and the final issue I want to raise is our airport. When I say “our airport”, I mean Durham Tees Valley airport, or Teesside airport, in the south of the region. Of course, the north-east has Newcastle airport and Teesside airport. In recent years, Newcastle airport has been somewhat more successful than Teesside airport, which has been trending ever so slightly unwelcomely downwards since about 2007 and is in a fragile state.
Peel, the owner, is making many of the right noises about investing there, but I have two concerns to put on record. One is the obvious point that Peel wants to sell part of the airport for housing so that it can invest in the rest of the airport. The airport should be run as an airport; the land is there to be an airport, not to be turned into a housing estate. Although I recognise the need for a financially viable and workable model, I am concerned about the proposals.
Significantly, the owners are also trying to offload pension liabilities on to the local authorities, which are shareholders in the airport. Indeed, they are pushing hard for the local authorities to accept the liabilities. The only situation in which any benefit would arise from the local authorities accepting the liabilities, as far as I have been able to ascertain from looking at the information that is available—Peel would, of course, still be paying—is if staff were to lose their jobs and the airport were to close. In that case, responsibility for making up the overall shortfall would fall to the local authorities, rather than to Peel. I stress to the local authorities that have shares in Teesside airport to be very careful indeed, in public money terms, about what they accept and to be wary of Peel’s overall intentions. While I hope those intentions are good, and I support Peel in the things it is doing to try to maintain the airport as an airport and to make it a success, we must be careful not to allow the fragility of the situation to be used to bully public authorities into making decisions they probably should not make in the long-term interest of taxpayers in my constituency and across Teesside. Instead, we must ensure Peel has the greatest possible incentive to keep the airport as an airport.
We have lots of great opportunities in the north-east. I welcome many of the investments the Government have made in my constituency, and I am grateful for them. They will improve the lives and transport options of my constituents. I welcome this debate, and I hope that, where we can find consensus, we can work across parties and across our region to deliver improvements for all.
Mr Kevan Jones (North Durham) (Lab)
I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on securing this important debate. What has come out of it so far is that there is a degree of consensus on some of the issues, so I do not wish to sound like the little boy who says the emperor has no clothes, but I have serious concerns about the quality bus contract going before the combined authority on 22 October. I will also briefly touch on the issues of rail and air.
The quality contract proposals have been in gestation since 2011—longer than the pregnancy of an African elephant. If we look at what is proposed, we have to question whether we have a solution looking for a problem, rather than a problem looking for a solution. The quality contract legislation was rightly introduced to address market failure. I accept what hon. Members have said about bus services being withdrawn, and that is market failure in terms of the effects on our constituents. However, no one can argue that the bus market in the north-east is failing from an economic point of view.
I have grave concerns about the quality contract. The impact on my constituency, in County Durham, and on the areas represented by Members from Northumberland, will be quite pronounced. The proposal from the combined authority provides for an exclusive contract to run all bus services in Tyne and Wear, but we must understand that people’s transport movements do not recognise local authority boundaries—that is the problem with the proposal. The hon. Member for Stockton South (James Wharton) suggested a solution that looked at the entire north-east, and that would be a better solution.
The quality contract is also being sold on the basis that it is the only way we will get an Oyster-type system. No, it is not, because advances have already been made on that issue. I support those moves, as I think all elected Members from the north-east, from all political parties, would, because they will make travelling easier. However, I do not recognise the argument put forward by the hon. Member for Hexham (Guy Opperman) that the ticketing system at the moment is very complex. It is not. The Tyne and Wear ticket system is one of the most integrated anywhere in the country. Likewise there is an integrated system in County Durham, with moves by bus operators on shared ticketing and making sure that people get the lowest prices. Yes, there is a need for action to improve integration across the region, but I do not think that there is a need to go down the quality service contract route to achieve that.
My constituency borders Tyne and Wear and it is a commuter constituency these days. The days of large-scale employment in coal mines are gone. People commute northwards to Sunderland and Newcastle, and southwards to jobs in Teesside. Twenty-five per cent. of the cross-border bus traffic originates in Tyne and Wear, and that is part of the problem with quality contracts. Those are the bus companies’ most profitable routes. That profitability sustains the rest of the bus network in rural County Durham and infrastructure such as Stanley bus station, and the bus station in Chester-le-Street. If that profitability were to be taken away there would be serious problems. My fear about Tyne and Wear’s proposals is that without that profitability there would be a direct problem in County Durham—and not just with sustaining the existing bus network; the system would affect garages and local employment, because of closures. With the franchise, there will be only one winner—the bus company that wins the prize of running buses in Tyne and Wear. There are currently three operators in my constituency and two will be losers. That will have a direct effect on the funding of existing services. I am also concerned that with the knock-on effect of the through route to Teesside and other parts south of the county bus operators will find it difficult to make the necessary profit.
Many of the ideas for the bus quality contract have not been really thought through. It is not possible to detach, somehow, rural County Durham and Northumberland from Tyne and Wear, as is being proposed.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
My hon. Friend makes some interesting points about profitability, but do I understand him right? Is he arguing that the bus companies should be allowed to maintain excess profits on some routes so that they, the private sector, rather than our elected representatives, can decide how to subsidise rural routes?
Mr Jones
I am sorry; that is what actually happens in practice with bus operators. There is an argument that somehow it is nasty to make a profit; but there are profitable routes, and that is nothing to do with the bus companies. The main route from Chester-le-Street to Newcastle, for example, is a profitable route. Why? Because people use it. That is a matter of fact, and irrespective of what politicians say it will not change. People vote with their feet and use the route.
Chi Onwurah
I certainly was not arguing that making profits is in some sense wrong. I was arguing—and it is market economics—that making excess profits is wrong, and it should not be for the private sector to determine which routes to subsidise with, effectively, public money. It should be for democratically elected representatives.
Mr Jones
No, I am sorry; my hon. Friend does not understand the system. [Interruption.] I am sorry, but she does not. If there are subsidised secured routes that are paid for by the taxpayer, the taxpayer can determine where they go. That is nothing to do with the bus company. My hon. Friend spoke of excessive profits, on those routes that are profitable, but there has to be money in the system; she should be aware, as I think many people are not, that under the current proposals Tyne and Wear council tax payers—I am not one—will underwrite its bus service system, with consequences for them if passenger numbers go up or more subsidy is needed.
I am not arguing for the old free-for-all, but that is not what we have. I remember the disastrous days of bus deregulation in 1986, with buses chasing buses, but we do not have that system now. A far better way forward for us would involve some type of regulation—and if the threat could be used as a bargaining chip with the bus companies I would totally agree with that. However, it is not a panacea for every issue. Quite a few hon. Members have talked about bus services being withdrawn, but a quality contract will not prevent that. They will be withdrawn unless more money is put into the system.
The hon. Member for Stockton South raised an interesting point, which is one that I make constantly to officers in County Durham. The problem is that in some of the areas in question buses are not the solution. We need to think of more creative ways to transport people from isolated communities, such as taxi-buses or alert-buses. I accept what my hon. Friend the Member for Sunderland Central (Julie Elliott) said: even in urban areas there can be isolated places. We need a system to feed the people who live in those places into the main, profitable system. That would be far better than to think that the solution is a bus. Quaking Houses is a nice rural village in my constituency, but there is not the demand for a double-decker bus on a Sunday. Reactive taxi services, for example, could take people to central hubs that would feed them into the network. That is how we need to think—not just focusing on buses, but more creatively.
Bridget Phillipson
I just want to point out that services are withdrawn not only because they are unprofitable per se. It can be because they are not profitable enough. Bus operators refuse to publish data on the profitability of routes. When there are big changes and routes are cut or withdrawn almost entirely—as happened in communities in my area such as Shiney Row, and Houghton and Hetton, which have big urban centres; a lot of people use the route—that is not about unprofitable services. It is just that the operators do not regard them as profitable enough. That is the distinction.
Mr Jones
I accept what my hon. Friend says, but under the current proposal those services will not be protected. The only way to do it would be to put more subsidy in. If the argument is that there is a bottomless pit of money from the taxpayers of Tyne and Wear to support them, that is fine; but in reality there is not.
To return to the cross-border issue, we might suppose it would have been thought about—and it has, but in a typically bureaucratic, council sort of way. The cross-boundary bus collaboration protocol is a fine document, from which I need to quote to show that the important people—the public and the people who provide the services—are being taken out of the equation. Paragraph 4.4 says:
“In the event that a Cross Boundary Service does have an adverse effect on the QCS Services the Combined Authority shall use reasonable endeavours to seek to agree amendments to the registration…of the relevant Cross Boundary Service”.
Therefore, there will be disputes, for which there is a great organisation called the cross-boundary officer group. It sends a shiver down my spine that it will be left to officers to deal with that. What clout will Durham have to protect services? None at all; because at paragraph 6.7 the document explains what will happen if
“the Council considers that the Draft Plan has an adverse impact on Service Users”
in Tyne and Wear:
“The Parties shall use reasonable endeavours to ensure that the Tyne and Wear Sub Committee considers such requests.
Where the Tyne and Wear Sub Committee makes such adjustments to the Draft Plan to accommodate requests made by the Council, the Draft Plan shall be deemed to be approved by the Council.”
It goes on:
“Where the Tyne and Wear Sub Committee does not consider it possible to make any such reasonably requested adjustments to minimise the…effect of the Draft Plan on the Council and its Service Users, the Combined Authority will seek to procure that the Tyne and Wear Sub Committee promptly responds to the Council in writing, providing reasons.”
If those involved fail to reach an agreement, it will go to a dispute resolution panel. That is fine, but what bureaucratic nonsense that system is. It will not help to solve cross-border disputes. We need to take a step back from the proposal, because it will be a problem for the likes of County Durham and Northumberland. I know that those plans have been in gestation for a long period of time, and that people perhaps think that because they have been sent a lot of work on it, “We’ve got to try and do something.” However, I would urge people to take a step back and think about it.
I want to raise two other issues. The first is airports, and I congratulate David Laws and the team at Newcastle airport, who have done a fantastic job. It is a gleaming example of where the private and public sectors can work together, not only to deliver great service to the travelling public in the north-east, but to be an important economic catalyst for the north-east economy, in terms of both passengers and freight.
I would like the Minister’s comments on one point, however. Under the new devolved arrangements for Scotland, will the airport passenger duty be devolved to the Scottish Government? If it is and we have two systems, undercutting will directly affect airports such as Newcastle, and their ability to compete on routes will be a problem. The Government are still out to consultation on another matter—the third runway at Heathrow—which is always seen as a London issue, but it is not. It is vital to Newcastle that that runway goes ahead.
I want briefly to touch on rail before I finish. In the north-east, there is an issue about the skills that we need to support existing and future rail infrastructure there. May I congratulate Newcastle college? I went to its new rail academy in Hebburn last week. It is a very forward-thinking project that is trying to ensure that people have the skills that they need, not only in terms of the hard-end engineering side of rail, but in terms of the softer, more customer-focused side. It will be a very good thing for a lot of young people to get access into an industry that has a future both in the north-east and in the rest of the country, and also has an international dimension that should be very important for them. With that, Mr Caton, I conclude my remarks.
Martin Caton (in the Chair)
Order. I intend to call the Front Benchers at 10.40 am, and four Members still wish to speak. You can do the arithmetic yourselves, but if everybody is going to get in, we are talking about less than five minutes each. I call Iain Wright.
Mr Iain Wright (Hartlepool) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton, and I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on securing this debate. I want to make three distinct points, on buses, rail and road, but they are all linked by a common theme: a lack of attention, priority, co-ordination, and investment when it comes to transport in the north-east.
Let me start with buses. Thirty years of deregulated bus services has not given Hartlepool a good market, full of choice and quality for passengers. According to Department for Transport figures, 91% of the bus market in Hartlepool is run by a single operator, Stagecoach. Arriva has 4.9% and the Go-Ahead Group has 1.7% of the market. A market distorted in that way is not a market that helps potential passengers. Little wonder that passenger journeys in Hartlepool, unlike in the south-east and London, are falling, from 5.4 million journeys in my constituency per year in 2009-10 to 4.6 million journeys in 2013-14.
People may be making fewer journeys because they are using other modes of transport, but it is more likely that bus journeys are falling because choice is being restricted, timetables are being cut and the ability of people to travel by bus in Hartlepool and further afield is being hampered.
Let me give a couple of examples. The No. 1 bus service, from High Tunstall into the centre of town, out to Seaton Carew and then further to Middlesbrough has its last bus from Throston Grange terminus not at 11 o’clock or 10 o’clock in the evening, but at 10 minutes past 6. If someone works in Middlesbrough and lives in Hartlepool, they have to catch the last bus home at 6.14 pm. The No. 4 service travels across the town from South Fens to Bishop Cuthbert, but if a person is going to a friend’s or checking on a relative at night, they cannot do it, because the service stops during the week at 10 minutes to 6. Those who live in outlying villages such as Dalton Piercy and Elwick are virtually imprisoned at night, because there are no services at all.
The lack of a true bus service both within Hartlepool and connecting to surrounding towns and cities is a real barrier to economic growth and social unity. If a person in Hartlepool wants to get a job in, say, the steel plant in Redcar, some 10 or 12 miles away, they cannot, because there is no bus service. The point was made by my hon. Friend the Member for North Durham (Mr Jones) that economic activity and travel-to-work patterns do not respect local authority boundaries. There is a pressing need for some sort of regulated service within the local authority of Hartlepool and the wider Teesside area, and also within the wider north-east region, to address that issue.
Secondly, I want to raise the issue of rail rolling stock. We have debated this in the House before, but no improvements are being made. People using the Northern Rail service from Hartlepool to Newcastle and Sunderland in the north, and to Middlesbrough in the south, are faced with the oldest rolling stock in the country, built in the 1980s, with standing room only, no toilet facilities and health and safety issues.
I wrote to Northern Rail on behalf of a constituent who was concerned about the overcrowding and the condition of the rolling stock. This week, I received a reply:
“Sadly, there is not much we can do to address the overcrowding issue in the short term. The fleet of trains we operate under the current franchise from the Department for Transport, which runs until February 2016 and is currently out for consultation, is aging and all units are used to their maximum.”
In other words, “Get used to it.”
There has been some confusion, and I hope that the Minister will clarify things today. Will he ensure that discussions on the new franchise will definitively include the need to replace, rather than refurbish, the decrepit Pacer trains that passengers in the north-east, unlike those in any other part of the country, have to endure?
The third and final issue that I want to raise is investment in the road network. All hon. Members here will realise that Hartlepool is the centre of the universe, but unusually for the centre of all known life and activity everywhere, it is difficult to connect to major economic centres such as Newcastle in the north and, particularly, Middlesbrough, North Yorkshire and Leeds in the south. There is a pinch point on the A19 at its interchange with the A689, which causes real traffic congestion. If connectivity is an important prerequisite for economic growth, investment to widen the A19 to three lanes between Wolviston and Norton would unlock economic development and employment opportunities in the short term, and would provide growth potential in the long term. Will the Minister give a commitment today that that project will be given the go-ahead soon?
People in my constituency have to contend with inadequate transport provision and infrastructure. In the north, we really need to address that in the round, and at the moment, that is not happening. There seems to be a lack of priority and a lack of attention, and I hope that the Minister will address that in his remarks.
Helen Goodman (Bishop Auckland) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on securing this very important debate. Transport in the north-east has a massive impact on the economic prospects of the region, as well as on the quality of life of all our constituents.
The transport infrastructure in the north-east is in an abysmal state. It is the only region of the country that is not connected to the rest of the nation by a motorway. Going north to Scotland, the road is in some cases a single carriageway. Going south through Yorkshire, the last Labour Government had a scheme for widening the stretch between Leeming and Barton. This Government put it off, then brought it back. The delay means that we will not get the widening scheme till 2017.
Looking from east to west, as the hon. Member for Hexham (Guy Opperman) said, we have the same problem on the A66. If the Minister is not interested in what Labour Members from the north-east say, I hope that he is listening to the hon. Member for Penrith and The Border (Rory Stewart), who is also concerned about the state of the A66. It means that an exporter in Middlesbrough who wants to sell something to a person in Liverpool has to send their lorries through a 30-mph zone, through the suburbs of Darlington. This is no way to run an economy.
Some people were rather shocked to discover that dualling the A1 to Berwick would cost £42 million, but the fact is that this Government are perfectly able to give the Mayor of London a £1 billion guarantee to extend the tube from Victoria to Battersea—a journey of a mere two miles—yet, when it comes to our region, the settlements are totally inadequate. When the Chancellor of the Exchequer switched money from public services to capital infrastructure in 2011, we got a grand total of 0.1% of the capital. That is completely inadequate, and I want to know what the Minister will do about the state of these major route arteries. The answer that I had from him to a parliamentary question was completely uninformative. I hope that today he will say a little more.
I concur entirely with the comments from colleagues about bad experiences. There are people in my constituency who are offered jobs but have to turn them down because they simply could not get to work. There are villages where there is only one bus a day. Evenwood, Cockfield, Ramshaw, Woodland, Lynesack, Copley and Softley are all phenomenally badly served because the Government cut the bus grant.
The Minister of State, Department for Transport (Mr John Hayes)
For the benefit of my summing-up, I just want to be clear. The hon. Lady said that she completely concurred. Does she completely concur with the hon. Member for Houghton and Sunderland South (Bridget Phillipson), who introduced the debate, or with the hon. Member for North Durham (Mr Jones), who made criticisms? I did not understand what she was concurring with.
Helen Goodman
I am concurring with the comments about the abysmal state of the service. That is what I am agreeing with. It is terrible, dreadful and completely unacceptable, and it obviously needs more money put into it—money that this Government have taken away.
There is a similar problem with potholes. Durham county council did a survey and found that the cost of mending the potholes on the unadopted roads in our county would come to £600 million. Obviously that cannot be done overnight, but this Government have cut Durham’s Government grant by 40%, so we are now going backwards, not forwards. The Minister may think, “Oh well, what do potholes matter?” Potholes do matter, because they mean that people get mud in their houses. Women have to clean their carpets totally unnecessarily. There are big holes in the streets. They flood. [Interruption.] They flood, and water gets into the house. The whole thing is like something from an 18th-century painting. It is completely unacceptable.
Finally, I want to say something about airports —my hon. Friend the Member for North Durham (Mr Jones) has tempted me to do so. I am not in favour of a third runway at Heathrow. I think that we need to bolster the regional airports instead. That seems to me to be a much better idea. It would be better for us and better for London. Will the Minister do something about restoring the London link, either to London Heathrow or to London Gatwick, from Durham Tees Valley airport? Will he address that with the Civil Aviation Authority?
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on initiating the debate and on the great work that she does to champion bus services.
I shall make just three points. First, on bus services, I have been a customer of Newcastle bus services since I was a baby, and it is a matter of regret to me that now every time I see a bus in Newcastle—there are still, thank God, a number of them—I am reminded of Baroness Thatcher’s ideological intransigence in deregulating bus services and imagining that the network economics of buses could serve the public interest. My hon. Friend the Member for North Durham (Mr Jones) asserts that there is no market failure. In that, he is right, inasmuch as this market could never have worked in the first place. Having worked for 20 years on building networks and studying their economics, I know that there is no way in which the unregulated free market can deliver the bus services that the people of the north-east need. As we have heard, it cannot bring together the combination of collaboration and competition to deliver bus services. The idea is wrong that certain routes need to be over-profitable so that the private sector can decide to subsidise other—[Interruption.] It should be for the public sector to decide which routes need to be subsidised. I will not give way, as I do not have time.
I would like the Minister to answer the question, specifically with regard to his support for quality contracts in principle, and assure us that the quality contract scheme board that will meet will look favourably on the principle of quality contracts while considering the proposal before it. I would also like to know whether he will discourage bus companies from launching appeals against the democratic will of the people.
While talking about buses, I find myself talking also about trains. As my hon. Friend the Member for Hartlepool (Mr Wright) will know, the class 142 Pacer units are literally old bus bodies on cheap chassis. My hon. Friend set out the points that I wished to make, but will the Minister also comment on the fact that nine trains in the rolling stock will be lost from the north-east to the home counties, as was reported recently? May I invite him to travel up, with other hon. Members perhaps, on the east coast line to the north-east to see the transport situation for himself? Perhaps on the way we could discuss keeping the east coast in public hands.
In the last few seconds of my speech, I want to mention cycling. We have a debate coming up on that, but I want to highlight the good work being done in Newcastle. The north-east has some of the lowest cycling levels in the UK, with just 8% of people currently cycling once a week. I pay tribute to the work that Newcastle city council, led by many members of the council who are cyclists themselves, has done so far, and to its commitment to support cycling in the city.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on securing this Westminster Hall debate, which is important for our region, as I am sure you can tell, Mr Caton, from the number of hon. Members who have turned up and want to take part.
All economies gravitate towards their centre, and ours is no exception. London and the south-east are a great powerhouse for the United Kingdom economy, but in our region we want to be part of that too. We are a net exporter, but crucial to our success as a region is connectivity with the rest of the world and, in particular, connectivity with the rest of our country. It is the function of Government to understand these economic laws and, where it is in the public interest, to push back against them. My criticism of the present Government is that they are just not taking regional policy seriously enough, and in no area of public activity is that more true than in transport.
We need only look at the funding figures. We receive a fraction of the transport funding that London receives. Per capita, funding in the north-east is £5; the same figure for London is £2,500. I put it to you, Mr Caton: is that fair? It clearly is not. If we are to have an integrated economy, bearing down on congestion in the south-east and dealing with the need for more economic development in the north-east, transport links are crucial and the funding formula should be more equitable.
In respect of national infrastructure spending, the north-east received 0.3% of the total, and we are 4% of the nation’s population, so we are not even getting a per capita share, but our needs are greater, so logically we should be a priority, not pushed to the back and out of the way. I hope that when the Minister sums up, he will address that point head-on. This is not just an argument about transport in the region, although that is vital; it is an argument about connectivity with the rest of the nation, of which we are a vibrant part. We should not be cut off from it because the transport links are not good enough.
I recently had the chance to visit one of the Government’s Work programme providers in the north-east. I asked what its biggest difficulties were in getting people into work, which is its function. Of course, it said that it was the lack of jobs. That is true, as all north-east Members of Parliament know; those who serve the Government nationally sometimes lose sight of that. However, the second biggest problem was getting people to work. When that was first said to me, I thought that it was the old business about youngsters not being able to get up in the morning, missing their buses and turning up late and all those other reprehensible things.
Mr Brown
My hon. Friend helpfully says, “And some older people.” But no, it was not that. It was because the public transport links early in the morning, when people have to start work, are not good enough. Bus connectivity does not deliver in the way in which the pioneers of the Tyne and Wear integrated passenger transport network, of which we are all still proud, envisaged. Much has been said about whether the current bus services, and the relationship between the private operators and the public authorities, serve the region well. The present system clearly does not. Competition was a farce. I remember when it came in, and since its introduction the private sector has ganged up and monopolised certain routes and parts of the region. That is not private enterprise. A better solution needs to be found.
Mr Gordon Marsden (Blackpool South) (Lab)
It is a great delight to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) on securing this important debate, and I emphasise that she has fought consistently and doggedly for better bus services for her community. I am pleased to see the strong representation from MPs across the north-east, who have spoken about their support for better-run services that work in the interests of local people. As a north-west MP, I agree that co-operation between the north-east and the north-west is a key part of the process. I do not have time to go through all the points that colleagues have made, but there is clearly a strong consensus among the Opposition about the need to move forward in this area. As my hon. Friend has said, we must look at new mechanisms and new structures.
I understand the points made by my hon. Friend the Member for North Durham (Mr Jones), who is a doughty defender of his constituents’ interests, and I am sure that those points should be taken forward. It is worth remembering what Nexus has said about the problems with the partnership offer:
“Whilst partnership boards would undoubtedly improve the dialogue between local councils and bus operators, the final decision on routes, timetables and ticket prices would remain firmly in the hands of the bus operators. This creates significant doubt over whether the improvements and savings would be achieved in practice.”
I want to recognise the hard work that Nexus has done over the past four years in pursuit of a quality contract scheme. In many cases, it has innovated where no passenger transport executive has gone before, with, frankly, little support from Government. The final decision must, of course, rest with the locally elected councillors in the combined authority, but the work that Nexus has delivered to them in recommending the quality contract deserves to be received thoughtfully and carefully.
Mr Marsden
I am sorry, but I cannot give way because of the time. We need to develop franchising schemes that can help to protect our bus services and their key role in society. Buses are too often the neglected foundation of our communities. As the Institute for Public Policy Research pointed out recently, three times as many passengers use buses as use rail. The Passenger Transport Executive Group has established that in metropolitan areas the bus networks generate £2.5 billion in economic benefits, which is five times as much as the £500 million of public funding that they receive. Buses provide economic and social opportunities, linking passengers up with apprenticeships, skills and jobs, as my hon. Friend the Member for Bishop Auckland (Helen Goodman) and others have said—not just any jobs, but aspirational, career-building ones. In the north-east, in particular, those benefits are valuable to the more vulnerable in society, who have few other means of getting around: young people, people on low incomes or those who do not want to or cannot afford to get snagged up in environmentally unfriendly congestion.
Too often, government works in silos, and too often, this Government have done so. Ministers must be alive to the possibility that better-run bus services can help to deliver Government objectives. Bus services can be a key factor in reducing energy demands and carbon emissions. The PTEG has shown that the best-used bus services in urban centres can reduce carbon emissions from road transport by three quarters. To meet the Government’s goals, people must have the bus services that they deserve right across the country, not only in London; my hon. Friends have already pointed out the absurd inequality of the funding structures.
Quality contract-type powers have worked before. As someone who grew up in Greater Manchester during the Thatcherite deregulation in the 1980s, I know how the metropolitan county council’s strategic oversight acted as a valuable devolved economic unifier in those areas. The selling off of those companies was accompanied by severe under-investment, which required the incoming Labour Government in 1997 to save what was left of the decimated bus service by boosting support from less than £1 million in 1997 to £2.3 billion in 2012, the latest figure. The previous Labour Government introduced quality contract legislation as a way for properly equipped communities to wrest back some control over services, and we progressively made the process easier.
Although Nexus has embarked on a step change to try to improve its bus services, it has not been given much assistance by the Government. More fundamentally, the Government have completely failed to grasp the value of the bus. It is no exaggeration to say that passenger numbers have fallen in most parts of the country outside London, which is not surprising because the Government have consistently slashed funding. Levels of support will be £500 million lower by the end of the Parliament than they would have been if 2010 funding levels had been maintained. The bus service operators’ grant has been reduced by 20%. According to the Campaign for Better Transport, £56 million of the funding for vital supported bus services has been cut. Freedom of information requests have revealed that council spending on local buses has fallen as a result of local government cuts, with Conservative councils likely to cut the biggest proportion of their bus budget. That has been a disaster for local communities, especially in Tyne and Wear where there are semi-rural areas, which, as my hon. Friend the Member for Houghton and Sunderland South has said, lack the light rail connections enjoyed by some other regions. I hope that the Minister, who is aware of the difficulties that affect rural communities, understands that problem and recognises that in a place such as Northumberland, which has had to cut its supported services by 19%, things cannot move forward.
An incoming Labour Government in 2015 would support large cities and combined authorities if they wished to establish London-style bus services and structures. We would want to emulate positive approaches to pursuing franchise mechanisms, such as the case we are discussing. The benefits of franchising systems are numerous and vital in today’s circumstances. We need strategically planned bus services that help all our communities, and bus fares that are sensitive to the crisis in the cost of living under the current Government. People have a right to expect cheaper fares through multi-operator tickets, which will give them the lowest fares going, whatever mode of transport they take.
Franchising can offer more frequent and punctual services and build into contracts incentives on punctuality. Such incentives are sorely needed, because Ministers have instructed the Vehicle and Operator Services Agency to stop going out and checking punctuality, which is now left to companies to self-police. The whole passenger transport experience needs to improve, and a franchised approach can take us down that route. Franchising can enable the provision of real-time information on bus stops, stations and the internet, and allow local authorities such as Tyne and Wear to target particular groups of people—perhaps young people—for special concessions.
As my hon. Friend the Member for Hartlepool (Mr Wright) vividly pointed out, the deregulated system often promotes crude cartels or de facto monopolies; it can allow inefficient bunching on most-used routes, while little is done to expand usage on new ones; and it often results in the ineffective use of subsidy. It is not the way ahead. Franchising can bring together local authorities, passengers, operators and trade unions to plan and deliver the network. It can create a virtuous circle of co-operation that encourages the devolution of decision making across an over-centralised England. The Government have failed in this area because they have not grasped the elements of the problem. As my hon. Friend the Member for Houghton and Sunderland South has outlined, the North East combined authority wants to move boldly on behalf of its residents, and it has chosen to look at recommendations by Nexus for a quality contract.
The Government have not come up with any other alternatives, and they seem to have little vision in this area. Buses were barely mentioned—I think they were given three words—in the Transport Secretary’s speech to the Conservative party conference last month. We recognise the role of buses in the heart of local communities. We pledge that under the next Labour Government, those communities will receive our support to find an easier process if they, too, seek to reclaim control of their buses. Through a combination of their cuts to local government, the lack of an overall strategy and their cuts to the bus funding structure, the Government have reverted to an isolated, siloed vision of what buses can do, rather than the environmentally friendly, socially useful, economic driver that buses should be. From what we have heard today, and from what I know, nowhere in the country needs that thoughtful, integrated, community-driven approach more than the north-east.
The Minister of State, Department for Transport (Mr John Hayes)
It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate the hon. Member for Houghton and Sunderland South (Bridget Phillipson) on securing this debate. Like the shadow Minister, I will resist taking interventions, not because I do not like to take them, but because I want to cover as much ground as possible. If there are any matters that I cannot address, I will write to hon. Members. Specific issues have been raised on particular schemes in particular constituencies, and people deserve a serious response.
I acknowledge three or four of the core points that have emerged across the speeches in this debate. First, transport serves economic interests, but it has a bigger function, too. Transport serves well-being and is critical to communications because it allows people to get to opportunities. If we restrict transport, we restrict opportunity, which is a point that has emerged on both sides of the Chamber during our short debate today. I will not use the text that has been prepared for me by civil servants, because as hon. Members know, I like to speak my mind and respond to debates properly.
Mr Hayes
This Chamber knows how I behave as a Minister, and my officials too are used to how I work.
The second point that has emerged from this debate is that, when serving well-being in the way that I have described, one needs to take a lateral, holistic approach. As the hon. Member for North Durham (Mr Jones) said, when people travel it is not easy to define boundaries. Different people travel to different places for different purposes at different times and by different means. For that reason, we have to consider transport in the round. We have to consider how bus travel interfaces with rail travel, and how investment in roads will affect other modes of transport. That is a challenge for any Government, because the shadow Minister is right that Governments tend to work in silos, and Departments do, too. I am the antithesis of a silo, as he knows, because I have a broad vision but a laser-like focus.
My laser-like focus is on the north-east, which I know well, although not as well as most people in this Chamber because I do not represent a north-east constituency. I regularly travel to the north-east using the A1. People who know me well will know that I am often in Northumberland, so I know the difficulties of getting to the north-east by road. One thinks of the A1 north of Newcastle, which has been mentioned in this debate and in previous debates. One thinks of the congestion around the west side of Newcastle. I was delighted to turn the first sod on the improvements we are making between Coalhouse and the junction to its north, which will not only allow local traffic to use the road but allow better throughput for those travelling further north. That scheme had been long called for.
I recognise that the connection between the north-east and the rest of the country is vital for economic purposes, as well as for well-being. I also recognise that that requires us to think carefully about the specific challenges in that part of the country. Members of Parliament for the north-east have made it clear that they see the particularity of their needs as being central to the concerns that I need to consider.
I am surprised that the shadow Minister has been untypically ungenerous about this, because that is not his normal style, but the Government can rightly claim to have taken a more strategic approach to road investment. As he knows, we have committed funding for a five-year period, rather than the stop-start funding that characterised the previous Administration. I am not generally one of those people who demonise earlier Governments, but one of the features of the previous Government was that they did not have as consistent a commitment to road investment as the current Government.
As the shadow Minister knows, and frankly the facts speak for themselves, we are making further investments. Some £24 billion will be invested in this Parliament and the next, comprising 54 new national road projects. Eighty per cent. of our roads will be resurfaced. There will be 750 extra lanes of smart motorways. As he knows, more than £17 billion will be invested in the next spending round, including £10.7 billion for major projects and £6 billion for maintenance and resurfacing.
The hon. Member for Houghton and Sunderland South made a spirited case for improving bus journeys. I do not want to get too involved in this familiar dispute, but the hon. Lady powerfully defended rural interests, echoing the sentiments of my hon. Friends the Members for Stockton South (James Wharton) and for Hexham (Guy Opperman), who are great champions of the interests of rural communities and fully understand that good transport enables such communities to access neighbouring places. There is clearly a major dispute in the Labour party, and it is not for me to comment on that, but as the hon. Lady knows, it is a matter for local determination. The Transport Act 2000 makes it clear that local authorities can make a decision in tune with local interests. It is not for me to get involved in such decisions. I assure her that I appreciate and understand the importance of bus travel, and I recognise that buses are vital for some of the people she described, who would otherwise be entirely isolated, and she has a long pedigree of saying so. Before coming to this debate, I checked her many contributions on this subject. Indeed, she spoke in this Chamber earlier this year about bus travel and its importance to her constituents. Although I will not get involved in that dispute, or indeed in that decision, the Government and I recognise the significance of bus travel. We will happily take further some of the suggestions that have been made in this debate about how we can further enhance what we do to support access to travel.
A number of hon. Members have talked about rail. I have mentioned that I regularly travel to the north-east, and I use the east coast main line. I get on the train in a rather more southerly place than many of the hon. Members in this Chamber, but I know the line well. People are concerned about the franchise, and I gather from what the hon. Member for Hartlepool (Mr Wright) and others have said that people are also concerned about the rolling stock. I will look at the rolling stock and whether it is part of the franchise, and I will respond to him on that specific point following today’s debate. He is right that detaching considerations about rolling stock from the broader considerations about the franchise would be an error.
We have also heard about Network Rail’s £530 million northern hub programme, the electrification of routes to the north-west, the north TransPennine line and other enhancements. All of that is evidence that the Government take the north of England, and travel to the north of England, very seriously. I entirely understand that it is a mistake to see such things in isolation, and my hon. Friend the Member for Stockton South, the hon. Member for North Durham and others have talked about taking a bigger view of transport. Of course every journey, by its nature, is local, but to see it in only those terms, without considering the whole of the north and the relationship between the north and the south, would be an error. We are also investing in stations. As the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) knows, funding from Network Rail and the regional growth fund is supporting a scheme that has not only transformed Newcastle station, which is a magnificent station that I know well—
Martin Caton (in the Chair)
Order. I am sorry to interrupt, but we now need to move on to our next debate.
Imprisoned Foreign Nationals
(9 years, 6 months ago)
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Mr Philip Hollobone (Kettering) (Con)
It is a huge pleasure to serve under your distinguished chairmanship, Mr Caton. I thank Mr Speaker for granting me the honour of securing today’s debate. I welcome to the debate my right hon. Friend the Minister, who serves in both the Home Office and the Ministry of Justice. I know that he takes a great interest in these important matters.
My contention on behalf of my constituents in Kettering is that far too many foreign national offenders are being held in British prisons. Do not get me wrong: it is excellent that so many criminals are being caught and sentenced, but such people need to serve their sentences in secure detention in prisons in their own country, because the cost to the British taxpayer is north of £300 million a year. At a time of severe constraints on public expenditure, that is far too large a bill to ask British taxpayers to pay.
My understanding is that England and Wales have a prison population of something like 85,000 prisoners; no doubt the Minister will be able to update the House with the very latest figures when he responds. I understand that 10,834 of those 85,000 are foreign national offenders; again, I am sure that the Minister will want to provide the House with the exact figures. I am a bear of little brain, but I estimate that that means that foreign national offenders make up something like 13% of our prison population.
Both the number of foreign national offenders and the total number of prisoners in British prisons have increased markedly since the early days of the previous Government, thanks in large part to the tougher criminal justice policies pursued by the previous Conservative Government, the previous Labour Government, and the current coalition Government. That is a good thing; criminals are being brought to justice and are serving longer in prison, and my constituents support that. However, having almost 11,000 foreign national offenders gives us huge problems. Our prison system is basically full, yet 13% of prisoners are foreign nationals. Public expenditure is tight, yet we are spending more than £300 million a year on these people. I understand that a number of Her Majesty’s prisons are devoted entirely to housing foreign national offenders. I am sure that the Minister will correct me if I am wrong, but I understand that HMP Canterbury and HMP Bullwood Hall are devoted entirely to housing foreign national offenders.
Our jails are host to foreign criminals from 160 countries around the world; indeed, 80% of the world’s nations are represented in British prisons. Something like a third of them have been convicted of violent and sexual offences, a fifth have been convicted of drugs offences, and others have been convicted of burglary, robbery, fraud and other serious crimes. Although 160 countries are represented in our prisons, something like 57% of the total foreign national prisoner population comes from just 12 nations.
I shall read out the list of shame: top of the polls is Poland, with 938 foreign national offenders in our jails; second is Ireland, with 779; third is Jamaica, with 737; in equal fourth place are Romania and Pakistan, each with 547; sixth is Lithuania, with 502; seventh is Nigeria, with 469; eighth is Somalia, with 430; ninth is India, with 426; 10th is Bangladesh, with 276; 11th is Albania, with 275; and 12th is Vietnam, with 247. I am sure that the Minister will correct me if any of those numbers are wrong or should be updated, but those 12 countries have the biggest national populations in our prisons, making up 57% of the total—that is 6,174 prisoners.
Guy Opperman (Hexham) (Con)
I congratulate my hon. Friend on securing such an important debate and addressing an issue that affects a lot of us. Does he agree that one way to resolve the problem is to use the budgets of both the Department for International Development and the Ministry of Justice to improve prisons in countries such as Jamaica—I have visited Kingston prison, where some UK nationals and almost 1,000 Jamaicans were being held—thereby allowing prisoners to be returned to a human-rights-compliant jail in their homeland?
Mr Hollobone
I am most grateful to my hon. Friend for his intervention; he knows a lot about the subject, and I congratulate him on taking the initiative to visit the prison in Kingston. There cannot be many Members of the House who have visited Kingston prison, so I applaud my hon. Friend for his endeavour. He makes an extremely sensible suggestion, but I must say that I do not think that my constituents in Kettering are particularly fussed about the human rights of foreign nationals who commit crimes in this country. However, I understand that, as things stand, we operate under human rights legislation introduced by the previous Government and are not allowed in law to deport criminals to non-human-rights-compliant prisons.
It would make sense to use the huge and increasing international aid budget to build suitable prisons in countries that provide us with a large number of prisoners. That is a good idea. Indeed, earlier this year I asked the then Minister of State, Department for International Development, my right hon. Friend the Member for Rutland and Melton (Sir Alan Duncan), how much we give in aid each year to Jamaica, Pakistan, Nigeria, Somalia, India and Bangladesh. The answer was that for 2012—one year—we gave them £973 million. Those six countries provide us with 2,900 foreign national offenders, which is more than a quarter of the total number of foreign national offenders. It costs this country more than £100 million a year to incarcerate these people in our jails. It would be a good idea to spend some of that £973 million on building prisons in those six countries.
Guy Opperman
What my hon. Friend is describing is not a novel idea. The Government have supported similar ideas in other countries: I believe that Haiti is one such case, and the Jamaican example is the one that is closest to happening. I hate to say it, but the project has stalled because there have been difficulties with the MOJ and DFID budgets and with driving the matter forward through civil servants and Ministers, and there have also been problems with getting agreement with the Jamaican Government. Nevertheless, where there is a will to deport these gentlemen, there is definitely a way.
Mr Hollobone
That is absolutely right. In that regard, I have great hopes for my right hon. Friend the Minister, because I am sure that if something can be achieved, he will achieve it. I would go so far as to say that we should make our international aid to these countries conditional on their acceptance of a prison-building programme—we should not give them international aid if they do not co-operate with us on this issue.
Again, I would be happy to be corrected if I am wrong, but I understand that we have been pursuing a compulsory prisoner transfer agreement with Jamaica for ages, but it is still subject to ratification by the Jamaican Government. We have only a voluntary prisoner transfer agreement with Pakistan. We have, at last, a compulsory prisoner transfer agreement with Nigeria, and I hope that the Minister will tell the House how many hundreds of Nigerians await deportation to that country. We do not have a prisoner transfer agreement of any sort with Somalia or Bangladesh, and we have only a voluntary prisoner transfer agreement with India. These six countries provide us with 25% of our foreign national offender population; we give them the best part of £1 billion a year in international aid; yet they are not co-operating with us in any sensible, meaningful way on taking back their nationals who have committed criminal offences in this country.
There is good news on EU criminals in our jails—it is not good news for them, but good news for us as British taxpayers—because there is now an EU-wide compulsory prisoner transfer agreement, whereby EU nationals convicted and imprisoned in our country can be sent back against their will to their country of origin. That applies so long as prisoners come from another EU state. However, my understanding is that only 14 of the EU states have ratified that legislation. Again, I would welcome an update from the Minister on that.
Poland, which is top of the list with almost 1,000 of its nationals in our prisons, has a specific derogation from accepting prisoner transfers under that EU agreement until the end of December 2016. That is an absolute outrage. Why should we pay to accommodate criminals who have come to this country from Poland? Poland should be securing those people in secure detention back in Poland, at the expense of Polish taxpayers. It is okay for there to be no restrictions at all on eastern Europeans coming to the United Kingdom; apparently that is fine—more than 1 million people from eastern Europe live, work or claim benefits in this country—but we are not allowed to send back to eastern Europe, and Poland in particular, nationals from those countries, including Polish nationals, who have been convicted, found guilty and imprisoned for serious criminal offences, and who are incarcerated in jail in this country. My constituents in Kettering, and I suspect most of the population at large, are outraged that this situation has been allowed to develop.
I am sure we can all agree that this is a serious issue that needs to be tackled; indeed, some distinguished figures have said as much. The Lord Chancellor and Secretary of State for Justice told me in November 2012:
“The prisons Minister…and I have met our Jamaican counterparts during the last few weeks. We are focusing our efforts to negotiate compulsory transfer agreements on the countries where the problem is greatest.” —[Official Report, 13 November 2012; Vol. 553, c. 165.]
That is great, but we still await these compulsory transfer agreements.
The Prime Minister said to me on the Floor of the House in July 2013:
“We have held specific National Security Council discussions about prisoner transfers and about foreign national offenders, because I think that we need to do much better in getting people out of our jails and back to the countries where they belong. We are making some progress, but it is hard work. This European Union agreement is a potential benefit for us and we have to do everything we can, both at the European Council and bilaterally with other countries, to get them to sign and implement. That is a programme that the Government are very much working on.”—[Official Report, 2 July 2013; Vol. 565, c. 773.]
That was in July 2013, but not much progress has been made since then, because the figures I have show that in March 2013 there were 10,735 foreign national offenders in our jails, whereas I think the latest number is 10,834.
The Lord Chancellor and Secretary of State for Justice said to me in June:
“This is a matter of great concern to Ministers. We are also seeking to speed up the formal deportation process through the Home Office. We need to reduce the numbers significantly, but it is proving to be a more stubborn and difficult task than any of us would wish.”—[Official Report, 16 June 2014; Vol. 582, c. 852.]
That is right, but we need to co-ordinate our efforts as a Government to tackle this problem. That is why I am delighted that my right hon. Friend the Minister for Policing, Criminal Justice and Victims is in his post, because he has a desk not only in the Home Office but in the Ministry of Justice, and so is uniquely placed to knock heads together in the two Departments to ensure that action is taken.
I am not a lawyer, and I am rather proud of that fact. I do not understand all the legal niceties about the differences between deportation, transfer, removal and repatriation. Apparently, all these terms have highly technical and specific meanings, but basically my constituents in Kettering and I want to see these foreign national offenders removed from here to there, and incarcerated at the expense of their own taxpayers.
More than that, once those people have left our shores, we want them to be banned from ever returning. That is why I introduced a Bill in the last Session of Parliament, called the Foreign National Offenders (Exclusion from the United Kingdom) Bill, which would exclude those people from the UK once they had been found guilty of a criminal offence on our shores and basically been forced to leave. I do not see why they should ever be allowed back into our country once they have been found guilty of, and imprisoned for, a serious offence.
This is an issue of serious concern. If we get it right, we would not only free up almost 11,000 spaces in our overcrowded prisons but save the British taxpayer north of £300 million every year. Some of the most senior politicians in the land have said that they recognise that this issue is a problem, and that they want to solve it. I say to them, through my right hon. Friend the Minister, that they have had long enough to do that, so please will he put a rocket under this issue to ensure that it is tackled once and for all?
The Minister for Policing, Criminal Justice and Victims (Mike Penning)
I apologise from the outset for several reasons, Mr Caton, not least because, if my voice gives out, I might splutter and cause germs to be spread around the room. However, I thought it was important that I attended this debate, even though I am clearly not the Minister responsible for this issue. I apologise on behalf of the prisons Minister, the Under-Secretary of State for Justice, my hon. Friend the Member for South West Bedfordshire (Andrew Selous), who is in prison today; he is visiting a prison and will be released later today. Indeed, I am not a Minister from one of the many other Departments that are involved in this difficult, multi-Government task.
I congratulate my hon. Friend the Member for Kettering (Mr Hollobone) on securing this debate. I have known him for many years and he will know that probably 90% of what he has said is not only factually correct but is something that I agree with in principle; in fact, I agree with him on nearly everything he said, and so do the Prime Minister and the Government. The frustration that he can hear in my voice was in his voice; I share his frustration.
In the meeting I had with officials this morning to ensure that I stuck to the line and read the speech, which I will not do, I was very surprised—as an MP and just an ordinary member of this country, and not as one of the great and the good—about some things that are being done. I am not a lawyer either, and if I was I think I would still find it mind-bogglingly difficult to work out why, in many cases, things do not happen.
I will just clarify one point. As usual, my hon. Friend was very accurate with his figures. He was absolutely spot on with the figure of 10,834; that is the latest figure that I have. That proves that parliamentary questions and everything else are working. He has asked many, many questions on this issue on behalf of his constituents and I expect more questions to come through—quite rightly so.
Do we keep foreign nationals in specific prisons? Yes, we do. That is because it makes it much easier to work out, one, how we deport them at the end of their sentence and, two, how we work on compulsory as well as voluntary transfers to foreign prisons while they are serving their sentence.
In his speech, my hon. Friend covered myriad different areas and I will try to cover as many as I can; if I cannot cover them all, as usual I will write to him after the debate. He asked about Canterbury prison and Bullwood Hall. I know Bulwood Hall very well; it is not far from where I used to live in Essex. It used to be an establishment for juvenile ladies many years ago, and when I was a fireman we went there on a regular basis, whenever the inmates decided to set fire to parts of the building. The two facilities specifically for foreign nationals are Maidstone and Huntercoombe. It is important that we clarify that. I have asked whether we have specific wings in other prisons for foreign nationals, so that we know where they are and have the right information to enable us to liaise well on how they are dealt with.
My hon. Friend said the situation with Jamaica is not what we would like it to be—absolutely spot on. I think we would all expect Jamaica to be in a position by now to take Jamaican nationals who have broken the law in this country. My note says that the Foreign and Commonwealth Office is working to restart discussions. I am not going to pull the wool over anybody’s eyes and say that the discussions are in full flow. However, there are issues to discuss. I assure my hon. Friend for Kettering, and my hon. Friend the Member for Hexham (Guy Opperman), that, across Government, we are doing whatever we can. I will, as Policing and Criminal Justice Minister, put whatever rocket I can under the separate Departments. It is a challenge in itself having to deal with two completely different Departments, although it works well, because it allows me to ask why a lot more often.
The 10,834 figure is right, and it is also correct that it is down from 11,153, but it is not fair to say that all those people would just disappear, should we put in place some of the plans that we agree should be put in place, not least because my police officers—I pay tribute to my hon. Friend the Member for Kettering, a special constable in the British Transport Police—arrest an awful lot of foreign nationals, who are then convicted because they have broken our law and are put in our prisons. Some are going out as others are going in. For instance, in 2013-14, 5,097 were deported and in 2012-13, 4,539 were deported. It is an in-out situation. I am sure my hon. Friend accepts that.
It is not just about what we would like to do. My hon. Friend the Member for Hexham said that we cannot deport people to a prison, because that is not acceptable under human rights legislation. I am sure that both my colleagues know my views on that. I agree completely with the Prime Minister that we need to have a bill of rights for ourselves and we should ensure that our judges abide by that, not by legislation that is now used in the European Court of Human Rights for a purpose it was never created for.
The Department for International Development is paying for improvements in countries that we have been alluding to, particularly Nigeria, although it is not paying for brand new prisons, because that would not be right in most cases—although it might be right to do so in some countries. I was in Washington earlier this month at the global summit on child online protection from paedophiles, an important thing that we do that we cannot do in isolation. Sadly, I missed the Conservative party conference, which I have not done for many years. However, I did bump into the Nigerian Justice Minister, who recently agreed not only with our officials, but with our Ministers, about taking back nationals. Nationals will start going back to Nigeria later this year.
We are leading the world in what we are doing in this regard. Most countries are not doing this and are not even trying to do it, because it is particularly difficult. We need—our rationale should be—to ensure that Departments, including the Home Office, the Foreign Office, DFID and the Ministry of Justice, work together to make sure that we get as many to go as possible.
My hon. Friend the Member for Kettering was right to say that his constituents would not understand this subject unless they were legally trained or took a particular interest in it, because of all the different narratives out there: voluntary, non-voluntary, compulsory, end of sentence or end of the statutory part of the sentence. For instance, with regard to longer sentencing, in most cases we do not even start to consider releasing people until we are getting close to 18 months before it would be possible in any circumstances for them to be released. That is probably understandable, because of the sheer amount of work that needs to take place. If that were done too early, we may find ourselves in a situation a bit like the one we have seen in Jamaica, where we thought we were in a position to do something, but were not.
In a nutshell, we would like as many foreign nationals as possible in our prisons to serve their sentence in their country of origin. That would be slightly difficult if they had dual passports; I will not discuss that in this debate, as it is a separate issue for debate. We want as many people as possible to go at the end of their sentence. It is also important that our friends in Europe fulfil their commitments. I do not know why Poland got a derogation to the end of 2016: it seems to have negotiated pretty well on lots of different things on joining this wonderful club. There are 18 countries that have implemented the provisions, but many of the countries that my hon. Friend mentioned in his list of shame have not. Interestingly, Jamaica was at No. 1, but is now No. 3. There is a lot of work to do on implementing this—we have done very well in Jamaica with the compulsory side of things—in other parts of world, as my hon. Friend said. To date, we have transferred 31 people to countries inside the EU agreement—this is purely the EU; not the EU and connected countries—which is a tiny number, but it is a start. That is something that we need to work on.
I do not think that anyone in the House would disagree that we should not let people who have committed a crime abroad into this country. Most other countries in the western world have the same attitude; Australia and America are classic examples. We are working on that. Information transfer is particularly difficult, especially with some of the newer member states. For instance, I understand that information from other EU countries is not transmitted directly to us, but to the EU, and then disseminated to member states. Clearly, that is not working well. We need to work harder at that.
The truth of the matter—I return to what our Prime Minister has said—is that we need to have better control of who is going in and out of this country. That is an issue, particularly in respect of EU treaties, although it is a negotiated position that I agree with. There are probably members of the coalition who do not agree with that position, but I do. One thing that we can do for all our constituencies is ensure that we know who is going in and out of our country and decide who does so. Once they are in this country and they commit a crime, the full force of the law needs to come down on them, and that is probably where my side of things is involved, through the police and the criminal justice system.
I agree that we need to work much harder, because this matter was ignored for too many years. It used to be a case of saying, “They committed a crime in the UK, so they end up spending their time in the UK.” Of course, they have human rights and family rights, and all the other different things. It was fantastic to read about a case recently where the judge—for the first time, I think—said, “No, that’s not what that legislation was implemented for. This person’s human rights are not going to be affected by this and I do not agree with the way that it has been implemented before.” I think that if more judges were doing that, we would all be a lot happier.
More work needs to be done. I am sure that we will get increased pressure from my hon. Friend the Member for Kettering. I will certainly do my bit, even though I fully admit that it is probably the police and criminal justice system, which is in my portfolio, that is filling up the prisons. However, once justice has been seen to be done, as many of these people as possible need to be in their country of origin. If prisons in those countries are not quite up to the standard of prisons in this country, but they meet the human rights requirements, so be it, and there they should go.
I congratulate my hon. Friend on securing this debate. I apologise that I am not the Minister with full responsibility. I have answered as many questions as I can, as candidly as I always try to do. I will write to my hon. Friend responding to questions that I have not answered. I hope that I feel a little bit better in the morning than I do at present.
Antibiotic Resistance
(9 years, 6 months ago)
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Julian Sturdy (York Outer) (Con)
I am delighted to have been given the opportunity to host a vital debate on antibiotic resistance. As ever, Mr Chope, it is a pleasure to serve under your chairmanship.
Many people will be aware that the 20th century discovery of antimicrobial drugs, a class of medicine that includes antivirals, antimalarials and antibiotics, such as penicillin, is among the greatest medical breakthroughs of our time. However, we have failed to heed the warnings of such people as Alexander Fleming, who, when collecting his part of the Nobel peace prize in 1945, warned:
“there is the danger that the ignorant man may easily underdose himself and by exposing his microbes to non-lethal quantities of the drug make them resistant”.
There has never been any doubt about the link between the misuse of antibiotics and resistance to them, but despite this antibiotics have been misused and, as a consequence, we now face the prospect of losing modern medicine as we know it. If people take a moment to think about the consequences, they will find them frankly horrifying.
In 2013, the chief medical officer, Professor Dame Sally Davies, told Parliament of an horrific scenario, where people going for simple operations in 20 years’ time could die of routine infections because
“we have run out of antibiotics”.
To some, this scenario may still seem too far in the future to warrant any immediate action, but for me the clock started ticking on this issue a long time ago. Yet we are no further forward.
In 20 years’ time, my children will be in their late 20s. Parents and families around the country will all want their children, and the next generation after that, to have the medical guarantees that we have the luxury of being afforded today, so inaction is simply not an option.
Antibiotic resistance is already changing clinical practices in this country, For example, in recent years complication rates for prostate biopsy, which carries a risk of septicaemia, have increased from less than 1% in 1996 to nearly 4% in 2005. Due to this, doctors are now carrying out the biopsy in a different way, changing clinical practice.
The rise of antibiotic resistance is widely seen by organisations such as the European Food Safety Authority and the World Health Organisation as a consequence of the use and overuse of antibiotics in both veterinary and human medicine. However, in this debate I will focus on the continuing overuse of antibiotics in human medicine, where considerable improvements could still be made in many countries.
Mr David Davis (Haltemprice and Howden) (Con)
I congratulate my hon. Friend on securing a debate about one of the great threats to modern civilization: the prospective failure of antibiotics. Since he is not going to focus on agriculture, might I ask whether he agrees that, because some 50% of antibiotics are used in agriculture in this country, and 80% in the United States, if we are to take an international lead, as the Prime Minister would wish us to, we have to clean up our own act at home, in the way that the Dutch have in agriculture?
Julian Sturdy
I agree. Although I was only going to touch on that matter briefly, that does not mean that I do not recognise the impact on resistance from use of antibiotics in veterinary medicine. My right hon. Friend is right to mention the problems relating to resistance in the US, especially because the way that veterinary antibiotics are used there is quite frightening. In the UK and Europe, we use antibiotics differently. The Dutch are the example in that regard, and we have to learn from that. If we continue to misuse antibiotics, whether in human medicine or in the veterinary industry, resistance is bound to happen and that is bound to cause a problem, so we have to tackle it on both sides, although I want to focus on the human medicine side.
Jeremy Lefroy (Stafford) (Con)
My hon. Friend mentioned malaria and the treatments against it that have been discovered. He may know that, through misuse of the latest generation of artemisinin-based antimalarials, resistance to those is already coming up through Thailand and Burma and will possibly, eventually, get to sub-Saharan Africa, with devastating consequences, as was the case with previous antimalarials.
Julian Sturdy
My hon. Friend is right. I was going to touch on that. Multi-resistance is widespread around the world. He mentions antimalarials, but resistance is also apparent in relation to tuberculosis and there is emerging resistance to the antibiotics of last resort—the so called super antibiotics—the carbapenems, which are not licensed for use in farm animals on the veterinary side. That resistance is causing real concern.
Returning to the livestock sector for a minute, there is a tendency among some sections of the intensive livestock industry, and even some Governments, to dismiss almost entirely the contribution to resistance by veterinary use of antibiotics. This is a dangerous path to take, because although antibiotic use in farm animals may not be the main driver of resistance in humans, it is a still an important contributor, and we must recognise that.
Glyn Davies (Montgomeryshire) (Con)
Before my hon. Friend moves away from the agricultural sector, let me say that, in a long previous life as a livestock farmer, one of my earliest experiences was of the most amazingly casual approach to the use of antibiotics. If we are going to change the mindset in the agricultural industry, we have to bring on board the unions that advise farmers and get the people running agriculture onside in recognising the danger of this, because an awful lot of individual operators just do not accept the dangers and risks.
Julian Sturdy
I agree entirely with my hon. Friend. I said earlier that we must tackle misuse in the livestock sector, as well as misuse in human medicine; we must tackle misuse across the world. Regarding food security and imported food, antibiotics are misused throughout the world in the livestock sector.
It is worth putting on the record that in the UK we have some of the best animal welfare standards in the world, but we do not misuse antibiotics to any extent in the food chain, as is seen in the US. Such misuse has to be stopped and action has to be taken on that.
For far too long antibiotics have been used as if they were a bottomless pit of cure-all miracle treatments. Some 30 years ago, the battle against infectious diseases appeared to have been won, at least in the developed world. The old drugs could handle whatever bugs came along, which meant there was no market for new ones. That is why, since the year 2000, just five new classes of antibiotics have been discovered, and most of these are ineffective against the increasingly significant problem posed by gram-negative bacteria, which are also difficult to detect. The fact is that misuse, over-prescription and poor diagnostics have driven an environment that favours the proliferation of resistant strains of bacteria, rendering once vital medicines obsolete.
Mr Iain McKenzie (Inverclyde) (Lab)
I congratulate the hon. Gentleman on securing this important debate. What does he think about the growing pressures on GPs from their patients to prescribe antibiotics, which causes over-prescription?
Julian Sturdy
The hon. Gentleman makes a valid point. I hope that, through this debate and beyond, we can get the message out there that the misuse of antibiotics is potentially the greatest threat to mankind that we have seen, and in doing so, I hope that the pressures on GPs will start to subside. He is absolutely right. GPs in my constituency tell me that as soon as some people get a common cold or a sore throat they are breaking down the door, asking for antibiotics. Sometimes it is difficult for GPs to resist those calls. If we are going to secure our long-term future in the medical industry, those calls have to be resisted and that is where it has to start.
If we look at deaths related to MRSA, which is a bacterial infection resistant to a number of popular antibiotics, mortality rates rose steadily in the UK from 1993 onwards to peak at more than 2,000 in 2007. Bacteria and parasites are already developing resistance to front-line antimicrobials, which are over-prescribed and under-regulated, leading to 25,000 people dying each year in Europe from infections that doctors were unable to treat with the drugs available to them. Those statistics, however, are just from the developed world; the misuse of antibiotics is a much more serious problem in lesser developed countries, as my hon. Friend the Member for Stafford (Jeremy Lefroy) said. Hotspots of antimalarial-resistant parasites are springing up in south-east Asia, as are cases of extreme drug-resistant tuberculosis in South Africa and other parts of the African continent. Those are among the many examples that illustrate the urgent nature of this health problem.
In an increasingly interconnected world, an infection that emerges in Delhi today will have an impact in London tomorrow. More needs to be done on a scientific level to develop new antibiotics and to improve diagnostics, but science alone will not solve the problem. Pharmas, which is the collective term for pharmaceutical companies —I put on record that I was a farmer, not a pharma—need to be incentivised to develop new antimicrobials. As with other resources, antibiotic effectiveness can be used up. The eventual loss of current antibiotics is sadly inevitable, but, depending on the actions taken now, it can happen at a much slower pace.
While there are many examples of misuse in lesser developed countries, I want to look specifically at the case of India, as the challenges associated with controlling antibiotic resistance there are many and multifaceted. India has a problem with the overuse and underuse of antibiotics. The underuse is mainly due to the lack of prescriptions. For example, prescriptions were not presented for one fifth of the antibiotics purchased recently in Delhi. However, in 2005-06, a large proportion of infant and childhood deaths from pneumonia would not have occurred if the children had been properly treated with antibiotics. On the overuse, patients with coughs and colds are often prescribed antibiotics, which wastes their effectiveness. As I said, many continue to purchase antibiotics without a prescription.
India has emerged as the world’s largest consumer of antibiotics, with a 62% increase over the past decade. They consume an average of 11 antibiotic tablets a person a year—that is five days of antibiotics for every person in the country. Additionally, the use of last resort drugs such as carbapenems has gone up significantly. That is due to the enzyme known as NDM-1, which makes bacteria resistant to a broad range of antibiotics, including the antibiotics of the carbapenem family. Bacteria that produce carbapenemases are often referred to in the media as superbugs, because the infections they cause are difficult to treat. In India, 50% of all superbugs are resistant to all known antibiotics. The only exception to that is colistin, but that is because the antibiotic, which was introduced in 1959, is considered toxic.
In India, it is commonplace for someone with a sore throat to go to the chemist and choose the antibiotic they want to use. From there, many people will go to a clinic and are given their chosen antibiotics intravenously to treat the sore throat. Usually, the full dose is not administered. That is a horrendous example of the misuse of antibiotics and simply cannot be allowed to continue. Over-the-counter regulation needs to be tightened in lesser developed countries and people need to be better educated on the problems associated with misuse.
On funding and bringing new drugs to the marketplace, when pharmaceutical companies are deciding where to direct their research and development money, they naturally assess the market for a drug candidate. They have an incentive to target diseases that affect developed countries, because they can afford to pay. The pharmas also have an incentive to make drugs that many people take, and take regularly for a long time, such as statins and antidepressants, which leads to enormous under-investment in certain kinds of diseases and certain categories of drugs. Diseases that mostly affect poor people in poor countries are not a research priority, because it is unlikely that those markets will ever provide a decent return. That problem can still be seen with antimicrobials. Again, the trouble is the business model. If a drug company invented a powerful new antibiotic, Governments would not want it to be widely prescribed, because the goal would be to delay resistance. Public health officials would, appropriately, try to limit sales of the drug as much as possible. That makes for good public health policy, but a bad investment prospect.
As we all know, pharmaceutical companies form a major part of how the problem can be addressed, but we have to keep regulation in mind. By that, I mean the ability to identify infected patients quickly and cost-effectively and, indeed, to identify whether antimicrobials are needed at all. Failure on that is a root cause of the blanket drug usage we are seeing around the world. Surveys in the UK have shown that many doctors, as the hon. Member for Inverclyde (Mr McKenzie) said, still prescribe antibiotics far more often than necessary, and they are often under intense pressure to do so. A significant number of patients fail to complete a full course of antibiotics, and I hold my hands up and say that I have done that, as I am sure have many other Members. As resistance becomes more commonplace, it increases the chances that the initial antibiotic prescribed will be ineffective. As a result, resistance to antibiotics, such as carbapenems, has grown from five patients in 2006 to 600 in 2013.
While improved diagnostics would increase the effectiveness of the antimicrobials already available, the need to develop more sophisticated drugs that can keep pace with resistance is critical. The development of new drugs, however, will only come when pharmaceutical companies invest once again in antibiotics. That will occur only when those companies know they can recoup their investment costs. Of the 18 to 20 pharmaceutical companies that were the main suppliers of new antibiotics 20 years ago, just four persist in the field. Ultimately, given the choice between making an antibiotic that a person might take for two weeks once in a lifetime or developing an antidepressant that a person would take every day for the rest of their life, pharmas will naturally opt for the latter. It is thought that we need some 200 new antibiotics to cope with the growing problem. However, pharmas are clearly wary of funding this type of investment if the scope for use afterwards is limited.
I originally believed that the best way to tackle the problem would be for the Government to agree a decent unit price for antibiotics. However, it is likely that pharmas would not trust the Government—of whatever colour or combination—to deliver on that promise, so the best option could be to let the market handle the unit price, meaning that Government would stop restraining the price of antibiotics and allow them to increase to entice pharmas to invest. The more I have researched the topic, however, the more convinced I have become that that idea would not succeed. Introducing a targeted antimicrobial and selling it for the price of a cancer drug is likely to be impossible, because this is a market where people are used to getting antibiotics for next to nothing. Why would they suddenly start paying such high prices? As a result, the best solution may be incentives. The key would be to reward companies for creating substantial public health benefits, and the simplest way to do that would be to offer cash prizes for new drugs. For example, the Government would make a payment to the company, and the company would in exchange give up the right to sell the product. That would ensure the pharmaceutical company would be paid, and it would avoid all the expenses of trying to push a new product, as touched on in a report by the Select Committee on Science and Technology.
Additionally, Governments could use the approach that worked with vaccines and new pre-purchase antimicrobial drugs for a set number of years. Such pre-purchasing agreements would mean that the health care system becomes responsible for the proper usage and surveillance of antimicrobials. Currently, no Government grants are aimed at antibiotic discovery, but I welcome the independent review into antimicrobial resistance that the Prime Minister announced in July. I also welcome the brilliant news that the public recently voted to focus the new Longitude prize on antibiotics. The money will go to whoever can develop a rapid bacterial infection diagnosis test within five years. Announcements such as that ensure that antimicrobial resistance is kept in the news and on people’s minds.
Another way to ensure progress is to set up a global organisation that focuses solely on antimicrobial resistance. The World Health Organisation is now devoting considerable time to the problem, but it only produced its first global report in April this year. We are entering a perfect storm with no global organisation or global pharmas tackling the issue head on. Ultimately, a global network needs to be created to fund global antibiotic discovery. In addition, we need to ensure that people are aware of the problem and how it can be solved. Only with the public’s interest can we rally enough support to ensure antimicrobial resistance stays at the top of the political agenda, which will ensure that action is finally taken.
Overall, the purpose of today’s debate is to raise the profile of the devastating threat of antimicrobial resistance and hopefully to strike a chord across the House. Solving the problem will not be easy and will take considerable time. However, if we do not act now, things will only get worse. Many people in positions of authority in the medical profession consider antimicrobial resistance to be one of the biggest threats to mankind and I agree with that assessment. Therefore, I would like to outline a three-step plan to the Minister, which is essential to tackle the problem head on.
First, I have always believed that an in-depth report is needed into antimicrobial resistance. As such, I am extremely pleased by the Prime Minister’s announcement in July that a report will be carried out by the renowned economist Jim O’Neill. The report will look at the increase in drug-related strains of bacteria; market failure, which is crucial; and the overuse of antibiotics globally. Secondly, a global network needs to be created to fund global antibiotic discovery. Finally, the Government must step up and support small companies that invest in antibiotic discovery. As the Prime Minister said in July, the UK should be proud to lead the way in tackling antibiotic resistance, but we must ensure that the rest of world keeps pace. All Governments have a responsibility to tackle the problem and only with full co-operation across the world can we make a real impact.
We live in a globalised world, and 70% of the bacteria in it have developed resistance to antibiotics. We have been through a golden age of discovery and have sadly become complacent. We cannot become the generation that squanders that golden legacy. As the director of the Wellcome Trust, Jeremy Farrar, said:
“We are sleepwalking back into a time where something as simple as a grazed knee will start to claim lives.”
The golden age of medicine could well be behind us. It is time to step up to the plate as politicians and take decisions which might not bear fruit in the short term and might not secure votes in forthcoming elections, but can help to secure the golden age of medical discovery that we in this room have had the fortune to benefit from. We must ensure that it is not squandered for future generations.
Mr Iain McKenzie (Inverclyde) (Lab)
It is again a pleasure to serve under your chairmanship, Mr Chope. I congratulate the hon. Member for York Outer (Julian Sturdy) on securing this debate on an important and alarming subject: infections becoming increasingly resistant to antibiotics.
Without doubt, antibiotics revolutionised health care around the world, and penicillin has saved tens of millions of lives since its discovery. However, the life-saving role of antibiotics is threatened by the emergence of antibiotic-resistant superbugs. At the G8 Science Ministers’ meeting in 2013, antibiotic resistance was highlighted as one of the top threats facing humanity today, and the World Health Organisation has highlighted the difficulty in tackling the global spread of resistance. Its report suggested that no single factor or isolated intervention would prove successful in reducing the threat of antibiotic-resistant superbugs. We are only too aware that antibiotic resistance is rising. Worryingly, multi-drug-resistant tuberculosis is on the increase around the world. Only a couple of drugs still work against it, and even they may soon stop working. In 2011, over 25,000 people in the EU died of antibiotic-resistant bacterial infections. That growing resistance raises the spectre of a return to the pre-antibiotic world, when many diseases were cured—or not—just by the body’s own defence mechanisms and the passage of time.
Antibiotics were designed to kill or block the growth of bacteria, so why have they stopped working? There would seem to be several reasons, one of which, as we have heard, is certainly overexposure. Overexposure to antibiotics promotes resistance in bacteria by favouring mutations with antibiotic resistance, which can be passed from one species of bacterium to another. The reason why bacteria develop resistance so quickly is that they multiply incredibly quickly. Some bacteria can double in population every 20 minutes, meaning that mutations can emerge quickly and nullify drugs.
We are now warned that a crisis situation is developing around the world. We have not had a new class of antibiotics for decades, so growing resistance is disturbing, but it is not only antibiotics that are losing the battle against resistance. Resistance also applies to antivirals. Why? As I have said, the more a particular antibiotic is used, the greater the chance that bacteria will develop a resistance to it. As we have heard from the hon. Member for York Outer, Sir Alexander Fleming foresaw that danger way back in 1945, when he said:
“It is not difficult to make microbes resistant to penicillin in the laboratory by exposing them to concentrations not sufficient to kill them…The time may come when penicillin can be bought by anyone in the shops.”
That now happens in some countries. He continued:
“Then there is a danger that…man may easily underdose himself and by exposing his microbes to non-lethal quantities of the drug make them resistant.”
We are adding to the problem by overuse, inappropriate use, not finishing the course of the antibiotic, and a lack of basic hygiene. All contribute to the ineffectiveness of antibiotics. Experts are concerned that we are reaching a point at which some previously manageable infections will become untreatable with antibiotics. The superbug MRSA is now resistant to so many drugs that it is already hard to treat, though outbreaks have been heavily reduced by people taking simple hygienic precautions. Recently, there have been reports of cases of difficult-to-treat sexually transmitted diseases; antibiotics normally used to manage the infection are again proving ineffective. Similarly, as I have said, we are seeing cases of multi-drug-resistant tuberculosis throughout the world. WHO says that 150,000 deaths a year are caused by multi-drug-resistant TB.
Given the recent outbreak of Ebola, we are only too aware that increased international travel means that people infected in one country can spread the infection to another country very quickly. Experts say that the danger posed by growing resistance to antibiotics should be ranked alongside terrorism on a list of threats to the nation. They described resistance to antibiotics as a “ticking time bomb”. The implication is that routine operations could become deadly in only 20 years if we lose the ability to fight infection, returning us to the medicine of the 1930s or before:
“If we don’t take action, then we may all be back in an almost 19th Century environment where infections kill us as a result of routine operations. We won’t be able to do a lot of our cancer treatments or organ transplants.”
If pharmaceutical companies do not develop new antibiotics within a matter of decades, we risk losing the war against microbes. Standard surgical procedures would become riskier, as would treatments that suppress the immune system, such as chemotherapy or organ transplant.
We can take steps right now. As I said, basic hygiene has reduced MRSA infection rates by up to 80%. The use of condoms can of course prevent STDs as well as HIV. We can reduce antibiotic use, and advise doctors to be frugal in their prescribing to help avoid resistance developing. We can educate people about hygiene and unnecessary antibiotic use. Pharmaceutical companies can produce new antibiotics and develop degradable antibiotics that do not persist in the environment. We are looking at developing new vaccines as well. Vaccines for MRSA should be ready within a decade. Finally, we need joined-up thinking and new approaches.
The rise in antibiotic-resistant bacteria is a global problem that requires international action to reverse. Developing new antibiotics and vaccines, however, is very expensive. To take a drug from discovery to market is estimated to cost about £700 million. Cost will always be a major factor in the development of new antibiotics, which is why Governments must somehow find a way to incentivise research and development in the area, because if companies do not develop new antibiotics, the future is unthinkable, with previously preventable infections claiming the lives of many.
Sir George Young (North West Hampshire) (Con)
It is a pleasure to follow the hon. Member for Inverclyde (Mr McKenzie), who set out clearly the problems of antibiotic resistance. I compliment my hon. Friend the Member for York Outer (Julian Sturdy) on his choice of subject and on how he developed the argument and presented the case, ending with a three-point action plan, which I hope that the Minister will be able to smile on when she responds to the debate.
Over the recess, I read Dame Sally Davies’s book, “The Drugs Don’t Work”, which was published last year. It is concise and understandable by a layman, but deeply alarming, particularly as it comes from the country’s chief medical officer. She warned that antibiotic resistance should be treated as seriously as terrorism when we rank threats against this country. The hon. Gentleman and my hon. Friend set out the problems as the risks of antibiotic resistance become greater because of over-prescription and overuse. At the moment we are all preoccupied with Ebola, which is a virus and not a bacterium, but many lower-profile cases of new strains of antibiotic-resistant bacteria are being introduced into NHS hospitals as a result of the admission of patients who have recently arrived from overseas.
As my hon. Friend the Member for York Outer said, if we do not raise our game against the superbugs, the chief medical officer warns that a cut finger could lead to a festering death. Each year across Europe, some 25,000 people die from drug-resistant-bacterial infections. As he said, the new antibiotic-resistant threat is from the less well known, so-called gram-negative bacteria, which have names such as Klebsiella, Pseudomonas and Acinetobacter. In many parts of the world, those bacteria are either untreatable or only treatable by a toxic antibiotic called colistin, which was discovered in the 1940s. Its use carries huge risks, as my hon. Friend said, because of its toxicity. The new strains of gram-negative bacteria create severe clinical problems for patients in intensive care units or other critical care units, such as oncology or transplant. The highly antibiotic-resistant bacteria affect very sick patients, who are found in intensive care and other high-risk units. Some of those bacteria lead to death rates of 50%.
Again as my hon. Friend said, no new gram-negative antibiotics are at an advanced stage in the drug discovery pipeline, so the historical approach of relying on the pharmaceutical industry to come up with a solution will not come to our rescue this time. He explained why we have a classic case of market failure. The business case against developing antibiotics is powerful. It can take 10 years and cost more than £1 billion to bring a new drug to market and, because those bacteria evolve fast and rapidly become resistant to new antibiotics, the research needs to be ongoing. Even if a successful drug is developed, a course of antibiotics might only last a week, so the revenue potential of any new drug is relatively low. My hon. Friend contrasted that with investment in statins, for example, which a patient may take for the rest of his or her life without developing resistance, so in a sense the question of where to put the money is a no-brainer. As a result, AstraZeneca is scaling back research into antibiotics and Roche has issued warnings about the terms of trade.
There is some good news. The severity and acuity of the problem is beginning to be recognised. WHO published a document highlighting the problem in April, and President Obama signed the Generating Antibiotics Incentives Now legislation. As both the previous speakers said, we await Jim O’Neill’s report next spring on why the industry has failed to deliver any new antibiotics. It is not clear, however, how the market failure can be addressed without Government intervention of some sort —my hon. Friend the Member for York Outer outlined a number of possible solutions. It would be helpful if the Minister could confirm that she has an open mind about changing the terms of trade with the pharmaceutical industry, if that proves to be the only way forward.
I am interested in the subject because I have in my constituency a firm called Bioquell, which manufactures equipment and provides specialist services that eradicate micro-organisms—bacteria, viruses and fungi. Its new Pod product comprises single-patient rooms that can be rapidly deployed in hospitals. Crudely put, they can turn a “Nightingale” ward into US-style single rooms. The single-patient room Pod product is generating interest from hospitals around the world worried about Ebola.
As became clear in one of our exchanges on Monday following the statement by the Secretary of State for Health, hospital structures throughout the world vary. Most intensive care units in France and the USA comprise single-patient rooms, whereas most ICUs in the UK comprise open, multi-bed units, which are often linked to high infection rates. We therefore need to have tools available to combat the threat from antibiotic-resistant organisms, which differ from country to country.
At the moment, Bioquell is involved in the decontamination of health care facilities around the world that have housed Ebola patients. Those include three hospitals in the United States, as well as hospitals in the UK, France and Holland. Recently, 20 of the company’s single-patient room Pods have been deployed in the middle east to help a hospital combat the spread of viruses. A small technology company from Andover—this ties in with my hon. Friend’s third point—is therefore leading specialist decontamination work in Europe and the US, helping to combat Ebola through the provision of safe single rooms.
I ask the Minister for an assurance that the contribution companies such as Bioquell can make will not be overlooked. The NHS is sometimes slow to adopt new technology, but when it faces substantial capacity and cost pressures due to an ageing population, the adoption of new technology must form a key part of the solution to those ever-growing pressures.
We rightly celebrate our knowledge-based economy. My hon. Friend the Minister’s Department has done much to export life sciences, to encourage med-tech industries and to generate export earnings. In return, however, the Government must support British innovation in the NHS. It is unrealistic to expect companies to be successful at exporting if they do not have a robust domestic market.
I end with the point my hon. Friend made about public interest. I hope the debate he has initiated will begin to drive the issue up the agenda, and bring home to the public and, I suspect, many of our colleagues the real threat antibiotic-resistant bacteria pose to the NHS. I do not think our colleagues appreciate that, with these new strains of bacteria, the NHS faces a major challenge, with high associated death rates, and no effective antibiotics exist. Unchecked, these bacteria will limit the ability of the NHS to provide many of the life-saving procedures we all take for granted, and the costs to the NHS will increase substantially. That means there must be a positive response to Jim O’Neill and active engagement with companies at the cutting edge of research in this field so that we can begin the fight back against these antibiotic-resistant bacteria.
Mr Christopher Chope (in the Chair)
Order. Before I call Jim Shannon, may I say that the winding-up speeches will start at 3.40 pm? Three hon. Members wish to make a contribution, and I hope that can be borne in mind.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairmanship, Mr Chope. It is always nice to speak on health issues in this hall. It is also nice to see the Minister in her place—we seem to be here regularly discussing health issues—and I look forward to her response.
First, I thank the hon. Member for York Outer (Julian Sturdy) for bringing this issue forward for discussion and for his introduction. The issue is of the utmost importance, and, despite the warnings about it, some people still want to bury their head in the sand like the ostrich—“If you put your head in the sand, the car won’t run you down.” Antibiotic resistance is a serious issue but, for some reason, some people—perhaps many people —are under the illusion that if we do not talk about it, it will not happen. However, it is happening right now, and we should all be extremely worried about it. That is why the debate is important. Indeed, the hon. Gentleman and the hon. Member for Inverclyde (Mr McKenzie) both mentioned the example of the grazed knee—in the past, it was not an issue, but it could be in the future, and people could end up dying from it.
Antibiotic resistance is the ability of a germ to prevent an antibiotic from working against it, and it is a global problem. It is also part of the reason why, in recent years, we have been warned over and over again to take antibiotics only when absolutely necessary. That is a serious issue, which we must address. Although we cannot become resistant to antibiotics themselves, because they are designed to target germs not cells, antibiotic resistance is a major health problem, and we already face the reality of having fewer choices of effective drugs with which to treat basic illnesses.
Some 70% of the world’s bacteria have developed resistance to antibiotics. Unfortunately, we are now in the position of considering drugs of last resort. Before we are at the stage when only one antibiotic is left that can do the business, we need to think ahead. Other Members have talked about the pharmaceutical industry and the development of new drugs, and that is important. The more a drug is used to treat germs, the more resistance they develop. For example, just a few years after penicillin was developed, resistance to it was found in Staphylococcus aureus, in the skin. After years of heavy use, several species of bacteria are now resistant to penicillin. However, the biggest problem facing us is the development of multi-resistant germs, which are resistant to a large range of antibiotics. As they begin to develop, effective treatments become difficult. In that respect, I declare an interest as a type 2 diabetic. Every year, I am eligible for a flu jab to help me combat colds and flu. Some years it does, but some years it does not—I am not quite sure why—but, again, that shows there is resistance to the jab used to deal with flu and the cold bugs out there.
We have been advised to follow some simple instructions to try to prevent germs from becoming immune to our medicines. The advice includes getting antibiotics only when absolutely necessary, and it falls to our GPs to know when that is. Other advice includes washing our hands regularly, finishing a course of antibiotics as advised and ensuring that antibiotics are taken only by the person they have been prescribed for. Finally—I hope the Minister can give us some indication of what is being done on this—GPs should not prescribe antibiotics for colds and flu, because they are caused by viruses, not bacteria. Sometimes GPs need to have a better focus on what is best. Do people always need an antibiotic, or do they need something different?
Mr Gregory Campbell (East Londonderry) (DUP)
Does my hon. Friend agree that we require an educational process—from the Government, to GPs, to pharmaceutical companies and to the wider public—to ensure that we do not face an Ebola-type position, where we are trying to play catch-up and the end result is many deaths?
Jim Shannon
I thank my hon. Friend for his intervention. As always, he succinctly puts the issue into perspective. We are all aware of Ebola, although we are not talking about it today. The question is how we resist such bacteria.
When it comes to viruses and bacteria, most of the pieces of advice I mentioned are simple enough for us to follow. However, the two most important, which involve access to drugs, relate to doctors, and my hon. Friend referred to that. Undoubtedly, we need to encourage greater awareness through media campaigns and posters in doctors’ surgeries, and by educating our children and young people. This is all about knowledge and awareness.
The findings from the World Health Organisation are quite disturbing. In May 2014, it warned that we should expect “many more deaths” because dishing out too many antibiotics
“will make even scratches deadly”.
That is the point many people are making. Over the years, antibiotics have been used properly to extend our lives, but now we are at grave risk of turning the clock back on medicine, with the World Health Organisation claiming that antibiotic resistance has the potential to be worse than the AIDS epidemic of the 1980s, which was responsible for 25 million deaths worldwide.
The importance of necessary prescriptions cannot be underestimated. In England last year, 41.7 million prescriptions were written out, up from 37.2 million in 2006. The World Health Organisation looked at data from 114 countries on seven major types of bacteria, and the results showed that we have reason to be most concerned about the bacteria that cause pneumonia, urinary tract infections, skin infections, diarrhoea and gonorrhoea—the hon. Member for Inverclyde referred to sexually transmitted diseases.
As people become infected by resistant superbugs, they are likely to need to remain in hospital for longer than would normally be required. That may also result in their being moved to intensive care. Both those things cost the NHS money, which is simply not an option in this economic climate.
Medicine is amazing, and we are blessed to have the NHS, which is so efficient and helpful. What has been achieved over the last 100 years is astounding. However, our generation has come to rely on tablets. We are all busy, and with work and families it is not always practical to take time off, but the convenience of taking a tablet to reduce our recovery time is beginning to have adverse effects. Unfortunately, while bacteria were getting smarter, we were loading ourselves up with antibiotics. If one did not work we got another one, and if that did not work we got yet another. Now bacteria are outsmarting us, and there are few new antibiotics in the pipeline.
Although we bear responsibility for our own health, and must ensure that when prescribed an antibiotic we take it properly, much of the responsibility lies with general practitioners. They must prescribe such drugs only when absolutely necessary, and they must prescribe broad-spectrum antibiotics suitably, making sure that the selection, dosage and duration are correct. That is a clear role for the GP to play. It is vital to review and renew our campaign to research and assess microbiological data, with the aim of preventing any more bacteria from becoming resistant to antibiotics. Perhaps in that way we will find a way to reverse their immunity, and ensure that the drugs that we are using are not those of last resort.
Jeremy Lefroy (Stafford) (Con)
I congratulate my hon. Friend the Member for York Outer (Julian Sturdy) on taking the lead in the debate, and in the House previously. I congratulate, too, hon. Members from all parties, on setting out the issues clearly.
I want to concentrate on the second action point set out by my hon. Friend—a global network. I shall take malaria as an example—I declare an interest as chair of the all-party group on malaria and neglected tropical diseases—and will speak about what happened when resistance to malaria drugs spread around the world in the 1980s and 1990s. The drug that was most effective until then for the standard treatment of malaria was chloroquine. Quinine was of course a last resort, but chloroquine was used by most people. Resistance cropped up, initially in south-east Asia, spreading throughout sub-Saharan Africa, until there was little that most people who caught malaria could do, besides hoping it would be effective. In many cases it was not.
A new class of drugs was discovered, based on artemisinin, and a network called Medicines for Malaria Venture was set up. The previous Government were instrumental in setting up and supporting it, and the present Government have continued substantial support for it. As a result, even in 2008 there was a reasonable antimalarial drug pipeline. A couple of days ago in this place I had the pleasure of launching our group’s 2014 report, which had some helpful financial support from the Medicines for Malaria Venture. The pipeline has grown substantially in the six years since 2008. It has been remarkable to see not only that drugs have been coming through the pipeline, but that four of the six most commonly effective antimalarials at present have resulted from the venture. That is an example of what can be done by a multinational network, with Britain taking the lead. I urge the Minister to consider such an approach for antibiotics.
The chief medical officer, among others, has rightly referred to antibiotic resistance as a threat equivalent to the threat from terrorism. We see our work in international development as a means to combat many of the sources of terrorism. Unemployment around the world is a breeding ground for people who want to peddle violent and hateful dogmas. Where people have no jobs, ISIL uses that as an excuse to commit terrible acts. Terrorism is a threat, and so is antibiotic resistance. The problem is a global one, and relates to the global public good. Dealing with it would help the poorest in the world more than anyone else, and we could easily justify using overseas development assistance funding from the Department for International Development, alongside commercial and public health service funding, to fund a network such as the one I described. I urge the Minister to take as broad as possible an approach when she considers what sources of funding could be used to confront the threat. It cannot be exaggerated.
Zac Goldsmith (Richmond Park) (Con)
I am thrilled that despite my breaking two rules in a short time when I walked into the Chamber you are still allowing me to speak in the debate, Mr Chope. It is a pleasure to follow all the speeches, which have covered virtually all the angles. I am grateful to my hon. Friend the Member for York Outer (Julian Sturdy) for securing the debate, and for the speech he made.
There is a depressing but nevertheless welcome consensus that we are losing our antibiotics to resistance, and effectively losing modern medicine as we know it. Notwithstanding the threat of Ebola it is hard to imagine a bigger health threat. The World Health Organisation has described antibiotic resistance as a bigger crisis than the AIDS crisis of the 1980s. If we lose antibiotics we risk the return of a time when basic operations will be deadly. I used to wonder what it would take to wake up the British establishment to that appalling threat. For years virtually nothing seemed to be done to combat the extraordinary phenomenon of antibiotic resistance. I thought, naively, perhaps, that once the health establishment blew the whistle, everyone else would fall into line and, fortunately, the health establishment has been blowing the whistle very loudly. We have heard various quotations today of the apocalyptic language of the chief medical officer, Dame Sally Davies. I think she has even used the term “apocalypse”. She has said that if we do not take action, deaths will go up and up, and modern medicine will be lost.
That is of course already beginning to happen. It is not a futuristic scenario. In 2006 there were just five cases in which patients failed to respond even to last-resort antibiotics in this country. Last year the number was 600. I know that there has been some action and I do not mean to disparage that. In March last year the Cabinet Office confirmed that it would examine the question of resistance as a national security issue. In September of that year it released an outline UK five-year antimicrobial resistance strategy. The Government have since set up a high-level steering group, chaired by Dr Felicity Harvey, the director general, public health, to implement the strategy once it is released, which I think will be later this year. All that is good news, and it is possible that the strategy will match the urgency of the situation. However, I am afraid that there are worrying signs that it will not.
Yes, there will be renewed efforts to develop new drugs, which is crucial. I was thrilled to hear the Prime Minister’s response to a question on the subject, during Prime Minister’s questions, when he briefly outlined the Government’s commitment to supporting the development of new drugs. That is obviously a prerequisite to solving the problem. There is nothing in the pipeline at all, and, as existing drugs become ineffective, we clearly must hope for new developments and do all that we can to facilitate them. There will also be renewed efforts to limit the inappropriate use of antibiotics in human medicine. That subject has been covered and I shall not dwell on it today. However, so far, successive Governments, including the present one, have resolutely avoided confronting a part of the problem that is not only huge but avoidable.
It is worth repeating that from day one, when Alexander Fleming accepted his part of the Nobel prize, he issued a dire warning. We have heard the quotation and I will not repeat it. The simple reality is that we have completely ignored that warning, more or less from the day he issued it. Instead of treasuring that miracle cure, we have squandered it—not just in hospitals but on intensive farms, and not just to treat sick animals but to keep animals alive in conditions where they otherwise would struggle simply to survive. That is not just a niche concern; 50% or thereabouts of the antibiotics that we use in this country are used on farms and it is even more in the United States and some other countries. Overall use per animal on UK farms is 18% higher today than it was a decade ago. That is disproportionately true of those antibiotics that are critical to human health.
Graham Stringer (Blackley and Broughton) (Lab)
The hon. Gentleman is making an important point: since tetracycline and penicillin-based antibiotics have been banned as growth promoters for farm animals, the use of tetracyclines has up gone tenfold and the use of penicillins has gone up fivefold. This is not a party political point: there is something that the Government can do immediately about that situation, which is to monitor and study it with a view to reducing the excessive use of antibiotics on farms.
Zac Goldsmith
I absolutely agree with the hon. Gentleman, and will come on to that briefly—I am going to try to keep my remarks short. That is exactly the point. Many people felt that the ban on the use of growth promoters back in—actually, I forget the year, but I think it was 15 years ago, although I may have got that wrong and am happy to be corrected—
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
It was in 2006.
Zac Goldsmith
It was eight years ago, then. Many people felt that ban heralded the beginning of the phase out of the routine prophylactic use of antibiotics on farms, but, as the hon. Gentleman just pointed out, use has continued to increase across the board and disproportionately with regard to those antibiotics that are critically important. Given that the antibiotics used in veterinary and human medicine are closely related it is impossible to believe that that increase has not contributed to antibiotic resistance and the transfer of resistant bacteria from animals to humans.
The problem is that the industry has dug its heels in and contested the link. We have been told that there is no proof, but we know that resistant bacteria can be passed to humans on food, through the environment, directly via raw meat and so on. Some strains of resistant bacteria can mix with human strains and pass on resistant genes. For example, E. coli in animals is different from E. coli in humans, but we know that resistance can be and is transferred between animals and humans.
The industry also says that levels of resistance on intensive farms are no different from those on extensive farms, but two reports from the Department for Environment, Food and Rural Affairs have shown that resistance is 10 times lower on organic farms. The industry says there is no problem because antibiotics have to be prescribed by vets and everything is handled responsibly, but more often than not it is the feed mills that place orders for antibiotics rather than the farmers themselves. Finally, we are told that the use of antibiotics is necessary for the provision of cheap food. Perhaps that is the case, but that food will feel a hell of lot less cheap if the cost that society has to pay is the loss of modern medicine.
A briefing has been sent out to a number of MPs by the industry body RUMA—the Responsible Use of Medicines in Agriculture Alliance—saying:
“Fluoroquinolones are rarely used in poultry in the UK.”
RUMA has stated that as fact in response to the points that I and others have raised today. But on 8 September, a few days before that briefing was released, I met representatives of the Veterinary Medicines Directorate, who told me that the British Poultry Council has so far refused to provide any kind of data on antibiotic use at all. How the industry body RUMA can make such a bold and plain statement is beyond me—I suspect it is simply nonsense.
The experts take a different view from that of the industry. Sir Liam Donaldson, chief medical officer before Dame Sally Davies, went so far as to say that
“every inappropriate or unnecessary use on animals or agriculture is potentially signing a death warrant for a future patient.”
The European Food Safety Authority said last year that it is a
“high priority to decrease the total antimicrobial use in animal production in the EU.”
The Minister’s predecessor, my hon. Friend the Member for Broxtowe (Anna Soubry), told me after a debate on the same subject last year:
“Routine prophylactic use of antibiotics in both humans and animals is not acceptable practice”
and that she would be writing to DEFRA
“to ensure that existing veterinary guidance makes that very clear.”
I do not doubt the commitment of the chief medical officer—I am a wild fan of hers, as I know many hon. Members here are. I have not read her book yet, but I will do; I have read much of her writing. I have also met Dr Felicity Harvey and seen the seriousness with which she takes the issue. But so far, at least, DEFRA seems to be dragging its feet. There has been no sense of urgency in any of the meetings I have had, and any response I have had from DEFRA has been far more likely to mirror the industry line than anything the experts have said. The body language of DEFRA as a Department is almost completely defensive.
Thanks to the Netherlands and other countries we no longer have any excuse to stall. The Netherlands has seen a 50% reduction in livestock antibiotic use and expects a 70% reduction by 2015. It has phased out almost completely the use in agriculture of critically important antibiotics. There has been similar action in Denmark, Norway and Sweden. As I understand it, even the US, the land of agribusiness—it is where it was invented—has banned the use of fluoroquinolones in poultry.
The UK has no such targets or aspirations, and it is time that changed. We need to stop hearing excuses about lack of data that the industry has not provided and require those data to be collected. That is a prerequisite, as the hon. Member for Blackley and Broughton (Graham Stringer) said earlier. If the five-year strategy is to be taken seriously when it is eventually produced, it must provide a pathway to ending the routine prophylactic use of antibiotics on farms. That is now a black and white issue. In addition, the strategy must provide a pathway to an eventual ban—ideally, sooner rather than later—on the use on farms of antibiotics that are critically important to humans. Those two measures are the least we can expect from the five-year plan if we are to have any hope at all of combating a threat that the World Health Organisation has compared to the threat of AIDS.
Mr Jamie Reed (Copeland) (Lab)
It is a pleasure to serve under your chairmanship, Mr Chope. I also extend my thanks to the hon. Member for York Outer (Julian Sturdy) for securing this critical debate. He has done a great deal of work on raising the profile of antimicrobial resistance since he entered this place in 2010. Like him, and every other Member who has spoken today, I understand the issues at stake if we do not do everything within our power to tackle this threat. As well as being a shadow Health Minister, I am also chair of the all-party parliamentary group on antibiotics, which is co-chaired by the hon. Member for Richmond Park (Zac Goldsmith), who has just made a superb contribution to the debate. The hon. Member for York Outer did an excellent job in setting out the scale of the challenge that we face today.
The APPG on antibiotics was formed in June 2013 specifically to raise the profile of antibiotic resistance. Through working with key stakeholders and experts on the issue, we hope to build a cross-party consensus on tackling the threat of AMR. Before moving on, I want to praise the work of Professor Laura Piddock and the British Society for Antimicrobial Chemotherapy. That organisation works tirelessly to highlight the threat of antibiotic resistance; without it, the APPG might not even exist.
In the foreword to the document “UK Five Year Antimicrobial Resistance Strategy 2013 to 2018”, Dame Sally Davies gave a concise explanation of the scale of the challenge that we currently face:
“There are few public health issues of greater importance than antimicrobial resistance…in terms of impact on society. This problem is not restricted to the UK. It concerns the entire world and requires action at local, national and global level. AMR cannot be eradicated but a multi-disciplinary approach involving a wide range of partners will limit the risk of AMR and minimise its impact for health, now and in the future.
The harsh reality is that infections are increasingly developing that cannot be treated. The rapid spread of multi-drug resistant bacteria means that we could be close to reaching a point where we may not be able to prevent or treat everyday infections or diseases.”
Her sentiments and judgment have been echoed by scientist after scientist and medical professional after medical professional. Dame Sally Davies must be commended on her commitment and work on this issue—I am pleased so many hon. Members have recognised that today—and her leadership should be applauded. The Government must take heed of what she says and take the actions she recommends.
A report published on 10 October by Public Health England, “English surveillance programme for antimicrobial utilisation and resistance”, highlights that the problem is already real now and, as Members have observed today, is getting worse. Antibiotic prescriptions are rising—they increased by 6% in the past three years alone. At the same time, resistant bacterial infections are also on the rise. Resistant E. coli infections have risen by 12% since 2010. Dr Susan Hopkins of Public Health England told the BBC recently:
“We know that less than 1% of bacteria are extremely multi-drug resistant at the moment…But in countries like India they are approaching 10% to 20% of individuals they are not able to treat effectively with the antibiotics.”
The threat is real and we all agree that something must be done; inaction cannot be tolerated.
The Science and Technology Committee published its report, “Ensuring access to working antimicrobials”, on 7 July. At Health questions on 15 July, responding to the hon. Member for York Outer, the Minister said that the Government would publish their response to that report in September. We are now into October, so I hope she will explain when that response will be ready.
Government action is overdue. With that in mind, I would be grateful if the Minister would update Members on the progress made towards the three strategic aims and the seven key areas for future action as prescribed in the chief medical officer’s report on the five-year antimicrobial resistance strategy. The three aims were to improve the knowledge and understanding of AMR, to conserve and steward the effectiveness of existing treatments and to stimulate the development of new antibiotics, diagnostics and novel therapies. Will she explain how the findings by Public Health England on increasing antibiotic usage and increasing proliferation of resistant bacteria square with the first of those strategic aims? According to the five-year plan, the aims were informed by the 2011 European Union AMR strategic report, so we should recognise that we are already behind the curve.
The Government seem no closer on the third aim, the development of new antibiotics, although I recognise that that is a difficult problem to solve. The Science and Technology Committee report states that
“the Government needs to work with researchers, investors, small and medium sized enterprises, large pharmaceutical companies and other Governments to urgently identify appropriate economic models that might encourage the development of new antimicrobials.”
Since the Prime Minister’s announcement of the commission to review the situation we have heard nothing further from the Government. I hope that the Minister will be able to give assurances that the review, which will clearly take some years, will not be simply a substitute for any action that could be taken immediately and that, in giving those assurances, she will explain what action the Government are taking in the meantime and what discussions they—or officials, critically—have had with the stakeholder groups highlighted by the Committee’s report.
It is clear that this is an international issue that requires work across Governments. We warmly welcome the G8’s commitment to tackling it, but it is clear that more needs to be done. It cannot be solved simply by eight countries acting by themselves; wider engagement is needed. Will the Minister therefore update Members present on discussions with counterparts throughout the world and the actions that are being taken internationally?
Finally, I want to question the Minister on the pressures on primary care. One often-cited solution to over-prescription of antibiotics is to administer them only if a patient’s condition worsens. While that is a sensible approach that, where clinically appropriate, reserves antibiotics for the most serious cases, in reality the pressure on GPs means that that is not always a credible or deliverable solution.
At present 13 million people wait more than one week to see their GP. During that time, symptoms could worsen and antibiotics could be the only treatment available to people when they are seen. If they had been seen earlier, however, alternative clinical options might have been available to them. Relieving the pressure on primary care must form part of the toolkit that should be employed to tackle AMR, yet it seems that, at the moment, the Government have no response.
The tackling of antibiotic resistance is incredibly important. The CMO has said that the threat posed by AMR is on a par with international terrorism and the Government’s wishes and rhetoric must be backed up with action. That is the settled will of the Chamber and I am sure that it is also that of all 648 sitting Members of Parliament. Where the Government do the right thing, they will have the full support of the Opposition without question. This is too important to be subjected to the banalities of party politics, so let us get on with it.
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
I thank all Members who have contributed to what has been an extremely good debate. I thank my hon. Friend the hon. Member for York Outer (Julian Sturdy), who led the debate and gave a thoughtful speech. I will try to respond to as many points as possible.
I will not spend much time on the scale of the threat, as many Members eloquently have outlined that. It was brought home to me clearly when, together with my noble Friend Lord De Mauley, on behalf of the Department for Environment, Food and Rural Affairs, and the chief medical officer, I represented the Government at a World Health Organisation conference in The Hague earlier this year. The conference started with a young woman talking to us. Essentially, she was dying: she had been through pretty much every stage of antibiotics available and all had failed. That brought home powerfully what we are talking about now and what Professor Dame Sally Davies has been writing about for some years. The case has been made by other Members and I will not dwell on it. This is an extremely serious global public health threat.
The Government have a “one-health” approach, working together across human and animal health with DEFRA. My hon. Friend the Member for Richmond Park (Zac Goldsmith) made some detailed points that I will probably ask DEFRA colleagues to respond to in more detail. We will be able to respond to some of them, and some will be encapsulated in the strategy, which will be published alongside an implementation plan. Virtually all the points made in today’s debate will be covered, as well as many additional points, in that publication; I will talk to Dr Felicity Harvey and the CMO to ensure that.
In the time available, I will try to outline what the Government have done to date and give Members reassurance that we are not complacent and that we recognise the scale of the threat. In response to questions raised by some Members, we are not waiting for a grand global strategy to try to take action ourselves; we already have many things in hand, because, as Members have said, time is running out.
In September 2013, we published the UK’s first five-year AMR strategy, taking the one-health approach that I have outlined to address the human, animal, food and environmental aspects of AMR, and set up the high-level steering group, to which some Members have referred, to oversee the delivery of that strategy and, importantly, to deliver metrics to assess progress and develop the implementation plan so that our progress can be judged. In June 2014, the steering group published the measures. Broadly speaking, they look at areas such as trends and resistance; antibiotic usage; the quality of antibiotic stewardship; public attitudes, knowledge and awareness; and changes in public and professional behaviour. All of those were touched on in the debate. I confirm to the shadow Minister that the Government published their response to the Health Committee’s report on 12 September.
The first annual progress report will be published later this year, alongside an associated implementation plan, which will pick up many of the points made in more detail. However, let me highlight some of the actions to date. I am delighted that the chief medical officer, Professor Dame Sally Davies, received so many plaudits from Members in the Chamber. I, too, have read her book, which is short but very alarming, and it brings home in graphic detail the scale of the problem we face—it certainly helped to focus my mind. She has led a global campaign of which the UK is right at the forefront.
The adoption in May 2014 of the World Health Assembly resolution on AMR, which was co-sponsored by the UK, was a major step forward. It provided a mandate for the World Health Organisation to develop a global action plan to tackle AMR by 2015. We are actively contributing to support the delivery of that global action plan.
The international nature of the problem was highlighted by many Members. India was mentioned by my hon. Friend the Member for York Outer and other Members, and I confirm that the recently produced Chennai declaration has begun to tighten up on over-the-counter use, so we are beginning to see significant action. India also supported a World Health Assembly resolution on this matter. However, sitting the table and hearing the different contributions at the conference at The Hague certainly brought home to me the fact that there are differing attitudes across the world. It will be a big task to get some countries to where they need to be and we certainly need to lead by example, which is a point that has been well made.
One of the things that we can do in supporting the work at a global level is building capacity and capability. As with so many problems of our developed world, we cannot afford to wait for everyone to go through the same cycle of development, discovery and identification of problems; we need to try to share our understanding. Public Health England is piloting a laboratory-twinning initiative, where high-income Commonwealth nations are working with low and middle-income countries to build up AMR education, training and surveillance capability, rather than waiting for them to develop their own.
The drugs pipeline is a huge issue, which was explained well and in some detail by my hon. Friend the Member for York Outer. That is an area in which we need rapid and concerted international action to stimulate the development of new antibiotics. The O’Neill review, which was commissioned by the Prime Minister in July, was mentioned. It is an independent review looking at the economic issues that cause this problem, and will make recommendations on what collective action can be taken by Governments globally. I confirm to my right hon. Friend the Member for North West Hampshire (Sir George Young) and others that that review will investigate solutions such as pricing and the introduction of incentives. The review is independent, so that team can think what they want—that is what they are tasked with—and we want them to come back with solutions to a problem that we know requires innovation. The interim report is due next summer, with the final report the year after that.
The faster adoption of new ideas was touched on, in particular those brought forward by small suppliers—Bioquell was mentioned. That is integral to the brief of the new Minister with responsibility for life sciences, my hon. Friend the Member for Mid Norfolk (George Freeman), who was recently given a joint appointment to the Department of Health and the Department for Business, Innovation and Skills to look at how we can accelerate the rate of innovation, because, as we know, we must not lose time on this.
Members were concerned to know whether, in the meantime, pending the O’Neill review, work was under way, and I can confirm that it is. Quite a lot of work is going on with the pharmaceutical industry. The industry is working with Chatham House and the Big Innovation Centre to explore issues about the pipeline and to look at possible options to stimulate antibiotic development. We expect the outputs of those initiatives to be published later this year, and they will feed into the independent O’Neill review. Other work is under way, some of which involves making public assistance available to smaller companies where they need it, but I can confirm that the pharmaceutical and biotech industries are fully engaged, as we need them to be, in exploring the issue and working together on the all-important research agenda.
Much of the focus for that research is diagnostics. We have commissioned work to improve our ability to diagnose infections quickly and increase the take-up and routine use of point-of-care diagnostics. That means being able to diagnose much more quickly—at the point of care—without the delay in having to send things away for study, and so on. The more quickly we can diagnose, the more quickly we can use appropriate medication. The Select Committee certainly pressed us on that when we gave evidence and we are aware that it wants us to take action on that issue. That is very closely linked to the work on improving prescribing, which is a key strand of efforts to reduce the overuse of broad spectrum antibiotics. Easy, cheap and accurate diagnoses will enable us to tailor patient treatment much more speedily and improve clinical outcomes, which is obviously a win-win.
Hon. Members have mentioned the award of the £10 million Longitude prize, which happened on the evening between the first and second days of the Hague conference, so it could not have been more appropriate and it was great news that came through while we were all there. It was fantastic on two counts: first, that money will go towards developing a new diagnostic for AMR, on which we expect further details to be announced shortly; and secondly, it felt like a great leap forward for public recognition and public engagement on the issue. That announcement was integral to a popular science programme on television—it was not just done by the scientific community; there was full public engagement, so I am really delighted about that and we have to build on it.
On research, hon. Members will be interested to know that the Medical Research Council is leading an AMR Funders’ Forum to improve the co-ordination of research relevant to all those different aspects of antibiotic resistance. In addition, there are two new National Institute for Health Research, or NIHR, health protection research units—I apologise for all the acronyms—with a focus on AMR and health care-associated infection. They were established in April at Imperial college London and at Oxford university, and they are in the process of agreeing their initial two-year work programmes, so more research is going on in those establishments.
In addition to important work to galvanise international action and stimulate drug development, we are trying to put in place the infrastructure and tools needed to improve infection prevention and control, and diagnosis and prescribing, in order to prevent the development and spread of AMR. That requires thinking about the problem in an entirely different way, because this problem is unique. The scale has been outlined by other people, but because of some unique aspects, we need to do things in a different way, and we are very aware of that.
Infection prevention is, of course, better than treatment, so we are refocusing attention on what more we can do to improve our ability to prevent infections and reduce reliance on antibiotics. To reduce the risk of importing very resistant infections from countries where the prevalence is higher—some of those countries have been mentioned—measures such as screening on admission to hospitals are now recommended and will be taken up.
Improving infection prevention includes work with NICE—the National Institute for Health and Care Excellence—and others to develop clinical guidance, best practice information and resources. We are also strengthening the code of practice on the prevention and control of infections to clarify for providers the measures they need to take to ensure effective infection prevention and, importantly, antimicrobial stewardship. That is being complemented by NHS England looking at the best ways to use levers on commissioning in the NHS and how it can establish local patient safety fellows to champion and help to embed best practice. On the animal side, DEFRA has provided guidance to assist with farm health planning. Work is under way to explore how we can make better use of vaccines and alternative treatments to reduce reliance on antibiotics and minimise the opportunity for resistant strains to develop.
I turn to the recent survey, the English Surveillance Programme for Antimicrobial Utilisation and Resistance —to which the shadow Minister nobly referred; it is quite a mouthful—or ESPAUR. That report from Public Health England was grim reading. It certainly made it clear that we have a long way to go in this regard, and it provided data that showed the enormous variability in the levels of prescribing across the health care system in England. It showed us some areas with extremely high prescribing rates, which often had the highest resistance rates. Although that report was tough reading, it was commissioned precisely because we did not really have a baseline report. We now have that, and it is a really important set of baseline information, from which we can go forward and help to improve practice.
Zac Goldsmith
Data are rigorously collected in relation to the resistance and use of antibiotics in human medicine, but they are hardly collected at all in relation to farm use. My understanding is that the whole system is entirely voluntary, and as a consequence, there are virtually no data at all. Is that an area where, at the very least, the Minister’s Department could pull rank on DEFRA and require the collection of data, so that we can have a meaningful discussion, because at the moment DEFRA does not seem inclined to pursue the matter with any great vigour?
Jane Ellison
I have already noted my hon. Friend’s concern about that, and I will bring it to the attention of my colleagues in DEFRA and ask them to give a detailed response. Although I had noted it as an area of concern, as I say, we work very closely together on this issue, which is why the UK, I think uniquely, sent two Ministers—one from agriculture and one from human health—to conference in The Hague.
To go back to GPs, we need to get to the bottom of why we have such variation around the country and why there is so much inappropriate use. That work is going on. There are some initiatives to support the optimisation of prescribing—essentially trying to give doctors more tools to enhance their professional skills. One of those is called TARGET—Treat Antibiotics Responsibly, Guidance, Education, Tools—and is being promoted by the Royal College of General Practitioners. Work is under way to develop this area and include it in health care training curricula. We have also developed new antibiotic prescribing measures for both primary and secondary care to try and help drive down that variability.
I think we can do more as MPs—all of us, in all our routine conversations with health and wellbeing boards, GPs and clinical commissioning groups, and with our local trust chief executives. This should be a standard question on our agenda for those meetings. That would really help, because I know, as a Government Minister, and I think we all know as MPs, that when we are aware that someone is going to ask us a tough question, we go away and start thinking about whether we have a good answer, so there is a lot more that we can all do to drive it at that routine level. There is only so much that the Government nationally can do to influence local GPs.
I want to reassure Members, however, that European antibiotic awareness day is on 18 November, and it would be a great moment for all of us to talk to our local health care professionals. I would be delighted if hon. Members here today, who are so interested in the subject, would work with me in putting together something in writing to all colleagues, with great questions to ask their local health care system. I would be delighted to do that and I can facilitate it. It would include posters for GPs’ surgeries as well as encouraging the public and professionals to become antibiotic guardians and to make pledges to undertake individual action in our effort to preserve antibiotics. Some members of the public are beginning to understand the scale of the challenge, but we are certainly not there yet, and I think Parliament has a role in trying to make that clear.
As a result of the work to date in the first year of the Government’s strategy, we have significantly better data and information, which we can use to inform the development of effective interventions. We have begun to define the scale of the problem much more, and I have outlined the action that we are trying to take in an international context to make sure that the spread of AMR is taken seriously across the world.
As I have mentioned, I will report all the points made in today’s debate both to the chief medical officer and to our cross-party high-level steering group to ensure that we have picked them up in the imminent publication. If there are any points that are not picked up, I will come back to hon. Members on them individually, but I want to reassure the House on the matter. I thank my hon. Friend the Member for York Outer for calling this debate and, indeed, the House for such a well-attended and thoughtful discussion. Everything we can do in this House to highlight the scale of the problem and the urgency of tackling it is very welcome, and I thank all hon. Members for their contribution today.
Mr Christopher Chope (in the Chair)
We now move on to a short debate on connectivity to Leeds Bradford international airport. I call Stuart Andrew.
Leeds Bradford International Airport
(9 years, 6 months ago)
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Stuart Andrew (Pudsey) (Con)
Thank you, Sir Christopher. It is a great honour to be able to raise this very important issue. I am particularly grateful to have secured a debate on connectivity to Leeds Bradford international airport, given its significance for many of my constituents, particularly those living in the Horsforth, Rawdon, Guiseley and Yeadon areas, but also those in areas much further beyond. When I was preparing for the debate, I reflected on the fact that when I was first elected to Leeds city council back in 2003, it coincided with the publication of the then Government’s White Paper, “The Future of Air Transport”, which said that the growth in air travel—
Mr Christopher Chope (in the Chair)
Order. This debate can continue until quarter to 5.
Stuart Andrew
I would like to correct the record, Mr Chope, because I think I called you Sir Christopher at the start of the debate. Of course, I strongly believe that you should be Sir Christopher.
The 2003 White Paper on the future of air transport stated that growth in air travel would continue, and that airports such as Leeds Bradford would need improvements to surface access to accommodate that growth. Since then, I have taken a keen interest in the matter, and I note that surface access improvements featured in the recent report by Howard Davies on air travel in this country.
More than a decade after the first report, when it comes to getting to and from Leeds Bradford airport, all we have seen are some improvements to signalling and traffic lights at the most congested local junctions, and some increase in bus services. That is hardly adequate if we are serious about finding ways to cope with increased numbers of passengers.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I congratulate the hon. Gentleman on this debate, which we have been looking forward to. My constituency welcomes the commitment to expand the potential of the airport and we are fully behind it, but he is absolutely right that we need the connecting transport that will allow us to get to that hub. It costs only about £55 or £60 to fly to Heathrow—what a bargain! Compare that with the cost of travelling on the east coast main line.
Stuart Andrew
I will come on to the point that extra flights of that sort will mean that more and more people use the airport.
Access to Leeds Bradford airport is notoriously poor. The airport is primarily accessed via single-carriageway roads, some of which are densely residential and some of which are merely country lanes. Given that since the publication of the report, the number of passengers has increased by more than a third, from some 2 million a year in 2003 to more than 3.3 million this year, the current standard of surface access is totally inadequate, not only for the passengers but for my constituents who live nearby.
Let me say how pleased I am that, at long last, the Department for Transport has commissioned a study on connectivity to Leeds Bradford international airport. The vast majority of passengers arrive by car. Whether they arrive by private car, Hackney carriage or private hire vehicle, some 85% to 95% of people travel to the airport on local roads, such as the horrendously congested A65 and A658. Local residents are frustrated by the amount of traffic on those roads. Despite the installation of traffic calming measures, many still use totally unsuitable roads, such as Scotland lane in Horsforth and Bayton lane in Rawdon, which causes all sorts of rat-running through those communities and many others.
One of the main reasons why I wanted to secure the debate was to make my position absolutely clear. The answer has to be a new rail link to serve Leeds Bradford international airport. As I mentioned, passenger numbers have grown significantly at the airport, and all commentators expect that growth to continue. The types of passengers using the airport are likely to add to the problem, with more business passengers than ever before.
Mr Sheerman
What would be the increase in traffic if, like the Isle of Man, we had a regular flight to London City airport? Would that not be an even greater reason to get a rail link to Leeds Bradford airport?
Stuart Andrew
The hon. Gentleman is in danger of giving my speech for me. He is absolutely right that new services would mean that more people used the airport. I will give the projections shortly.
Leeds Bradford airport is already one of the UK’s fastest growing airports, and it already supports more than 2,600 local jobs. All those people have to travel, of course, so they would need to use the rail link. The airport contributes more than £118 million to the city region economy. The Department for Transport has forecast that there is potential for the 3.3 million passengers to increase to 7.3 million by 2030, and to more than 9 million by 2050. Just this afternoon, the executive board of Leeds city council is discussing the potential for growth at the airport, and how it might be managed.
It is therefore imperative that instead of talking about the need to improve surface access, we start to do something about it and plan ahead. In my constituency, many of the old mills and factories have been replaced by new residential estates. Thousands of new houses are being built with barely any improvements to infrastructure. What is the result? We have caused real problems for my constituents. In a sense, we put the cart before the horse. We built the houses and caused a lack of school places and GP surgeries, and our road networks have become increasingly congested. I do not want us to make the same mistake with the airport.
As we have heard, passenger numbers are already increasing. The airport is working to increase the number of services, and its representatives are going to shows across the world to encourage new airlines to use its facilities. In the past two years, as the hon. Member for Huddersfield (Mr Sheerman) said, British Airways has introduced domestic flights to and from London. Aer Lingus is about to introduce flights to Dublin and on to the United States. The airport is encouraging more business travel, with flights to more European cities, such as Frankfurt, Brussels and Madrid. That, coupled with the huge success of the Tour de France, is seeing Yorkshire take its rightful place as a wonderful tourist destination.
Greg Mulholland (Leeds North West) (LD)
The airport is in my hon. Friend’s constituency and mine, and the links will be built in our constituencies, but it is great to see colleagues from across the region here, because this affects the whole region. I fully support the rail link. My hon. Friend has mentioned our delivery of the Tour de France. We do not want talk on these issues; we want action. Does he agree that, with the Leeds city region having an economy worth more than £50 billion, we should be able to take such decisions for ourselves, including on whether we have light rail in Leeds, rather than having to go cap in hand to Whitehall? We need to make such decisions in Yorkshire, so that we can get on and have this rail link and the kind of modern, 21st-century transport system that we deserve.
Stuart Andrew
I could not agree more. We definitely need the system that we want. We know our local areas and the benefits that a rail link would bring. I hope this is the start of a joint mission to give a loud Yorkshire clout to securing the investment that we need. My hon. Friend is right about the increase in tourists and business passengers. We can see how quickly the passenger numbers could rise to those predicted by the Department for Transport. The airport could become one of the largest airports down the east side of England, and it could be bigger than the airports in Liverpool, Newcastle, Doncaster and the east midlands.
I am aware that the current study considers a range of options, one of which is a new link road from the ring road at Horsforth through the fields that are the natural border between Horsforth and Rawdon, past the airport and joining the A658. The West Yorkshire transport fund is carrying out further studies into that solution, but it will not solve the problem. In fact, it could make the situation a lot worse for my constituents, because passengers arriving at the airport by car will still have to use the roads through Apperley Bridge, Rawdon and Horsforth to get to the link road. The increased traffic that the new road would bring will make a bad situation much worse. Additionally, I fear that the road could become a new rat run for drivers wanting a short cut from the M62 to the A1 heading north. If we are serious about coming up with a long-term solution that will provide better connectivity to the airport while improving the experience for passengers and, more importantly, reducing the impact on my constituents and the constituents of other hon. Members, the only option is to create a new rail link.
Mr David Ward (Bradford East) (LD)
My hon. Friend mentions Apperley Bridge, and everyone here is familiar with the dreadful Greengates junction. This is all a false economy, because we now have to invest a huge amount of money to address the jams occurring in those areas. If we invested in a rail link, we might be able to save money that would otherwise have to be spent on clearing up problems caused by those traffic jams.
Stuart Andrew
My hon. Friend is another constituency neighbour, and he is absolutely right about the traffic jams that go right through Greengates, which people try to avoid as much as they can. Adding a new link road up to the airport would do nothing to alleviate the traffic on that road. In fact, as I said, a new link road would make the traffic much worse.
Alec Shelbrooke (Elmet and Rothwell) (Con)
Does my hon. Friend agree that the biggest problem when assessing accessibility to the airport is that solutions have always been sought in and around the airport’s immediate vicinity, rather than across the whole region? Many people from my constituency also access the airport, so we must look for solutions on a much wider scale.
Stuart Andrew
Absolutely. I hope that the rail link to the airport is the start of a wider connection improvement across Yorkshire. The new rail link is the only option for me, because it offers an opportunity for greater modal shift, which will mean that we are better placed to cope with any future expansion. We need only look at other airports across the country that have direct rail links to see how successful they have been; I am thinking of places such as Manchester airport. A number of rail options are available to us. Some of them are gold-plated, but I would advocate going with a stage 1 approach that links the airport to the existing Leeds, Horsforth and Harrogate line. That would mean that a journey time of as little as nine minutes would be possible from the centre of Leeds, which is a pipe dream for anyone trying to achieve the same journey by road.
Julian Sturdy (York Outer) (Con)
I congratulate my hon. Friend on securing this important debate. The rail line he is talking about runs through my constituency, too, which shows how important Leeds Bradford airport is for connecting our region. If we are truly to connect the whole region, it must be through the rail infrastructure, rather than by tinkering with the road infrastructure. That means long-term investment, not short-term investment that means only short-term gains.
Stuart Andrew
I could not agree more. If we were to have such a spur, we could connect Harrogate, York and places much further afield, so that people had a decent transport system that offered a real alternative to those who might be thinking about using the car.
We have to be mindful of costs, and here again there are often great variations. We have all had transport projects in our constituencies and been staggered by the costs that some consultants seem to add. I had a meeting with the airport last week; the Horsforth spur that I suggested would cost some £50 million, and the Harrogate spur would cost an extra £25 million to £30 million. With all the other costs that would be added, the total is some £98 million. I know others have suggested that it would be much more expensive, and I realise that it is a considerable amount of money, but if we are serious about connecting the north, we need to invest and take a long-term approach, as my hon. Friend the Member for York Outer (Julian Sturdy) suggested.
I praise the Government for their investment in the northern hub and the massive electrification programme, but it would be perverse in the extreme not to link one of the region’s largest airports to that new and improved network. When officials and Ministers are looking at the options, they will of course have to consider the cost-benefit ratios, but I hope that they will bear in mind the cost-benefit ratios for the Jubilee line, which were poor at the time but improved significantly once the line was in operation.
I would also argue that the playing field is not level. Traditional DFT assessments of benefits relate to the value of time saved to business and leisure users over a 60-year period, meaning that a highways scheme, such as a new bypass, has a clear and large time-saving value for each road user. In turn, that becomes a large financial benefit in the appraisal. Until recently, there was an assumption that public transport travel was made up of non-working time, so that if there was a shift from using cars to using a new train service, the true value of time saved for business users was not accounted for, and neither was the regeneration or the economic impact of a new rail service. Although that has changed with more recent DFT appraisal methods, the uncertainty over the value attached to working time in the case of rail, and over the economic benefits, means that the value of time benefits for road users will more than likely be more pronounced in any appraisal.
It is imperative that we do not see a rail link in isolation. I have already mentioned the northern hub and the electrification programme, but we must not forget that we also have one of the largest infrastructure projects this country has seen in centuries coming into Leeds within the next 20 years. I am, of course, talking about HS2. What a missed opportunity it would be if people were to get off a brand new, shiny, high-speed rail link in Leeds station—one of the busiest in the country—and discover that they could not get to the airport by train. Even a three-year-old child would not come up with such a hare-brained scheme.
In conclusion, there is much that I welcome: at long last, the Department seems to be taking the issue of surface access to Leeds Bradford airport seriously, for which I am thankful. Nevertheless, this is our opportunity to be ambitious and to get it right, because this is not just about getting passengers to the airport, or the airport wanting to fulfil its expansion plans; it is also about looking after the people I represent, who live in the area. If we were simply to go with the easy option of a new road, I feel sure that within the next 20 years, or possibly even sooner, whoever is representing my seat—I hope it is me—will be calling for another debate asking for a rail link.
The time to do this is now. When the airport talks to airlines about its facilities, the question that is always asked is, “How do people get there?” For too long, it has been by car. A rail link would offer new capacity to deal with a long-standing problem and improve the attractiveness of Yorkshire and beyond, through inward investment. It would help us to cope with new tourists who want to visit the wonderful county of Yorkshire, and would also help us to spread the benefits of HS2 and the northern hub. I plead with the Minister; he could become the greatest living Yorkshireman if he is bold, takes the decision we need, and gives us the rail link that we want.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
I must say that the greatest living Yorkshireman has to be Geoffrey Boycott, and I could not even hope to compete with him. I congratulate my hon. Friend the Member for Pudsey (Stuart Andrew) on securing this debate about connections to Leeds Bradford International airport, my local airport, which I have used many hundreds of times to fly to various places around Europe.
I was pleased to visit Leeds Bradford International airport, or Yeadon aerodrome, as many people still refer to it, in my official capacity on 1 May this year, when I saw some of the surface access problems. I made it clear to my officials that I wanted to visit the airport using public transport, so I embarked on the Yorkshire Tiger bus, which took me from outside Leeds station up to the airport. Although the service was very good, it was not particularly quick. Perhaps we have a general problem with railway stations and rail companies not encouraging people to take buses, but it was not immediately clear which bus stop to use or how to get to it. It occurred to me that it might have been nice to have a little aeroplane symbol next to the correct bus number on the electronic display at the bus stop.
Greg Mulholland
I am delighted that the Minister visited Leeds Bradford airport in my constituency, and I accepted his apology for his officials’ forgetting to tell me. I would have been delighted to join him and hope that I can do so the next time he visits. I am delighted that the Minister has already offered some support to the idea of a rail link to Leeds Bradford airport, but such a link must be connected to the modernisation and electrification of, and the improvement of rolling stock on, the important Leeds-Harrogate-York line. That is such an important line but currently cannot be used because of those issues.
Mr Goodwill
The gradients involved in potential rail access to the airport are sufficiently steep that I suspect one would need an electrically powered train to have the correct number of driving wheels, and I have been advised that doing that is not just a straightforward engineering challenge. I am well aware of the surface access issues at Leeds Bradford airport—indeed, my constituents on the coast at Scarborough and Whitby often tell me that it is more convenient to use Manchester airport because there is a direct trans-Pennine express service from Scarborough and through York and Leeds. They can get on the train in Scarborough and get off the train in the terminal at Manchester airport.
The debate is timely because, as my hon. Friend the Member for Pudsey indicated, the feasibility study that we commissioned into connectivity to Leeds Bradford International airport is nearly complete, and Ministers will shortly be considering its recommendations. Members’ contributions to today’s debate will be a vital input to our consideration. My hon. Friend has been campaigning hard on the need for a rail link and has wasted no time in taking his case to both the Secretary of State for Transport and the Chancellor. Today’s debate is another part of the process.
Before I come to the study itself, I want to say a few words about the role of regional airports. The Government have always made it clear that regional airports make a vital contribution to the growth of regional and local economies and are a way to provide convenience and travel choice for air passengers. That was recognised in the Government’s aviation policy framework, which was published in March last year. The UK’s airports help to encourage investment and exports by providing valuable local jobs and fuelling opportunities for economic rebalancing in their wider region or area.
The aviation policy framework also recognised regional airports’ very important role in providing domestic and international connections. The local availability of direct air services from such airports can reduce the need for air passengers and freight to travel long distances to reach larger UK airports. New or more frequent international connections attract business activity, boosting the regions’ economies and providing new opportunities and better access to new markets for existing businesses. The Civil Aviation Authority’s statistics for last year show that the UK’s regional airports handled 90 million passengers—around 39% of the UK’s total—and services from regional airports operated to more than 100 domestic and international destinations. We should therefore start referring to these airports as local international airports rather than regional airports.
Airports act as focal points for local business development and employment by diversifying into other aviation-related areas such as hosting on-site aircraft maintenance, repair and overhaul companies, and aviation training facilities, as well as into non-aviation businesses. Leeds Bradford International airport is home to Multiflight, a flight training and aircraft engineering organisation that provides helicopter and fixed-wing charter flights, aircraft sales and management. It is also home to the Aviation Academy, which is affiliated to the universities of Leeds and Bradford and trains and prepares students to work in the aviation industry.
I am aware that many UK airports were affected by the economic downturn and that some have struggled to maintain their commercial viability. In that regard, I was saddened to learn of the closure of Manston airport in May and, just recently, Blackpool airport. I know that those closures have caused concern for people and businesses in, respectively, the east Kent and Fylde areas. However, airports operate in a competitive market and, although regrettable, the operators’ decisions to close them have been made on commercial grounds. I must say that the story is much better for Leeds Bradford airport: since the advent of Jet2, it has many times more passengers than it had in the old days when I used to fly to Brussels with Sabena.
Just like our economy, however, many of our airports are seeing real growth again. For example, Leeds Bradford and Belfast City airports saw passenger growth of more than 10% between 2012 and 2013, and we want that growth to continue. We warmly welcome the ambition of the UK’s regional airports. They are responding to local and regional demands by investing in their infrastructure, to enable services to more destinations, and to offer better facilities and more choice to their passengers.
As hon. Members will be aware, LBIA recently completed an £11 million passenger terminal development to increase airside space by 65%. That development is being replicated around the country with major investment at other airports, such as Manchester, Birmingham, Bristol and Glasgow. Given the important role that regional airports play across the UK, by providing domestic and international connections and making vital contributions towards local growth, I want to see their development continue, and I want to see LBIA reach its full potential.
The Government recognise that good surface access to airports is a key part of their success. That is why the “Investing in Britain’s Future” document, published by the Treasury in June 2013, included a commitment from the Government to undertake a feasibility study into improving connectivity to LBIA, to consider problems and identify potential solutions, some of which we have heard about today. That study has recently been completed and my ministerial colleagues and I will consider its findings and recommendations during the next few weeks, before deciding how to proceed. So, as I indicated earlier, this debate is very timely, and I welcome the opportunity to hear from my hon. Friend and other Members.
The Government wanted to understand the issues that affected the airport, which is why we commissioned a study to identify and appraise potential improvements that would substantially improve the connectivity of LBIA to its catchment area, taking into account the aspiration of the airport to grow, and including both road and public transport options. There have been a number of studies over the years to look at various aspects of surface access to the airport. Given the significance of regional airports to the economy, we thought it was important to take a fresh look at this issue, taking the previous studies and reports into account, but also undertaking some new analysis in the context of today’s air travel market.
Therefore, WSP/Parsons Brinckerhoff was appointed to conduct a study in April and is due to submit its final report shortly. It has looked at the evidence and reviewed the existing body of work on the issue, identified and shortlisted options, appraised the shortlisted options and set out its conclusions. I am pleased to say that the study has also drawn on the knowledge and expertise of local stakeholders, through the stakeholder reference group, which included representatives from the airport, local councils, Network Rail, bus operators, environmental organisations and the LBIA air transport forum. My colleague, Baroness Kramer, has provided updates to local MPs and ran a briefing session for them this morning.
I recognise that hon. Members may have concerns about the impact of potential solutions to this issue on their constituencies. All modes of transport have been considered in the study, including consideration of the case for new and improved highways, as well as bus and rail options. It may be that some of these potential impacts may be positive if congestion is reduced and connectivity improved, but I am well aware that some of the proposals for both road and rail schemes could require the construction of new infrastructure in what is now open space. That is naturally a cause for local concern and I can assure hon. Members that environmental considerations form part of the assessment process.
Whatever action the Government decide to take on the study’s recommendation, individual scheme proposals such as a new road or rail link would need to be subject to further evaluation, and would require statutory consents before they could proceed. This process would provide the opportunity for further consultation and public comment if people have concerns that they wish to bring forward.
Grimsby Seafood Manufacturers
(9 years, 6 months ago)
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Austin Mitchell (Great Grimsby) (Lab)
I am glad to have the opportunity to discuss an anomaly that arises from the common fisheries policy. The anomaly is a measure designed to check state aid for fishing, but it is now depriving Young’s Seafood—a firm that we are very proud of in Grimsby and Cleethorpes, and my colleague, the hon. Member for Cleethorpes (Martin Vickers), is here—of the ability to get state aid for investment and expansion.
Young’s is a seafood manufacturer on a considerable scale; I think it is the biggest seafood manufacturer in the country. However, this anomaly also applies to other seafood manufacturers, and seafood manufacturing is a major section of the food manufacturing industry. None of these companies can get regional selective assistance, or other public support, for the investment they need to expand and grow.
I emphasise that although my reputation is for being a Eurosceptic—a man whose opinion of the European Union can be summed up in four words, three of which are “the European Union”, and who is a continuous critic of it—I do not raise this issue just as a critic of the EU. I raise it because this situation is daft, impinges on a major manufacturing firm in Grimsby, and needs to be ended.
What is at issue here is the EU guidance on state aid regarding the entire fisheries sector. That sector is defined as being concerned with
“the exploitation of aquatic resources and aquaculture together, with the means of production, processing and marketing of the resultant products”.
That definition is being interpreted as applying to Young’s, which employs 3,000 people in Grimsby and Scotland. It is the largest single private employer in Grimsby, employing 1,700 people in processing jobs there, and—I have to say—creating a superb product range. It seems to me, and to Young’s, that to extend these European guidelines to the company is a distortion of their purpose, because Young’s itself catches no fish. It farms no fish; it does not have a fishing fleet; and it does no primary processing of fish, which is the filleting and gutting of fish—the only processing, I think, that the guidelines are meant to cover.
Young’s imports its fish from all over the world. In fact, it uses 30 species of fish from five continents. Very little of that fish is caught under the CFP, of which these guidelines are part. Young’s makes from those fish more than 300 dishes. It makes dishes; it turns fish into meals by processing it, adding ingredients and selling it as a meal. So, in every sense Young’s is not a fishing company but a food processing company—a fish and seafood processing company—and therefore it deserves to be excluded from these guidelines.
Young’s is a food manufacturer and it is an important part of Britain’s manufacturing industry. Young’s and other food manufacturers hit by this anomaly are anxious to expand, grow, invest and create jobs, but they cannot because they cannot get public support in the way that other industries that they are competing with for investment can. I hope that I can persuade the Minister to see that, and to do something about it, because if he does not, he will put Young’s and other seafood manufacturers at a competitive disadvantage not only to other food manufacturers but to the rest of the industry. He will also put us—the people of Grimsby, which is Europe’s food town—at a competitive disadvantage when it comes to attracting jobs and investment, which will harm the development of Grimsby, because we all know the importance of cluster growth, as emphasised by Michael Porter, whereby clustering industries can trade experience, skills, staff and research. We have such a cluster in Grimsby, but it will be damaged if it cannot get Government support in this way.
I have been working hard to drive that lesson home. On 6 June, I wrote to both the Department for Environment, Food and Rural Affairs, and the Department for Business, Innovation and Skills. In those letters, I asked for an early reply, but I did not get one. BIS passed the letter to DEFRA, and DEFRA did not answer. An Under-Secretary of State at DEFRA wrote to Young’s on 17 September—although I had written in June—explaining what the Commission thought, but we already knew what the Commission thought. What the Commission thinks is wrong. We want independent thought relating to the point that these are food manufacturers, not fisheries firms. The reply seemed over-complacent about the situation.
I took the issue up with our local enterprise partnership, which is very good and active. Lord Haskins, the chair, wrote supportively and pointed out in passing that some restrictions also apply to flower-growing in our area, although I do not see why, and to making potato chips. Let us face it: the fish and chip industry, which is vital to this country and provides a good deal of the sustenance for our people—and certainly for me—is being hit both ways; it is being hit because we cannot invest in the seafood producers, and because of restrictions on what can be allocated to producing chips. However, I am not taking up the chips side of the argument today; I am taking up only the seafood manufacturing side. Lord Haskins added helpfully that he and the LEP supported Young’s, which he said were
“wealth creators and providers of large local employment”,
which is true.
Our Euro MP, Linda McAvan, was also helpful. She understood the problem and the consequences and mentioned that guidelines for the fisheries sector are being revised at this very moment. If those guidelines are being revised, it is up to us to get our voice in, to get that revision changed so that this restriction no longer applies to seafood manufacturers. I want the Department to get in there and get this regulation changed.
That is my plea. I plead to the Government and Ministers to stop wringing their hands and stop telling us what they cannot do. Government is good at telling people what they cannot do. I want the Minister to find out what is happening to seafood manufacturers in other European countries, because I am sure, from a little bit of evidence that I have—it is incumbent on the Department to check this—that they are being aided by the state in a way that our state will not aid our seafood manufacturers. I will bet that those states are doing that, because the degree of cheating on European regulations is quite astonishing; others are less timid and hidebound than we are.
I plead with the Minister not to brass-plate European lunacies. Let us get round them, put Britain first, and put Young’s at the forefront of putting Britain first. Let us get food manufacturing excluded from this fisheries regulation, so that structural aid and regional support aid for investment and jobs can come to this sector, which is anxious. The purchase and consumption of seafood dishes is increasing steadily; they are good for us, and we want to encourage that and to encourage the manufacturers. The firms want to expand, and it is only this barrier that is preventing them from expanding.
I am fed up with excuses, and so is the industry. We need action on this anomaly. It ill behoves a Government who are constantly telling us that they will get a better deal from Europe to do so little to get a better deal in this instance. I have every hope that the Minister will accept that.
Martin Vickers (Cleethorpes) (Con)
I share my hon. Friend’s views, and congratulate him on getting this debate. The other word that he uses in connection with the European Union is surely “out”; I would agree with that, as would most of our constituents in north-east Lincolnshire. Does he agree that this is yet another example of a case where the seafood and fishing industries have been at a disadvantage as a result of European intervention, and that they have missed out on many of the grants and benefits that other industries have had? To take up the point he was just making, does he agree that this issue should be a vital part of any renegotiation?
Austin Mitchell
I agree with my hon. Friend and colleague. I will also agree on the use of “out”, but there is a long trail a-winding there. The immediate issue is to get help now for a firm that needs and wants investment. My last words to the Minister—other hon. Members will have something to add—are these: stand up and support Young’s and Grimbsy, and get rid of this anomaly.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
I congratulate the hon. Member for Great Grimsby (Austin Mitchell) on securing this debate. I want to balance his Yorkshire passion with the Lancashire side of things, and I take this opportunity, as this is his last year in Parliament, to thank him on behalf of the fishermen of Fleetwood for all the work he did in the past. He still has a great name in Fleetwood for standing up for fishermen across the country, alongside the late Mark Hamer, from Fleetwood. I am grateful to the hon. Gentleman.
Again, he hits the nail on the head. Fleetwood is very similar to Grimsby now, because although the fishing industry is almost gone—there are just three boats that fish—a large fish-processing industry is left behind, with more than 30 separate companies based in old-fashioned accommodation on the dockside, employing more than 600 people in Fleetwood. The majority of fish comes in by truck, as in Grimbsy. Much of it is shellfish and much of it—some 80% to 90%—is exported. That huge industry is able to take on new contracts, but unable to meet the specifications of supermarkets because of the old accommodation and all the health and safety regulations. I am sure that the hon. Gentleman’s view about the EU would be that expressed on any street in Fleetwood, which has seen the EU’s depredations on its once-great industry. However, we are where we are.
I should like to add to the hon. Gentleman’s appeal to the Minister. We still have huge skills and talents connected to the fish industry, and those are in fish processing. However, companies in Fleetwood are telling me that they are having to turn down orders because they do not have room, or accommodation with the capacity to meet health and safety conditions. With support of the Wyre district council, they want to come together in new buildings and create almost a northern Billingsgate. That would enable them to expand and increase their export markets—they reckon they could take on another 150 to 600 employees to meet that market—and create a centre for tourism, because the site would be open, like the new Billingsgate in London. Everything is there. The land is there; much of it is derelict. The old land would then be released for new developments along the dockside.
One would have thought that the whole thing was a straightforward regeneration bid, but we are stuck on where to go to find the wherewithal. As the hon. Gentleman said, we cannot go to Europe about the fishing industry, because for some reason this is seen as a separate business, although it is tied utterly to the historical skills of families in Fleetwood, who have been connected, from the earliest days, not just with fishing, but with processing fish. Those skills are still there.
We have gone to the LEP, and we are now looking at trying to get a regional growth bid, to help fuel this and get it working. I am taking the selfish opportunity, following on from the points made by the hon. Gentleman, to say to the Minister that the case in Fleetwood is exactly the same. Would it not be such a plus to revive these deprived fishing areas, which thought the whole thing was dying, and which still believe that there is no support anywhere, whether from Europe or central Government? I suggest that we could revive the industry in Fleetwood, with real jobs, new export markets and tourist attractions. Through that, we could reverse the damage done, including by the European Union, to what used to be a staple of England—its fishing fleets.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)
I congratulate the hon. Member for Great Grimsby (Austin Mitchell) on securing the debate and bringing this subject to the attention of the House. As other Members have said, he has long been a champion of fisheries issues and the many fisheries businesses located in his constituency. Indeed, I remember when he changed his name a little over a decade ago to Austin Haddock, to highlight the plight of our fisheries industry. Earlier this year, I had the pleasure of visiting the Grimsby fish market and, along with my hon. Friend the Member for Cleethorpes (Martin Vickers), Grimsby Seafood Village. I also visited the new Morrison’s fish processing facility, and at a dinner I had the opportunity to meet representatives of Young’s to discuss some of their plans and aspirations. I understand how important the sector is to the local economy around Grimsby, so I am pleased to have the opportunity to respond to this debate.
As the hon. Gentleman said, we have corresponded on this matter, and I have also received representations directly from Young’s Seafood. He expressed some regret that we took some time to reply to that letter, but I assure him that there was a good reason for that. When I was shown the initial draft, it said that we could not do anything, and I wanted to explore the issue further. I put a hold on the letter and said I wanted a meeting to explore the issue with officials, to discuss it more fully with our lawyers and to challenge the legal opinion that we had. During that discussion, however, I was persuaded that their interpretation was correct. I will come on to explain the reasons for that, but first, I underline my support for the fish processing industry. When I visited Grimsby earlier this year, I saw at first hand what a forward-looking and dynamic sector it is. As well as employing thousands of people, it plays a vital role in providing the whole country with affordable, healthy food.
The hon. Gentleman and I have something in common: we are both on the Eurosceptic side of the political spectrum, despite being on opposite ends of the political spectrum on many other things. He has been consistent; I remember him saying before that his view of the European Union can be summed up in four words, and three of them are “the European Union”, and I can see that that has not changed at all. When I was the director of the “No” campaign against the euro, he played a leading part from the Labour Benches. I am afraid that the regulations I will describe will probably not do anything to diminish his scepticism on the European Union.
There are two issues under consideration: first, what constitutes a seafood business, and, secondly, whether such a business should be eligible for financial support from public funds. On the first question, which relates to the state aid rules, there are two relevant regulations. The first is the fisheries block exemption regulation, EC regulation 736/2008, which concerns aid to small and medium-sized enterprises active in the production, processing and marketing of fisheries products. The second is the fisheries de minimis regulation, EC regulation 717/2014. Both are clear, in alignment with the financial measures under the common fisheries policy, that they apply to the entire fisheries sector. The rules cover not only fishing or fish farming, or even the primary stages of processing, as the hon. Gentleman suggested, but all stages of production, including the processing and marketing of the finished product. The regulations effectively mean that support can only be offered in accordance with the conditions set out in the European fisheries fund, which is soon to become the European maritime and fisheries fund. There is a de minimis exemption for small projects, up to a total of just €30,000 over three years. I appreciate that such a small amount is of little comfort to Young’s, which has such an ambitious project.
I have some sympathy with the argument that a company, as the hon. Gentleman said, may primarily be a food manufacturer that produces meals of all kinds, rather than just a fisheries business, but I cannot agree that we are gold-plating the EU state aid requirements. They have a little room for interpretation, but it is just that: a very small amount of room. In this instance, it cannot reasonably be argued that a business whose entire product range appears to be fish-based is anything other than a fisheries business, as defined under the regulations.
We have applied the rules consistently, and have rejected similar large proposals from large applicants on exactly the same grounds. To be consistent, we have to apply the same approach now. If we were to take a high-risk approach on Young’s and allow it to receive this aid, the risk would lie with Young’s. The European Commission could decide that the aid was unlawful and require it to be repaid. If Young’s had already invested the funds in infrastructure and jobs, it would then be in the unenviable position of having to repay the aid in full, plus interest. That could pose a greater risk to the business than simply being clear in the first place that it is not eligible. In addition, should the Commission find the UK to be systematically making unlawful payments, that would put the entire programme at risk.
The hon. Gentleman asked an important question: what do other countries do? As a Eurosceptic, I always ask whether we are gold-plating regulations and what other countries do. The risk I described is not theoretical. There was a similar case in 2012 concerning a manufacturer of frozen fish products in Spain. The European Commission opened a formal investigation to determine whether the type of aid proposed was compatible with the internal market. It concluded that it was not, which resulted in the entire project being cancelled and the funds disallowed. If we look at what happened with that case and the approach we have taken with other large processors, we have to be consistent and recognise the risks of doing what the hon. Gentleman urges us to do.
It is not all bad news for Grimsby, however. There are a lot of good projects that have been supported through the European fisheries fund. Some 31 projects carried out by seafood businesses in the Grimsby area have already received some £3.2 million of European fisheries funding under the current programme. Individual grants have ranged from £4,000 to £1.2 million. Those projects have already delivered a wide range of local benefits, including port improvements, new processing units and ice plant facilities in the fish market, which have allowed local businesses to grow and prosper. When I visited the Grimsby Seafood Village, I saw a lot of those businesses benefiting from new premises and new investment to allow them to take their businesses forward.
While very large companies would be excluded from such support under most scheme rules due to their size, there are also significant general EU restrictions on large companies receiving state aid. That is simply because the European Commission has concerns that large subsidies in the fish processing sector would seriously distort the market. That is why the de minimis ceiling for state aid has been set at €30,000 over a three-year period. Additionally, the European Commission is explicit in stating that aid can be used only to support activity that a company would not otherwise undertake. That is what they call the incentive effect, and it is contained in article 7 of the fisheries block exemption regulation, which stipulates:
“Aid shall be considered to have an incentive effect if it enables the beneficiary to carry out activities or projects which it would not have carried out as such in the absence of the aid.”
I am not sure that we can make that case with Young’s.
Austin Mitchell
I thank the Minister for giving way. First, he is telling us why it cannot be done, but fish is only a part of the fish meals prepared by Young’s. There are other ingredients, whether carrots or chips or whatever. This is food manufacturing, so why can it not get support for the other sides of the process, which would help it to expand? The problem is that the alternative available sources of fishing finance mentioned by the Minister are only small-scale stuff compared with the big investment need of Young’s. Secondly, what are the British Government doing in Europe to change the situation?
George Eustice
I will come on to that second point, but on the hon. Gentleman’s first point about Young’s selling products that are not predominantly fish, when I had that meeting with officials I said, “Go and look at Young’s website and look at their entire product range. Let’s see what they are actually selling.” We could not find a product that was not fish or predominantly fish or one that would not fall within the definition of fish product under the regulations.
I want to finish the point that I was making about investment. Taking a broader perspective across the Humber, most businesses have benefited from some large-scale investment. Some £260 million in public and private funding is being invested under the local enterprise partnership growth programme. There is also the electrification of the east coast main line right out to the coast, so we are doing many things to help Grimsby.
In answer to the hon. Gentleman’s second point about what the Government are doing, the Government recognise not only that large companies are often part of the driving force behind growth in the regions, but also that they can in many cases have the greatest impact on the environment. As such, we are in discussion with the European Commission about ensuring that when it comes to investment in environmental protection or upgrading a plant’s facilities to help the environment, we may indeed be able to change the block exemption rules. We will work with the Commission on that for the benefit of those sectors of UK industry that stand to benefit, including the companies discussed today. We have already raised the matter with the Commission and if we get the proposal through, it could be of benefit to companies operating in the aquaculture and fish processing sectors and would at least help to support their investments in some of their environmental improvement, which we would encourage.
In conclusion, I again thank the hon. Member for Great Grimsby for his efforts in securing the debate. I reassure him that I did not just sign a letter and send it back. When I saw the draft, I was clear with officials that I wanted a meeting to get to grips with the issue. Having discussed the matter with our lawyers in some depth, I am afraid that my conclusion was that their interpretation and the Marine Management Organisation’s approach had been right, but I thank the hon. Gentleman for the opportunity to set out what we have done and the attempts that I made on his behalf to explore this important issue.
Question put and agreed to.
Written Statements
(9 years, 6 months ago)
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National Minimum Wage (2015 Report)
(9 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I am pleased to announce that the Government have written to the Low Pay Commission setting out what we would like the Commission to consider on the national minimum wage. The document contains the Government’s interim evidence on economic and non-economic issues, including the minimum wage rates, the youth labour market and apprenticeships. An updated version of the evidence will be published later when the latest information on earnings and economic forecasts will be included.
A copy of the evidence will be placed in the Libraries of both Houses and will be available from the BIS website at: http://bis.gov.uk.
Police Taser Statistics (England and Wales 2014)
(9 years, 6 months ago)
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The Minister for Policing, Criminal Justice and Victims (Mike Penning)
I am today publishing the statistics on police use of Taser in England and Wales for the six month period between 1 January and 30 June 2014. These show that:
The total number of times Taser was used by the police in this period is 5,107.
Non-discharges account for 81% of the Taser use.
The most common use of Taser in this period was “red dot”, which accounted for 52% of overall use.
The percentage for “drive stun” and “angle drive stun” accounted for 3% of overall use.
The percentage for “fired” accounted for 16% of overall use.
Full details are available from: https://www.gov.uk/government/statistics/police-use-of-taser-statistics-england-and-wales-january-to-june-2014 and a copy will be placed in the Library of the House.
EU Transport Council
(9 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
I attended the first Transport Council under the Italian presidency in Luxembourg on Wednesday 8 October.
The Council adopted a general approach on the ports services regulation. Following intense negotiations with other member states and the Commission, the UK secured an important competitive market exemption clause, ensuring that, where effective competition demonstrably exists, this regulation would not impose additional unnecessary burdens on ports. In the main, ports in the UK fit this criterion.
Despite concerns from some member states that the proposed regulation does not go far enough, particularly with regards to scope and financial transparency, all member states voted in favour of the proposal apart from Lithuania, who voted against, and the UK, who abstained. Looking ahead to their upcoming presidency Latvia indicated that they would look to sustain momentum on this dossier.
The Council also reached a general approach on the revised directive on the cross-border exchange of information on traffic offences. I fully supported the road safety objectives of the proposal but simultaneously expressed concerns that we had not been given enough time to analyse the detail and reserved the right to examine whether future proposals in this area contained justice and home affairs content. As a result I formally tabled a joint minute statement with Ireland setting out these concerns and abstained.
In the Council’s first discussion on the fourth railway package market pillar, I strongly endorsed proposals to liberalise the domestic rail passenger market. I emphasised that the effects of competition in the UK over the last 20 years had delivered a thriving rail industry. Some member states supported market opening in principle but the Council was clearly divided with many favouring investment over market opening as a more effective means of securing rail’s future. The Commission emphasised that investment alone was not the solution to combating rail’s declining competitiveness and loss of modal share and that the market pillar was an essential complement to the technical pillar to deliver rail’s full potential. The presidency agreed it was inconceivable to consider the fourth railway package without the market pillar and restated its ambition to reach general approach at the December Transport Council.
The Council went on to discuss the opening of the market to the civil use of remotely piloted aircraft systems (RPAS). There was unanimous support to integrate RPAS into European airspace but member states stressed the need for a gradual approach which ensured the primacy of safety and sufficient time for the development of associated technologies. I strongly pressed that any future regulatory proposals should avoid stifling innovation and provide a framework proportionate to the risk. Latvia stated that it was keen to progress political discussions on RPAS during its presidency and would host an event in Riga in March 2015.
On the single European Sky II+ progress report, the presidency reported that good progress was being made on this challenging file and invited Ministers to a policy discussion on the single European Sky in Rome on 6 and 7 November 2014, with a view to reaching general approach at the December Transport Council.
The presidency presented its paper on elections to the International Civil Aviation Organisation (ICAO) Council. I urged EU member states to support the ongoing consensus-seeking process among the pan-European 44 states of the European Civil Aviation Conference (ECAC) to decide this matter. The Council took note.
The Netherlands spoke movingly on aviation safety and the follow up to the crash of Malaysian Airlines flight MH17, and informed Council on the preliminary findings of the investigation by Dutch Safety Board with expert support from the UK, Ukraine, the USA, Malaysia and Netherlands. The interim report concluded that the aircraft had been penetrated from the exterior by a number of high energy objects which led to a loss of structural integrity and the break-up of the aircraft. The investigation was expected to issue its final report by July 2015. A concurrent criminal investigation had been launched. The Netherlands asked member states to contribute to the ongoing ICAO taskforce which aimed to review procedures for civil flights over conflict zones with a view to better exchange of information. The Commission added that its external action service would be working with EU member states to determine a mechanism for information sharing with EU airlines. I expressed our sincere sympathy and solidarity with the Netherlands and stated that we would continue our active engagement in the ICAO taskforce.
In a wide range of any other business, the presidency summarised the outcome of the informal Transport Council held in Milan on 16 and 17 September, which had focused on the Trans-European Transport Network (TEN-T). The discussions on planning, governance and financing of infrastructure would feed into the mid-term review of the Europe 2020 strategy. In his last Transport Council, Vice-President Kallas reflected that he was proud of his achievements in reshaping TEN-T and urged Council to ensure transport secured an appropriate share of President Juncker’s recently announced €300 billion investment programme.
Poland presented an information paper on the situation of road hauliers in the context of the Russian import ban on certain EU products, calling upon member states and the Commission to help mitigate the effects of the Russian import ban on the road haulage sector. Three member states echoed these concerns and called for measures to be taken at an EU level. The Commission expressed sympathy with those member states but underlined the importance of the wider political context and stated that it was not planning to amend legislation at this stage.
Finally, the Commission updated the Council on the recent Galileo satellites incident, indicating that the most likely cause was a mechanical fault and a full report was due by the end of October. The launch planned for December would be postponed until the root cause was established and corrected. This was likely to be within the first half of 2015.
Grand Committee
(9 years, 6 months ago)
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Consumer Rights Bill
(9 years, 6 months ago)
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The Deputy Chairman of Committees (Baroness Harris of Richmond) (LD)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Clause 20: Right to reject
Amendment 14
Baroness Jolly
Baroness Jolly (LD)
My Lords, I appreciate that the government amendments are technical in nature, so I would like to take some time to explain what they do.
The Bill sets out key statutory remedies, such as the right to reject substandard goods, which entitle the consumer to reject goods, treat the contract as terminated and get a refund, but there is also court-developed common law regarding contracts for goods, and the Bill is intended to work alongside much of that. Amendments 14, 17 and 18 are to explain how the rights to reject goods under the Bill work, where contracts are severable under contract law. By severable, I mean contracts where parts are intended to be independent of each other, so different parts of the payment can be assigned to different parts of the trader’s performance. For example, it could be a contract for numerous goods where payment is due per item or for building work where payment is due pro rata for work done, regardless of whether all of the work has been done. That is distinct from obligations which are entire, when the consumer has to pay only when all the trader’s obligations have been fulfilled—for example, a building contract under which the trader must carry out all the work before the consumer has to pay a lump sum. It is that existing common-law distinction and principle to which the amendments refer.
Let me state from the outset what the amendments are not about. They are absolutely not about preventing consumers from rejecting faulty goods. Where goods are faulty, the consumer has the right to reject them under the amendments. The amendments clarify that where the contract is severable, the consumer has the right to reject the faulty goods and may also have the right to terminate the whole of the contract. Above all, the amendments provide clarity that the Bill would not override the distinction between severable and entire contract, which currently exists in common law.
The Bill, like the Sale of Goods Act, explains the position for contracts where the parties agree to deliver and pay for goods in instalments. A contract, including a mixed contract, such as one where goods are supplied alongside services, may be considered to be severable in other situations. For example, goods may be delivered in instalments but paid for monthly rather than per instalment. I gave some other examples earlier.
Under the Sale of Goods Act, much of the detail of how the right to reject operates is dealt with by common law, whereas in the Bill we have greater clarity about the right to reject. To provide that greater clarity without cutting across the existing concept of severability, we consider that it would be helpful to include some clarification about how the right to reject operates for severable contracts, other than those for delivery and payment in instalments.
Under current law, if a consumer and a trader make a contract which is severable and an item supplied under the contract is faulty, the consumer may be entitled to compensation in relation to the faulty item, or may be able to terminate the whole contract—it will depend on the nature of the goods, the fault, and the detail of the contract. The amendments are intended to set out the position in the Bill.
If the contract is not severable—for example, if the consumer is required to pay only once and the trader has carried out all of the work—the amendments do not bite. The consumer could terminate the whole of the contract if there is a fault in one of the goods.
I turn to the amendments. First, Amendments 14 and 17 are to clarify that the rights to reject goods take account of this common-law distinction between severable and entire contracts. The Bill provides that a consumer should be able to reject goods, including those supplied as part of a mixed contract, where the goods breach one of the statutory rights in the Bill. However, where the contract is severable, in some cases the faulty goods supplied might represent only a small part of the whole contract. These goods or the fault with them may have little impact on other things which the trader must do or supply under the contract. Of course, in other cases the faulty goods may represent most of what the consumer is paying for under the contract, or the fault in the goods may be representative of an inherent fault in other goods which are to be supplied. That is why the amendments provide that the consumer’s right to reject may apply to a severable part of the contract or that the consumer may also have a right to terminate the wider contract.
Whether the consumer can treat the whole contract “as at an end” may depend on the circumstances and the contract. Under common law, the main tests for deciding whether a consumer may treat the whole contract as being at an end in such cases are the extent of the breach compared to the whole contract and the likelihood of the breach being repeated in the other things that the trader is to supply. Imagine, for instance, that a trader has renovated a bathroom and billed the consumer separately for the different items. There is no issue with the trader’s work or most of the items but there is a fault with the sink. Amendment 17 is to make clear that the consumer’s right to reject would apply to the severable part of the contract and not to the whole contract, unless the circumstances justified this. In my example, therefore, a consumer could reject the part of the trader’s performance which did not meet the consumer’s rights—here, it is the sink—but not necessarily the whole bathroom.
Amendment 18 ensures that the distinction between entire and severable contracts is also reflected in Clause 21, which enables a consumer who has the right to reject goods under a contract to choose to reject only some of the faulty goods. Where a contract is severable, the consumer might have the right to reject goods supplied under part of the contract but not all the goods under it. The amendment therefore makes it clear that in this situation, too, the consumer may choose to reject only some of the faulty goods which they are entitled to reject.
As I said at the start, I appreciate that these are technical amendments and if the noble Baroness, Lady Hayter, would like additional time to consider them more fully, the Government are willing to withdraw and not move them at this time and reintroduce them on Report.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I do not want to run before my horse by talking about an amendment which I shall bring up later but I was listening carefully to what my noble friend was saying about the ability to reject part of a contract. In the case that I shall come to in a minute, which will be about custom-made double-glazed units, will that mean that one window only could be rejected?
Baroness Jolly
My noble friend makes a very good point. I have extensive speaking notes on that part and we will come to it later in the afternoon.
Baroness Hayter of Kentish Town (Lab)
I thank the Minister for that. Perhaps it would be helpful if I put on the record what our questions are. I take very much the offer that she has made to withdraw and not move these amendments so that we can come back to them; with them being tabled at this stage, we obviously have not had all the time that we need. Neither have they been scrutinised by the BIS Select Committee or in the Public Bill Committee in the other place. That would give us a little more time and we are grateful for that.
The real question, which the Minister helpfully set out, is whether it is reasonable for a consumer to reject every part of what they think was bought under a single sales contract or only the faulty parts. With the example given, it may be that an entire bathroom suite has been ordered—all in the same pale blue or whatever one wants for a bathroom suite—but if the sink is faulty, that may have implications on the bundle and on whether the quality of the whole is affected by one part.
Though hearing and understanding the intention, we are worried that this proposal could have consequences for big, very expensive items, particularly whether the amendments would create an incentive for traders to supply related goods under separate orders or contracts to try to make the contract more severable. That could apply to a whole furniture suite, a music centre, a matching table, chairs and cupboards, and so on where the householder thinks that they are buying a complete look. Rather like the Minister, I have focused on kitchen equipment and those sorts of things. However, telecoms and media bundles, which can include phone, broadband and television, are increasingly purchased by consumers. Such purchases raise the same issues as to whether they are a single contract or severable.
I should like to lay two further issues on the table because we will, with the Minister’s generous offer, come back to this. Thinking of the whole area, it will at least be possible for the installer or the retailer to take out insurance against the whole or the parts, whereas an individual consumer cannot at the point of installation. The Minister has kindly offered further discussions on the point at which one pays and whether one simply pays at the end of a contract. If it is for something fairly small, that may be simple, but when I have had building work done, money quite rightly has been wanted up front to buy components. We have tended to pay in bits, which makes it sound as if each bit is separate, although it was really just to help a small trader. Again, we would like the time to look at that. If this amendment really is to clarify current law, we would have fewer worries. For the moment, we are grateful for the time and hope that we will be able to sort this out.
Baroness Jolly
I thank the noble Baroness for her comments and appreciate that she needs more time to consider the amendments more fully in the light of remarks on this issue. I am happy therefore to withdraw the amendment with a view to revisiting it on Report.
“( ) A consumer shall not be obliged to incur any costs when returning rejected goods except those incurred in returning the goods to the place where they acquired physical possession of those goods.”
Lord Stevenson of Balmacara (Lab)
My Lords, Amendment 15 would ensure that a consumer would not have pay to return faulty goods other than any costs incurred in returning them to the place where they originally acquired physical possession of them. It is intended to stop traders charging additional costs, such as large postage costs or costs for delivery of large items. I understand the Government’s view and I expect the response to be along the lines of that raised in the other place when this issue was raised; namely, that the present arrangements under the Sales of Goods Act 1979 should be continued. Basically, what is being said here is that when a consumer exercises a right to reject faulty goods, they are not obliged to return the goods unless they have agreed to. All the consumer needs to do is to make the goods available to the trader. The consumer and trader can arrange for the consumer to return the goods but it would be the consumer’s choice.
Of course, it does not exactly make it the trader’s responsibility in that circumstance to do that. The whole of this appears to be on an edifice of good will and sound trading, which often does occur but, in reality, sometimes does not. Good traders are not the ones we have to worry about: it is the unhelpful, nitpicking, take-it-or-leave-it traders who we have all come across and who may say, “Oh yes, we will give you a refund on your sofa but you have to bring it back to the depot”. You then work out how on earth you are going to do that and probably give up in despair.
It has already come up in our Committee that there is clearly an invisible but rather firm line on the part of the Government regarding where they want to go on some of these issues where they feel that the evidence that comes from the earlier legislation is sufficient. However, times are changing, and the sharp practices and issues that have been raised with us as we have approached the Bill need to be addressed. This very simple amendment would put into the Bill something that we think would be good practice. It would help consumers, particularly vulnerable ones, to deal with poor traders, and would level the playing field between the good and the bad retailers. I beg to move.
Baroness Jolly
The noble Lord has eloquently described how unfair it would be for a consumer to have to pay the cost of returning substandard goods. I have a lot of sympathy for the sentiments that he conveys; to receive substandard goods is disappointing and frustrating in itself, but to have to pay the cost of returning them really would heap insult upon injury. Where I think we differ is that I am not convinced that further protection is required. This is because of the protections already in the Bill and in common law. Moreover, there seems to be little evidence of bad practice from traders insisting that consumers fund the return of shoddy goods. Some large online retailers already cover the cost of returning goods, either by arranging for a courier or by providing a freepost sticky label.
The Bill already provides protection by stating in Clause 27 that there is no need for the consumer to return the goods unless they have specifically agreed to do so. The consumer need only make the goods available to the trader—for example, to facilitate their collection. Furthermore, if the consumer rejects the goods and terminates the contract, he or she can also pursue a damages claim against the trader in order to recover further costs that they have incurred, and these damages could include the cost of returning the goods to the trader if they had been required so to do. So although I am with the noble Lord opposite on the spirit and intention behind the amendment, I question the need for it. I therefore ask him to withdraw the amendment.
Lord Stevenson of Balmacara
My Lords, that was not unexpected, although I noticed, as the Minister was framed by the TV behind her, that Christmas bells were ringing, and I thought my time had come and this was going to be the first crack in the edifice that has been erected between us in this debate, but sadly not.
We are so close on this that I do not understand why the Minister cannot accept the argument. I find it very strange that the Government would be happy to rest on a situation where a poor, vulnerable consumer, with a sofa that is bulky, difficult and unfit for purpose, has to rely on the good will of the trader to send a courier van, as she has described it, or even to send a sticky label—though I do not think that that would be much use—in order to send the sofa back to the warehouse. What happens if the trader does not do that? Are we really saying that everyone in the country has to become expert in raising small claims charges in small claims courts to try to persuade recalcitrant traders to do what is obviously the expected thing? I do not think so. I hear what the Minister says and I understand where she is coming from, but we might wish to return to this. I beg leave to withdraw the amendment.
“( ) The entitlement to reject shall not apply, notwithstanding the right to repair set out in section 23 and the right to a price reduction under section 24, if the contract is for goods that---—
(a) are made to the consumer’s specifications or are clearly personalised, or(b) have been installed following significant alterations to the existing fabric of a building so as to render return of the product impractical.”
Lord Hodgson of Astley Abbotts
My Lords, this amendment appears to be sticking one’s head in the lion’s mouth, in that it appears at first sight to be an amendment in favour of double-glazing salesmen. Like many Members of the Committee, I have seen examples on various consumer protection programmes where the behaviour has been completely unacceptable. Before Members switch off completely, though, I wonder whether they will bear with me while I drill down a bit into the issue. There have been egregious examples of fly-by-night double-glazing operators but equally there are many reputable firms, some of which offer guarantees as long as 10 years for the performance of their products. It is of course also worth being aware that double-glazing plays an important part in improving the insulation of people’s homes and in the fight against global warming. Therefore this industry has an important commercial role to play in our society. However, the nature of its bespoke—I use the word carefully—way of working can make it the victim of the unscrupulous customer. I will explain briefly what I mean.
New double-glazed windows have to be custom-made. They have to be measured individually, and the new window is thereafter made appropriately. Under present regulations—the consumer contracts regulations; I am sure that the Minister will correct me if I have this wrong—if the windows are wrongly installed, the customer has, quite appropriately, the right to repair. If the repairs are unsatisfactory, the customer is entitled in the end to a discount on the price. Those remedies are of course reinforced in Clause 23: the “Right to repair or replacement”, or in Clause 24: the “Right to price reduction or final right to reject”. I think the industry, and others, would say that in so far as the new provisions do not repeal the existing consumer contracts regulations, we need to make sure that they mesh up and match precisely. The industry supports the provisions of Clauses 23 and 24, as my amendment makes clear.
The challenge to the industry comes from the provisions of Clause 20 and the apparent lack—I hope that the Minister will be able to reassure me on this—of any test of proportionality. If I may take an example, a customer might order a dozen windows to double-glaze his or her house. The windows are measured, manufactured, and fitted. At that point, the provisions of Clause 20 appear to give the customer almost any grounds for rejecting the goods and treating the contract as being at an end. There is no requirement, as I read it, to seek any remedial work before ending the contract. At this point, the supplier is of course in a very weak position. The fitted windows have no alternative use, as they have been specifically measured and made. Moreover, they now form part of the structure of the building, which makes their removal even more legally complex. Amendment 16 merely seeks to achieve some equality of arms, that this absolute unproportional right of rejection as in Clause 20 is limited where goods are personalised and have been installed in a building.
To conclude, this Bill is entitled “Consumer Rights Bill”, and I support its principles. However, not all consumers are angels; therefore there is a concern that without some protection of proportionality these firms may find themselves taken advantage of by the unscrupulous. In addition, of course, the better the firm, the greater the risk, because the fly-by-night operators who should be the focus of our regulatory efforts will by then be over the hills and far away. I beg to move.
Lord Clement-Jones (LD)
My Lords, I will briefly support the amendment in the name of the noble Lord, Lord Hodgson. He has made an even better case than the one that was presented to him in the first case. It struck me that in principle, if we set our minds to it, we could probably find quite a number of other areas apart from double-glazing, which was the example that the noble Lord gave, where goods are manufactured, bespoke, to a customer’s requirements. This particular case is very strong because of the construction work that is required to be done, which you cannot undo without serious damage to a property. I therefore hope that the Minister can give either clarification or assurance that something in the Bill deals with these kinds of made-to-measure products. A very valid point has been raised, and the noble Lord, Lord Hodgson, has put the case extremely well.
Baroness Hayter of Kentish Town
My Lords, the amendment as it is written, not necessarily as it is intended, is what concerns us. As written, it would undermine the right to reject. We do not see why a consumer should have any less of a remedy when something has been made to their specification than anything else. In fact, very often if it is made to their specification it may be particularly valuable, desired and even expensive. They certainly should not lose their rights just because of that. To some extent their rights should be stronger. because they have negotiated and explained exactly what it is that they want. As I was saying to the Minister earlier, I am wearing a made-to-measure garment.
Baroness Hayter of Kentish Town
For readers of Hansard, you would love my crimson chiffon, off-the-shoulder, diamante-encrusted gown. However, at that level, yes, I have made-to-measure clothes, but my grandchildren, called Poppy and Isaac, have “Poppy” and “Isaac” embroidered all over their swimming towels and things like that. I had a very nice hand-painted plate made for my godchild’s wedding. What I would not like to see is that, as a consumer of those made-to-measure or personalised goods, I would lose my rights to reject if they were faulty. If they are for a wedding I am afraid that a replacement probably would not arrive in time. I am not convinced that personalised, made-to-measure things should lose their rights. If it is bespoke it is probably something that has been made fairly specifically.
I understand that the wording used has probably been carried across from the distance contracts rules, where if one orders a personalised product then one obviously cannot reject it simply because one has changed one’s mind, because there is nothing else the supplier can do. We understand that completely, but that is obviously not the same as where a personalised product is faulty. Our worry is that the amendment from the noble Lord, Lord Hodgson, as worded would undermine the rights that a personalised order should have.
If we have read this correctly, the amendment would be not a clarification, but a change in the current law. Our understanding is that the current law has not produced any problems in the past. We have certainly heard no catalogue of complaints, although the Minister might know more than we do about that. Our worry therefore is, whether it is simply my dress or a tailor-made kitchen, that we would want consumers to retain their rights if such a kitchen was full of faults or badly installed. It is a bit like what my noble friend Lord Stevenson said on the previous amendment: I do not think good traders have anything to worry about, but it is the others that we are worried about, who would be the ones most likely to misuse something such as this. Many personalised goods are expensive and very much thought about. If they are in one’s own house it is not that easy to keep having them changed: one has to take more days off work to have that done. This is one’s home we are talking about.
We hope that the Government are not going to accept this amendment, which I am sure is well intentioned but perhaps unnecessary.
Baroness Jolly
I thank my noble friend Lord Hodgson of Astley Abbotts for the reasoning behind his amendment. I also welcome his general support for the principle of the Bill. My noble friend Lord Clement-Jones is absolutely correct in pointing out that the amendment’s application would be wider than double-glazing: spectacles are another really good example of something that is personalised. I am grateful to have the support of the noble Baroness opposite.
The Government disagree with the approach that the amendment takes. The rights to reject in the Bill—both the short-term and final right to reject—represent fundamental protections for consumers where goods do not meet the consumer’s rights under the Bill.
Lord Hodgson of Astley Abbotts
I am grateful to the Minister and particularly to my noble friend Lord Clement-Jones for his support. This is a probing amendment and, quite rightly, some of its defects have been pointed out. However, my noble friend did not answer on whether partial rejection could take place. If I may use the example given by the noble Baroness, Lady Hayter, let us suppose that she bought not just an aquamarine off-the-peg but a crushed raspberry and a shocking pink as well, and let us say it turned out that the garment in crushed raspberry was poorly manufactured. Was she entitled to return them all? Is that part of the same contract? The issue for my noble friend is this: if in the example that I have given there are 12 windows and one is faulty, does the right to reject extend to all 12 windows, or is it limited to the specific article about which problems have been found? In the example given by the noble Baroness, of course she can return the one dress, but can she return all the dresses that formed part of a single order? That is what I am not clear about. I do not know whether my noble friend can illuminate me any further now.
Baroness Jolly
Indeed, my Lords. I will try to keep out of people’s wardrobes. Of course we are keen to ensure that rejection is a proportionate remedy. Amendments 14, 17 and 18 on severable contracts, which we have already discussed, were intended to give clarity here. As was explained in that debate, if the contract is severable, the consumer would have the right to reject the affected part, and the circumstances of the case would determine if they could reject the other parts of the contract.
Lord Hodgson of Astley Abbotts
My Lords, we seem to be getting some good clarity there. I will read carefully, take some further advice, thank my noble friend and all noble Lords who have taken part, and beg leave to withdraw the amendment.
Baroness King of Bow
“( ) Where, given the nature of the goods and all the circumstances existing at the time the contract was entered into, it is reasonably foreseeable to the parties that the consumer will not be able to ascertain whether the goods are in conformity with the contract within the time period set down in subsection (3), the time limit for exercising the short-term right to reject in relation to those goods shall end once the consumer has had a reasonable period in which to ascertain whether the goods are in conformity with the contract.”
Baroness King of Bow (Lab)
My Lords, Amendment 19 allows the period within which a consumer can exercise the short-term right to reject to be extended beyond 30 days when necessary to give the consumer sufficient time to assess the goods. In other words, the amendment is about limited flexibility and maintaining rights available to consumers under current law.
When the Law Commission recommended a 30-day period for a consumer to exercise the initial right to reject, it was on the basis that 30 days would be the “normal period” but that there would be flexibility in appropriate circumstances. The Bill recognises that some goods will typically perish within 30 days, and in those cases a 30-day right-to-reject period clearly is not appropriate. However, the Bill does not recognise that a longer period may be needed in some circumstances. Under current law, a consumer has a “reasonable” period within which to exercise the initial right to reject. The Law Commission recognised that for many purchases a court may consider a reasonable time to be longer than 30 days. We have some of the current case law, including the court finding it reasonable for a consumer to reject a new car after seven months. Presumably without this amendment a consumer would not have that protection from the courts. A more obvious example is a pregnant woman buying a pram before her baby’s birth or goods bought out of season—skis during the summer, lawnmowers in the winter, or the obvious Christmas present scenario.
Without the ability to extend the right to reject in such circumstances, consumers might be worse off under the Bill than under the current law, which allows that reasonable period. That is obviously our concern—and not just ours: apart from the Law Commission, the BIS Select Committee recommended that,
“the Government reconsider an exception to the time limit for the early right to reject where it is reasonably foreseeable that the consumer would need a longer period to inspect the goods and to try them out in practice”.
Amendment 19 would implement that recommendation. I beg to move.
Lord Clement-Jones
My Lords, I am intervening rather unfairly on this amendment to say that I do not support it and that, as the Bill’s passage carries on, a number of sectors will have their voices represented. I want to raise issues that have been raised with me by the motor sector, particularly the Finance and Leasing Association, which represents a wide range of those who finance the purchase of motor cars by consumers.
As we heard, Clause 22 introduces this 30-day right to reject goods if they are of unsatisfactory quality, however minor the defect. Sellers are unable to deduct the costs incurred—for example, depreciations—while the goods have been used by the consumer. As a result, the right to reject could have a particular cost implication in the world of motor finance, where 75% of private new car sales are bought on finance. New cars, as my noble friend may know, typically lose 15% to 20% of their value in the first 30 days, and in the event of a defect the car dealer will have to offer to repair the car, although the customer is not obliged to accept that and can simply opt to hand back the vehicle. In a worst-case scenario, as the FLA says, the customer might have had the car for a month and driven it extensively, clocking up thousands of miles, only to hand it back because of a very minor defect—for example, the windscreen wipers failing to work properly. That is the case that the FLA makes.
I am very happy for my noble friend to write, since this is a rather unexpected intervention. There is clearly a balance to be struck between ensuring that customers are able to return faulty goods and preventing potential abuse. I therefore ask my noble friend whether the department will clarify, in the accompanying guidance to the Bill and in any associated publicity, that this new short-term right to reject should be invoked only if the quality of the goods is genuinely unsatisfactory—that is, the defects are not simply minor mechanical or cosmetic ones—and ideally it should be done as soon as possible within the 30-day period.
Secondly, could my noble friend confirm how this new short-term right to reject fits with Section 75 of the Consumer Credit Act, which already allows the customer to make a claim against a supplier or lender for breach of contract? This Consumer Rights Bill gives the consumer a right to challenge the supplier, whereas Section 75 of the CCA establishes an additional right to pursue the creditor for breach by the supplier. Will the Government be making clear in the guidance that the customer must obtain recourse from the supplier first, and that the supplier must not renounce responsibility on the grounds of Section 75?
Baroness Jolly
My Lords, this amendment reflects a recommendation by the Law Commission in its 2009 report, Consumer Remedies for Faulty Goods. Many of the recommendations in that report are implemented in the goods chapter of the Bill. Indeed, a normal period of 30 days was recommended by the Law Commission as giving a reasonable opportunity for a consumer to inspect goods, as well as meeting the expectation of consumers. However, I am concerned that the amendment would undermine the benefits of certainty provided by the 30-day time limit for the short-term right to reject.
Here I am staying with the example of the pregnant lady buying a pram. Let us look at the example of a pregnant woman who buys baby equipment in preparation for the birth of her child. The amendment would allow her to exercise the short-term right to reject potentially months after purchasing the goods, should it transpire that they were faulty. On the face of it, that may seem fair, but I see many issues that could arise to make this impractical. If a friend who was not pregnant bought the same goods for the same unborn baby, it is not clear whether it would be reasonably foreseeable that there might be a delay before they were used. Should all baby-related goods be subject to a longer period for rejection because it is not unreasonable to think that they may be for a baby who has not yet been born? Or would this only be reasonably foreseeable if the consumer said something to indicate it, or had a sign, such as being pregnant?
If it was reasonably foreseeable that there may be a delay before the consumer would use the goods fully, it seems difficult to know what the reasonable period would be. Take the example of a consumer buying skis in the summer. What is the reasonable period for the consumer to be able to test them? A week into the European ski season, or a month? Not until the end of the season? How would the trader know when the consumer came to return the goods whether a delay was reasonably foreseeable when the consumer bought them? Would the trader have to keep a record of who bought what and any relevant circumstances, such as when they said they would start to use it? This would be extremely burdensome on businesses.
Baroness King of Bow
My Lords, I thank the Minister for her response but the key point here is that consumers, in some circumstances, will see a reduction in their rights under the current law. That is what would worry me, if I were one of the Ministers taking the Bill through. It is the Consumer Rights Bill, not a consumer rights reduction Bill. Notwithstanding the examples of pregnant women all over Britain, we want to see those rights upheld. The Minister spoke about the undue burdens on business. In theory, I could have some sympathy with what she was saying but in fact, as things stand, we do not see Britain awash with businesses in disarray as a result of the current law. Given that, it seems strange that we would reduce the rights that consumers currently have.
I thank the noble Lord, Lord Clement-Jones, for raising the issue of balance because that is the key issue here: the balance of rights for both businesses and consumers. So, lastly, we think that this is an important issue. Both sides seem to come back to the pregnant women conversation. On hearing of this debate, should any pregnant women with backache in the middle of the night be reading the Hansard of this Committee, they will no doubt hope that they do not have overdue babies but women who have premature babies may rejoice at the current passage of the Bill. I beg leave to withdraw the amendment but we may well return to it at a future date.
“(a) do so as soon as reasonably practicable and in any event within 14 days, unless the consumer expressly agrees otherwise;(aa) do so without significant inconvenience to the consumer; and”
Baroness Hayter of Kentish Town
Amendment 20, which stands in my name and that of my noble friend Lord Stevenson, aims to provide greater clarity on how long a repair should take and, therefore, how long a consumer must wait before they may be entitled to a refund or a price reduction. At Second Reading, the whole House was very supportive of the aim of the Bill to increase clarity. Under current law, and under the Bill, where a consumer asks for a faulty good to be repaired, the trader has to do so within a “reasonable time”. However, “reasonable” is not specified, which causes uncertainty for the consumer but probably for businesses as well.
We are very keen that the Government’s new remedies should work but they will do so only if customers feel confident about their rights, particularly about when they can exercise those rights. As we have just been discussing, elsewhere in the Bill there is a significant change that we welcome, where the 30 days replaces the reasonable period to reject. The Minister has just emphasised the clarity of that. Our concern is that in this area the word “reasonable” remains as regards how long it takes to complete a repair. Clearly, the range of goods covered goes from yo-yos to the double glazing referred to by the noble Lord, Lord Hodgson. It would apply to an enormous range of goods and therefore it is difficult to have a precise time for all repairs.
Amendment 20 therefore proposes a longstop, coupled with an obligation for traders to effect the repair sooner if possible. For most repairs, 14 days would be absolutely adequate, even if spare parts had to be sourced from overseas. But the amendment also would provide flexibility where the consumer could agree to a longer period where they are happy to do so. This may be in cases such as those raised by the Glass and Glazing Federation where on-site visits will have to take place before any repair could be ordered, let alone fitted. That flexibility obviously would be possible. For other goods, there is no reason why they should not be repaired in less than 14 days. In a Which? survey, more than half of the respondents said that traders should not have more than 14 days to effect a repair. After all, that would leave a customer without the goods for quite a long time.
The clarity that this amendment seeks is to empower consumers to exercise their rights. In other words, they will know that they can ask for a repair to be done in that time. We think that it will reduce unnecessary disputes as to what is reasonable because both sides will know what to expect. It will also deter poor practice. The problem that the consumer has is that, while they are awaiting a repair, they are caught: they do not have the good; they do not have the money, so they cannot replace it at another shop; and they cannot have it repaired by another trader because they would have to pay for it. At that time, they would be very vulnerable. We hope that this amendment will facilitate the clarity that the Government seek in this Bill. I beg to move.
Baroness Jolly
My Lords, first, I acknowledge that a minority of consumers may be frustrated by lengthy waiting times when they have asked for a repair or a replacement. We have found little evidence that the time taken for repairs is a common problem. The Consumer Engagement And Detriment Survey 2014 found that of those consumers who had experienced a problem with goods and services, only 5% had a problem with a failed or delayed repair and, of this group, delayed repair is likely to be a smaller problem.
BIS has considered a time limit with regard to repairs and replacements. There was a consultation in 2012 and we discussed the issue further with stakeholders, consumer organisations and traders. On the basis of that consultation and those discussions, we concluded that the best approach is a simple limit of one repair or replacement of goods that must be provided within a reasonable time and without significant inconvenience to the consumer. I am concerned that setting a longstop date for repairs or replacements lacks the necessary flexibility to deal with all types of goods in all circumstances. Attempting to apply such a broad rule would at the least be burdensome to some businesses, but may also lead to unwanted consequences.
The Bill provides flexibility because the time needed to carry out a repair will depend on the goods and the circumstances. In most cases of repairs there are a number of factors beyond the control of the trader, so a backstop period may impose a burden. If goods are faulty and the consumer wishes to reject them under the short-term right to reject, this is a simple process. The consumer need only notify the trader that they wish to do so. On the other hand, repair or replacement of goods is a more involved process which will vary according to the goods in question and the type of fault. The application of a specific time period for repair work cannot effectively take account of all the relevant factors that affect the trader’s ability to provide a repair or replacement.
Repairs are often not carried out by the trader themselves, so the goods may need to be transported to and from the repairer. Further time is added if parts need to be ordered. For complex goods, time-consuming processes of diagnosing the fault and testing the repair may also be needed. The amount of control that the trader has over those factors is proportionate to the size of the trader. Small businesses have relatively little or no control over their suppliers and so would bear a larger burden. The British Retail Consortium gave the following evidence when this issue was discussed in the other place. It said that for small and medium businesses, setting a deadline for repairs is,
“more difficult … because they cannot have control over third parties that are perhaps coming in to do the repair … If that was regulated, clearly that would be one-size-fits-all, and would, I fear, penalise small, medium-sized and micro-businesses”.—[Official Report, Commons, Consumer Rights Bill Committee, 11/2/14; col. 33.]
The amendment would enable the consumer to agree to an alternative timescale. While this goes some way to providing flexibility we do not believe that it does enough, for two reasons. First, it opens up the possibility of the consumer simply refusing to agree an alternative timescale where it is impossible for the trader to provide a repair or replacement within 14 days. This creates an opportunity for the consumer to circumvent the first-tier remedies altogether, to the cost of the trader. Secondly, the amendment suggests that the alternative timescale should be agreed in advance. In many cases it will only become clear in the course of carrying out the repair that a longer period is necessary. If a repair takes a long time, of course, the consumer may well suffer inconvenience from being without the goods. The Bill already allows the consumer to move to the second-tier remedy if that happens. That protects the consumer, while still allowing the flexibility needed for the rules to work for different goods and circumstances.
The second main concern we have about this amendment is the risk of unwanted consequences. I underline the fact that we believe that repair is a vital remedy; it provides the trader with the opportunity to put right what has gone wrong, while enabling the consumer to have the goods they wanted. If done properly, it meets the needs of the consumer while reducing the burden on the trader and is more environmentally friendly as it is less wasteful than rejection. We are therefore concerned about any amendment, such as this one, that could shift the balance and lead to more rejections over repairs.
Imposing a backstop date may lead to a reduction in the quality of repairs. The trader may feel pressured to do a “rush job” to get it back in time rather than having the time needed to get it right. If consumers begin to lose faith in repairs, this could lead to an increase in rejected goods, which would be wasteful and costly. This is not just limited to repairs. Flexibility is also needed where a trader is to provide a replacement, as the necessary time will depend on factors such as stock, their source, and whether the goods were bespoke. Bespoke goods are a good example of where the amendment could be problematic. Many bespoke goods will take longer than 14 days to make, in the case of a replacement, or to repair.
Creating a backstop 14-day period, and requiring the consumer’s agreement for a longer period, means that the consumer would always have an automatic right to veto the repair or replacement and move directly to rejection or money off for these types of goods. This would be hugely detrimental to the whole industry, which is especially concerning when you consider that many of the businesses offering bespoke goods are small, specialist traders that would be hit hard by these costs. I therefore ask the noble Baroness to withdraw the amendment.
Baroness Hayter of Kentish Town
I thank the Minister for that thoughtful reply. Maybe we should revert to day one of Committee, though: if the Minister is going to help micro-businesses, we should make them consumers under the Bill. However, we decided that on an earlier day. I want to put on record that we welcome the main point about having one repair before rejection; we do not in any way question that.
I have only one comment. Which?, representing consumers, is very much in favour of this, and although I said its research showed that half its respondents said that 14 days was the right limit, one in five of them actually said that it ought to be seven days. I did not use that figure before. It is interesting that that group of consumers want quick repairs whereas the Minister quoted the British Retail Consortium, which clearly represents a different interest, and to some extent this is a balance between the two. I thank her for her comments and beg leave to withdraw the amendment.
Lord Clement-Jones
(a) ”
Lord Clement-Jones
My Lords, I shall speak also to Amendment 20B. I am afraid that I am going to do exactly what the noble Baroness, Lady Hayter, did not want to do, which is to question the “one repair” point. I return to some of the concerns of the motor industry. The Society of Motor Manufacturers and Traders and the National Franchised Dealers Association have raised significant concerns over the wording of Clause 24 regarding “one repair” and the right to reject the product and demand a refund. These concerns are centred not on the principle of the right to repair or replacement itself but rather specifically on what “one repair” entails. This issue is of course particularly pertinent to the final right to reject in Clause 24.
At present the Bill does not specify what “one repair” would entail but the draft guidance states that one repair means a single attempt at repair and that the trader can offer further repairs and replacements, but only if the consumer agrees. Members of the motor industry and the trade seek clarity over the definition of “one repair”, and do not accept that the current status of the draft guidance provides a fair interpretation of what is really needed to give clarity. They point out that the notion of a single attempt at repair, as set out in the draft guidance, is problematic for highly complex consumer goods such as motor vehicles. They say that these complex products may show a fault that requires more than one repair, involving a series of visits to the garage so that the fault can be diagnosed and tested, and have causes ruled out. In addition, a repair may appear complete but the fault may reappear, as can be the case with electrical faults, and a second or subsequent repair may fix the problem. These issues are likely to become increasingly apparent as motor vehicles become even more technologically complex, as they have done over the past few years.
The amendment seeks to include a definition of “one repair” to permit a process of repair and provide traders and dealers with a fair opportunity to fix these complex goods. It is worth noting that the consumer will still be fully protected by the right to repair or replacement under the amendment, as the process of repair would still need to be completed within a reasonable time and without significant inconvenience to the consumer. I hope that at least meets the interest of my noble friend, as this is a matter of considerable concern. On the previous amendment to which I spoke while seeking further clarification on the guidance, I note that my noble friend answered the second point about the CCA but not the first: what clarification the guidance would give for minor defects. Perhaps my noble friend can write to me on that matter. In the mean time, I beg to move.
Baroness Hayter of Kentish Town
We think that the noble Lord has brought an interesting issue to the Committee; I do not know whether the Government find it such. However, we are unconvinced that this needs to be detailed in the Bill as suggested. The Bill simply states that repair means making the goods conform to the contract, which means making them deliver what was promised. I do not think that it says “at one go”. Obviously, we look forward to hearing what the Minister will say on that.
However, the Committee will not be surprised that our worry is that the danger of the new wording is to allow a trader to make more than one repair and then claim that it was simply different stages of the same job, whereas actually they may have tried this, that and then something else—and want another go if they did not do it at first. I recognise that that is not what the noble Lord, Lord Clement-Jones, is aiming at, but the wording might allow for that. It is exactly to avoid such situations where consumers are fobbed off by a number of unsuccessful repairs before they can move to the next stage that we like the clarity of the Bill and would not want it jeopardised by these amendments, no matter how well-intentioned they might be.
As we are into personal stories, such as my clothes, let us take my new car. Of course, it got a great big problem and I took it back to Nick but rather than opening the bonnet all he did was to put a computer on top of the car, which seemed to tell him what was wrong. I do not know how that worked but 55 minutes later it was completely mended. Cars, which I no longer understand even if I once did, may be more complex but one does not want to have to keep going back to the trader. We worry that the amendment would lose the clarity that there is in the Bill.
Lord Borwick (Con)
My Lords, Clauses 23 and 24 as they stand seem to state that a consumer can have their money back if one repair does not fix the problem. That is reasonable for a product such as a television but it may cause problems where the fault is less obvious. Some products are incredibly complex; just as complex as consumers.
While we are telling personal histories, from my time in the London taxi industry I know that the clause would cause huge problems for car repairs. We had a customer bring in a taxi for repairs to his rear axle. My mechanics could not find anything wrong with it, and they therefore stupidly said that they had mended any problem that existed. However, the customer brought the car back, insisting that he was hearing dreadful noises from the back of the car. It turned out that the customer had spanners stored in the boot of his taxi that were slipping around. He removed them to bring the car to the garage, which is why no fault could be found. He then put the items back into the boot and so began hearing strange noises again as things slipped around, so he brought the taxi back in. Would the clause as drafted mean that we would have had to refund him because we did not fix the problem the first time around? You can have two problems—one masking the other—and you may need a process, as suggested in the amendment, to resolve some problems.
Baroness Jolly
I thank my noble friend Lord Clement-Jones for his clear explanation of the purpose of these amendments, and other Peers who have added their thoughts. The amendments reflect concerns that the motor industry in particular has about a single repair or replacement. Officials have engaged with the industry on this throughout the Bill process—I do not think that spanners came into the conversation. If it will help to allay the noble Lord’s fears, my noble friend Lady Neville-Rolfe or I will be happy to meet with representatives of the motor industry to discuss their concerns.
I am concerned, however, that these amendments would undermine the clarity of the Bill and the consumer protection that it provides. When the Law Commission consulted in 2008 on clarifying when consumers can move to a second-tier remedy, it concluded that the best and simplest way to make the law on repairs and replacements an effective protection for consumers was to create a cut-off so that after one failed repair or replacement the consumer was entitled to a second-tier remedy. In 2012 BIS consulted again on this matter and reached the same conclusion.
In both consultations, evidence was given by Which? and Citizens Advice of consumers becoming trapped in a cycle of repairs or replacements that failed to fix the problem but where it was not clear whether the existing triggers for the second-tier remedies were met. In fact, one of the examples given was that of a car. The limit of one mandatory repair or replacement before the consumer is entitled to money back mitigates this risk. The consumer should never find themselves without a clear route to a satisfactory outcome for them.
These amendments would entirely undermine that certainty. For complex goods, they would allow a single repair to be extended indefinitely over a number of attempts. The intention in the Bill is that after a single repair attempt, the consumer is entitled to a second-tier remedy if the goods are still faulty. Under the amendments, while the consumer would not be trapped in a series of failed repairs, they could easily become trapped in one ongoing repair without an end in sight. Just to be clear, the effect on the consumer would be the same, and I am sure that noble Lords can see that.
The noble Baroness, Lady Hayter, talked about one repair and there have been some comments about what “one repair” means. The Bill is clear that a repair is an attempt to bring the goods into compliance with the Bill’s requirements. One repair is complete once the trader returns the goods to the consumer in response to the consumer’s request for a repair.
Of course, it is also important to remember that the Bill does not prevent the consumer from agreeing to further repairs. If goods do not conform to the contract after a single repair attempt and the consumer would prefer the trader to carry out a further repair rather than rejecting the goods, they are entitled to choose that.
I know that the motor industry has an excellent track record in providing good service to consumers, and that rejection is rarely resorted to by consumers because of the warranties supplied for motor vehicles and the repairs that they provide. There is no reason to believe that consumers will change this behaviour under the Bill; they already have the right to reject under the current legislation but choose not to do so in many cases.
If noble Lords consider the consumer’s position when a fault occurs with a vehicle, they will see that a repair, rather than rejection, is often in the consumer’s interest. It makes sense that consumers take time to choose expensive items. It also makes sense that it is not very appealing to give up on something that one has spent a lot of time and money considering and selecting. Presumably, the consumer has the car for practical reasons such as going to work, the school run, or doing the shopping. If the consumer rejects the vehicle, they will have the inconvenience of getting another one to carry out these normal day-to-day activities. However, the industry says that repairs are generally completed quickly, and where there could be a delay a courtesy car is often provided to mitigate any inconvenience to the consumer.
I believe that repair will remain a crucial remedy that consumers want so long as business, such as the motor industry, continues to provide effective, convenient repair. Crucially, the consumer is protected in the Bill in the worst-case scenario of a series of repairs failing to bring the vehicle up to standard. These amendments would remove that protection.
Where the faith of the consumer in the trader is eroded following a repair, the consumer should have the right to exit the contract or get some money back. They should not be trapped without further recourse. On the basis that the amendments undermine a key consumer protection that the Bill establishes, I must ask my noble friend to withdraw the amendment.
Lord Clement-Jones
My Lords, I thank my noble friend for her response, rather negative though it was. I suspect that to some degree we are victims of our own personal experiences in this respect. The noble Lord, Lord Borwick, whose support I am grateful for, has had some unfortunate experiences from a business point of view; on the other hand, the noble Baroness, Lady Hayter, looks at this through rose-tinted glasses, having had her car repaired in a trice. It therefore depends on where you stand on this. I do not accept the Minister’s point that the amendment would have the effect of extending the repair indefinitely or undermining, which was the word that she used, the whole edifice that has been established here—that is a rather an extreme view about this.
The Minister’s statement about what “one repair” constitutes may go further than the wording of the guidance, some of elements of which I found quite helpful. That may horrify her, but she may have gone further than guidance, in which case I would ask that the guidance is looked at in the light of what has been constructed as a response today. That would be helpful.
I suspect that the industry will continue to kick the tyres of these clauses, to coin a phrase. It is still concerned about them. It may be that some tweaking could be done without opening the door in the way that the Minister thinks we have done in these amendments. I think that there will be some further discussions and I welcome in particular her offer, and indeed on behalf of her noble friend Lady Neville-Rolfe as well, to continue those discussions with the industry, which after all is an extremely important sector for us. In the mean time, I beg leave to withdraw the amendment.
Baroness Hayter of Kentish Town
My Lords, we now move to a tricky and, from our point of view, rather serious amendment. The other amendments have been serious, but this is a significant amendment that we wish now to move. Amendment 21 stands in my name and that of my noble friend. I shall speak also to Amendment 22.
Clause 24 deals with the right of the consumer to receive a refund for faulty goods. It allows the seller to make a deduction from that refund to reflect the use that the consumer has had of the goods if it has been over some time. For example, if a sofa falls apart after a year—and, no, I do not have such a sofa—the seller can deduct a proportion of the price which reflects the use that has been made of it at that time. However, if the refund is sought within six months, there should be a full refund with no deduction for use.
However, the Bill creates an exception to that full refund within six months for items that it describes as having an “active second-hand market”. Our fear is that this could undermine the otherwise clear and final right to reject. Our amendment would remove that exception and retain the principle of a full refund in the first six months for all goods.
Our understanding of the background to the introduction of the “active second-hand market” let-out is that it addresses the particular issues of new cars, which it is estimated lose 40% of their value in their first year, about 10% in their first couple of yards as they are driven off the forecourt and up to 20% in the first 30 days. The argument is that a car dealer should not be required to provide a full refund in the first six months when, simply because of the way the car market works, the car has lost a significant amount of its value.
However, it seems to us that if the consumer, wanting a new car, has bought a faulty one, they should get a full refund. Otherwise they cannot replace what they thought they were buying—a new car—with another new car, because there will have been this deduction in value. They will not be put back in the position where they can buy a car and be the first registered owner, which is what makes it especially expensive to be the first owner of a car. The sums involved are quite considerable. I have it on good advice—since I have not bought a new car but, rather, have a newly bought car—that a new car could cost £35,000 but, if it was faulty, the dealer could reduce what they got back by £5,000. That leaves the consumer without a new car but with only £30,000 instead of £35,000 in their bank, and perhaps only 500 miles on the clock.
The other issue about the drafting of this clause is that it does not restrict the exemption from the deduction for use only to cars but covers every other sale of goods where the trader can demonstrate that there is an active second-hand market. The Government have argued that they have carefully drafted to cover only second-hand markets for sale “by traders to consumers”, to exclude the general eBay type of second-hand markets of individuals selling to individuals. There are a lot of other second-hand markets of traders to consumers, both online and on the high street, of furniture, second-hand clothing, vintage jewellery and—as I know better—bicycles, and so on, but if you buy a new one and that turns out to be faulty, you want the money back to buy another new product.
We are therefore worried that consumers will be denied a full refund for new furniture that collapses, clothing that is so damaged that you cannot even wear it, or broken jewellery, simply because there is an “active second-hand market” for these and the trader says, “I’ll deduct it for use because you had some use of it”, even if they could not wear it or carry it, or whatever the case may be. Another problem is that, as the clause currently stands, the seller determines how much should be deducted for use; it is not a negotiable price. That creates quite an escape clause for dodgy traders, who have the freedom to set that reduction-for-use amount without it being reviewable as an unfair term because it would count as priced.
The then Office of Fair Trading and the Law Commission have both opposed this exception. The OFT thought that the drafting on “trader to consumer” did not exclude eBay-type comparisons, as many traders operate on eBay. The Law Commission opposed the deduction for use for the first six months and has urged us in Parliament to consider removing it, citing how much ill-feeling was caused by such deductions. As it said:
“Consumers felt that where they had paid for new goods, they wanted new goods. If the first goods were faulty, they wanted to be able to start again, with enough money to buy other new goods, not second hand ones”.
Which? worries that the let-out,
“could leave consumers out of pocket”,
and,
“does not give consumers the certainty and protection they need”.
I understand that the Government have been focused on this let-out being for these very high-value goods, which lose their value very rapidly. The Minister in the other House said that the drafting had followed the recommendations of the BIS Select Committee. However, the Select Committee was critical of the drafting, pointing out that the lack of a definition of an “active second hand market” had been criticised in many submissions that it received. It also said that it would apply to most goods, which rather contradicts what the Government said about there “normally” being no deduction for use. The committee felt that the drafting would cover a lot of goods, and pointed again to the advice of the Law Commission that the deduction for use was “inflammatory” for consumers. According to the Select Committee, the Law Commission also said that it was rarely employed, so it may be an unnecessary complication.
The Select Committee concluded that,
“neither the policy … nor the drafting … on deduction for use is clear”.
It did not believe that the exemption from the six-month refund rule was workable, and recommended the deduction-for-use clause. It said that, should the provision be retained, the reference to a second-hand market comparison should be removed, with any deduction for use being based on the lifespan of the goods. In the case of the car I assume that this means that, if you had it for five months, the deduction would be based on five months’ use rather than on whether you could actually buy a five month-old car.
The clause may again be well intentioned and aimed at a particular problem with a particular product, but the catch-all is so wide now that it is probably misguided. It certainly seems unworkable, could be unfair and could undermine consumers’ rights on a much wider range of goods.
The British Vehicle Rental and Leasing Association supports our amendment. It pointed out that in certain industries, particularly electric cars, there has not yet been enough time to develop a second-hand market, which might make it less likely that people would buy a new type of car. They would know that if anything went wrong with it they might lose their rights and be less likely to get their money back, the second-hand market not being a deep one.
I urge the Government to rethink the clause. If it really is simply cars that they have in mind, it might be better to deal with them in a different way rather than risk a much wider range of goods being caught by this provision. I beg to move.
Baroness Jolly
I thank the noble Baroness for outlining the reasoning behind her amendments, and will look first at Amendment 21. The principle of deduction for use is fair. Where the consumer has enjoyed uninterrupted use of the goods, the consumer should be accountable for that use. For example, if a consumer has been driving a car around for three years of normal use and then a fault manifests, the trader should be able to reduce the refund to take account of those three years of unaffected use. Of course it is right that consumers should be able to exit the contract at that point, but it is unfair to require the trader to bear the costs of that use.
When the Government consulted on the issue, only a very small minority of respondents to BIS’s consultation favoured scrapping the deduction for use, and two-thirds of online respondents agreed that it was right to allow a deduction to be applied in some instances. However, it is frustrating for consumers to get a partial refund even though they have had little use of the goods. The irritation of having to deal with a fault often eclipses what little enjoyment the consumer may have had from the goods, so the Bill includes a new protection that prevents, in most cases, a deduction from being applied within the first six months. There is a limited exception to this rule and it is this exception that Amendment 21 would remove.
Baroness Hayter of Kentish Town
I thank the Minister for that. Unfortunately what she said—that this is aimed at complex and high-value goods, which I absolutely understand—is not stated in the Bill, so it will not just cover those goods. It will cover things where there is a make and model, but that does not necessarily make them complex or high-value. We can perhaps come on to whether or not it affects cars, but we have a real concern that this will go far further than complex and high-value goods: it may cover yachts, helicopters, jets, planes and cars, but it will include anything else where a make and model can be covered. We continue to have worries on that. This will therefore be something we will need to come back to, but for the moment I beg leave to withdraw the amendment.
Baroness Howe of Idlicote
“Right to redress
(1) Where the consumer does not believe that remedies offered adequately resolve the original problem, the consumer has a right to seek redress from an alternative dispute resolution scheme, as provided for in statute or as approved by the competent authority.
(2) The Secretary of State must appoint a single competent authority.
(3) For areas not covered by an approved or statutory alternative dispute resolution scheme, the Secretary of State must appoint a residual body to provide this service.
(4) The Secretary of State must ensure that consumers have a single point of contact to identify the relevant alternative dispute resolution scheme.”
Baroness Howe of Idlicote (CB)
My Lords, the Bill offers an excellent opportunity to simplify and improve the consumer rights and redress landscape across the UK. Much of the Bill is certainly to be welcomed, consolidating and simplifying the existing landscape surrounding consumer redress as it does. However, it is notable that reference to alternative dispute resolution —ADR—as provided by ombudsman schemes and strongly backed by Which?, is absent from the Bill.
ADR provides benefits to both customers and businesses. For consumers, it offers free, fast and effective redress when things go wrong. For businesses, it provides a cost-effective way of improving the trust in and performance of their organisation. However, the current landscape surrounding ADR is complex and confused. ADR is available in some sectors but not others. In some sectors, ADR schemes cover only part of the market; in others, multiple ombudsman schemes exist. This patchwork of provision means that consumers face a complicated and confusing landscape and are often unaware of what support is available to them. I believe that my amendment would help to improve the situation.
In keeping with the ethos of the Bill, the amendment would simplify the ADR landscape and, importantly, strengthen access to redress for consumers across all sectors. Importantly, too, the new clause would formally set out the existing rights to redress that consumers have and ensure that all ADR schemes are consistent in standards and quality of services, improving the support and protection available to consumers. It would also ensure that the Bill complements work currently being undertaken as part of the transposition of the EU directive on ADR. The directive, to be transposed by spring 2015, requires businesses across all sectors to offer redress via an ADR scheme, either as a specific scheme or as part of a wider residual scheme. Lastly, and equally importantly, it would provide for a single point of contact for consumers, who could then be directed to the relevant ADR scheme depending on the nature of their problem.
The amendment would materially benefit consumers across all sectors by formally establishing the right to redress through ADR, paving the way for wider coverage of ADR schemes and achieving simplification in the system. I beg to move, and would welcome the views of the Government and others on the amendment.
Baroness Drake (Lab)
I support the noble Baroness, Lady Howe, on Amendment 23. At the moment, in so many areas of retail, the primary route to a remedy if there is a dispute is to go to the courts, but going to a court is far too daunting and complicated for many people. The paperwork may well put them off. The court fees may act as a disincentive, especially if the goods purchased are modest in monetary value. Even if a consumer wishes to begin by going to the small claims court, if a case is considered complex by the judge, it may be transferred to the normal county court list, which would definitely deter and daunt most people.
I realise that mediation has been introduced in small claims cases, but the psychological impact of going to court—its legalistic aura, the language of the courts and dealing with the necessary paperwork—can all still be off-putting and a deterrent. The behavioural response of consumers to alternative dispute resolution and the courts is very different. The court system is not really fit for purpose for many ordinary consumers, certainly in respect of smaller consumer rights claims. As the noble Baroness put it so compellingly, alternative dispute resolution is essential, otherwise consumers will have their rights enshrined in a new Bill but many will be deterred from exercising them. Consumer inertia in pursuing rights and securing remedies will remain strong—an assumption, unfortunately, that some traders build into their responses and their market behaviour.
Consumer rights and access to an effective means of enforcing them need to be inseparable. You can give consumers all the rights in the world, but if they are deterred from exercising them because the process is off-putting, complicated, disparate or whatever, as was clearly set out by the noble Baroness, their rights will not be effective and the market will remain dysfunctional in part.
The Bill has several clauses that relate to redress, but it does not lock into an alternative dispute resolution scheme. It seems extraordinary that a Bill so focused on securing and improving the position of consumer rights does not seize the opportunity to lock into ADR. I know that the Government are consulting on the details of such a scheme in the light of the EU directive, but that in itself is not a reason for missing the opportunity to use the Bill to place a duty on the Secretary of State to implement such an alternative dispute resolution scheme. As the noble Baroness pointed out, a key purpose of the Bill is to consolidate, simplify and strengthen consumer law.
The Government agree—it was confirmed by the Minister, Jenny Willott—that if we are to have a consumer rights system that works, ombudsmen and alternative dispute resolution will be critical parts of it. Having conceded that fundamental analysis and intellectual point, we have this big omission in the Bill. Although the Government are working on implementing the EU directive and looking at the different options, the amendment does not inhibit or undermine that detailed work. It does not prescribe exactly how the directive will be implemented; rather, it makes clear in the Bill that the right to redress for consumers must include access to an effective, independent alternative dispute resolution regime and that the duty is on the Secretary of State to ensure that that happens. The amendment would not prejudice the outcome of the consultation on the implementation of the ADR directive but would clearly place the duty on the Secretary of State. Having followed the debate on this in the Commons, it would appear that the only argument mobilised by the Government is that somehow it would prejudice the outcome of consultation. I do not think that it does, because it enshrines a fundamental principle which the Government concede is essential to an effective system of consumer rights. The detail of implementing that principle can be left to the outcome of consultation and subsequent regulation.
Baroness Crawley (Lab)
My Lords, I, too, support the amendment in the name of the noble Baroness, Lady Howe of Idlicote, and, in doing so, refer noble Lords to my consumer interests in the register.
As we know, the alternative dispute resolution directive requires the existence of simple, efficient, fast and low-cost ways of resolving domestic and cross-border consumer complaints—without the need to go to court, as my noble friend Lady Drake just said. It also assists business, as the noble Baroness said. ADR should have expertise; it should be independent; it should be impartial. The process should be transparent, effective, fair and legal. Member states are required, as the noble Baroness, Lady Howe, said, to identify competent authorities to ensure that ADR entities are competent to deliver the directive’s requirements. That process is ongoing.
The important point to keep in front of us today is the need to keep the environment as simple and as accessible as possible for the consumer. Although there is a need for sectoral expertise in transposing the directive, it is also important to have a low number of brands involved and a common front end or entry point, as both noble Baronesses have referred to, for the consumer to access a resolution to their complaint, be it a low-level complaint or a highly complex one.
The amendment in the name of the noble Baroness, Lady Howe, backed as it is by respected consumer bodies, will give consumers the confidence of legislative heft when it comes to this important new aspect of justice for consumers, which has attached to it a date of spring 2015.
Accepting the noble Baroness’s amendment is not gold-plating in any way; it is ensuring that the Government’s implementation of the ADR directive is a feasible process in the first place. I hope that he ramendment is given the serious consideration that it deserves.
Baroness Hayter of Kentish Town
My Lords, as has been clearly stated, the proposed new clause addresses what my noble friend Lady Drake says is the extraordinary absence from the Bill of any mention of the EU directive on ADR, the absence of any right to go to independent redress, and indeed the absence of any reference to what has just been mentioned—the competent authority to be set up to approve such schemes according to the EU directive.
The amendment would also add a very welcome missing element from the directive: the right for a consumer to have their complaint heard by such an alternative dispute scheme. Without such a scheme, we wonder what will happen to consumers when they cannot agree on the remedies set out in the Bill. Elsewhere, the Government have said, “They should go to Citizens Advice”, which I hope will be well funded to do all this. However, even if they do so, Citizens Advice cannot adjudicate; nor can it enforce any remedy. As has been said, the only alternative then is for the consumer to go to court for damages, and the reality is that that will not happen. At the moment, legal and financial clients, social housing tenants and patients can all go to an ombudsman; there are statutory ombudsmen for all those. The Government are in due course going to implement the directive, so they agree with us that consumers should have access to ombudsmen across the whole market.
The BIS Select Committee asked the Government why on earth the EU directive had not been included in the Bill. Which? regretted that it was omitted, and the OFT, as it was at the time, asked for the incorporation of the directive into the Bill. Two really quite good things are happening. I know that I am not allowed to say that the Government are doing good things—but they are with the Bill. Some people would not like me to say that the EU was doing good things, but I am happy to say that it is with its directive. So we have two good initiatives coming along, but would you know it? They are being handled in different ways with different legislative processes and on different timing.
It is not as if this is a difficult issue. The British Retail Consortium and the Federation of Small Businesses welcome the alternative dispute approach to dealing with problems, rather than going to court. As Martin Lewis commented when he was giving oral evidence to the Public Bill Committee, unless the Bill and the directive are joined up,
“you are going to have a wonderful Bill that gives people many new rights”—
he went further than I would about the Bill—
“that they are never going to be able to use”,—[Official Report, Commons, Consumer Rights Bill Committee, 11/2/14; col. 55.]
because they will be without redress. The Government have assured us that the new directive will be implemented by spring. However, we still await their response to the submissions that BIS got to its consultation, which I think finished five months ago. The clock may be slow in this Room today, but it is ticking. We may have no chance to debate BIS’s response to the consultation because it may not be dealt with in primary legislation, which also seems a shame.
Most importantly, the two items are two sides of the same coin, so we hope very much that the noble Baroness the Minister will accept the amendment today. Whether or not the exact words please her we understand, but if she could accept that there should be reference to and embedding of the ADR in the Bill, that would be to the credit of the Government. We will then try to seek credit for it, but we will give it to the noble Baroness, Lady Howe, instead. It would be a wise Government who did this and took the full credit for it.
Baroness Oppenheim-Barnes (Con)
Could I just highlight one of the main points? The noble Baroness mentioned the AER. One of the directives that she has mentioned as dealing with the way in which payday loan information is given by the providers is that it is still given in the old form, with the AER only, with no written amount. The noble Baroness might recall that we had an amendment to the Financial Services Act, during which we were told that the Government at that time—this is some time ago—were busily discussing that directive and would be wanting to implement it as soon as possible. It seems to me that the request from the EU about AER was a very small, perfectly justified and overdue one, and it is particularly disappointing if the Bill becomes law before that amendment has been made by the Government.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
My Lords, I thank the noble Baroness, Lady Howe, for raising this very important issue. Her interest and expertise in consumer problems was demonstrated at Second Reading, which I missed, so it is very good to have her engaged on this important subject. The noble Baroness, Lady Drake, also rightly underlined the value and importance of ADR and of ombudsmen and ombudswomen.
I want to make it clear that the Government are very supportive of alternative dispute resolution, which provides a more accessible route than the courts for consumers to obtain redress. Accessibility was a point well made and emphasised by the noble Baroness, Lady Crawley, and, as the noble Baroness, Lady Howe, said, it is also good for business. The noble Baroness, Lady Hayter, described the advantage of wider ADR and talked—rightly, I think—of the benefits of both this Bill and the ADR directive, so I thank her for that.
Before I address the specific amendment, I shall take a moment to reflect on what the Bill seeks to achieve. The Consumer Rights Bill sets out a simple and modern framework of consumer rights and, where appropriate, enhances measures to protect consumers. Clearer rights and remedies mean that both consumers and businesses will be better equipped to resolve any issues at an early stage. Having said that, we recognise that there will be occasions when problems arise that cannot be so easily resolved between the parties. In these instances, access to alternative dispute resolution can prove invaluable.
I am glad to say that the Government will be strengthening the framework for alternative dispute resolution when it implements the European directive on ADR in July 2015, to which I think all the noble Baronesses referred. Currently there are well established mandatory ADR schemes in sectors with a high risk of consumer detriment. It is worth remembering that. One example is financial services, and I was interested to read that the largest ADR provider in Europe is the UK’s financial ombudsman, and that last year it resolved 500,000 cases. Another example is energy, but in other sectors access to ADR is limited. The directive requires us to address these gaps and ensure that ADR is widely available.
We recently undertook a consultation exercise, which has been referred to, on the best way to implement the ADR directive. Stakeholders were asked for their views on the issues covered in this amendment, and we addressed several other issues in our consultation. We proposed that the compulsory use of ADR should continue to be targeted at sectors where consumers most need it. We said that our preferred option was not to gold-plate the directive by introducing a blanket compulsory requirement for all businesses to use ADR; that would come at significant cost to businesses, which pay for the provision of ADR through a mixture of annual fees and case fees. However, we expect the directive’s requirement for businesses to inform consumers with complaints about ADR and to encourage much greater participation in ADR schemes. We will very shortly be publishing our consultation response document, which will outline the Government’s proposals for implementing the ADR directive and improving and simplifying access to redress for consumers, a point raised by the noble Baroness, Lady Crawley.
Baroness Hayter of Kentish Town
Can the noble Baroness tell us when the consultation will be published?
Baroness Neville-Rolfe
All I can say is that the consultation will be published shortly. I confirmed that the implementation date for the directive is 2015. The noble Baroness anticipates what I was going to say at the end, which I will say now. I assure your Lordships that our implementation plans for the Bill, which we discussed on Monday, will also advise businesses of their forthcoming responsibilities under the ADR regulations. Similarly, information to consumers will be available in one place—to meet the point that we will be joined up.
If I may elaborate, our response will explain how we intend to make ADR widely available and accessible for consumer disputes and our plans for competent authorities to monitor the provision of ADR. I hope that noble Lords will understand that I cannot set out the full detail of the Government’s response before publication. We consulted on whether a consumer complaint helpdesk would be useful to help consumers and business to access ADR, which was a point made by the noble Baroness, Lady Drake.
We will publish our intentions in our consultation response document. Once we have published our response, we will work with partner bodies to prepare for implementation. We will then publish draft regulations to transpose the ADR directive by spring 2015.
I would not want to affect the ongoing work to implement the ADR directive in regulations by amending the Bill. The noble Baroness, Lady Howe, said that her amendments would achieve consistency and simplification. However, the ADR directive contains many provisions, several of which are linked. That is why we feel that it is far better and more straightforward for businesses to implement the ADR directive in one package. Our consultation response document will set out our plans for doing so. We certainly want to avoid any unhelpful confusion that could be caused by implementing the directive partly through the Bill and partly through regulation.
The noble Baroness, Lady Drake, raised an important point about the need for the implementation of the ADR directive to complement consumer rights. I am glad to say that the changes that we will make to implement the ADR directive will complement the reforms in the Bill and improve access to and awareness of the ADR. We want to take the same comprehensive approach to ensure that we deliver the best possible ADR framework. Our plans for implementation allow us to do so. I therefore ask the noble Baroness to withdraw her amendment.
Baroness Oppenheim-Barnes
Before my noble friend sits down, can she tell the Committee what AER stands for?
Baroness Neville-Rolfe
ADR stands for alternative dispute resolution. I thank the noble Baroness for her intervention, which I did not think called for comment but I am happy to discuss it with her on another occasion.
Baroness Howe of Idlicote
My Lords, first, I thank the Minister for putting so explicitly the Government’s position of where they intend to be going with ADR—now we all know what the initials stand for. She has raised a lot of expectations and some hope. We are all concerned to ensure that it is kept on the agenda. We would not want it to be as slow as she has in mind. It is clear that those of us who feel similarly will need to table another amendment, which may be rather different, at Report to see how things are progressing.
Once again, I thank all my colleagues for so kindly joining in to support the amendment from their professional background, and I beg leave to withdraw the amendment.
“Product safety and recall
(1) The General Product Safety Regulations 2005 (SI 2005/1803) are amended as specified in the following subsections.
(2) In regulation 9 (obligations of producers and distributors), after paragraph (3)(d) insert—
“(e) a summary of what the producer or distributor suspects, or has reasonable grounds to suspect, is the number of consumers affected and the type of personal injuries and property damage which the risk associated to the product has caused”.(3) In regulation 32 (reports), after paragraph (5), insert—
“(6) Before completing any report under this regulation, the Secretary of State shall consult the enforcement authorities, such bodies representative of producers and distributors, such bodies representative of consumers and such other persons as he thinks fit.”
(4) In regulation 33(3) (duty to notify Secretary of State and Commission)—
(a) after “specifying the reason for taking it” insert “, and shall publish such measure, and the reasons for taking it, on his department’s website”,(b) after “of any modification or lifting of such a measure” insert “and shall publish any such modification or lifting immediately on his department’s website”.(5) In regulation 33(5)—
(a) after “the Secretary of State shall immediately” insert “publish such measure or action on his department’s website and”,(b) after “of any modification or withdrawal of any such measure or action” insert “and shall publish any such modification or withdrawal immediately on his department’s website”.(6) In regulation 39 (information)—
(a) in paragraph (1), for “shall in general make available to the public such information as is available to it on the following matters relating to the risks to consumer health and safety posed by a product” substitute “which has received a notification under regulation 9(1) shall immediately publish on its website in respect of the product”.(b) after paragraph (1)(b), insert—“(c) a summary of the number of people reasonably suspected of being affected, and the type of personal injuries and property damage reasonably suspected of being caused by the risk”. (c) in paragraph (1), for “and the measures taken” substitute “and the measures or action taken, whether on a compulsory or voluntary basis,”.”
Baroness Hayter of Kentish Town
My Lords, Amendment 24, which stands in my name and that of my noble friend Lord Stevenson, addresses a very serious and sometimes fatal weakness in consumer protection for electricity safety: when there is a generic and dangerous fault in a particular model of electrical goods. There is no adequate mechanism whereby other owners of the same make and model are notified of the need to stop using it and exchange it.
The amendment therefore requires manufacturers to inform enforcement agencies of the number of consumers affected, and of the extent and type of damage and injuries that have been caused. It also requires the Secretary of State to publish information on dangerous products and to consult consumer groups when publishing their five-yearly report on consumer protection regulations.
This is an issue of great sadness, because it is very much about deaths and injuries. There are probably 40 or 45 deaths a year in domestic fires that have been caused by faulty appliances. Although there is a system for manufacturers to recall faulty products, it is very flawed because of the difficulties of alerting customers who have unwittingly bought such faulty products. It has also been undermined by unjustifiable delays on the part of some manufacturers in recalling products, even once they know them to be unsafe. Such cases relate to potentially fatal faults, such as risks of fire, electrocution or carbon monoxide poisoning.
It has been estimated that there are up to 2 million unsafe products in people’s homes. Manufacturers currently have no obligation to declare how many of those dangerous appliances are in circulation. Once manufacturers become aware of faults in their goods there is no specific timeframe in which they have to take action. In several instances, manufacturers have taken years to take action after a fatal accident caused by one of their appliances. Current BIS guidelines say that a recall is expected,
“as soon as the manufacturer becomes aware of a problem”.
That is not specific—more than that, it is not mandatory.
The Government do not feel that this should be mandatory; they want to continue with the voluntary approach. In the Commons, the Minister said that most—I emphasise, most—businesses take their customers’ safety seriously. I do not think that is good enough: “most industries” is not “all industries”. We have to safeguard consumers not from the good businesses but from those which do not take safety seriously.
Electrical Safety First detailed a particularly sad case of a preventable death that happened because of failures in the recall system—I am sure other noble Lords have received the same information. Mr Santosh Benjamin-Muthiah, a 36 year-old father of two, died in 2010 because of a fire in his home caused by a recalled fridge-freezer. The manufacturer had been aware of a fault with the defrost timer on that defective fridge-freezer three years before 2010, but did not issue a safety notice until 2011, by which time as many as half a million had been sold. In 2013—two years after the recall had started—the manufacturer estimated that, although 190,000 had been repaired and 186,000 were scrapped, about 114,000 were still unidentified and still in someone’s home. The coroner at the quite recent inquest on Mr Benjamin will, I think, have written to the Chief Coroner rather than to the Government. However, he has written through his official channels calling for the creation of a simple, easy-to-use and government-funded all-national website where all products can be registered and accessed by consumers and retailers. He also called for increasing fines for manufacturers who fail to notify and for the creation of a code of practice on product recalls. The Chief Fire Officers Association has also called for manufacturers to take legal responsibility for eradicating risks caused by faulty appliances. Peter Dartford of the Chief Fire Officers Association has said:
“The reality is that it is the manufacturers who have created these risks and it is their moral and legal responsibility to ensure that these risks are eradicated from homes”.
Our amendment would strengthen consumer protection in line with the coroner’s recommendation and the fire officers’ views. Perhaps even more importantly, our amendment is in line with the views of the families, who have been quite needlessly bereaved of their loved ones. I beg to move.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I support this amendment and I thank the noble Baroness, Lady Hayter, for her example of Mr Benjamin, as it saves me the trouble of giving that same very tragic example. It seems not unreasonable for the trader to record the consumer’s details at the point of sale and return the guarantee card to the manufacturer. This would seem a more efficient way of dealing with it than the present, somewhat haphazard system of leaving it to the consumer to fill in and return the guarantee—a document which is often at the bottom of the packaging and sometimes overlooked. If such a system were in existence, it would be much simpler to compile a register of consumers and contact them individually when and if a product recall is necessary. This would ensure that all those affected by product recalls were aware, rather than some being left in the dark about the risks they run by continuing to use the product.
Consumers, once they are aware of a product recall, are generally assiduous in returning their products to the relevant trader for repair or replacement. This is particularly important, as we have heard, where the product has an electrical fault which could lead to damaging and life-threatening domestic fires. The fire service, as we also heard, is able to produce quite frightening statistics on domestic fires caused by electrical faults, some of which tragically involve death. It is really important that we do all we can to protect consumers from this fate and I am pleased to support this amendment.
Baroness Neville-Rolfe
My Lords, there is already robust legislation on product safety that is based in large part on an EU-wide regime. I have listened to the debate and I would like to address the general, because I think the amendment is a general one, and then look at the electrical issues that have been raised.
The General Product Safety Regulations 2005 place strict duties on producers and distributors to ensure that only safe products are supplied. Importantly, these duties are backed by criminal penalties. However, there will unfortunately be occasions when things go wrong and a product needs to be recalled. I very much share the concerns of the noble Baroness, Lady Hayter, about accidents, especially fatal accidents. We need to learn all the time from such experiences. When a recall is necessary, producers and distributors are legally obliged to notify and collaborate with trading standards to ensure that all reasonable measures are taken so that unsafe products are swiftly removed from the market and the risks to consumers are addressed.
Baroness Crawley
The Minister has reiterated a number of times the role of trading standards in crucial product recalls. However, does she agree that the serious cuts to the trading standards departments across the country and throughout local government over the last number of years have impaired the effectiveness that she talks about?
Baroness Neville-Rolfe
My Lords, I am grateful to the noble Baroness for giving me the opportunity to say what a good job I think trading standards do in many of those very difficult cases, having worked with them for many years. It is true that many government services have suffered from cuts as a result of the need to get the economy back on track and deal with the deficit problems that we inherited.
As noble Lords know, spending and resourcing decisions about local trading standards are made by the individual local authorities. They, rather than central government, are best placed to make decisions about the enforcement needs of their local communities. However, I have talked to them about how you can focus and get local authorities to focus on the real areas of importance, and they are trying to do that in often deeply difficult circumstances. BIS greatly values their work protecting consumers from everything from rogue traders to scammers and so on. That is one of the reasons why we have set up the National Trading Standards Board and work with the Local Government Association on trying to improve enforcement in local authority areas in important areas. Of course, product safety and risk of death always come very high on their agenda.
Baroness Hayter of Kentish Town
My Lords, I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, for her support for this amendment.
The Minister’s response will be deeply disappointing to the fire officers and Electrical Safety First, who worked on this and who have earned this amendment. They are the stakeholders who are referred to, and they do not feel that what the Government are doing is enough, which is why they have called for this amendment. The Minister said that the legislation is robust, but it is not working. We are having a death a week because of faulty appliances, so that is not working. I do not ask for the information now, but it would be helpful if she could write and say how many prosecutions there were in the last five years of companies for not having reported and taken necessary action.
However, my noble friend Lady Crawley raised an extraordinarily important point. It is also a surprise to find that this Government are saying that on this issue they want the public sector—that is, trading standards—to deal with it, rather than the people who done wrong—the manufacturers—who acted unwittingly to begin with, but who made a faulty product that is leading to carbon monoxide poisoning, electrocution, or death by fire. It is interesting that the Minister wants not to absolve them of that but to say that the major responsibility is to tell trading standards—that is, the public sector—which will do something about it. Other things that come from the Government are all about the public sector doing less and all of us, whether it is the big society or manufacturers, doing more. Therefore I am surprised but also disappointed that the Minister does not want to put more of an obligation on to the manufacturers who have made these fire traps. However, she will understand from what I am saying that we feel very strongly about this, and we will come back to it. It certainly does not seem to be good consumer protection when once a week somebody dies when they do not have to. However, for the moment I beg leave to withdraw the amendment.
“Secondary ticketing platforms: ticket information
(1) Where a ticket is sold through a secondary ticketing platform—
(a) the seller must provide all relevant information about the ticket, and(b) the secondary ticketing platform must publish all the information about a ticket provided by the seller in a prominent and clear way.(2) Information to be requested by the secondary ticketing platform and provided by the seller for the purposes of subsection (1) should include, but is not limited to—
(a) the name of the seller of the ticket;(b) the face value of the ticket;(c) any age or other restrictions on the user of the ticket; and(d) the designated block and row and the seat or ticket number, where applicable. (3) Where tickets are being resold in contravention of the terms and conditions agreed to by the original purchaser, this must be stated prominently by the secondary ticketing platform at every stage of the purchasing process.
(4) Information provided by virtue of this section must be—
(a) accurate; and(b) prominently displayed before a buyer is able to complete their purchase.”
Lord Stevenson of Balmacara
I shall speak also to Amendments 26 to 31, which I am glad have been grouped, because they deal variously with one or two aspects relating to ticketing, and I think that there is a great deal to be taken from the fact that an all-party alliance is putting forward the various points. I hope that the Government are in listening mode, at least on these matters.
What is a ticket? That is definitely not a rhetorical question. We have a real problem about what we understand by the word “ticket”. What does purchasing a ticket confer on the purchaser in terms of rights and responsibilities? I would be very grateful if the Minister, when she replies, would spend some time explaining what the Government think a ticket is, because I would be illuminated by that.
There are two strands of thought. The promoters of many of our larger sporting and entertainment events feel that a ticket is an intangible right to attend an event or performance, a personal licence for the person who bought the ticket—and, presumably, those for whom he or she has bought the ticket—to attend a specific event, occupying a designated seat. That is not what is believed by the secondary ticket companies, who take the view that a ticket is real property and, once bought, is available to the original purchaser to sell and resell to any third party willing to pay a market price for it.
The problem is that there is no real accommodation between those two approaches. On the one hand, the promoters of events feel that tickets which have not been released are being advertised and sold, which means that the seller cannot guarantee that they will ever be able to honour that transaction. Tickets are being sold at prices well above their face value and the purchasers have no idea that that has taken place. Fans can end up buying tickets which do not guarantee them entry even to the event to which they think that they have bought a ticket, because there may be terms and conditions for the sale that have not been disclosed to them, which prevent them being transferred. I was at an event last weekend where I had a ticket issued by a reputable national theatre company which said clearly on its face that it was not valid if sold at a premium price. Of course, I knew that, because I could read it; but others may not have spotted that. In general, the view taken by many promoters is that consumers are being priced out, mis-sold or even defrauded when tickets are resold on the secondary market.
Two principles underlie that. The first is that promoters should make tickets available to people at affordable prices and that that should be protected; but also that consumers should be provided with more information about what they are buying when purchasing tickets through secondary outlets.
The secondary ticket market takes the view that people should have the right to buy surplus or unwanted tickets, and argues that by providing a platform for buyers and sellers, it offers an excellent service. In many cases, that is true. It also thinks that the traditional model means that only a very small number of tickets are made available, with the balance being sold at premium prices to sponsors and corporate hospitality organisations.
It is fair to say that this issue has a long history, with both this Government and the previous one trying to respond to public pressure, which is clearly pulling in two directions. On the one hand, people want access to tickets when they go on sale, but they are also against thousands of tickets being bought by people seeking to make a profit rather than attending the event. Equally—people will say this within a few seconds—they feel that they ought to be able to buy tickets if they decide, perhaps late in the day, that they would like to see the event after all and get very annoyed if they find that there are no tickets available or the price is extraordinary.
Recent technological changes have had an effect on this. We often find computerised botnets—as I think they are called—hoovering up tickets on sale online. What chance have ordinary punters to get tickets in the first place? Most people will either have been or will know of people who were trying desperately to buy tickets for the Olympic Games when they first went on sale, and spent many hours on the phone waiting for someone to respond or online waiting for something to respond. Sometimes you won; sometimes you did not. Obviously, with very popular events there will be a problem however you do it, but computerisation is both an advantage and a disadvantage.
We are beginning to worry about money-laundering and criminal gangs active in this area. If that is the case, where should the public interest now lie?
There is already a huge amount of legislation. I will not go through it in detail but there is the Civic Government (Scotland) Act, the Criminal Justice and Public Order Act and the London Olympic Games and Paralympic Games Act, and in addition to specific legislation on touting there are legal remedies under existing criminal law relating to theft, deception, obstruction or threatening behaviour. In addition to primary legislation, there is a substantial amount of secondary legislation coming through from the Consumer Protection from Unfair Trading Regulations 2008 and the Price Indications (Resale of Tickets) Regulations 1994, some of which have a direct impact on the way in which people are going to be treated if they are caught transacting secondary sales.
Lord Clement-Jones
My Lords, I shall speak to Amendments 29 to 31. Although I think that I am singing very much from the same hymn sheet as the noble Lord, Lord Stevenson—I apologise if I go over some of the same ground because, as was the case in the Commons, these amendments are in parallel to those of the Labour Front Bench—these amendments follow directly from the conclusions and recommendations of the recent excellent report by the All-Party Group on Ticket Abuse. I happen to be a member of that group but, since I was not able to take part in the inquiry, I cannot claim any credit for it.
The amendments are not an attempt to shackle an important and growing service for consumers or to ban the resale of tickets. While accepting that there is a role for a legitimate secondary ticket market, the all-party group found considerable problems with how this market, which is estimated to be worth about £1 billion a year, works at present.
In particular, it does not adhere to the same principles of transparency and consumer protection to which other markets are held. With internet ticket selling becoming more streamlined, touts are able to use sophisticated computer systems to buy large volumes of tickets automatically, mere seconds or minutes after they are available online. That can often mean that it is practically impossible for genuine fans to access the event, forcing them to rely on an artificially created secondary market and depriving content creators of revenue for their event.
As the noble Lord, Lord Stevenson, mentioned, the Met Police published a comprehensive report on fraudulent ticketing and the dangers it posed to the Olympics. It specifically cited ticket fraud, touting and ticket reselling websites as areas of concern. The report stressed the need for an open and transparent system for ticket reselling, with clear and appropriate regulations. The new clauses address those shortcomings and would increase consumer confidence in the secondary market.
The first two new clauses address the lack of transparency, which the noble Lord, Lord Stevenson, emphasised. Amendment 28 is about who is selling the ticket. It would place a duty on secondary ticketing platforms to provide basic identifying information about the individual or business offering a particular ticket or set of tickets for sale. It would allow consumers to say how prolific and reliable a particular seller was; that would make the secondary ticketing platforms much more transparent. Importantly, it would also require secondary ticketing platforms to be transparent in cases where the seller was also the event holder. The practice of events organisers secretly allocating whole blocks of tickets directly to the secondary market has been on the rise. It was the subject of the Channel 4 “Dispatches” programme broadcast in 2012, entitled “The Great Ticket Scandal”. There is also a dishonest practice whereby a secondary ticketing platform, or rather its employees or shareholders, buy and sell tickets themselves, as the “Dispatches” programme also exposed.
Amendment 29 relates to the transparency of the ticket itself. I was very interested in the introduction of the noble Lord, Lord Stevenson, when he talked about the ticket itself; in many cases, knowing the characteristics of a ticket would make a material difference to a buying decision, particularly in the case of seated events, in which a person’s position in the venue can make a significant difference to their enjoyment of the performance or experience. Providing that information would also give consumers the confidence that the individual or company selling the ticket actually had tickets in hand and was not just speculating that it would be able to provide them at a later date. Making sure that consumers are made aware of the original price of the ticket that they are buying at the earliest opportunity gives them another piece of the information that they need to make an informed choice about whether to enter into such a purchase. Any genuine fans who need to sell on their tickets should not have a problem providing the basic information about the product that they are selling; nor should any professional reseller. The secondary ticketing platforms which claim to have higher standards should therefore have no problem adapting to the new provisions.
Amendment 30 concerns the recourse available to consumers. There have been numerous reports of event-goers being turned away with counterfeit or invalid tickets that they have bought via the big four secondary ticketing websites, all of which heavily promote their reliability and guarantee that their tickets are genuine. Of course those websites offer refunds, but people who come to venues with unusable tickets have all incurred at least some travel cost getting there. In some cases, they have come from abroad for the express purpose of using the ticket. For such people, a full refund on the ticket, while welcome, will still leave them out of pocket. The new clause would therefore allow those consumers to claim back the extra cost associated with attending an event, up to a reasonable level.
In practice, some resellers already offer reimbursement of travel costs. The new clause would place primary responsibility for that initial payback on the secondary ticketing platforms because they offer guarantees which, they say, consumers pay for in their significant service charges. However, having paid out that money, the new clause makes clear that the secondary ticketing platform may recover it from the seller of the ticket. The only individuals or businesses that the new clause would hurt, therefore, are those who have sold fake or invalid tickets and consequently caused financial loss to the consumer. The new clause would have the positive benefit of giving consumers the confidence that they would not be left out of pocket when they purchased tickets through the secondary market.
Baroness Heyhoe Flint (Con)
My Lords, I wish to speak specifically to Amendment 28, which, as my noble friend Lord Clement-Jones has so eloquently put, is inextricably linked to Amendments 26, 27, 29 and 31. I am pleased to have the opportunity to return to the subject I raised at Second Reading. I am delighted that, in doing so, I am joined by colleagues from all sides, made up of many distinguished people—all finely tuned athletes, of course—who have been campaigning for many years to promote the interests of British sport.
The support for Amendment 28 demonstrates the need for specific action to protect the interests of sports fans when they purchase tickets to sporting events. I apologise if I am repeating what has also been stated so clearly by the noble Lord, Lord Stevenson, but just because we call them fans does not mean we should forget that they are consumers. I identify to the House that I am on the Board of the England and Wales Cricket Board, which is one of many sporting organisations that have expressed support for these amendments, such as the RFU, Wimbledon and the Ryder Cup, to name but three global event presentation organisations.
I thank the Minister for taking the time recently to meet with sports delegations on this issue. I shall reflect on that meeting in my comments and touch on the examples she requested. She asked for more feedback and we too would like more feedback.
First, I will address whether, as was suggested to us, the amendment would place too many restrictions into the market place and act as a burden on the buyer and the seller. I cannot see how the amendment can place any unnecessary burdens on the ticket buyer. It is in their interests to be told the face-value price of the ticket they are buying; its location in terms of block, row and seat number, so that they understand where they will be sitting; and, most crucially of all, whether that ticket is rendered invalid if it is transferred. These facts are material to making an informed decision about whether to purchase the ticket.
As for the seller, I do not see that having to provide this information is a restrictive burden. All the major sites that sell tickets already have online forms that people have to fill in with their ticket details. It will take just a few seconds more to add this additional information. Indeed, I tested it myself. I think it takes about 20 seconds to provide this information, which is nothing in the context of having to log in and enter other information. Alternatively, in this modern age people have the option of taking a picture of the ticket with their phone and uploading it, but I have not currently conquered that art of IT communication.
The Government already require information to be provided through the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 —I almost ran out of breath there. That is a very minor step, due to the lack of information and transparency to the buyer. My first question to the Minister is whether she accepts that the amendment places very little burden on the seller and that it is merely an extension to the existing regulations her department introduced this summer. I am sure that the Minister will respond to this short debate by referring to those regulations. They are of course welcome and a step in the right direction. Indeed, they show me that the amendment is in line with the Government’s existing policy approach. However, these regulations, as has already been pointed out, have certain flaws. The main one is that they apply only to sellers who are defined as “traders” and do not apply to consumers selling to other consumers, as happens so often and is the business model for secondary ticket sites.
Let me give an example. Last year one of our major venues, Durham County Cricket Club, managed to uncover the activities of Nicholas Hubscher—this in the public domain—a British Airways pilot who was found to be,
“touting on an industrial scale”,
as a sideline from his main occupation. I have a six-page selection of the cuttings and e-mail reports officially identifying the 800 tickets that Hubscher touted, with a face value of between £50 and £100, during the tests at the Oval, Old Trafford and Durham. These tickets were partially sold for hugely inflated prices on third-party ticketing websites such as Viagogo and Seatwave. The tickets were obtained not though sophisticated software but through using multiple credit cards and names. The England and Wales Cricket Board, in conjunction with the venues, successfully brought a civil action against him in the High Court but it was a stroke of luck that they found him. It had nothing to do with the regulatory regime that the Government have in place. Yet in this case, despite selling hundreds of tickets, Hubscher would not be caught under the existing regulations as he would not come under the definition of a trader.
Even when the sales are placed on secondary sites deliberately to make a profit—which is surely acting as a trader in any other sense—it circumvents the regulations that the Minister says will assist us. Can she therefore confirm that, at present, the application of the regulations only to traders allows for organised touts and others to evade the new regulations?
I am sad to tell the Committee that so many people are doing this. Just yesterday, I went online again to research the issue. On the Viagogo sites, I found scores of tickets for the opening Ashes match at the SWALEC stadium in Cardiff next July—tickets, incidentally, which were only recently put on sale. Those tickets have not even been sent to purchasers yet. Perhaps I may cite an e-mail sent to the England and Wales Cricket Board from a frustrated and angry consumer:
“Dear Sir/Madam, I have tried and been unsuccessful in obtaining three tickets for day three of next year’s test match at Edgbaston in the Ashes. Just by looking online for tickets, I have come across this advert”—
this relates to an eBay advert. The consumer went on:
“Can you please explain to me how these companies get all these tickets and sell them at extortionate prices when genuine fans cannot get them?”
In one instance, four tickets are listed at hugely inflated prices but nowhere does the post tell me the face value of the tickets. Nor does it tell me the exact seating location or whether Glamorgan County Cricket Club, which is the host of the event, is permitting that ticket to be transferred. This advert—there are many more like it on this and other sites—demonstrates the flaws in the existing regulations. Will the Minister look at these ads on sites such as Seatwave, Get Me In! and Viagogo? Perhaps she has already, because I know that my noble friend the Minister is a keen cricket fan. Can she confirm that they are currently in breach of existing regulations and that consumers are not getting the protection we would all wish to see?
I have also seen example after example from Wimbledon of consumers from around the world purchasing tickets at inflated prices and not receiving what was advertised. There are examples referring to debenture tickets which were bought in good faith yet were not debenture tickets, which classify which rather exclusive zone you sit in at Wimbledon. There are complaints from members of the ticket fraternity or the supporters and fans of Wimbledon from the USA about tickets which they did not receive or with which they were refused entry. There were tickets that were not even for the original place that they had booked and paid for. There were also tickets that had previously been stolen from another source. There are these fears in the background, which have alarmed all the people who have spoken so far.
This amendment will make it a specific requirement that the fan buying the ticket must be told what the terms and conditions of the transfer of that seat to them are. Many sporting events do not allow seats to be transferred above face value or without prior approval. As the noble Lord, Lord Clement-Jones, pointed out, we are talking about a £1 billion worldwide “business”. I hope that the Minister will review carefully the case for this amendment, work with those Peers and sporting organisations who have called for change and consider whether this amendment or a revised version of it is the right approach, ahead of Report and Third Reading in this House.
Lord Pendry (Lab)
My Lords, I will talk to this clutch of amendments, but specifically to Amendments 26 and 27.
Protecting sports fans from ticket touts and being ripped off when buying tickets for leading sporting events is an issue that I and others have been working on for over 20 years. At that time the focus was of course mainly on disorder issues in football, which were highlighted by Lord Justice Taylor and his report after the tragic events at Hillsborough stadium in 1989. Way back in 1994 I led from the Labour Benches in the other place a campaign to have the then Government extend the provisions they were introducing to ban ticket touting at football events to other sports, in the Criminal Justice and Public Order Act 1994. We were partly successful in that we obtained reserve powers to be added to that Bill to allow a Home Secretary to designate other sporting events. The amendment to that Bill was added in this place—just to show that we often have greater wisdom here than in the other place—but sadly, the measure has not yet been used, by successive Governments.
Back then I was working with the noble Lord, Lord Moynihan, on this issue, and here we are today still battling away to protect sport and its fans. I hope that today we will be successful, as the amendments before us have the support of the Opposition Front Benches and eminent Peers with a long-standing interest in sport, including the noble Baronesses, Lady Heyhoe Flint—as we have just heard—Lady Grey-Thompson, and others. They know well the issues that arise from certain individuals and companies who try to rip off genuine sports fans.
Of course, the Government acted to ban ticket touting at the London Olympics—at the behest of the IOC—and clearly the noble Lord, Lord Moynihan, must have had a major say in that decision. It is a great shame that we did not learn from that experience. Everyone agrees that one of the joys of the Olympics was the ambiance and general good will of the Games. That was aided by the fact that the approach to sporting venues was not inundated with shady touts doing their business and adding the air of menace they often bring. Instead, we had smiling volunteers and a general ambiance as real fans entered the various venues.
We also saw the wonderful atmosphere that it generated at the sporting events, as the legislation restricted the secondary market and helped more fans to get tickets. What a shame that we did not learn directly from that experience and create a positive legacy for all sporting events. I know that we often hear about the legacy benefits that the Games created, but in that area we certainly have yet to learn from that past experience. Today, we have an opportunity to make a difference. The amendments before us would not criminalise ticket touting. That is a debate for another day, although I hope it comes pretty soon. Instead, we can today provide more protection for fans who buy tickets and introduce more transparency into the arrangements. As others have said, it is an extension of measures that the Government already have and, for that reason, I am hoping that the Minister will accept the amendment.
The proposed new clause builds on existing government regulations by making requirements of certain ticket details that must be provided. To my mind, this is sensible. It will enable a sports fan to know the exact location of the seat that they are purchasing, its original cost and whether or not it is in the terms and conditions for that ticket to be transferred. This is important, as we know that fans are often grossly overcharged for tickets with no awareness that this is happening. In the most serious cases, the fan may not even get into the event they have bought the ticket for. If it is against those terms and conditions for the ticket to be resold, they find it invalid.
Will the Minister address this particular question when she replies? Can she explain why it is not in the interests of the consumer for them to be made aware whether it is within the terms and conditions of a ticket for that ticket to be transferred? Clearly, the basic principle is that to sell something that does not actually exist is wrong. This proposal would place no extra burden on consumers. For the seller, it would probably add seconds for the information that they have to provide when listing a ticket for sale—or if they have the technical ability, which I certainly do not, to take a snap of it on their smartphone and upload that picture to the online sales process.
Finally, as we have heard from the noble Lord, Lord Stevenson, the amendments have the support of sporting organisations including the British Horseracing Board, the England and Wales Cricket Board, the Rugby Football Union and Wimbledon tennis. All of them have contacted me—and others, I am sure—to say how it would help them to meet their objectives of protecting their sporting events for the many and not the few. I urge the Minister to accept the amendments before her. In future all sports fans could have greater protection to see their favourite sporting events not being marred by the unscrupulous, who currently are content to see genuine sporting fans being ripped off.
Lord Borwick
My Lords, very few secondary markets are perfect but they are certainly welcome in that they provide liquidity to the primary market. These amendments on secondary ticketing platforms would get in the way of the primary market. When somebody buys a ticket for an event, they are investing in something that is often way into the future. Tickets for big shows are often released a year in advance or more, so buying tickets to such events strikes me as a rather entrepreneurial activity. It is risk-taking: you cannot know whether you will enjoy the show or event and there are no reviews to read or critics to listen to. Yet if you decide that you cannot go to the event or change your mind, it is a good thing that there are proper secondary platforms developing to sell those tickets. These amendments would mean that people would think twice about that risk of buying tickets in the first place. They would be distortionary.
The noble Lord, Lord Stevenson, mentioned botnets. I think they were also mentioned by the noble Lord, Lord Clement-Jones, with whom I entirely agreed on his earlier amendment. I am afraid that I disagree with him now because surely there are very good pieces of software that can stop the purchasing where computers buy automatically. Those aggravating things where you have to fill in a distorted word to prove that you are human can stop the botnets.
The noble Baroness, Lady Heyhoe Flint, talked about her aggravation that somebody was paying £4,000 for a ticket to a cricket match. I am aggravated that that £4,000 is not going to the cricket club but rather to somebody else. If somebody is prepared to pay £4,000 for a ticket to a cricket match, why is the cricket club not charging that figure? That money would then go to the sport rather than to somebody else. Of course, the real problem is the ticket touts outside railway stations or on street corners who are selling outright fake tickets or perhaps their electronic equivalents. Selling electronic tickets or trading on the street without a licence is illegal; there is already legislation to deal with this problem. The secondary platforms are already ensuring that resold tickets are valid. They usually insist that the face value of the original ticket is stated during the transaction. The market is providing solutions. We do not need new legislation and new burdens. In any case, these amendments would hit the good guys instead of the bad guys.
Lord Moynihan (Con)
My Lords, I shall speak to Amendments 28 to 31, standing in the name of my noble friends Lady Heyhoe Flint and Lord Clement-Jones. I see significant merits in Amendments 26 and 27, which I would support had we not tabled our own amendments to effectively the same objective.
In the spirit of the noble Lord, Lord Stevenson, and my noble friend Lady Heyhoe Flint, I begin with the question: what is a consumer? In the context of the amendments before us, the answer is a sports fan.
It is a rare occasion for the title of a Bill fully and concisely to reflect its intentions. On this occasion, the Consumer Rights Bill achieves that objective: it is a Bill about consumers and it rightly seeks to protect and, where appropriate, strengthen consumer rights. It is a Bill that addresses inadequacies in consumer protection and derives its strength from addressing malpractice against consumers, who can be exploited by loopholes in the law or interpretations of it which, without legal backing, can lead to the exploitation of consumer interests for commercial gain. It is therefore important in the context of these amendments to recognise that, in every sense, consumers are sports fans.
The amendments should be seen as a constructive step towards protecting the interests of fans. As my noble friend has said, they would make it a specific requirement that a fan buying a ticket must be informed of the terms and conditions of the transfer of the seat to them.
This was a key issue for us when hosting the Olympic Games. The subject of ticketing gained prominence for two reasons. The first was a decision made by the International Olympic Committee not to provide a ticketing platform, a platform that incrementally built on the experience of previous Games. The IOC Games department took the view that each host city should start from scratch and that the role of the IOC in this context would be purely advisory. I made my view very clear at the time: that ticketing each and every event at an Olympic and Paralympic Games, while taking into account the myriad contractual requirements of the IOC and the Olympic family for free tickets, required a platform built on experience and expertise that should be refined and improved by each host city, not one that is reinvented every four years. A pattern will emerge of the demand by the world’s athletes for free tickets, greatest—not surprisingly—after they have completed their events. I believe that, had that been in place, we would not have faced at the beginning of the Games the issue of empty seats in areas allocated for the Olympic family.
The second reason emanated from the legal framework for the Games and is directly relevant to these amendments. The Olympic legislation was introduced by this Government specifically to protect fans who sought to buy tickets for the Olympic and Paralympic Games. The Government were initially nervous about addressing this issue at the time. Historically, they had consistently taken a position that the resolution of any problems through voluntary action by the market participants was strongly to be preferred; that new regulation would be considered only as a last resort, even for the Olympics, and only where there was clear evidence that it was in the public interest; and that new regulation and the associated cost of enforcement were likely to impose greater burdens and restrictions of consumer choice as compared to market-led solutions.
However, the Government, along with the police, the fans and the organisers of the Olympic Games, collectively took a very different view after the Olympic Games were over and they had time to reflect on the effectiveness or otherwise of the legislation that had been put in place. In that context, I say to my noble friend in sport, the noble Lord, Lord Pendry, that I believe the Government learnt a lesson that I hope they will not go back on as a result of the experience that was derived from those Games.
Lord Addington (LD)
My Lords, I was debating whether or not I should speak but, having been told that I am expected to, I think that I probably have to. I should declare a couple of interests. Probably the most important one is that I am a lifelong rugby player. Even now at this advancing age I still occasionally don a jersey and wander around the pitch—I would say “run” but wandering is a bit closer to it now.
One of the first points made by the noble Lord, Lord Stevenson, was that if you are generating income from these major events, at least some of it—as much of it as possible—should go to the grass roots, and many of the events that we are talking about do that.
Then there was the other major point about the fact that by touting in this way you are devaluing the event for the fan, the people who often actually make it a special event. To talk about Rugby Union, and I thank the RFU for once or twice giving me tickets, I would say that makes those games so special is the fans, so you are actually damaging your base if you allow these things to happen. These people do not go to an “event”; they are going to watch a sport and give some enthusiasm. That will be helped by this amendment; you will help to build it up and layer it through. Please pay attention to this.
The Government have been given—what shall we say?—a very moderate set of proposals. Any one of these amendments, or any combination of them, could probably achieve a great deal to make the situation slightly better. That is all we are asking for—to try to make it slightly better and preserve what is important. That is about all that we can hope for. As my noble friend Lord Moynihan has pointed out, we have tried and succeeded with a more draconian system for an event that was at the top of sporting demand, the Olympics, so surely having something here that at least gave greater certainty could not hurt.
Lord Stoneham of Droxford (LD)
My Lords, I am somewhat reluctant to go slightly against the tide in the face of noble Lords who I greatly admire in the sporting world speaking here today. I have great sympathy with what my noble friends Lord Clement-Jones and Lord Moynihan, the noble Lord, Lord Hendry, and my noble friend Lady Heyhoe Flint said about the war on ticket touts; I support that, and I support the values in it. However, we have to ask a number of specific questions about these amendments and what this legislation can actually do.
Most authorised resale ticket sites give guarantees on the validity of tickets or provide a value back if the tickets are not valid. One of the issues is how we get people to use those sites more. We do not want to upset anyone to move away from them, which would be into the hands of people who are fraudulent and are trying to break the system.
The other thing that is very important is that the public want the opportunity to resell and buy in the secondary market. This is particularly important when tickets are being sold a year ahead of the event. Another problem is that often the tickets are not issued until six weeks or so before the event, so some of the information that might be required in the resale market might not be available.
There is already considerable legislation against fraud and against competition and there are issues of restraint of trade, all of which need to be taken into account. We also have to ask ourselves why this primary legislation is being asked to make specific requirements in one sector. Should it be doing that? Should we not have more embracing legislation that deals with this issue? All the recognised operators have an interest in preventing fraud; that is what actually protects their brand, as any fraud inevitably undermines their genuine business.
There is an issue with sellers providing information, particularly individual consumers. I am not sure that I want my name going on a ticket that I might have had if it has gone through a recognised secondary provider—in fact, I certainly would not want that. So the guarantee is the key, as is establishing that the tickets are valid.
Baroness Neville-Rolfe
My Lords, we have heard a range of detailed and informed comments during this debate and I thank all noble Lords for their contributions, to which I have listened very carefully; it was good to have a variety of points made, and I am grateful to all noble Lords who have spoken. I am also grateful to the various sports, music and ticketing businesses that have spent time briefing me and the Government on these issues. In fact I should probably declare an interest as a big sports fan and a mother of cricketers.
Given the breadth of this issue and the different angles that people are coming from, I will divide my response into the two main types of sales in this market: sales from a trader to a consumer, and sales between consumers. I will then touch on the issue in Amendment 30 concerning refunds and compensation.
Before I do that, I shall briefly address the philosophical question posed by the noble Lord, Lord Stevenson, of whether a ticket—because it is either a goods item or an intangible legal right—is even capable of being sold on or transferred. The answer is that it is possible for a ticket to be defined either way. However, I am advised that this is ultimately a matter for judicial consideration, so it is not appropriate to attempt a determination in this Bill, or indeed for the Government to state publicly how we think a court would or should determine that question.
I turn to Amendments 26, 28 and 29 on business-to-consumer sales. I reassure the Committee that when traders sell to consumers there are already rules in place to ensure that consumers are aware who they are buying from and what they are buying. My noble friend Lord Clement-Jones said that the market was not subject to the same rules on transparency as other sectors, but this is simply not the case. The ticketing market is subject to consumer laws, including information requirements, to the same extent as any other retail sector.
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, to which my noble friend Lady Heyhoe Flint referred, set out clearly in list form what information must be provided. For distance and online sales, such as ticket sales, that includes the price, the identity of the trader, contact details for the trader and the main characteristics of the ticket. In fact, there are no fewer than 24 information requirements on that list covering all the information that the consumer needs to make an informed decision.
In guidance on the regulations, we have included a specific paragraph on how the information requirements apply to tickets. I can quote directly from the guidance to reassure your Lordships that much of the information listed in the amendment is already required. The guidance states:
“Information on the main characteristics of the tickets and their total price (including delivery costs and other charges) must be given to the consumer in a clear and comprehensible way before the consumer purchases the ticket … For a ticket associated with a particular reserved seat (e.g. Seat 1, Row A) the seat number is a main characteristic”.
The regulations build on existing consumer law. The Consumer Protection from Unfair Trading Regulations 2008 protect consumers from being misled into a purchase by a trader.
The noble Lord, Lord Clement-Jones, asked about the October regulations. They are the Consumer Protection (Amendment) Regulations 2014; is that right?
Lord Clement-Jones
I did, but before my noble friend moves on to that, I quoted from the guidance and pointed out that, effectively, this is voluntary. The guidance states:
“Main characteristics include (if known to you)”.
I directly quoted from the regulations, as well. My noble friend has cited other parts of the guidance, but that is the crucial part.
Baroness Neville-Rolfe
I thank the noble Lord for that clarification. Perhaps I can continue to address the trader side. Where a consumer is sold a ticket that is claimed to be on the front row, for example, which turns out to be on the back row, that would breach the 2008 regulations. Advertising for sale a ticket that a trader is not in a position to sell because the ticket is either not available through the primary outlet yet or because the trader is awaiting the outcome of a ballot would also be a breach of the regulations, as well as a potential Fraud Act offence. Criminal penalties reinforce the legislation. A trader or a marketplace can be subject to a fine or even imprisonment if these regulations are breached. In conclusion, we believe that there is already sufficient law in place to ensure that consumers have all the information they need about what they are buying before they buy from a trader.
The noble Lord, Lord Stevenson, asked about botnets. A range of offences is available to law enforcement to tackle the fraudulent sale of tickets and the criminal harvesting of tickets from online ticket sales. The Computer Misuse Act 1990 sets out the framework of offences associated with interfering with a computer, including the criminal use of tools or articles to commit a computer misuse offence, such as a botnet. It was good to hear from my noble friend Lord Borwick that he believes that we are on the way to solving the botnet problem.
The noble Lord, Lord Stevenson, also asserted that there is evidence of large-scale criminal activity. We disagree. Europe Economics found that 90% of sales are by consumers such as you or me. There is already a strong framework to deal with criminality, such as fraud and money-laundering laws, which the noble Lord mentioned, that might take place in a market. Additional legislation for ticket marketing would not address such criminal activity. Obviously it is important to work with the police and other enforcement authorities, and we will review the data that the noble Lord asked for to see what up-to-date data we have. I will write to him on that point.
My noble friend Lady Heyhoe Flint said, “Will the Minister look at the websites?”. I will, but the enforcement of the law is for the CMA and trading standards. We have done some research. These sites already require key information to be given. All these sites have money-back guarantees. Most ticket transactions pass without problem—it is over 90%—so I think progress has been made there.
My noble friend Lord Moynihan gave us a very interesting summary of his experience with the Olympics—that wonderful summer which we all enjoyed in the brilliant sunshine, and the success of the Games. Indeed, as he described, it was very successful in terms of ticket sales, although of course there were some gaps in the audience, which was a sadness for consumers who would have liked to have been sitting in those seats. A ticket resale regime was a condition for hosting the Olympic Games. We brought that in and said at the time that such cases have to be considered on a case-by-case basis. I do not think that my noble friend was suggesting that this should be extended widely but he was asking us to consider that issue.
My noble friend Lord Moynihan also asserted that other countries had found a good way to regulate ticket sales. Our finding is that the evidence is mixed. New South Wales has a draft Fair Trading Amendment (Ticket Reselling) Bill restricting ticket resales, and we do not yet know its impact. As we understand it, these new restrictions are not the same as those in one of the amendments under discussion today. We have also seen press reports arguing that Queensland’s anti-scalping laws, as I think they call them, have had little effect. However, obviously we will keep those under review.
I have tried to talk about traders. I should now like to turn to the subject of Amendments 26, 28 and 29, which is consumer-to-consumer sales. We want consumers to be active and empowered in the market as buyers and sellers. It is a fact of life that sometimes consumers have a ticket that they cannot use. At this time of year I might buy tickets for my husband, a son and myself for a classical concert in the Royal Parks next summer. If my husband is taken ill six months later and cannot attend, I need to resell the ticket. That means that I can get my money back and it gives other consumers the chance to attend the sold-out event. We see no need to restrict this. Consumers should be able to freely and easily resell in this way tickets that they cannot use; my noble friend Lord Borwick made this point very well. The OFT has said that secondary agents can,
“provide a useful function for consumers who need tickets for events and are willing and able to pay premium prices”.
My noble friend Lady Heyhoe Flint asked about the impact of her amendment and how to build on the 2013 regulations. I shall try to answer. We know that over 70% of consumers think that they should be able to resell their tickets. Not only is it the right thing to do to allow this market to operate, but that statistic also indicates that if we restricted the legitimate resale market, consumers would find other ways to sell on the black or grey markets. We also know that consumers care about protecting their data and identity online. The Communications Consumer Panel reports that nearly two-thirds of social network users said that they had a high level of concern about the use of information from profiles by companies. In that same survey, the largest top-of-mind concern related to the safety of personal details or ID theft, with just over one-quarter of internet users spontaneously mentioning it.
Most consumers would not be comfortable having their contact details prominently displayed on a website. I am not sure I would like that—but I am sure I am not the only one who already receives too much junk mail. Consumers want to sell online and to protect their personal data. The current regulatory system allows that, while protecting consumers when they buy from traders.
Lord Clement-Jones
Before the noble Lord, Lord Stevenson, responds, I want to make just a couple of comments. I, of course, also will read Hansard carefully. I am somewhat disappointed because I am not sure that the voices in the debate have been heard clearly. I feel that somewhat of the straw man or Aunt Sally is being erected here as if the proponents of these amendments are trying to restrict the secondary market and prevent resale. My noble friend Lord Stoneham talked about restraint of trade. I thought that that was quite extraordinary and that we were almost in the realms of the EU or something. That is not the intention; nor is it the intention to drive people away from the event organisers to the secondary market. I do not believe that that would be the impact of what we are talking about here; that is, to get the benefit of a guarantee delivered by a secondary market in the possible event that a ticket is invalid or fraudulent. Surely, when you buy it from the event organiser, you know that it jolly well is not fraudulent or invalid. I am not really sure about that argument.
I could say many other things. As to the whole notion of the secondary market being entrepreneurial, if you know that a major sporting event is coming down the track, I do not know how entrepreneurial you have to be to reckon that a ticket for the World Cup is worth money and will be worth a great deal more money the nearer the time. I am sure that the noble Lord, Lord Borwick, is a great friend of entrepreneurs but there is entrepreneurialism and entrepreneurialism, in my view, in all of this. I think that a little bit of a splendid smokescreen is being erected around this issue. However, I take it from what my noble friend has said that there is an issue about the information given about an ordinary seller who is an ordinary consumer who has bought a ticket and wants to resell it, and the whole of their history is revealed for all to see on the secondary market. That is a perfectly valid objection and it may be a bridge too far. But there are many other aspects of these amendments which are extremely important.
My noble friend prayed in aid the regulations. The fact is that they are there but they are not adequate. I am grateful to the noble Lord, Lord Moynihan, for using the word “forensic”. If you look at the impact of these consumer regulations, you see that they are not sufficient to drive good behaviour, which is all that we are talking about in these circumstances. The main four resellers in the secondary market may well do what they can. They do not always publicise exactly what the tickets relate to. There may be merit in considering some sort of regulation where consumers do not have to pay for their tickets until the identity is known. It may be that you need a condition precedent: for example, having made the reservation, the consumer perhaps should not have to pay until the seat number can be stated. It is perfectly possible to think of a situation where that would be a valid way of behaving.
I will chew over what my noble friend has said but we have quite a bit more discussion to take place. Clearly, she recognises the strength of feeling in Committee. I think that this is a matter that we will take further during the course of the Bill.
Lord Stevenson of Balmacara
My Lords, I share the disappointment that the noble Lord, Lord Clement-Jones, expressed at the response to the debate. It was a very high-quality debate with some very important and influential speakers with track records and experience. It is not so much that their points were rebutted—that is what Governments do—but to have them rebutted in such an inventive way seems to me to trivialise what is an important point. We need to think very hard about what the next steps in this should be. For example, the Government do not seem to have a view on my genuine question of what a ticket is, yet they are regulating out of their ears—or that is what they say they are doing. To do so on the basis of not knowing what the central point is seems to be specious in the extreme. If they do not know what a ticket is, is it any wonder that the regulations do not do the trick?
It is absolutely clear from what has been said today and from the evidence that we have received that the current regulatory structure is a bit of a joke. It does not do what it is required to do: to make an efficient market for those who are trying to sell tickets for events they are running and for those who wish to attend them in a genuine capacity. It is not catching all the activity that is going through. The Government say that it is designed for traders, but somehow consumers are in a different category. I do not think that distinction stands up in what we are doing.
The guidance that has been issued has been tried and tested already and is clearly failing. It does not work. We need to do something about that. Under the regulations that have been in force since June 2014, I have been told by several sports bodies that no tickets that they can find on sale have the seat numbers or seller details provided. Are we to believe that no tickets at all are being sold by these traders? I do not think so.
Also, what exactly is a trader? During her response the Minister seemed to imply that there would be a case for arguing that people who bought tickets in excess of their personal demand could be treated as traders. If that is the situation, why do we not say that in regulatory form so that it is clear? It is currently up to the seller to define whether they are a trader or a consumer. In the example given by the noble Baroness, Lady Heyhoe Flint, the BA pilot who was caught selling several hundred Ashes tickets would definitely have been a trader by any definition yet was not prosecuted in that way. This is largely about consumer protection. Consumers are not going to be concerned about whether their ticket is coming from a trader or a consumer. They should have the right to know what they are buying. That is the basis of all the consumer discussions we have had on the Bill so far. It seems odd to carve this out in a different way.
I take the view that, if the Government are not going to outlaw secondary ticketing—I do not think they should—they must regulate properly for what they want: the desirable things, the things that will help the sports and help consumers. That will help to create a proper and open arrangement that is not susceptible to criminal activity of the type that we heard about from the noble Lord, Lord Moynihan, but which seemed to be rebutted by the Minister when she responded. The noble Lord, Lord Moynihan, said that there were about 1,000 people involved in criminal activity from known facts as a result of the Government’s investigations into the Olympic and Paralympic Games. What exactly is she saying if she says that some economists say that there is not any criminal activity because it was consumers who were buying the tickets? Of course it was consumers who were buying them, but if they were arriving through some form of criminal gang activity, that is not a very satisfactory situation.
As was made very clear in the debates, the amendments taken together give a range of options for the Government to look at. That is a rich opportunity for the Government to come back with something sensible at later stages in the Bill. We are not saying that there is a particular solution to this; there is a range of things that the Government could do. We are tending not to be draconian. We are not insisting on banning secondary ticketing; we are trying to say that there is a gap here in expectation. The genuine fan, the keen person who wishes to go to an activity but cannot access tickets at the beginning of the process and has to pay over the odds for them, is not well served by the information requirements. This simply is not working well. It could be changed through very minor regulatory change. It should be in the Bill because it is clear that the secondary legislation is not working. I really cannot understand why the Government are happy to be accused of standing by while consumers are being exploited.
We will undoubtedly return to this. I hope that between now and when this matter comes back on Report there may be an opportunity to have a further, more in-depth discussion with the Minister where we might get further down the line on this. In the interim, I beg leave to withdraw my amendment.
Baroness Neville-Rolfe
My Lords, this may be a convenient moment for the Committee to adjourn.
The Deputy Chairman of Committees (Baroness Pitkeathley) (Lab)
The Committee stands adjourned.
House of Lords
(9 years, 6 months ago)
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Introduction: Lord Farmer
(9 years, 6 months ago)
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Health: Ebola
(9 years, 6 months ago)
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Lord Giddens
To ask Her Majesty’s Government what is their assessment of the progress of international efforts to contain the spread of the Ebola virus.
Baroness Northover (LD)
My Lords, the UK is playing a leading role in response to the Ebola outbreak in west Africa, having already committed £125 million to it. We are also mobilising our Armed Forces in the effort to defeat the disease, but the scale of the outbreak is unprecedented, and more needs to be done. We are very actively encouraging other countries to join the international response.
Lord Giddens (Lab)
I thank the Minister for that response. I put down this Starred Question a month ago. Since that time, the situation with Ebola in west Africa has deteriorated markedly to become a tragedy of horrible proportions whose tipping point could become a catastrophe. That catastrophe could have global implications far beyond those we have seen so far. As Anthony Banbury, the head of the UN Mission for Ebola, said yesterday, major changes and major transformational policy on a global level are necessary by 1 December,
“or we face an entirely unprecedented situation”.
How is it possible to make these changes in such a short period of time? There are only six weeks in which we have to get a radical uplift in global policy.
Baroness Northover
The noble Lord is absolutely right; he was absolutely right to put down this Question. The situation has indeed got a lot worse since he did so. If this does not make the case for aid in terms of our own self-interest, as well as a moral case, I do not know what does. The epidemic is moving rapidly ahead of us in west Africa, as he points out, and he talks about a tipping point. The United Kingdom is leading a major effort to tackle the disease in Sierra Leone; the United States is doing that in Liberia and Guinea, and France is doing that in Guinea. However, a lot more needs to be done internationally and the UN is absolutely right about the need for unprecedented global action. The noble Lord is right about that.
Lord Alton of Liverpool (CB)
My Lords, has the Minister seen the comments of the director-general of the World Health Organisation, Dr Margaret Chan? She said that this is,
“unquestionably the most severe acute public health emergency in modern times … I have never seen a health event threaten the very survival of societies and governments … I have never seen an infectious disease contribute so strongly to potential state failure”,
and that,
“the whole world is put at risk”.
Will the Minister detail to the House the ways in which this country, admirable though our efforts in Sierra Leone are with the provision of 700 beds, is bringing together the international community to fight a disease that is already predicted to take the lives of 1 million people in west Africa?
Baroness Northover
The noble Lord is right, and so is Margaret Chan. The noble Lord will no doubt be reassured to know that the Foreign Secretary is chairing a COBRA meeting on EU co-operation this afternoon—in fact, as we speak. It is extremely important to get that international engagement. The Prime Minister will chair another meeting of COBRA tomorrow at 3 pm. We have sought to galvanise international reaction to this. As the noble Lord said, it is absolutely critical that we do so.
Viscount Ridley (Con)
My Lords, will the Minister congratulate those who are volunteering to go and work on this problem in west Africa for their courage, skill and generosity? Does she also agree that this will be defeated by on-the-ground, low-tech action but that, if it does not happen that way, we have a really serious problem because it will be a long time before vaccination and cure can help?
Baroness Northover
I am more than ready to endorse that view. It is astonishing to see the number of volunteers who have decided that they wish to go out to this extremely challenged region. We are humbled before that effort. My noble friend is right that we have to tackle this as a public health crisis but it is also encouraging to see the amount of effort now going into developing potential treatments and vaccines. It may come to nothing but I am extremely pleased that the United Kingdom is again leading in terms of the trials of the vaccine at the Jenner Institute in Oxford. If that works out, those vaccines should be available by the end of the year.
Baroness Kinnock of Holyhead (Lab)
My Lords, does the Minister agree with President Kim of the World Bank that the world community has “failed miserably” in its response to Ebola? Dr Chan, head of the WHO, who was mentioned earlier, drew attention to the appalling neglect of the pharmaceutical companies, saying that, after 40 years of Ebola, there are still no vaccines or medicines. She said:
“The rich get the best care. The poor are left to die”.
Baroness Northover
We can see how we are all interlinked—something that happens in one part of the world may very well affect another. It is encouraging to see that the pharmaceutical industry is now picking up speed. However, the noble Baroness is quite right: that has not been its history.
Lord Steel of Aikwood (LD)
Will my noble friend be kind enough to have a word with the Home Secretary because there is a problem that doctors from west Africa working in this country who go to help in this crisis might run foul of the visa restrictions? It is very important that that sort of bureaucracy does not get in the way of sending the most valuable doctors—those who know the area and can speak the languages.
Baroness Northover
I am very happy to reassure my noble friend that the Home Secretary is looking at this at the moment. Tier 2 skilled workers can indeed return to their home country for short periods to provide support and can take their annual leave to volunteer. However, the Home Secretary is looking at this.
Baroness Hayman (CB)
My Lords, alongside the need for developing vaccines and cures for the diseases of the poor that the noble Baroness, Lady Kinnock, described, is there not also a tremendous need to develop public health and basic health systems in the developing world in the future? On the Ebola crisis, does the Minister agree that, alongside our assistance on medical treatment services, it is very important that we also help on the prevention side by stopping transmission, getting good public information and sensitising communities? In that respect, will she endorse the work of the British NGO Restless Development—I declare a family interest—which has already sent 200 young Sierra Leonean volunteers to work in their own communities?
Baroness Northover
The noble Baroness is quite right about the importance of public health in strengthening health systems and changing various cultural practices. I again pay tribute to those who are working there at the moment.
Lord Collins of Highbury (Lab)
Universal health coverage is an essential element. Will the Minister explain why the Government oppose that at the UN in terms of post-2015 objectives?
Baroness Northover
The United Kingdom supports the development of health systems in developing countries, and health is part of the approach to the new MDGs.
Schools: Class Sizes
(9 years, 6 months ago)
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Baroness McIntosh of Hudnall
To ask Her Majesty’s Government what action they are taking to reduce class sizes, particularly in primary schools.
The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)
My Lords, we are making every effort and are investing heavily to address the unprecedented increase in pupil numbers. The average class size remains below the statutory limit, despite a massive population increase. We are investing £5 billion of capital funding, which has already enabled local authorities to create 260,000 additional pupil places between May 2010 and May 2013. This includes 212,000 primary places. There are 300,000 more places in the pipeline for September 2015.
Baroness McIntosh of Hudnall (Lab)
My Lords, I thank the Minister for that reply which, although welcome, strikes me as just a tiny bit complacent when we see that the figures for primary school children being taught in classes of more than 30 have gone up more than 200% between 2010 and 2014. Does he agree that most educationalists and teachers consider that, generally speaking, children do better in small classes? Indeed, that is what people who can afford to pay for their education are generally looking for. Will he say what he and the Government regard as the optimum primary school class size and on what evidence he bases his view?
Lord Nash
I would be interested in the noble Baroness’s definition of complacency because, despite the massive population increase, the previous Government cut the number of primary school places by 200,000 and the money by 26%. We have more than doubled the amount of money invested in class sizes. The relevant figures are that the class size in key stage 1 is 27.4 this year as opposed to 27.3 last year, a tiny increase. The pupil-teacher ratio is 21 in primary schools. Of course we would all like smaller class sizes, although the OECD and the EEF toolkit tell us that a reduction in class size gives a very poor return on investment and that increasing teacher quality and training is much better. It is true that some private schools have very low class sizes, but generally they are not as low as people think.
Lord Storey (LD)
My Lords, my noble friend the Minister will be aware that the UK has bigger class sizes than most of its overseas competitors. He is also right to point out that the £5 billion being spent to reduce class sizes is more than the previous Government were able to provide. However, those resources take a long time to work through. Does he think that where class sizes exceed the so-called legal limit schools should be allowed to put extra resources in, or perhaps be given extra resources in terms of an extra teacher or a classroom assistant, or perhaps be able use the pupil premium in such cases?
Lord Nash
In fact, the OECD tells us that our secondary class sizes are quite a bit below the average international size although our primaries are somewhat higher. However, we have no evidence for the high numbers in class sizes that some people refer to—I saw 70 in the paper the other day which is clearly misreporting. The statistics I have given give us great comfort that we have the right amount of investment in the sector.
Lord Lexden (Con)
How does this Government’s record in building new schools compare with that of their predecessor?
Lord Nash
We are spending £18 billion on school buildings in this Parliament, which is more than the previous Government spent in their first two terms combined. We are building or improving the condition of 900 schools—double the previous Government’s performance in 13 years.
Baroness Massey of Darwen (Lab)
Does the Minister agree that an absolute priority, as my noble friend said, should be reducing class sizes where possible and not spending money on new free schools set up in areas where excess places exist already?
Lord Nash
I cannot agree that an absolute priority should be reducing class sizes because I have already said that all the evidence is that that was a very poor return on investment. In fact, Andreas Schleicher tells us that there is no relation between class sizes and performance. I entirely agree that we should not be putting up schools in areas where there is no need and I can assure the noble Baroness that since I became a Minister, just over two years ago, virtually all the free schools we have approved have been in places of need.
Lord Tebbit (Con)
My Lords, can my noble friend tell me why it is that when I was at primary school a teacher could teach a class of 48 or 50 pupils to read adequately and in fact rather better than is done in classes of 30 these days? What has changed—the teachers or the children?
Baroness Jones of Whitchurch (Lab)
My Lords, does the noble Lord not accept that all the evidence shows that smaller class sizes make a difference for younger children—for infants in particular—and actually that is one of the key markers of going on to have educational achievement. Does the noble Lord not recognise that the Government have now been missing their target for recruiting new teacher trainers for the last three sessions and that we are heading for the perfect storm where we do not have enough teachers and classes are getting bigger? That is inevitably going to damage children’s education.
Lord Nash
I am not rushing to take lessons from the party opposite on pupil place planning. The ONS data which came out at the beginning of the last decade made it clear that there was a pupil place crisis looming and it was not until 2008 that the previous Government even managed to produce predictions for the size of the school population. As I say, they actually cut the number of primary school places by 200,000 and slashed the funding by 26%. We are the first Government for a long time actually to increase the amount of money available and we have also invested in new free schools in places where they are needed.
ISIS
(9 years, 6 months ago)
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Baroness Falkner of Margravine
To ask Her Majesty’s Government what is their strategy for confronting ISIS.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, we aim to degrade and defeat ISIL and reduce the threat to the United Kingdom and our interests. At home, the focus is on preventing attacks and countering ISIL’s ideology; abroad, we work with coalition partners to support moderate forces fighting ISIL and tackle ISIL’s access to funds and fighters. We are pressing for political reform in Iraq and for a political transition in Syria to isolate ISIL politically; and we provide humanitarian aid to those most affected.
Baroness Falkner of Margravine (LD)
My noble friend has mentioned co-operation with partners, so she will undoubtedly be aware that the United States is moving to a strategy—if you can call it that—of using more drones in armed warfare in Syria. Given the experience that it has had with Pakistan, Yemen and several other countries, where more than 60,000 civilians have accidentally been killed as collateral damage, can she tell the House whether the United Kingdom is contemplating such a move? Can she also tell the House whether the Government have had any conversations with the United States about the pursuance of that strategy?
Baroness Anelay of St Johns
My Lords, I hope that my noble friend will understand that I am not in a position, and nor would the House expect me to be, to comment on United States military operations. However, I understand my noble friend’s concern about drones and their use; Members of the House have expressed that concern in relation to other matters previously. I can say that our military efforts are intended to help defeat ISIL on the battlefield. We are going to use our military capabilities in Iraq to achieve that objective while working to support political reform in Baghdad to ensure inclusive governance; while in Syria we are engaged in training and providing non-lethal equipment.
Lord Dannatt (CB)
My Lords, having clarified that the objective of Her Majesty’s Government is to defeat ISIL on the battlefield, can the Minister confirm that they are ruling options neither in nor out, and that all options remain on the table for future engagement if required?
Baroness Anelay of St Johns
My Lords, when we had the recall of Parliament, the Leader of this House and my right honourable friend the Prime Minister made it clear that the security of this country is our first objective; that we had come to Parliament to seek agreement that we should engage in airstrikes in Iraq; and that if there were premeditated action which we needed to take elsewhere because of extreme danger to our humanitarian provision, we would return to seek the approval of Parliament.
Lord Sugar (Lab)
My Lords, does the Minister agree with me that cutting off finance to these people will result in them being less of a danger? Would she care to go on the record in the House and disclose who the financiers of these evil people are? What have the Government—or the American Government—done to discourage those who are financing these people?
Baroness Anelay of St Johns
My Lords, ISIL finance comes from a variety of sources, as the noble Lord will be aware. There are allegations of funding from overseas countries. I do not have proof of that so I am not able to reveal it to the House, because it would not be factual. What is a fact, of course, is that ISIL has been engaged in taking oil production facilities and selling that oil illegally on the black market, and wherever it has rampaged with its evil regime it has seized banks and Iraqi security forces materiel. It has significant amounts of money.
Lord Elystan-Morgan (CB)
My Lords, does the Minister recollect that, some time ago, Her Majesty’s Government gave blanket recognition to all the military forces that were fighting President Assad in Syria? Although ISIS was not specifically mentioned, does it not seem clear that there were kindred military forces, which now form part of ISIS, that were operating at the time? What have we done, if anything, to derecognise those forces?
Baroness Anelay of St Johns
My Lords, there is continuous evaluation of the variety of forces to which the noble Lord refers: how they operate and what they call themselves. The difficulty is that as soon as one lists one, it changes its name and becomes something else. Noble Lords will have watched very carefully over the summer and seen that what can apparently be ISIL or ISIS, and the different ways of referring to that, can suddenly form a breakaway group. We therefore have to refer to all of these groups that are trying to create havoc as ISIL.
Baroness Nicholson of Winterbourne (LD)
I welcome the Foreign Secretary’s recent visit to Baghdad, but can the Minister disclose Her Majesty’s Government’s strategy towards the greater involvement of Turkey, which is, after all, fundamental to the security architecture of the region, of Europe and of the wider NATO circuit? What is happening in our relationship with Turkey? We are primus inter pares in our pressure for Turkey to enter the European Union; surely we have a unique position.
Baroness Anelay of St Johns
My noble friend is right to draw attention to the important role played by Turkey. It is clearly ISIL’s ambition to grab enough land so that it has an enormously long boundary with Turkey. As an important player in the European and east European field, Turkey has a vital role to play. It does that. It plays its role in the coalition effort, particularly through its humanitarian support in the region and through its support to the Syrian moderate opposition. We welcome Turkey’s support for the air strikes in Syria and Iraq and the President’s affirmation that Turkey is willing to play its part in the military campaign. We are now continuing to discuss with them what form that contribution might take.
Baroness Morgan of Ely (Lab)
The Government have already spent around £25 billion training the Iraqi army. Many would question whether that money was well spent. Can the Government explain what further steps can be taken to develop the resilience of the Iraqi army and what the Iraqi army can do to command support from the different communities within Iraq?
Baroness Anelay of St Johns
The noble Baroness draws attention to an important fact—that in the early days of ISIL’s advance, the Iraqi security forces were not able to withstand it. The noble Baroness is alluding to the fact that it was felt that the security forces did not have the support of local communities, and they then fell back. We are engaged—the Foreign Secretary has made it clear on his visit to Iraq this week—in providing support to the Iraqi security forces in the form of training and guidance. I know that they value the surveillance help that we give them; we can give them the confidence, and then the people whom they are trying to protect will have confidence in them.
Palestine: Recognition
(9 years, 6 months ago)
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Baroness Warsi
To ask Her Majesty’s Government what is their position on the recognition of Palestine as a state.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con)
My Lords, the UK is committed to seeing an independent Palestinian state. We will recognise a Palestinian state at a time of our choosing, when we think it can best bring about peace. A negotiated end to the occupation is the best way to meet Palestinian aspirations on the ground.
Baroness Warsi (Con)
I thank my noble friend for that Answer and I congratulate her on her new job. Could the Minister detail the specific conditions or criteria that would need to be met for this Government to recognise the state of Palestine? What is the Government’s response to the overwhelming vote for recognition that we saw in the House of Commons on Monday?
Baroness Anelay of St Johns
My Lords, first, it would look churlish of me to thank my noble friend for wishing me well, but we both know what we mean. I am delighted that she remains a colleague in this House and a good friend.
My noble friend referred to the debate on Monday which caught the attention not only of this country but of the countries in the Middle East. The vote showed that Parliament considers the resolution of the Israeli-Palestinian conflict urgent. We agree with that. The issue is and will remain a foreign policy priority for the UK, but, as I said, we need to judge when it is right to take that decision. What we need to do is to find a negotiated end to the occupation. That is the most effective way of proceeding. My noble friend asked about criteria. Clearly, you judge criteria on a fluid system. You watch, you wait and you encourage the Middle East process to continue—and one does not give up.
Baroness Ramsay of Cartvale (Lab)
Does the Minister agree with me that a premature and unilateral declaration of recognition would not only not aid the peace process in the Middle East towards a two-state solution but would in fact appear to be rewarding Hamas, which is a terrorist organisation that calls for the destruction of Israel and rains thousands of rockets down on her civilian population?
Baroness Anelay of St Johns
My Lords, I entirely agree with the noble Baroness.
Lord Alderdice (LD)
Do Her Majesty’s Government understand that many people not just in the region but in this country and, increasingly, in Israel itself believe that the only way to save a two-state solution, if it is not already too late, is to recognise a Palestinian state immediately, and that without that Her Majesty’s Government unintentionally may be contributing to the intractability of the problem rather than its resolution by giving a veto to one side through their policy on recognition?
Baroness Anelay of St Johns
My Lords, I understand my noble friend’s strength of feeling. I also understand that there is a lot of public concern and, indeed, more than interest—rather, engagement—in all of this. However, one has to say that the Middle East process itself has not failed; it proceeds. Prime Minister Netanyahu and President Abbas continue to say that they are committed to a two-state solution. That is the way forward, whereas this country recognising Palestine now would not achieve anything. It would not remove the occupation or give everyone the opportunity to do what we need to do now, which is to focus on the people of Gaza and the rebuilding of it.
Baroness Deech
My Lords, does the Minister acknowledge that if a state of Palestine were to be recognised, the Palestinian residents within it would cease to be refugees, that those Palestinians living in other countries would have a right of return and would also cease to be refugees, and that there would be no more call for UNRWA and the refugee problem would be ended?
Baroness Anelay of St Johns
My Lords, the noble Baroness makes an interesting point, but it would depend on the way in which the future state were created, so I think that there is more complexity to the issue than she raised.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, I am sorry to interrupt from the Dispatch Box again. If noble Lords are very brief, we can hear from the noble Lord on the Labour Benches and then from my noble friend.
Lord Grocott
My Lords, various references to the problem of recognising a Palestinian state indicated that it would somehow inhibit the peace process. I ask: what peace process? What achievements can be chalked up to this alleged peace process? All we have seen from the process over the past 50 years is a continued diminution of the prospect of a Palestinian state because of the constant settlement activity in violation of all international law which the Israeli Government seem to be able to pursue with impunity.
Baroness Anelay of St Johns
My Lords, the developments with regard to settlements clearly have lost Israel many of its friends and it has a duty to rebuild trust by looking again at its policy on settlements. However, I do not agree with the noble Lord that we should give up hope on the Middle East peace process. As I said in answer to another noble Lord, the two main actors in this process wish to be engaged in it and will be engaged in it—and we will encourage them to do that.
Baroness Eaton
Given the fact that Arab citizens, together with members of all religions, are free to live in the state of Israel, does the Minister agree that the same must be the case in a Palestinian state in which all members of society, no matter what their race or religion, should be afforded absolutely equal rights in order to practise their respective faiths without any fear of persecution?
Baroness Anelay of St Johns
My Lords, one of the six priorities of the FCO is to have freedom of religion or belief, so I can say to my noble friend: yes.
Wales Bill
(9 years, 6 months ago)
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Lord Roberts of Llandudno
“Part 1AVoter registration Power of Secretary of State to make regulations for data sharing
(1) The Secretary of State shall by regulations impose a duty on government bodies requiring those bodies to provide specified information to registration officers in Wales for the purposes of electoral registration.
(2) Regulations under subsection (1) must include as government bodies the Driver and Vehicle Licensing Agency, the Department for Work and Pensions, HM Passport Office and the National Health Service.
(3) Regulations made under subsection (1) shall include the provision of data collected by specified government bodies by virtue of specified applications, which must include applications for new or renewed driving licences, Disability Living Allowance, Jobseeker’s Allowance, Employment and Support Allowance, new or renewed passports, and to register with a GP (as applicable to the specified government body).
(4) Registration officers shall use the specified information received in relation to a person—
(a) if the specified information received contains all of the information required, to register that person on the appropriate electoral register or registers; or(b) if the specified information does not contain all of the information required, to make further enquiries of that person to receive the information required to register that person on the appropriate electoral register or registers.(5) For the avoidance of doubt, nothing in this section shall give any government body the power to share any information about a person without that person’s consent.
(6) In this section—
“electoral register or registers” means the registers in section 9 of the Representation of the People Act 1983;
“specified applications” means any applications made by a person potentially eligible to be registered to vote as are specified in regulations made under section 1(1); and
“specified government bodies” means any government bodies specified in regulations made under section (1)(1).”
Lord Roberts of Llandudno (LD)
My Lords, I will also speak to Amendments 20 and 61.
I begin by recalling some friends, who moved to live near Llanuwchllyn in Merionethshire, as it was. At the bottom of a farm field was a swiftly running stream. Glen, the wife, had six children. People said, “You must fence off the stream to safeguard your children”. She said, “No, I will not fence it, I will teach them to swim; by teaching them to swim, they will be able to survive whatever the circumstances”. So it is, I think, with young people today. We cannot safeguard them in every possible way, although we would like to. We would like to save them from every harm, but they must go out into a world that is full of threats and dangers. In this world they must survive—they must swim in the tide of destruction and total despair. They need to feel part of society and committed to its well-being.
Although it is not in this Bill, there was a suggestion on the previous day of this debate that we should think of reducing the voting age from 18 to 16. There was widespread agreement in the Committee that by reducing the age to 16, young people could become more a part of their communities and committed to the well-being of these communities. However, if they are to vote, they must first be registered to vote. Without the most accessible of methods being used, there will be many thousands of them who will not be on those registers. That means that their voices will not be heard. That is why Amendments 19 and 20 are so important.
The Electoral Commission found that only 44% of young people voted in the 2010 election, and only just over 50% were registered. That percentage of registration—just over half—shows that the present registration system is not working and cannot be defended. With an election on the horizon in a matter of months, surely we should move speedily to ensure that as many youngsters as possible are able to vote when that election comes. A maximum registration grant has been offered to some local authorities by the Cabinet Office. There are 22 local authorities in Wales, but I have heard of only one—Ceredigion—that has dealt with this particular grant and the amount was only £1,700. We must find out how it is possible to maximise the number of people on the register.
I am proud to be honorary president of the Bite the Ballot organisation. It is travelling throughout the country, trying to register as many young people as it can. In February of this year, it registered more than 35,000 young people in a matter of days. When they reach the age of 18, they will take their places automatically on the register. We understand that in the Scottish referendum more than 100,000 young people between the ages of 16 and 20 registered. Bite the Ballot’s efforts cost, I am told, 25p per registration. The Electoral Commission’s charge is £25, not 25p, per registration. New ways have been found and trodden, and now we must adopt them ourselves.
The United States enacted its national voter registration legislation in 1993—the “motor voter” initiative. Whenever a person, young or old, signed up for, say, a passport, a driving licence, national insurance or work and pensions, there would be on the form another box asking whether they wished to be included on the voter register. All they had to do was put a tick in that box. It was the simplest thing possible to get them on the register and enable them to vote. We can do it. It can be done. When people sign to donate, say, a kidney, they could place a tick on the forms. It is the easiest thing possible and would be without any great cost. People tell me that it will cost a lot of money, but how much do door-to-door canvassers cost? I suggest that we could even make a profit from this new method of signing up people on the register. In the new Northern Ireland schools initiative, 50% of young people signed up.
If we value the vote, it is our obligation to ensure that the utmost effort is made to make it possible for people to register. Schools and colleges could be visited and, with a person’s consent, the electoral registration officer could be provided with details of pupils to enable them to vote at 18. This would be a step in the right direction to enable a person’s voice to be heard as an elector. As I said earlier, they would be learning to swim and tackle the difficulties that they will face, especially in this world which, as we heard in Question Time today, is causing so much heartache. We can help our young people to face those problems. There is no complication. The Chief Electoral Officer for Northern Ireland says that thousands and thousands of youngsters were able to be signed up without any problem.
A week or two ago, the National Assembly of Wales supported such initiatives and the four party leaders—Carwyn Jones, the First Minister; Andrew RT Davies, who leads the Conservatives; Leanne Wood, leader of Plaid Cymru; and Kirsty Williams, the Liberal Democrat leader—signed up to them. They were united in their support, as was the Presiding Officer. The Assembly overwhelmingly voted in favour of this measure being introduced in this Wales Bill. What right have we, as a Parliament in Westminster, to refuse the request of the Assembly in Wales? It is happy with this new registration initiative and asks for our support. I suggest that it would be very churlish and unwise indeed, at a time when devolution is so much in the headlines, to say, “No, Westminster will not allow what Wales wants”. It therefore gives me the greatest pleasure to propose these amendments. I beg to move.
Baroness Gale (Lab)
My Lords, I support Amendments 19 and 20. It is a great pleasure to follow the noble Lord, Lord Roberts of Llandudno. As he said, in 2010, only 56% of 17 to 24 year-olds were registered to vote, and only 44% of them voted at the general election. In Wales in 2011, 35% of young people voted in the Assembly elections, an even lower number than at the general election. So the current low levels of voter registration in Wales, especially among younger voters, combined with the lower turnout in Welsh elections indicate that, with the general election in seven months’ time and the Assembly elections in 2016, this is the right time to be taking the actions set out in Amendments 19 and 20, which explore ways of developing a system in which government bodies provide information directly to the EROs. The aim is to empower citizens to register to vote when filling in, for example, applications for a new or renewed driving licence. People can apply for a provisional driving licence from the age of 15 years and nine months. Other methods could be through passports and benefits, or when registering with a GP.
The noble Lord, Lord Roberts, mentioned the American “motor voter” Act, which seems to have been very successful in 1993. He also mentioned the initiative taken in Northern Ireland, which has been very successful in improving the rate of registration among young people. Virtually all the young people who remain at school or college to complete A-levels or the equivalent are added to the register and this represents approximately 50% of the total eligible population in that age group. The schools initiative is the most productive aspect of the Chief Electoral Officer’s community engagement programme, with 99% of targeted schools visited, and 11,000 16 to 17 year-olds.
Having just moved to a system of online, individual electoral registration, which, according to the Cabinet Office, appears to be flourishing, we believe that Wales has the technological capacity to make this type of data-sharing system flourish. The Labour Party will make a manifesto commitment at the general election to a policy of school and college registration, as my right honourable friend Sadiq Khan, the shadow Justice Minister, announced recently. He said:
“Too many young people don’t register to vote. If we can’t get young people registered, then it makes the task of getting them to vote even more daunting. We need to do more to turn our young people into habitual voters. Improving citizenship education and getting them registered will be crucial”.
Welsh EROs will be required by this amendment to take active steps to increase the number of people registered from underrepresented groups, including the specific step of organising at least one voter engagement session per year, per school or further education college in their area of responsibility. If action is taken as set out in Amendments 19 and 20, it would mean that young people, people with disabilities and ethnic minority groups—those who have been consistently underrepresented in Wales’s democratic processes and are least likely to be present on the electoral register—could take an active part in democratic life. They could be registered to vote and, through voter engagement sessions, encouraged to use their vote.
I suggest that there is no time to lose in making Wales’s voter registration processes as easy and straightforward as possible. Having just moved to a system of online, individual electoral registration, it is even more important. Sixteen year-olds, depending on when their birthday is, can be registered to vote, and if we move to giving 16 year-olds the vote, it would mean that 14 year-olds would, depending on when their birthday is, be on the register. We are talking about individual registration, so a lot of education will be needed.
As the noble Lord, Lord Roberts, said, the four Welsh party leaders signed a letter to the Prime Minister, the Deputy Prime Minister, the Secretary of State for Wales and the Welsh Office Ministers, expressing support for Amendments 19 and 20. In addition, the Presiding Officer of the Assembly, Dame Rosemary Butler, wishes to offer her full support for this approach. She recently announced her intention to start a national conversation with young people about voting rights, including votes at 16 and the voter registration process, before the end of this year. That is a strong endorsement.
Lord Elis-Thomas (PC)
My Lords, I am very grateful to my colleague in the adjacent barony of Llandudno, along with my colleague in the barony of Llanrwst, for introducing this topic. I speak of course, as the Lord of Nant Conwy—a fine historic barony in the history of Wales—but we will leave that for today. Before the Minister responds to the debate, let me say that I would encourage her to respond positively.
As noble Lords will be aware today, for the feast of St Edward the Confessor holy communion in the abbey close to us occurs at his shrine, which unfortunately also includes the grave of Edward I—a place that I do not normally visit. But having visited that place this lunchtime has enabled me further to consider how appropriate it is that, at this time of the feast of St Edward the Confessor, we should continue our debate on the future of the nations of these islands. Such a debate is stimulated by the whole question of participation.
The Minister will be aware, because she and the noble Lord, Lord Bourne, were there at the time, that the Assembly is already empowered to spend money to promote its activities as a part of democratic participation. We did that alongside the Electoral Commission in the period before the last referendum. But these have been sporadic initiatives. What we want is a systemic way in which to ensure that there is automatic participation by the potential electorate before they get to voting age in democratic elections, by being clearly included and prompted. There is no coercion here; it should be seen as part of citizenship that the opportunity to participate is presented to the potential voter.
I remember an occasion when I took part in one of these promotion things when I visited my native county of Carmarthenshire and spoke to young people in primary school, whereupon we had a real vote in the classroom itself. At the end of the day, apparently, one of the young pupils went home and told her parents, “A man from Cardiff whom I had seen on television came to my school and told me to tell you that you have to come out to vote”. So there are dangers in these things. The more we can make this acceptable as a painless and democratic part of our electoral system, the better. This might be the first opportunity for the Minister to accept an amendment in principle and bring back an even better one on Report.
Lord Tyler (LD)
My Lords, I am delighted to add my signature to this group of amendments. Although I am very proud of my Celtic ancestry in a different part of the United Kingdom, I am not Welsh, not a lawyer and not even a Methodist local preacher. So I can be incredibly succinct in saying that what is so important about this group of amendments is that it is based not on any theory but on practical experience both in Northern Ireland and now in Scotland, as my noble friend Lord Roberts has said. I hope that, in that spirit, the Minister will be able to accept these amendments in toto because they do not in any way extend into a new area. They simply take advantage of the practical experience we have had in other parts of the United Kingdom.
Lord Howarth of Newport (Lab)
My Lords, given the very disappointing levels of registration and turnout among young people to which both the noble Lord, Lord Roberts, and my noble friend have referred, we clearly need to be a lot more energetic and imaginative in the ways in which we seek to engage young people in our democratic processes. I find the proposals in these amendments very attractive, but I wonder whether the Minister, or the noble Lord who moved these amendments, would offer any thoughts on two issues.
The first is that it is going to cost money. The noble Lord, Lord Roberts, suggested that these processes could be carried out even, perhaps, at a profit. I would be grateful if he could clarify how this might occur because, if we ask electoral registration officers to take on additional responsibilities and to become busier, it is likely to cost money. In this time of austerity, when local authorities are operating within such extremely stringent financial limits, there are questions about priorities. When local authorities are finding it extremely difficult to carry out the responsibilities that they wish to do in relation to education, social services, housing and so forth, where would the pursuit of improved levels of electoral registration best lie within their scale of priorities?
The other issue on which I would be interested to hear the views of the Minister and of the noble Lord is whether we should move to giving the vote to young people at the age of 16. Of course we want to encourage young people to participate in our democracy. Many young people would wish to do so and feel ready to do so at 16. When I was the Member of Parliament for Newport East and used to hold meetings with sixth-formers in my constituency, I was quite surprised to find how many young people had their doubts as to whether it was appropriate to lower the voting age to 16. I would be interested to hear the thoughts of noble Lords opposite as to whether that sentiment has changed in the 10 years since I ceased to be a Member of Parliament for a Welsh constituency and whether, if we enfranchise people at 16, we will see them positively engaging in democracy with that new opportunity.
Lord Lexden (Con)
My Lords, I am glad to follow the noble Lord, Lord Howarth of Newport, whom I have known personally and respected for many years. I strongly support Amendment 20 which provides the key to securing a marked and rapid increase in the number of young people registered to vote. Time and again, the need for effective action to tackle the acute problem of underrepresentation among the young has been highlighted, not least in the reports of the Hansard Society of which I have the privilege to be a trustee.
Across the House we support the marvellous organisation Bite the Ballot, which is bringing determination and dedication to the task of getting many more young people on to the register, as we have heard. Surely we must give the organisers of Bite the Ballot the tools they need for this vital job. Nothing, it tells us, is more important than the creation of a sustained and lasting partnership between electoral registration officers and schools based on the model developed in Northern Ireland. We have heard today from my noble friend Lord Roberts and others that this is the wish of the Welsh Assembly, too.
The case for such a partnership is surely overwhelming—it has been proved beyond all doubt in Northern Ireland. The Province has pointed the way. As a staunch unionist, I say: let Wales, and indeed the rest of the country, follow where Northern Ireland has led. It would be a tragedy if the United Kingdom as a whole failed to reap the benefits of what has been pioneered in Northern Ireland—a point that I hope my noble friend on the Front Bench would be particularly sympathetic towards, given her dual responsibilities in Wales and Northern Ireland, and I am quite convinced that St Edward the Confessor would be on our side.
Lord Richard (Lab)
My Lords, perhaps I may say a brief word. Following the noble Lord, Lord Tyler, I should perhaps declare an interest. First, I am Welsh; secondly, I am a lawyer; and, thirdly, I am not a Methodist minister but my grandfather was, so I suppose that that qualifies me to speak on this amendment. I do so for one basic reason, which is to assure the Government that there is very warm cross-party support in the House for these amendments. When the Minister replies, I hope that we shall not hear, as we have on many occasions on the Bill so far, that this is not the right time to do it. It seems to me to be absolutely the right time to do it. Indeed, if you are looking for a better time to do it, it will be difficult to find one. With elections looming for the Assembly in 2016, it seems to me absolutely right that we should go down this route now.
The desirability of the amendments is perfectly clear. What is proposed is not based upon anything fanciful; it is based upon practical experience of the way that it has worked in Northern Ireland. There is also some evidence in the United States that this type of approach is effective, and I cannot see for the life of me any reason why it should not be introduced in Wales in time for the next election. I hope that the Minister is not going to get up and say merely that it is not the right time to do it; I believe that the House thinks that it is.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)
My Lords, there must be, and clearly is, concern across the Chamber about the low engagement of young people in particular with our democracy and with civic life. However, I have to make the point to noble Lords that registration in itself does not mean that young people vote. Experience in Northern Ireland—and, as my noble friend Lord Lexden made clear, I am very familiar with that experience—has shown that voting does not necessarily follow from registration. Therefore, I think that we have to work very hard at what is a complex issue which goes beyond simply having to ensure, quite rightly, that more people vote.
Lord Richard
Before the noble Baroness leaves that point, it is perfectly true that if you register, you do not necessarily vote, but it is also true that if you do not register, you cannot vote. With great respect, we are talking here about the qualifications for voting.
Baroness Randerson
I think that the noble Lord misunderstood what I was saying, which was that this is a very complex problem that goes well beyond these amendments, and is one of which the Government are very well aware.
My noble friend’s Amendment 19 would impose a duty on the Secretary of State to make regulations which require government bodies to provide registration officers with personal data. Registration officers could then use this information to add people to the electoral register or make contact with them in order to obtain the necessary information. Amendment 61 is consequential on Amendment 19, and Amendment 20 inserts two new subsections into Section 9A of the Representation of the People Act 1983, in order to place duties on registration officers in Wales to ensure that they focus their registration efforts on specified groups, particularly young people, disabled people and people from certain ethnic groups.
Lord Tyler
As my noble friend will know, I have been following the DVLA issue through the IER process for a number of years and I welcome what she has just said. But even more valuable than all these pilot studies would be to look very carefully indeed at the very recent experience in Scotland. The levels of registration, particularly among young people, exceeded anything we have seen anywhere else in the United Kingdom. One of the differences between Scotland and Northern Ireland on the one hand and England and Wales on the other is that there is greater direction in Scotland to the local electoral registration process to make sure that there is an equal quality of service at the lower level.
As I mentioned quickly in my previous remarks, I encourage the Minister and her colleagues to look very carefully indeed at the recent experience in Scotland. It is practical experience—it is not a pilot in a particular area. As the noble Lord, Lord Richard, said earlier, it gives added impetus to the suggestion that now is the right time to take a forward step in this area.
Baroness Randerson
My noble friend makes a good point. Of course, the Electoral Commission will be doing a report on the referendum in Scotland that will cover those issues.
I recognise that there is considerable sympathy in this Chamber and beyond for the aims of Amendment 20. I assure noble Lords that I share them. However, the Government are already taking steps to increase the engagement and registration levels of traditionally underregistered groups. Five national organisations and every registration officer in Wales, as in England and Scotland, have shared £4.2 million of funding aimed at maximising the rate of voter registration as part of the transition to IER. I draw my noble friend’s attention to the fact that every electoral registration officer in Wales has received that funding—not just one. Cardiff received almost £25,000 in order to engage more with underregistered groups and Ceredigion received £4,290 in order to take that work on. The amounts given were based on a formula that related to the level of underregistration in every local authority throughout Great Britain and the number of 16 to 18 year-olds within that area specifically so that EROs could go into schools and do the engagement work that is encompassed in my noble friend’s amendment.
Perhaps I may also respond to his comment that it needs only a tick in a box—would that that were so. Unfortunately, there is a complex legal basis for voting. The form has to be set out in a particular way and it has to be of some considerable length. The tick-box would work in terms of expressing an interest in voting, but, as the noble Lord, Lord Howarth, pointed out, it means that you have to follow up on the person. It is to be hoped that if they have ticked a box, they would respond to a letter, but people often tick boxes and then do not respond to a letter, so they could well require door-to-door canvassing. Ticking a box sounds good and it works up to a point, but in itself it does not actually get anyone on to the register. Northern Ireland is indeed a case of best practice in our country. That effort was based on going into schools and getting young people to fill in paper forms. The crucial difference between Northern Ireland and the rest of the UK is that Northern Ireland has a paper-based system and we now have online electoral registration.
Perhaps I may return to the amendment. I know that the Electoral Commission sent a briefing to noble Lords setting out its view that while it strongly supports the principle of EROs working with local education establishments to encourage registration, there is no need for additional legislation to provide for this. I should point out that there is no obligation in Northern Ireland on the electoral officer to engage with schools and colleges. That work was done without any legal obligation or basis. However, in the light of concerns expressed by noble Lords and indeed in the letter referred to from the four party leaders in the Assembly, I will be happy to look at this issue again. However, I should say that registration officers already can and do visit schools, colleges and other locations in Wales in order to target under-registered groups and fantastic work is being done up and down the country by civil society organisations to find new ways of reaching a range of underregistered groups and encouraging them to register to vote. The Government are proud to fund this type of activity and I congratulate the wide range of organisations engaged in this work.
I want to make a final point about Northern Ireland in response to the comments made about the low levels of registration among young people there. Yes, the figures were woefully low in part because they had not been doing the annual canvass. That has proved to be the crucial thing. The annual canvass must be maintained alongside all the additional work. However, given that registration had fallen to very low levels in Northern Ireland, considerable remedial work needed to be done.
The noble Lord, Lord Elis-Thomas, referred to the National Assembly. The National Assembly has an excellent record in terms of its outreach work with young people. I think that at one point the Assembly was the major tourist attraction in Wales. A large number of young people come into the Assembly to learn about politics and to hear excellent debates. That is the kind of thing I was referring to in the first sentence of my response. It is about more than registration—you have to engage young people and explain why it is relevant to them.
I have already referred briefly to online registration. It brings voter registration into the 21st century and it is particularly attractive to young people because it is easier, simpler and faster. More than 410,000 applications have been made online by people aged between 16 and 24 since 1 July this year. More than 90% of the users of the system have been either satisfied or very satisfied, so it is obviously an easy system to use. The Electoral Commission has further noted that a statutory change specifically relating to electoral registration officers in Wales would be complex to manage at a time when they are dealing with things throughout the UK on IER. However, in the light of the concerns and the consensus here today, I certainly undertake that, before Report, I will discuss with the Minister for the Constitution all the issues that have been raised. I will also discuss with the Electoral Commission the issues that it put forward in its circular to all of us saying that these amendments are not necessary.
Lord Elis-Thomas
In the spirit in which the Minister has spoken, and in the spirit already referred to by colleagues of the all-party consensus emerging very strongly in the National Assembly—I draw the attention of Members of this House to the Motion that has today appeared on the Order Paper signed by the four party leaders, which will be debated in the Assembly on Tuesday—would it be possible for her to give an assurance that she will speak to the First Minister, the appropriate representatives, the Presiding Officer and so on in the National Assembly on this matter?
Baroness Randerson
The noble Lord has anticipated my next sentence. In the light of the letter that has been received, I will, of course, liaise with Members of the National Assembly, because it is very important to ensure that their views are taken into account. In the light of these points, I urge my noble friend to withdraw the amendment.
Lord Roberts of Llandudno
I am most grateful to my noble friend for her full reply. I understand her reluctance, but I do not accept it and I hope that on Report we will have a very different statement from her. Perhaps I may tackle one or two matters. First, over the next four or five years, we are going to face a referendum on whether we remain in Europe. If that referendum takes place on the register as it is, then half our young people will not be eligible to take part. There will be a general election next May, and unless we move immediately—there is no time to lose—our young people will not have a voice in that election. There is no time to waste. I know that there are “t”s to cross and “i”s to dot, but there is certainly no time for anybody—including the Electoral Commission—just to hope that this will go away. It will not go away.
Secondly—this is the most important point of all—what is the relationship between the Houses of Parliament here in London and the Assembly in Cardiff? Yesterday I asked the Electoral Commission itself who has the last word: is it the civil servants or the Electoral Commission or is it the parliamentarians representing us at every level? The answer, of course, is that it is the parliamentarians. I say to my good friend here that something must be done immediately to come to an understanding. If the Assembly in Cardiff has voted 41 to a handful in favour of this, if all four leaders of the parties there have voted and written in favour of this, then unless we do something, we could well create resentment in Wales that will cause us to have another referendum, this time not in Scotland but in Wales itself. Therefore, I urge the Minister—I know she will; I know her well enough—to move in immediately and perhaps by Report give us a glimmer of light, if not a big flashlight, on this matter. I beg leave to withdraw the amendment.
Lord Wigley
Lord Wigley (PC)
My Lords, as well as Amendment 21, I will also speak to Amendments 22 and 23, all standing in the name of my noble friend Lord Elis-Thomas and myself. Amendments 21 and 22 are aimed at allowing the Welsh Government to introduce new tax credits as well as devolved taxes. That would mean that Wales was able to help target areas that require economic stimulation in one form or another.
Paragraph 4.6.8 of the Silk commission’s first report stated:
“In addition to the use of taxes to achieve policy outcomes in devolved areas, credits can also be applied so that activities are effectively subsidised. While existing tax credits such as the working tax credits (and in future the Universal Tax Credit) should remain UK wide, the Welsh Government should be able to introduce its own credits in relation to devolved taxes and through use of devolved grants and subsidies to promote investment and getting people into work”.
I hope that the Government will therefore either accept these amendments or bring forward their own amendments on Report to achieve that end—unless of course the Minister can persuade me that some other power exists or is in the pipeline that will achieve that.
I turn to Amendment 23. At present, any devolved tax to be implemented in Wales must be agreed by each House of Parliament as well as the National Assembly. We feel that it is wrong that a party in the Welsh Government implementing a manifesto pledge should be prevented from doing so by Governments in London. If the objective of this Government is to get the devolved Government to accept full responsibility for their actions then surely they should be given full and undivided authority in such matters. Manifestos and devolved taxes are matters for Wales, and the UK Government should not interfere in them. This amendment therefore removes the requirement for each House of Parliament to agree to the devolved tax so that it is in the hands of the National Assembly. It would mean that the people of Wales were absolutely clear as to where responsibility lies. I beg to move.
Baroness Morgan of Ely (Lab)
My Lords, the tax credits that currently exist are closely associated with welfare payments. The whole issue is integrated into the wider debate about welfare support which provides a basic living standard for people who are working and yet need state help. Introducing any amendment that would erode the provision of welfare in Wales would be a mistake—in particular, without that very comprehensive and structured debate about the implications in Wales. The Minister suggested that the noble Lord is talking about a new kind of tax credit. Could the noble Lord elaborate on what kind of thing he had in mind, beyond what currently exists?
Lord Wigley
If the noble Baroness refers to the Silk report, she will see the arguments made there. The whole point and ethos of the Silk report is to open out as much freedom as possible for the devolved authorities to develop ideas and even experiment with this area to reach the objectives that both she and I would wish they did. It is giving them more tools. I hope that those tools help them do the job.
Lord Howarth of Newport
My Lords, whatever the future structure of the United Kingdom, the union is surely to be based upon twin principles of solidarity and diversity. Tax credits are a principal structure of the welfare state. As my noble friend just now suggested, the welfare state is a fundamental underpinning of that solidarity. Given that in the last figures I saw only about 2% of the people of Wales do not wish to maintain the union, I very strongly suspect that noble Lords are a little bit ahead of themselves—not for the first time—and that the people of Wales would wish nothing to be done that would weaken the welfare state and undermine that principle of social solidarity that ought to underpin the union. I make this point particularly because great figures in Welsh political history were among the leading architects of the welfare state. Whether by accident or design, we should not do anything to undermine the welfare state and the solidarity that binds the people of Wales together with the rest of the United Kingdom through the welfare state and associated principles of fiscal redistribution.
Lord Newby (LD)
My Lords, Amendments 21 and 22 seek to include a reference to “associated tax credits” as part of the power to add further devolved taxes. I thought that the noble Lord was going to discuss tax credits associated with devolved taxes. In respect of landfill tax, at the moment, existing site operators can contribute a percentage of their tax liability to environmental benefits and get a 90% tax credit. As far as devolved taxes are concerned, that ability will still exist. For that type of tax credit, the power is there.
I think that the noble Lord, Lord Howarth of Newport, was talking about welfare benefit payments. Welfare benefits are not covered by the Bill. There has been no proposal to devolve power over welfare benefits to the Welsh Assembly. I thought that the noble Lord made strong arguments about why that might be opposed. The Bill makes no provision for devolving discretion over welfare benefits to Wales for good reason, and the Government are not minded to change their view on that.
Amendment 23 would remove the UK Parliament from the process of creating further devolved taxes. The Bill enables the Government to devolve further existing taxes as well as enabling the Welsh Government to create new devolved taxes. Clause 6 requires that if either of these powers is used the order would need to be approved by this House and the other place as well as by the Assembly.
Lord Wigley
Where powers to devise and implement new taxes in Wales are devolved to the National Assembly and those taxes have an appropriate dimension where tax credits could be introduced, would the powers allow that?
Lord Newby
Yes, they would, just as for existing taxes. The same principle would apply to any further taxes that were devolved to the Welsh Assembly.
Clause 6 requires that if either of the powers devolving further existing taxes or enabling the Welsh Government to create new ones is used, the order would need to be approved by this House and the other place as well as by the Assembly. The amendment would remove the UK Parliament from this process so that the order would need to be passed by the Assembly only. That would mean that the Assembly could pass an order under which existing tax powers would be transferred from the UK Parliament without this Parliament having any say. Clearly, that cannot be right. Surely it is important that the process of tax devolution continues to take place in the constructive and collaborative manner that has led to this Bill. As a mere Englishman now grappling with what we do about devolution within England, I have found the Silk process extremely impressive and one that could possibly be successfully emulated in England. The follow-up to the Silk process, under which there have been discussions with the UK Government and parliamentarians about how to take that forward, has been extremely constructive.
As for how we manage the existing devolution of tax proposals and take them forward, we have established the Joint Exchequer Committee, based on a similar body in Scotland, consisting of leading parliamentarians in Wales and the Treasury, specifically to look at how we implement the existing powers and at what further can be done. That would be one of the ways in which it would be sensible to contemplate adding additional tax powers. If Members of the Welsh Assembly have strong views about additional tax powers—and first they would have to express those views—they will then have a vehicle for discussing them. It seems to me that that is a very sensible way forward. Any change or devolution of powers over tax from the UK to Wales has, at the very least, implications for tax legislation in the rest of the UK, so it is only logical that the rest of the UK is involved in the discussions. It must be right that any future order-making process, whether initiated by the UK Government or the Welsh Government, should involve both the Assembly and Parliament. I hope that the noble Lord will withdraw his amendment on that basis.
Lord Wigley
My Lords, I listened with considerable interest to the responses I have had, and part of the clarification has been helpful. Certainly with regards to the tax credit associated with any new taxes, that may come along. However, may I just say to the Minister and to the House—without in any way wanting to cut across what has been largely a consensus approach to this legislation—that the whole point of giving new powers to the National Assembly for Wales or indeed to the Scottish Parliament is to trust them and enable them to go on with their business. We had for a period after the 2006 Act powers to legislate in Wales but in every instance we had to get orders passed through the House of Commons and the House of Lords. In its wisdom, Parliament has seen that this is probably not the right way to do it—if you have a dog you allow him to get on with it and do not try barking yourself. In this regard as well, if the people of Scotland had been told that any powers that they will get over taxation will be second-guessed at Westminster and orders will need to be put through before they can be implemented there might have been some second thoughts in Scotland as well on 18 September.
I believe that there is a strong opinion in Wales that, while all the details of devolution for Scotland and for Wales may not be at the same place in their development and some details may not even be appropriate, the principle is that the elected Assembly in Wales, the National Assembly, and the elected Parliament in Scotland should have the clear-cut responsibility for what has been devolved and that people should be able to see that. Once you bring in mechanisms to second-guess and to veto you are cutting right across that approach. I realise the Minister will not be in a position to give me any authoritative response with regard to the similarity or contrast between the powers for the National Assembly and those for the Scottish Parliament but it is undoubtedly an issue that will raise its head again, and I invite the Government to give further thought to it. On that basis, I beg leave to withdraw the amendment.
Baroness Morgan of Ely
“Review
In the event that the power to add new devolved taxes under section 116C of GOWA 2006 is exercised, the Chancellor of the Exchequer shall undertake a review of the benefits of parity in the devolution of taxes between Wales and Scotland, and shall review the existing principles of tax devolution.”
Baroness Morgan of Ely
In this amendment we are looking at future-proofing the legislation. We are very aware that there is a fast-moving feast going on in terms of constitutional changes in Scotland so we need to look at how we future-proof it. That is why we have suggested that if any new taxes are devolved to Scotland—and I must say that we probably need to tighten up the amendment’s wording—we would like an opportunity to assess whether they could be offered to Wales as well. That is the idea behind the amendment.
We are conscious that things are changing very quickly and we do not want to lock ourselves in because of the timing of this Bill. Labour is very keen to ensure through our suggestion, which we will come to later, that Wales can vary income tax rates, for example, to 15p in the pound rather than 10p, which is consistent with our position in Scotland. That is not the position of the Tory party which has suggested that it wants to see 100% of income tax being devolved to Scotland. The amendment looks at this consistency in approach and would at least give us the opportunity to think about whether we might like to pick up other opportunities that may be offered to Scotland later; we have to understand that there will be an impact on other parts of the UK if income tax rates are varied. It is correct to ensure that we take the temperature of how devolution has changed between now and the time when the powers to vary taxation at a Welsh level are taken up.
It is interesting to look at the joint agreement that has been made by the parties and the Assembly. On the proposal that if, for example, air passenger duty for long-haul flights were to be devolved to Scotland and Northern Ireland, we would want to look at that. That is the spirit of the amendment: we need to understand that if they are getting extra powers it will have an impact on us. We need to think about how we would want to respond to that.
Lord Newby
My Lords, Amendment 23A seeks to place two statutory duties on the Chancellor of the Exchequer when a new devolved tax is created in Wales. The first would be to review the benefits of symmetry in the devolution of taxes between Scotland and Wales. This would effectively require the Government to assess whether a tax being devolved to Wales should also be devolved to Scotland, although the way in which the noble Baroness moved the amendment inverted Scotland and Wales.
The second duty would be to review the principles of tax devolution. These are three: it should have cross-party support; it should be evidence-based; and any devolution of taxation should not be detrimental to the rest of the UK. These are good principles, and I am not sure that we want to have a root-and-branch discussion of them. What the noble Baroness was talking about, however, were the circumstances in which Scotland gets more powers, and the formalisation of a structure under which the Welsh Assembly not only thinks about them but has a process for discussing those matters with the UK Government.
On the symmetry of devolution settlement, until now the Government have been clear that we consider devolution decisions for each country on their own merits. The existing arrangements provide flexibility for the Government to consider Wales and Scotland either separately or at the same time. However, the Scottish referendum result puts us in a new position in discussing devolution. Nobody seriously believes that we are at the end point in terms of devolution anywhere in the United Kingdom. Over the next year or two, we are clearly going to see a debate of an intensity that we have not seen in England at all, and have not seen in Wales since the Assembly was first established. We are talking about considerable potential changes. In these circumstances, it seems that the Welsh Assembly will be involved in those discussions, not least through the Joint Exchequer Committee if it has any specific proposals. There will be also be almost ceaseless debate in any constitutional convention, if one is established, or more generally in Parliament about what the future structure should look like.
I therefore think that the kind of formal review the noble Baroness proposes will be unnecessary. There will be no lack of opportunity for these issues to be debated. The challenge to the English regions and counties and to Wales is to produce a compelling argument for the kind of change that is required, and then to seek and obtain a political consensus for it. Whoever is in government after the next election will be faced with a situation in which there is a clear appetite for devolution in various respects. That will only crystallise into action when there is real pressure and a consensus in the nations and regions of the UK as to what that future of greater devolution might involve. With that in mind, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Morgan of Ely
I thank the noble Lord. It is important to understand that, at the moment, we do not know what that process is. My concern is that if we do not get this down somewhere, it is possible that Wales will be left out of that debate, until a mechanism is devised. Ministers have talked eloquently about the mechanism that may be put in place but, at the moment, there is no formal structure. At this point, we are trying to make sure that there is a proper mechanism in place so that there is an opportunity for us to work out whether anything that is offered in Scotland is something we would want to take up in Wales.
Lord Rowlands (Lab)
My Lords, I wonder if I may briefly intervene before the Minister moves her amendments. I have a very modest amendment, Amendment 31, which has been included in this list. It addresses a completely separate point from the whole swathe of government amendments and I would suggest that we take Amendment 31 separately. I hope that that would be possible.
Baroness Randerson
I understand the noble Lord’s point but I am intending to speak to my amendments and then give way to the noble Lord to make his points. I will then respond separately. Although it is in the same group, there will be plenty of time for us to give separate attention to the noble Lord’s amendment.
Lord Rowlands
I appreciate the Minister’s offer but it is a very different point altogether. I think that it would disrupt the flow of the debate on the Government’s amendments if Amendment 31 was included and involved in it.
Baroness Randerson
Following the points that the noble Lord has made, we will uncouple his amendment and have a separate debate at that point.
Amendment 24
Baroness Randerson
Baroness Randerson
My Lords, I am delighted to be introducing this series of amendments. Concerns were raised across the Chamber at the previous stage of the Bill. The Government have listened and, as a result, have tabled the amendments that we have before us. These amendments seek to remove the lock-step from the income tax provision in Clauses 8 and 9, which has been subject to a great deal of debate during the passage of the Bill thus far.
The Bill would enable the National Assembly for Wales to set a single rate of income tax that would be applied to all three income tax bands if income tax devolution were approved in a referendum. These amendments would allow the Assembly to set separate Welsh rates for each band instead, as the Silk commission recommended. I said at Second Reading in July that the Government were prepared to revisit these arrangements, and that is what we have done. The lock-step has been debated at some length in both Houses throughout the passage of this Bill and we have listened to and reflected on the arguments that have been raised. Through these amendments, all three income tax rates would still be reduced by 10p in Wales, with the Assembly taking control of nearly half of all income tax paid as a result.
It would then be for the Assembly to set a separate Welsh rate for each band which would be added to the reduced UK rates. I believe that these amendments remove a significant barrier to devolving an element of income tax to Wales. Subject to their inclusion in the Bill, my hope is that the Welsh Government will now feel that they can call a referendum on income tax devolution as soon as possible after the Bill receives Royal Assent.
As a result of this Bill and the full devolution of business rates which we will implement next April, the Welsh Assembly will become responsible for raising around a quarter of the money it spends. By removing the lock-step, the Welsh Government now have no reason to delay a referendum. It is high time that the Assembly is given power and responsibility for raising significant amounts of its own revenue and thereby becomes more accountable to the people of Wales.
These amendments align the income tax provisions in the Bill with the Silk recommendations and show that the Government are prepared to listen to the arguments of those who disagree with us. The amendments show that we are prepared to be bold in progressing devolution in Wales. I therefore urge noble Lords to support them. I beg to move.
Lord Wigley
My Lords, I am very glad to have the opportunity to speak in this debate and to welcome the step taken by the Government in moving their ground with regard to lock-step. The noble Baroness, Lady Randerson, will well remember that I expressed some fairly strong feelings at an earlier stage with regard to lock-step. We felt that it was an inappropriate restriction and I am delighted that the Government have seen fit to move on it.
Amendment 37, standing in my name and that of my noble friend Lord Elis-Thomas, is included in this bank of amendments. We had a very useful debate on Monday in relation to constitutional principles on which there was a lot of consensus. Although the Government could not necessarily immediately accept the points that we made, they undertook to look at some of them. I hope that the same spirit will be adopted in their approach to other financial matters as has been shown with regard to the lock-step.
Amendment 37 seeks to ensure that the Assembly will be able to levy the three Welsh rates of income tax as it sees fit. The amendment is drafted to ensure that the Assembly will get full responsibility for raising and spending one of the three largest sources of government income alongside national insurance and VAT. If we give the Assembly the power to control these rates, it will enable Welsh Ministers to create additional jobs, which we hope will lead to an increase in the Welsh tax base. That would be an incentive for investment in the Welsh economy—which it certainly needs. As I say, we welcome the fact that the lock-step has been removed, which will give the Welsh Government greater freedom.
Amendment 38 stands in the name of the noble Baroness, Lady Morgan, who will no doubt speak on it in a moment. I will listen carefully to the arguments that she will put forward but I have some sympathy with what appears to be the intention of that amendment. However, I will listen carefully to what she has to say, and will listen to the Minister’s response to Amendment 37 to hear how the Government intend to build on their intention to give maximum flexibility to the Welsh Government.
Baroness Morgan of Ely
My Lords, the Labour Party understands the principle of the need for accountability and the need for the Welsh Assembly politicians to have responsibility not just for spending money but also for raising it. Devolving an element of income tax will undoubtedly increase the financial accountability of the Assembly. It will enable the Assembly to fund more of the spending for which it is responsible and will allow the Welsh Government to vary the levels of tax and spending in Wales and, crucially, it will allow Wales to borrow against tax.
We focus in these amendments on issues of income tax. However, it is worth pointing out that this is just one tax. In context, in 2013 income tax was 26% of the total tax take in the United Kingdom. It is significant, visible and understandable, but it is worth remembering that it is only one tax.
Devolving income tax powers to Wales has never been a priority for the Labour Party and the Welsh Government. However, it is important in terms of positioning the Assembly in the right place in the long term. We should remember that it was the Labour Party which devolved income tax powers to Scotland, but only after asking the Scottish people in a referendum whether they wanted that power. We would have to undertake a similar referendum if Wales were to follow suit. I will elaborate on this further when we discuss that group of amendments.
We will not always be in this situation. We are future-proofing here. I am confident that one day the Welsh economy will grow. There are clear signs that the Welsh Government’s efforts in this area are already bearing fruit. However, we must be aware that the whole principle behind the concept of the UK as a political entity is that we are supported by a social system that is available to all. We must be careful not to erode that basic philosophy and so provide fuel to the nationalist fire. There is a £16 billion annual gap between what Wales raises and what it spends. We must not lose focus on this issue. This is the economic foundation stone of the UK.
What drives us in the Labour Party is not some ideological zeal to create an independent utopia in Wales, but a practical, hard-headed approach to what is best, in particular for those who are struggling on low incomes, are desperate to make ends meet and are often dependent on the state to keep them afloat. We must remember that Wales has a weaker tax base than the UK as a whole. We must be careful when devolving tax powers that we do not lose out. HMRC estimated that in 2010 there were 89,000 higher rate taxpayers in Wales. They represented 7% of all taxpayers and were responsible for 33% of all the income tax revenues raised in Wales. There were only 4,000 additional rate taxpayers paying 45p in Wales. I could practically name them—they were mostly Tories, I will let you know. On the whole, we must understand that our tax base is very weak and we must be careful when we go down this route.
It is also worth noting that a very small proportion of revenues are raised by local taxation and the consequent tendency of Whitehall to wish to dictate how funds from the centre are used has seriously eroded local democracy and accountability. We must be very cautious and note that local revenue-raising should not go too far, since that tends to reinforce the regional disparities of income and wealth.
Tax differentiation can also lead to tax competition. In principle, this is not something that we encourage. We must be clear that we do not want to embark on a race to the bottom in relation to taxation. We are fearful that there is a hidden agenda on the part of the Conservative Party, which is for ever anxious to reduce the role of the state. The Conservative Party is committed to cutting taxes for the wealthiest people. Let us be clear: tax competition will lead to less money in the state pot, which means less money for our schools and hospitals.
The Conservative Leader of the Assembly, Andrew RT Davies, has said that he would like to make Wales into a “low tax economy”. He has pronounced proudly that he wants to cut just the top rate of tax. We must be aware that every time there is a tax cut, it is accompanied by a cut in services. It seems odd to consider this, at this moment in particular, in isolation from the discussions in the rest of the United Kingdom, and we need to consider what is happening in relation to the Smith commission in Scotland. That is why Labour would like to see this discussion occurring in the context of a broader constitutional convention involving the public and representatives of civil society. We must acknowledge that there is a disconnect between politicians and the public, and it is critical that we do not have a conversation about how money is collected and distributed from the distance of an ivory tower. However, the genie is out of the bottle and we need to respond.
Let us be clear that devolving income tax powers will not be a panacea for the economy of Wales. The chances are that income tax variations will not be significant. The previous Secretary of State suggested that he would like to see a 1p cut in income tax rates across the board. Research has suggested that that would cost £200 million. That would mean £200 million in terms of cuts to services—the equivalent of 7,700 nurses losing their jobs—in the hope that the economy would grow. That could happen but in the context of a Welsh Government budget of £15 billion it is hardly going to make a massive impact.
Of course, differential taxation of income would involve the need for a separate Welsh revenue collection mechanism that must be neither inefficient nor costly. The Government do not seem to be clear about the costs involved in establishing this mechanism. In Scotland, it is estimated that differential taxation would cost between £40 million and £42 million to set up. Can the Minister give some indication of how much it would cost to set up in Wales?
In anticipation of the Bill receiving Royal Assent, the Welsh Government have already set out in a White Paper how that mechanism would work. The Welsh Government and the National Assembly will have the ability to develop certain taxes shaped to the needs, circumstances and priorities of Wales. This is the first Welsh tax legislation in modern times. It is both historic and significant for Wales but we need to consider border issues, and I therefore turn to our Amendment 36.
We need to be aware of the complexity of border issues in relation to Wales, compared to Scotland. The Scotland-England border is not nearly as densely populated as the Wales-England border. Only 3.7% of the population of Scotland and 0.5% of the population of England live within 25 miles of the English-Scottish border. In Wales, the situation is totally different, with 48% of the population of Wales and 10% of the population of England living within 25 miles of the Wales-England border. There are more than 130,000 daily commuters. The fact is that introducing a variation in income tax could give rise to the possibility of higher taxpayers moving across the border in one direction or another. My understanding is that no Treasury impact assessment has been undertaken on this matter, although I understand that the previous Secretary of State said that a consultation has happened. Can the Minister confirm whether that is the case and will she commit to a Treasury impact assessment on that border issue?
I turn now to the lock-step issue. The Government have put down an amendment to remove the lock-step, thereby allowing the Welsh Government to vary increases or decreases to individual tax bands independently of one another. Again we would argue that this discussion ideally needs to be set in the context of a UK debate over the organisation of tax across the whole UK. To deal with this in isolation is inviting trouble, and that is why we need urgently to establish the constitutional convention. The public should have a greater say on where power should lie across the UK, including on the nature of tax devolution. Further devolution should not be piecemeal. The Minister referred to that in her comments on Monday. The notion of breaking lock-step is something that needs to be discussed in that broader context
Lord Howarth of Newport
My Lords, it must be right as a matter of equity that Wales should have the same powers to alter tax rates as does Scotland, but my noble friend is right to remind the House that the exercise of those powers could be a poisoned chalice. In the extremely unfortunate situation in which we find ourselves, in which the Government are pledged to retain the Barnett formula, it is very hard to foresee circumstances in which it would be in the interests of Wales to use such further devolved powers of taxation. So long as Wales gets an unjust and inadequate funding settlement from the Exchequer, not based on needs but based on population, Wales will be at a loss, and it would be very dangerous for the Government of Wales to accept that it is their job to make up the shortfall by raising tax rates in Wales. I think that that would lead to extremely unhappy long-term consequences for the economy and society of Wales.
So, although I support my noble friend in her amendment to create powers that would be comparable to the powers in Scotland, we should keep our eyes wide open as to the realities of this. I cannot foresee that, in the absence of reform of Barnett, there is going to be any possibility of a stable and acceptable new constitutional settlement for the United Kingdom. However, these are larger issues that we shall debate another day.
My noble friend is also right to remind the House that the nature of the border between Wales and England also imposes a very powerful, practical restraint on the scope for differentiating tax rates. If people who are living in Wales near the border feel themselves to be so penalised, so disadvantaged by differential tax rates in Wales as compared with England, a number of them will move their residencies across the border and that would be very detrimental to Wales. As far as I can foresee, the practicalities are pretty unattractive compared with the notional possibilities that we are discussing in this legislation.
Baroness Randerson
Noble Lords will have noticed that the pleasant agreement and consensus across the Chamber has disappeared in the last group of amendments. I thank the noble Lord, Lord Wigley, for his speech, bearing in mind that the transfer of powers proposed in his amendments would mean Wales becoming entirely separate in taxation terms. He will not be surprised to hear me say that I am not going to accept these amendments.
However, I wish to spend some time on the speech by the noble Baroness, Lady Morgan, and to express some considerable surprise. I took the trouble to reread what she said at Second Reading. The Labour Party’s views appear—to use a colloquial phrase—to be all over the place because of the considerable gap between what the noble Baroness said at Second Reading, what she is saying now, what the First Minister of Wales has said and what the honourable Owen Smith said in the other place. Name a person, name a debate and you can have a slightly different view. In fact, there is a huge gap between one debate and another.
The principle of accountability lies behind the proposal in the Bill to devolve an element of income tax to the Welsh Assembly. The noble Baroness asked me what the reason was for the Government changing their mind on the lock-step. The reason was quite simple. People such as the First Minister said that this power was no use, therefore they could not use it. They said that the lock-step was not a good idea. We listened to people and it seems that, across parties and across the country, there has been huge support for the removal of the lock-step except now, suddenly, in the Labour Party, which had condemned the lock-step as being fatally flawed. It therefore surprises me that, when the lock-step was proposed, the Labour Party did not make clear that it was totally opposed to the devolution of income tax, rather than simply opposed to the lock-step.
I want to take up a few issues that the noble Baroness, Lady Morgan, raised. She referred to the serious erosion of local accountability. That may be the case in Wales and, if so, it is down to the Welsh Government, because they have devolved responsibility for local government. However, looking at the pattern in England, there has been a big increase in the amount of local power and local discretion for local authorities and councils in England. I agree with the noble Baroness that there has been a contrast between the two countries. In Wales, there has been a process of centralisation; in England, there has been a process of decentralisation.
Lord Howarth of Newport
I am grateful to the Minister but does she recognise that, in the context of an unfair funding formula which simply fails to address the reality of the needs of Wales, Wales has less scope to cut taxes than other parts of the United Kingdom?
Baroness Randerson
I recognise that there is an issue with the funding formula but I think it is also possible to overestimate the level of unfairness. I believe that this week the honourable Owen Smith suggested that the gap in funding for Wales was £150 million per annum. That is a significant amount of money but in a budget of more than £15 billion it would not offer a total revolution for Wales. Nevertheless, I recognise that it is an issue that needs to be looked at in the context of other devolution discussions at the moment.
I turn to the questions asked by the noble Baroness. An impact assessment of the costs was published alongside the Wales Bill. It indicated that the estimated cost of setting up the income tax changes in Scotland was £40 million to £45 million. An updated estimate is now available of £35 million to £40 million, which is rather less than we initially thought. There has also been an updated impact assessment. The estimate of the annual running costs is £4.2 million, and that will be updated in due course.
The noble Baroness also asked whether we would agree to a Treasury impact assessment of the taxes on either side of the border. The key thing is that there are provisions in the Bill on the transparency of the whole thing and of the discussions between the parties. A joint Treasury committee has been established between the Welsh Government and the UK Government, and it is already in discussions. Welsh Ministers and UK Ministers are discussing these matters. That is the kind of detail that would flow from those discussions.
I turn now to the Labour amendment. Forgive me, but I find it quite difficult to understand the intellectual inconsistency of arguing against the removal of the lock-step, while at the same time arguing for an increase in the amount of devolved income tax from 10p to 15p. I remind noble Lords that the First Minister said on several occasions that the lock-step was an inappropriate method of dealing with income tax devolution, and that this was unusable and unworkable. He did not say that he was opposed to income tax devolution. Now, apparently, it is dangerous as a mechanism to devolve income tax and, at the same time, it is also all right to devolve 15p but not 10p.
I believe that noble Lords will be surprised that the Labour Party is having so much difficulty in coming to a firm position on this. The noble Lord, Lord Howarth, exposed one interesting piece of inside information with his use of the phrase “poisoned chalice”. He said that the devolution of income tax could be a poisoned chalice for the Labour Party in Wales. It is called “government”. I leave you with that thought.
Lord Rowlands
Lord Rowlands
My Lords, like many Members of this House, for a number of years I have had to read through Bills. In doing so, I eventually developed a habit that I cannot kick, namely that if I come to a clause or part of a clause that I cannot fully understand or appreciate and translate into the language of a lay man, I table amendments to delete those particular elements in the clause. I do this in the hope and the expectation that when Ministers reply they will tell me what it really means, and it will become crystal clear. I have to say that there have been occasions in the past when that has not happened, but I am sure that it will happen tonight and that we will have a clear view of what some parts of this clause are saying.
I must confess that I struggled with much of Clause 8. It is a very long clause; it rambles on for four and a half pages of the Bill. However, I was okay and I was getting there, until I hit new Section 116F on page 10. I was particularly intrigued by its subtitle, “Welsh taxpayers: Scottish parliamentarians”. I was intrigued to find out how this clause—presumably—seeks to define those Scottish parliamentarians who may end up paying Welsh income tax. I immediately seized the text to find out who these unfortunate—or fortunate—Scottish parliamentarians would be who could become liable to pay a Welsh income tax. I went through the text of new Section 116F from line 20 on page 10. We find in this new section that the Scottish parliamentarian is:
“An individual (T) who is a Scottish parliamentarian for the whole or any part of a tax year is a Welsh taxpayer for that tax year if—
(a) T is resident in the UK for income tax purposes for that year (see Schedule 45 to the Finance Act 2013),
(b) T meets condition C in section 116E for that year, and
(c) T meets either of the following conditions for that year.
(2) T meets the first condition if—
(a) the number of days in that year on which T is a member as described in any of paragraphs (a) to (c) of section 116E(4), exceeds
(b) the number of days in that year on which T is a Scottish parliamentarian.
(3) T meets the second condition if—
(a) the number of days in that year mentioned in paragraphs (a) and (b) of subsection (2) are the same, and
(b) T meets condition A or B in section 116E for that year”.
I am sure now that every Member of the Committee who is here will know exactly who the Scottish parliamentarians are who are liable for tax.
I am quite good at the Times Codeword, but I have not decoded this particular new section at all. I immediately seized the opportunity to read the usually helpful Explanatory Note on this particular new section. It should be illuminating and answer all my queries. It states:
“Section 116F(1) sets out that if an individual has been a Scottish parliamentarian in a tax year, they will be a Welsh taxpayer if they are UK resident for the tax year, have also been a Welsh parliamentarian in that tax year and can meet one of the two conditions set out in the section. Taken with section 116E(5) this means that, if an individual is a Scottish parliamentarian for part of the year, but not a Welsh parliamentarian in that tax year, they will be a Scottish (rather than Welsh) taxpayer, even if, for example, they also have a close connection with Wales”.
Did I read that right? Are we talking about a Scottish parliamentarian who would be liable if he or she was also a Welsh parliamentarian in the same tax year? Who is this amazing creature? Who has this amazing electoral capacity to serve in one tax year both as a Welsh parliamentarian and a Scottish parliamentarian so that he or she would then be liable to pay tax in Wales? I find it difficult to envisage such a person ever existing. Everyone talks about belt-and-braces draftsmanship and this must surely be it. I would be grateful, when the Minister comes to reply, if he or she will tell me whether they know of anyone who is likely ever to be a Welsh parliamentarian and a Scottish parliamentarian in the same tax year so that we might then know which Scottish parliamentarian may be liable for Welsh income tax.
I use this as an illustration because I sometimes find that in this House—and I was a strong campaigner in the other House—I occasionally rebel against parliamentary draftsmanship of this kind. All these cross-references make it almost impossible to read. Even an intelligent person who is used to reading legislation should not be faced with drafting of this kind. It would be a good idea, once in a while, for the House to say to the Government, “Take this back, not because we do not agree with the intent but because it is drafted in such a way that it is almost incomprehensible”. If we started doing that, maybe we would have Bills better drafted than this one is.
The Deputy Chairman of Committees (Lord Geddes) (Con)
Having posed such a fascinating question, would the noble Lord like to move his amendment?
Lord Richard
My Lords, I support my noble friend on this. I am not a tax lawyer and I have given thanks for that ever since I was called to the Bar. I am bound to say that I read this new section with incredulity. It is designed to cover a Scottish parliamentarian as well as a Welsh parliamentarian—Mr Mac ap Jones, I suppose we can call him. That individual is covered here in such a way that it is a masterpiece of almost Proustian complexity. Even for one who is reasonably familiar with looking at legislation, I found it almost impossible to understand. I did what my noble friend did and went to the Explanatory Notes, but they are almost impossible to understand, too. Why on earth are we legislating in this way? Some 40 years ago, I was a member of a committee presided over by the late Lord Renton on the drafting of legislation. It was an interesting committee and we said that the practice of legislating by cross-reference meant that you had to have half a dozen books open at the same time to get even a glimmer of understanding of the subject. We said that that was bad and something should be done about it. Of course, successive Governments said, “Yes, we agree entirely that it should be changed”, but it never is. It just seems to get worse as time goes on—until we arrive at the nonsensical drafting that appears in this Bill.
Perhaps I may make a simple suggestion to the Minister. It is obviously designed to deal with a person who may be working in one jurisdiction and has residency in another. It is meant to make sure that the person does not pay two lots of tax in two different jurisdictions. Why can we not have a simple residence test? I would suggest tentatively that the Minister should look at proposed new Section 116E, which states at the end of page 9:
“For any year, a Welsh taxpayer is an individual”,
and thereafter it sets out an enormously complicated structure. Why can we not say that in any tax year, a Welsh taxpayer is an individual who is resident in Wales? We could have similar rules for Scotland, England and Northern Ireland. With any luck, Mr Mac ap Jones would be successively reinterred and we need not bother about him again. Really, the way this has been drafted is too much. I agree totally with my noble friend that perhaps it is time for this Committee to say, “We do not like this drafting. We don’t understand the purpose of it, and we think it could be simplified so that people can understand it. The Government should take it away and try again”.
Lord Wigley
I want to join briefly with colleagues who have raised these points. Over many years I have often heard the argument made that matters of substance are passed through Parliament by order—by secondary legislation and so on. Here we have the reverse position, where there are matters that should surely be set out in orders. Ministers should be empowered to introduce orders to deal with a variety of circumstances that certainly do not warrant taking up the face of the Bill. If that were the case, there would be flexibility within the orders to deal with other cases which possibly have not been thought of. Putting this in the Bill in this way is surely a nonsense.
Lord Thomas of Gresford
My Lords, I am most grateful to the noble Lord, Lord Rowlands, for drawing my attention to these new sections, in particular new Sections 116G and 116H. I spend around 140 days of the year here, about 60 days in my family home in Scotland and the rest of the time in Wales. On these formulae, I am not liable to pay income tax in Wales, certainly not in Scotland, and possibly not in England, if we have similar provisions. Thank you very much. Devolve away.
Baroness Randerson
My Lords, I understand that this new chapter is not the easiest read. In fact, I found it quite good for getting to sleep on one occasion. However, it is important to recognise that this is a complex issue and has a direct relationship with things such as tax law, and when you get an indirect relationship with tax law. When you get into these things, the more you think about it, the more exceptions that occur to you to be considered.
The clauses in this Bill are very closely based on those in the Scotland Act and have been subject to the whole scrutiny process in that respect. I suggest that noble Lords think about how to deal with somebody who is a lorry driver or a shift worker. Every time you set a test, you can think of exceptions. Before the noble Lord, Lord Rowlands, thinks that being a Scottish parliamentarian and a Welsh parliamentarian in the same year is unusual, may I remind him that I call this the “Keith Raffan clause”? Keith Raffan was an MP in north Wales and then almost immediately an MSP in Scotland. He moved from Wales to Scotland.
Lord Anderson of Swansea (Lab)
Did he hold both positions in the same tax year?
Baroness Randerson
We are talking about the situation in the past. Keith Raffan moved from Wales to Scotland; he also moved from the Conservative Party to the Liberal Democrats. The whole thing is a relevant example: the thing you would imagine would never happen has already happened.
Lord Rowlands
I am sorry; I do not know Mr Raffan’s parliamentary history? Was Mr Raffan both a European Member and a Member of the Commons in the same tax year?
Baroness Randerson
He was an MP and an MSP in the same tax year. I am pretty certain I am right, but the principle is that he moved from Wales to Scotland, straight from one job to the other.
Lord Richard
Is it not absurd that we should be legislating in this way for one person? Is it not absolutely ludicrous? Has there been a flow of parliamentarians across the borders in this way, or is it just this one individual? The Minister, with great respect, should take these measures back and look at them again and, if she wants to, simplify them and bring them back.
Baroness Randerson
This has been through the whole scrutiny process in relation to Scotland. If noble Lords wish to blame someone, I suggest they blame the Scots. They sat in here and in the other place and thought up a lot of complexities that had to be answered in the case of both this Bill and the Scotland Act. Just for the sake of clarification—
Lord Anderson of Swansea
What is the answer to the good point made by the noble Lord, Lord Wigley, that this is appropriate for an order, rather than for the face of the Bill?
Baroness Randerson
That is a perfectly valid point, but we have it here in the Bill. I am also very conscious of the fact that noble Lords constantly complain that there is not enough in the Bill and that there should be more on its face and less in orders for the sake of transparency. On this occasion, you have total transparency. There is also, of course, the argument that we are talking about tax rules for individuals. In fact, if you have more on the face of the Bill, that could be said to be easier for individual taxpayers to follow.
May I finally make it absolutely clear to noble Lords that the noble Lord’s amendment would, in fact, mean taking away the simple test—which is the test, if you have only one home, of where your closest connection is—and replacing it with everyone counting days? Counting days is one way of dealing with it but not the simplest one. For most people, the simple thing is to ask, “Where is your home?” and, “Where do you spend most of your time?”. Taking away that option and leaving everyone counting days would possibly make life much more complex.
The noble Lord, Lord Richard, asked why not just say “resident in Wales”? I think noble Lords are well aware that the concept of where your residence is has caused a number of people a lot of trouble over the years. It is really important that we have clarity and absolute rules. There should be no doubt in people’s minds as to which rules they need apply.
Lord Richard
With the greatest respect to the noble Baroness, residence is a very well known concept in tax law. If you talk to taxpayers, particularly in areas such as the City of London, they know what their residence qualification is. They know that they have to establish a certain residence and that it is on the basis of where that residence is that they pay their tax. That is a much simpler concept than this.
Baroness Randerson
These rules flesh out what the term “residence” means in tax rules in relation to Wales. I hope noble Lords will accept that although the rules may not make pretty reading, they are workmanlike and, despite their complexity, they are clear, unambiguous and easy for people to follow.
Lord Rowlands
I find it difficult to believe that they are very easy to follow. I also do not believe that there is clarity here: there is a lot of confusion. I am delighted that the noble Lord, Lord Thomas, will become completely tax-free as a result of the other provisions in the Bill. What we are trying to show and expose is that we are getting fed up with the way in which Bills are drafted in this kind of way. The constant cross-referencing makes it almost impossible for a Member of Parliament or Member of this House to follow the Bill as closely as he or she would want. This amendment was tabled to cause this debate and I have no intention of forcing it to a vote because, of course, in the process I would take out other parts of the Bill that I would support. I hope that, if nothing else, when Ministers go away and talk to parliamentary draftsmen, they will say that there is great and bitter agitation against this type of drafting and legislation. If nothing else, this debate would then have served a purpose. I beg leave to withdraw my amendment.
Baroness Randerson
Baroness Randerson
Lord Wigley
“(3A) The Secretary of State must lay a draft statutory instrument containing an Order under subsection (1) before each House of Parliament and the Assembly if—
(a) the First Minister or a Welsh Minister appointed under section 48 of GOWA 2006 moves a resolution in the Assembly that, in the Assembly’s opinion, a recommendation should be made to Her Majesty to make an Order under section 12(1), and(b) the Assembly passes a resolution on a vote in which the number of Assembly members voting in favour of it is not less than two-thirds of the total number of Assembly seats. (3B) The Secretary of State must lay the draft statutory instrument specified in subsection (3A) within the period of 30 days beginning immediately after the day on which the resolution under that subsection is passed.”
Lord Wigley
My Lords, this amendment stands in my name and that of my noble friend Lord Elis-Thomas. I will also speak to the associated group of amendments on the Marshalled List. In doing so, I suspect that there may be differences of opinion across the Chamber on some of the matters involved in these amendments.
Amendments 41 to 48 are drafted to ensure that only the National Assembly can begin the process of calling a referendum on the commencement of the income tax provisions in the Bill. Amendment 41 would ensure that a referendum might be called if a two-thirds supermajority of Assembly Members approved it—and that, this being the case, the Secretary of State would be required to make the order within 30 days of it being approved. This is evidently a change from the 180 days in the Bill, which we believe to be an unnecessary delay.
Amendments 42, 43 and 44 are consequential and ensure that although an order would still need to be laid before each House of Parliament, only the Assembly would need to approve the referendum order. We believe that the responsibility should be fairly and squarely on the shoulders of the Assembly in this matter, as in other matters which we debated earlier.
Amendment 45 similarly ensures that there is no unnecessary delay in the proceedings. As currently drafted, Clause 12(6) allows the Secretary of State to consult on the draft order until whatever time he or she considers appropriate. Amendment 45 would remove that provision.
We have laid an amendment arguing that Clause 13 should not stand part of the Bill for the reason that, were our other amendments in this group carried, the provisions in this clause would no longer be necessary. It should be for the Assembly to determine whether a referendum is needed. This decision should not be subject to the approval of the Secretary of State.
Amendments 47 and 48 allow for a supermajority of the National Assembly to decide whether there should be a referendum on transferring income tax powers or whether—I emphasise this—simply to commence the provisions. We believe that if a cross-party consensus were reached in the Assembly, which would be needed in order to achieve a supermajority of Members, that institution should not be compelled to put it out to a referendum. If all the parties agree on these matters, why on earth go to the expense of holding a referendum? Scotland is apparently going to be given far-reaching new taxation powers without such a referendum. Why should we in Wales have one forced on us?
On Monday, I argued that the Assembly should have the power to hold a binding referendum on matters which are already within its competence. A referendum on tax matters should be an available option if the Assembly deems it necessary. That would be for the Assembly to determine. The principle contained in this group of amendments is the same: if the Assembly should determine for itself whether to put a question to the electorate, it should have the power to commence that process itself. Similarly, if it agrees that a referendum on a technical issue such as this should not be necessary, it should be within its power to commence the provisions itself and, at election time, to be held accountable to the Welsh electorate on that basis. I beg to move.
Lord Elis-Thomas
My Lords, this amendment follows the amendments to Part 1 that were debated on Monday. The intention is to establish the constitutional principle that it is by requiring a threshold of a two-thirds majority of Members of the National Assembly present and voting that we can maintain the checks and balances brought about by the change in devolution. Since we debated these matters on Monday there has been rapid movement in the interparty discussions both here in Westminster between the political leaders and, equally importantly—I was about to say more importantly—in Cardiff. Those discussions have resulted in the Motion on the Assembly’s Order Paper which will be debated on Tuesday. It will clearly set out the view of the four party leaders in the Assembly in relation to negotiating with the United Kingdom Government and to the interparliamentary negotiations on some aspects of the procedure that will be required to take these matters further.
The principle of interparty agreement in Cardiff leading to a request to the UK Government, and to the UK Parliament where relevant, should generally be welcome in this place and throughout the United Kingdom levels of government in response to the new times that we are in as regards devolution.
Interparty agreement has been the route that we have taken for the development of devolution in Wales since the conversion of the Welsh Conservatives—I see my friend from the Assembly, the noble Lord, Lord Bourne, sitting on the Front Bench—to a position of embracing devolution. My intention has always been that, regardless of what happened in Scotland or Northern Ireland, that should be the route followed in Wales. Therefore, when there are contentious matters, it is the Assembly, on a supermajority, that should decide these things. It does not need to have it imposed on it by Parliament or, indeed, by political parties outwith the Assembly.
I therefore ask the Minister to consider this amendment in a spirit of agreeing to serious discussions. The Prime Minister has said—we do not need to quote this continually—that Wales should be at the heart of the debate on devolution. If the Assembly’s making a request to the UK Government and Parliament is not the people of Wales speaking through their elected representatives and asking to be part of the discussion on equal terms, what is? How are we to express that will? The expression of that will is essential to the spirit of the new union, as the First Minister of Wales called it today in this city. In that spirit, I ask the Government seriously to consider the direction of our amendment.
Lord Elystan-Morgan (CB)
I endorse with very great enthusiasm everything that has been said by my noble friends Lords Wigley and Lord Elis-Thomas, particularly on the question of unity. We as a nation have been blighted by disunity for so long. That refrain was taken up over the years by my old and very dear friend Lord Elwyn-Jones: our predilection to fissiparous division. He had a marvellous story, and I hope the House will indulge me for a moment. A shipwrecked sailor was cast on a desert island, the only survivor of the tragedy. He was there for years, but ultimately a ship drew into the bay. A boat came ashore, and there was great jollification all round. Before leaving the island, the sailor showed the boat’s crew where he had been living: his living quarters, where he had kept the animals and a cave with a cross over it. He said, “That is the church in which I worshipped on Sundays”. Somebody among the boat’s crew said, “But there’s another cave with a cross on it”, and he said, “I wouldn’t be seen dead in that place”. That is the sort of people that we have all too often been in Wales, and unity is very greatly to be welcomed. I have already paid tribute to the noble Lord, Lord Bourne. The Silk commission tried to find a reasonable, meaningful, least common multiple. The chairman, the assessors and the four representatives of the various parties succeeded in doing that, and long may that continue.
I turn to the question now of the amendment itself. I accept the principle that it is healthy, proper and courageous for the Welsh people to take on themselves these heavy fiscal responsibilities and that the decision should essentially be theirs alone. On the other hand, I would not wish the situation to develop other than through a referendum because I think that a referendum would clarify the mind—as Dr Johnson might have said—and would allow these issues to be examined in very great detail. I was disappointed in 1997 when the Labour Government, having been elected, made it clear that they would proceed with the issue of some form of Parliament for Wales and then said at the same time that there would be a referendum. I was disappointed but I was enthralled that we managed to carry that referendum, albeit by a slim majority. It gave us a sovereignty and a moral certainty in relation to the matter and I think the same would be true in this connection.
I am sorry that I missed the beginning of this debate—I was upstairs in a sub-committee dealing with European matters and I apologise for that—but I believe I heard the Minister say, with regard to a referendum, that she wished that the matter would be dealt with fairly quickly by the Welsh Assembly. I see that she nods. This is my plea. This is a crucial matter that deals with the very essence of whether a Welsh Parliament can succeed in a credible way. Everything turns in the first place on the validity of that referendum in so far as it reflects the wishes and understanding of the Welsh people. There can be no question of meandering into the dark in this matter, marching possibly to the beat of a distant drum while looking at some faint point of light in the distance. It is the same as a jury contemplating a serious case. There has to be certitude over exactly what the issues are and what the main relevant facts are in relation to them.
Let me come to the point immediately. There are many issues but the most important one is Barnett. The Government have said in relation to Scotland, understandably and perhaps in a mode of panic, that they will not touch Barnett at all. Barnett shall be utterly inviolate. Having said that, it means that it is virtually impossible to contemplate a situation where they will be willing to discuss Barnett in the context of Wales. It is one and indivisible—the bubble is either pricked or it is not. As far as the losses under Barnett are concerned, I know that various figures are mooted. The probability is that the annual loss at this stage is of the order of £200 million to £300 million and will increase as prosperity increases. Be that as it may, I ask the Minister to give these undertakings. First, the Government should appreciate that it is the legal right of the Welsh Assembly, and no other body, to decide whether there should be a referendum and when there should be one. Secondly, they should not contemplate bringing any pressure to bear on the Welsh Assembly in that regard—it should have a free, unfettered choice. Thirdly, there should be no question of asking the Welsh people to determine this momentous matter of a referendum without the Barnett matter having being settled fully, comprehensively and once and for all.
Baroness Morgan of Ely
My Lords, the Labour Party in 1997 made a promise in that first referendum which established the Assembly. In that promise we made it clear that we would not introduce income tax variations to Wales unless and until the people of Wales gave us permission to do so. Let us not forget that we won that referendum by a hair’s breadth. It would be a massive political mistake to go against that. I honestly believe that had there been a question about tax in that referendum we would not have an Assembly today. We have to honour that promise we made to the Welsh electorate. The referendum promise to the people of Wales is one of three locks we want to be sure are in place before tax raising or cutting powers can be used in Wales. If we have learnt anything from the Scottish experience it is that the public will get involved if it is something that impacts on them directly. There is nothing that impacts more directly than income tax so they are sure to get involved in this debate. We must do them the honour of respecting their views and we will not know what those views are unless and until we hold that referendum.
Baroness Randerson
I thank noble Lords for their contributions to this debate. The Government have been consistently clear that the decision on whether to trigger a referendum on the devolution of income tax is a matter for the Assembly and the Welsh Government. I say that in response to the noble Lord, Lord Elystan-Morgan. Clause 13 empowers the Assembly to trigger a referendum to ask the electorate in Wales whether they want some of their income tax to be devolved. The Government agree with the Silk commission that the 2011 referendum on full lawmaking powers for the Assembly provides the best model for conducting such a referendum. Clause 13 replicates for the most part Section 104 of the Government of Wales Act. The clause provides for the Welsh Government to move a resolution in the Assembly to trigger a referendum. If the Assembly passes the resolution by a two-thirds majority, the First Minister must ensure that notice of the resolution is given in writing to the Secretary of State. The Secretary of State or the Lord President must lay a draft order before Parliament within 180 days. I refer the noble Lords, Lord Wigley and Lord Elis-Thomas, to Clause 13(3)(a) and (b) on page 18 of the Bill:
“the Secretary of State or the Lord President of the Council must lay a draft of a statutory instrument … the Secretary of State must give notice in writing to the First Minister of the refusal to lay a draft”.
The first thing I asked when I read the Bill was, “In what circumstances could the Secretary of State refuse?”. I was advised that the only sorts of grounds on which a Secretary of State could refuse would be where there was genuine doubt about the procedures of the Assembly that led to the two-thirds majority being obtained or whether it had been obtained.
Lord Wigley
Where in the Bill does it say that those are the only circumstances in which the Secretary of State can refuse to do so? Why must it take up to 180 days for such a decision to be taken?
Baroness Randerson
The Bill does not give those reasons. The legal advice I was given related to tried-and-tested constitutional principles. Dare I say it, the noble Lord is now asking for more to go into the Bill and in the previous debate he was asking for it to be reduced.
Baroness Randerson
I will just answer the noble Lord’s intervention and then I will certainly give way.
The noble Lord, Lord Wigley, asked, both in his speech and just now, about the 180 days. I remind noble Lords that the previous referendum in 2011 took 246 days, albeit with the intervention of a general election—but we have them quite regularly. It could be that another referendum would be interrupted in such a way. I am sure that the noble Lord, Lord Elis-Thomas, recalls that there was a tremendous scramble to make that timetable of 246 days. Our 180 days is therefore an amendment to take account of experience. I reassure the noble Lord that it is a limit, not a target.
Lord Elystan-Morgan
With great respect, I wholeheartedly agree with the noble Baroness that that is the only circumstance in which there could be any dubiety at all. My question is not irrelevant: who decides? Is it the Secretary of State who decides whether there has been a valid two-thirds majority, or it is the courts?
Baroness Randerson
That would depend on the circumstances, would it not? Someone may wish to test such a matter before the courts; I speculate here, but there might be objections lodged by certain Assembly Members. I emphasise to noble Lords that the driving seat is occupied by the Assembly in this process.
Lord Elis-Thomas
I will not pursue this matter, but I tell the Minister that if she has been given legal advice that procedures of the Assembly are in doubt, she must know that those matters are for the Presiding Officer and the Assembly itself, and must be so.
Baroness Randerson
That is exactly the view of the Government. The Assembly, as I have just said, is in the driving seat in this process.
I resume my response to the initial speeches in this debate. I point out that by opposing the question that the clause should stand part of the Bill and through Amendments 41 to 45, 47 and 48, noble Lords are of course seeking to remove important parts of a tried-and-tested mechanism which was recommended by the Silk commission. Silk is the basis of consensus. The noble Lord, Lord Elis-Thomas, referred to the importance of agreement, and so on, and the characterisation of consensus as something that the Assembly has sought on many occasions. Silk is the basis of the consensus behind the Bill. I ask noble Lords to recognise that we sometimes need a bit of choreography in order to maintain unity. That means that there has to be agreement to work in unison, although it may not always be exactly what we would prefer at any one time.
Amendments 41 to 45 would remove the need for Parliament to approve the draft order that sets out how a referendum is to be conducted, and the right of the Secretary of State to consult before such an order is laid. I repeat that all this is based on the experience of the 2011 referendum for lawmaking powers. It is the mechanism that has been agreed.
Through Amendments 47 and 48, noble Lords are seeking to provide a mechanism by which the Assembly could resolve to commence income tax provisions in this Bill without a referendum. I realise that there are those who do not believe that a referendum is necessary, but I recognise entirely the arguments put forward by the noble Baroness, Lady Morgan, that the original referendum did not include a tax question. It is therefore important that people are engaged in this debate and given the opportunity to make their voice heard. It is a fundamental, far-reaching issue and therefore the people of Wales need to be consulted.
The noble Baroness, Lady Morgan, was concerned that I had deliberately misunderstood her, which I find a distressing accusation. I invite the noble Baroness to reread what she said earlier in the debate; she might then understand why it is possible to have misunderstood her.
I therefore ask the noble Lord, Lord Wigley, to withdraw the amendment, and not to oppose the question that Clause 13 stand part of the Bill.
Lord Wigley
My Lords, I am grateful to every noble Lord who has taken part in this debate and to the Minister for her response. There has been clarification on some points, such as the 180 days and so on, which is useful.
There is, however, a central point here: whether or not this House trusts the National Assembly for Wales, the elected parliament of Wales, to take decisions such as this. I have every faith in its Members that, if there is doubt as to whether they can carry the people of Wales with them in their decision within the Assembly, they know that they may need to revert to a referendum. Of course, they have as much intelligence to provide that as we do in this House.
Lord Wigley
More, my noble friend says. In many ways, he is right: they are in Wales dealing with the circumstances of Wales. With all the good will in the world, what is done here is done for Wales and what is done in Cardiff is done by Wales. We want to ensure that they take that responsibility on their own shoulders. That is one of the driving forces towards getting a consensus of approach.
The noble Baroness mentioned choreography in getting agreement. There must have been a lot of choreography in getting all four party leaders to sign up to the Motion that is coming before the Assembly next Tuesday. It is a substantial step in the right direction. The way in which we are doing these things in Wales is different to the way in which they are being done in other parts of these islands. I think that, in many ways, we are doing them better and they will stand the test of time. We have to trust the people in a referendum, yes, but also the representatives to come to a sensible decision in regard to such matters.
I accept what the noble Lord, Lord Elystan-Morgan, said about the Barnett formula. We will be coming on to that in a later bank of amendments. Of course there has to be an acceptable basis before one moves into the income tax provisions, but we are going to have to go there. Otherwise we are not going to get the answerability that we need. Any hurdle that we put between the present position and getting those powers means that we are imposing a delay, a built-in roadblock, that stops the movement towards a more responsible and transparent national parliament for Wales. That is the background to the tabling of the amendment, and the Government should take it on board not just in the context of this debate but in the generality of the Bill. On that basis, I beg leave to withdraw the amendment.
Lord Rowlands
My Lords, there is a consensus that both stamp duty and landfill tax should be devolved. I have no intention of questioning that consensus. The purpose of my seeking a debate on these clauses is to ensure that we know the implications of devolving these taxes, particularly on the block grant. To date, I do not think we have concentrated on that issue.
I have some questions, first, about stamp duty. Stamp duty revenues were £115 million in 2010-11, according to the Silk commission. This represents only 2% of the total. The Silk commission makes the obvious point that stamp duty is a very volatile tax. It can vary from year to year depending on the state of the housing market. No form of indexation such as has been developed to deal with income tax devolution was recommended; in fact the recommendation was for a fixed reduction. How is the fixed deduction from the block grant going to be determined? What will be the arrangements and process, and how will it be assessed? What impact will the devolution of stamp duty have on the block grant?
The second tax that we are devolving—the landfill tax—is very different. It is a tax that is not really aimed at raising revenue. It is intended to encourage waste saving and recycling. In fact, the success of this tax would be if the revenue declined. Indeed, the Silk commission points out that that is exactly what is happening: the taxable base—that is, the volume of waste sent to landfill—is declining. Across the UK, the taxable base for landfill has fallen by 33% in the last five years, and so the value of the block grant offset would need to reflect a declining tax base. Again, there is a serious issue about what impact the devolution of this tax would have on the block grant: how it will be assessed and how it will be decided what the deduction will be.
There are a couple of other complications with the landfill tax, as listed in paragraph 24 of the March 2014 White Paper. There is a UK Landfill Communities Fund attached to the landfill tax. This fund is financed by contributions from the landfill site operators, who receive an LfT credit worth 90% of any contribution they make. This is a UK fund and a UK landfill tax credit arrangement. However, once devolved, the operators in Wales will no longer be eligible for UK tax credits. As I understand it—and it is clearly stated in paragraph 24 of the White Paper—once we devolve the landfill tax, the eligibility for the UK-based landfill tax credits will disappear. I am not quite sure but I thought that the Minister implied in an earlier remark that in fact it would not, but according to paragraph 24, that is the case. It says:
“Once LfT is devolved to Wales, operators of landfill sites in Wales will no longer be eligible for a UK LfT credit”.
So that credit would fall. Are there powers in the Bill to allow a Welsh Government to create an equivalent landfill tax credit scheme of this kind?
In Wales, there are 24 registered landfill site operators, of which 15 were in receipt of tax credits during the financial year 2013-14. HMRC will not disclose information relating to how much the individual operators receive but the landfill communities contributed £4.19 million in 2010-11, £4.3 million in 2011-12 and £4.3 million in 2012-13 towards environmental projects in Wales.
Paragraph 24 on page 11 of the White Paper explains that there is going to be a transitional period. Will the Welsh Government, if they wish to, be able to establish an equivalent landfill tax scheme, of the kind that has been operating and which has successfully ensured that in some areas—where these landfill sites are often very controversial and have impacts upon local communities—they are able to make contributions and maintain some kind of local community fund?
The second problem identified in paragraph 24 is that:
“LfT is a key lever for the UK Government to achieve its 2020 landfill reduction target under the Landfill Directive (relating to the biodegradable municipal waste). Member states may be fined if they fail to achieve their target. In the unlikely event that the UK fails to meet its landfill reduction target solely because of changes to landfill tax policy in Wales, the Government will seek to recover this cost from the Welsh Government”.
There is an uncertainty hanging over this issue and the impact that it will have.
We are advised in paragraphs 31 and 32 of the Government’s White Paper on the question of how we are going to determine the reduction in the block grant. I would be grateful if the Minister could elaborate and explain paragraph 31 in more detail, as I have not fully understood it. It indicates some kind of proposition for the way they will handle the assessment of the reduction in the block grant once these taxes are devolved.
Paragraph 32 says:
“The Government continues to discuss this proposal, and other options, with the Scottish Government and has now opened similar discussions with the Welsh Government”.
Could the Minister update us on these discussions? How close are they to coming to some real understanding and agreement on the basis for reductions in the block grant as a result of devolving these taxes? I hope that the Minister will give an assurance that when we come to Report, these two important implications of how the block grant will be reduced will be much clearer and we will be able to approve these clauses in the full knowledge of the impact they will have on the block grant. I hope that the Minister will be able to reply.
Lord Anderson of Swansea
My noble friend as usual asks some very probing and cogent questions. On the face of it, these transfers of tax responsibility are relatively symbolic because, on the “bucket and the well” principle, what is gained on the one hand is lost on the other in terms of the block grant. It would be helpful if that could be elaborated on. Perhaps the best answer is that these transfers give a basis for the borrowing powers, which are very welcome, and which are contained in the Bill. Just a word of caution, however: the idea of a transfer of stamp duty has already been seized upon by other groups, notably by the Mayor of London, Boris Johnson. London, of course, has far greater resources and far more wealthy houses and land than Wales. If this were to move along the spectrum in the UK, it could have substantial implications, not least for Wales. Therefore, I utter a word of caution. However, on the other side of the coin, the borrowing powers, and the use to which they will be put—pace the noble Lord, Lord Thomas of Gresford, who feels that north Wales is likely to lose out in terms of the borrowing powers—are indeed welcome in principle.
Baroness Morgan of Ely
My Lords, Labour supports the move to devolve stamp duty land tax to Wales as it would be an obvious candidate due to the highly immobile nature of the tax base. The other issue to consider is the fact that housing is already a devolved issue. Devolving this tax would allow the Welsh Government to have a more comprehensive approach to housing needs in Wales. I echo the concerns of my noble friend Lord Rowlands about the impact on the block grant. Obviously, there would be an impact. The Command Paper states that the Government continue to discuss this proposal. However, the problem is that we are back to a negotiated agreement based on subjective decisions, so it is not as clear as we would like it to be.
As my noble friend Lord Anderson said, we have to be very careful about this issue. If Scotland and Wales opt for this measure, what will happen when London, with its £1.3 billion of stamp duty, starts to ask for it? If we go down this route, we must be very careful and do so with our eyes open. I am not saying that we should not go down this route but we should be aware of the floodgates that we might open in doing so. However, we support this tax.
The most obvious problem with the landfill tax is that the more successful the policy of using the tax as a means of getting people not to use landfill is, the less income will be derived for the Welsh Government. The other problem is that the current system of landfill does not identify the geographical location of the taxable activity, so we would have to bring in a whole new administrative mechanism as it does not exist in the UK at the moment. A danger could arise of the cross-border disposal of waste if there were a change in the rate of tax between one country and another. We need to be aware that these things could cause problems. However, as I said, the benefit is that this is a relatively immobile tax and waste management is a devolved responsibility so there would be opportunities to co-ordinate policy, particularly in respect of the environmental aims of the Welsh Government. We are in favour of devolving these taxes given their importance in providing an independent source of income to borrow against but we should be aware of the floodgates that might open in the rest of the UK.
Lord Newby
My Lords, I am grateful to the noble Lord, Lord Rowlands, for raising these questions, which are central to how these two devolved taxes are administered. As he said, stamp duty land tax is a somewhat volatile tax and is not as steady as some others. However, there is a borrowing power to deal with any volatility. As with any other body, it will be available to the Assembly to build up cash balances which could be used should it find that in a particular year stamp duty brings in less than it expected. However, the volatility is not all one way. As with the UK Government more generally, in some years the Welsh Assembly will do very well out of stamp duty land tax and may choose in such a year to set aside a certain amount against any potential property downturn.
The noble Lord’s most fundamental question concerned how one decided what the block grant off-set should be for both these taxes. As he pointed out, the Command Paper says that there is a two-part process. First, you make an initial reduction to the block grant which is based on current takings from those two taxes. That is straightforward; it is just a mathematical calculation. Secondly, you have to decide how you amend the block grant in every subsequent year. As we say in the Command Paper, a logical way to do it is by having smaller Barnett consequentials every year. However, that may be an unacceptable way of doing it from a Welsh perspective. There are other ways of doing it. For example, it could in theory be linked to overall changes in public expenditure. However, this is one of the key issues to be discussed by the Joint Exchequer Committee, which will have its first meeting next week. Therefore, I hope that by the time we reach Report there will be something further to report on all this. However, that is the mechanism for deciding exactly how the subsequent year adjustment is calculated. The key point is that it is something that will be agreed with the Welsh Assembly, rather than being imposed by the UK Government.
The noble Lord, Lord Rowlands, asked about the eligibility for UK tax credits, or rather how tax credits will be treated. It will be for the Welsh Assembly to determine what sort of tax credits it wants. If it wants to set up the same operation as we have had with the Landfill Communities Fund, it has the power to do so.
Lord Newby
It is in the Bill. I will correct myself if I am wrong but I am sure that this flows from the point I made earlier about the ability for tax credits to be assigned to these taxes in the same way in Wales as they are in the UK.
The noble Lord, Lord Rowlands, asked what would happen in respect of the existing Landfill Communities Fund and possible contributions to Wales. The fund is financed by contributions from landfill site operators. Obviously, once the Welsh landfill tax is in operation, the eligibility under the UK fund will eventually dissipate. However, I understand that this will not happen immediately. I believe that the Joint Exchequer Committee will determine the exact mechanism for dealing with that, bearing in mind that the Welsh tax is not envisaged to be operational until 2018, so there will be a transitional period and projects that are already in the planning process, or where allocations have already been made, will go ahead.
Questions were asked about how you determine whether somebody is an eligible landfill operator. My understanding is that 13 landfill operators have all their landfill sites in Wales and would need to register for the new Welsh tax and deregister from the UK landfill tax, and that another 11 have landfill sites in both Wales and elsewhere in the UK and would need to register for the new Welsh landfill tax in respect of their sites in Wales but would remain registered for the current UK landfill tax.
The noble Lord, Lord Rowlands, asked what would happen if, as a result of Welsh decision-making, the UK failed to meet its landfill reduction targets under the landfill directive. He also asked about the meaning of the statement,
“the Government will seek to recover this cost from the Welsh Government”—
that is, if the UK were fined. Obviously, if the Welsh Government were to say that they were setting the landfill tax rate at or near zero, and as a result all English landfill operators were rushing to landfill in Wales, and we therefore missed our target, it would be reasonable for the UK Government to say, “We are being fined only because of that decision and therefore it is reasonable that the Welsh pay any fine”. We are talking about a very remote possibility, not least because we are making reasonably good progress in reducing landfill across the UK. We do not believe that we are in danger of being fined under that directive in the foreseeable future.
The noble Lord, Lord Anderson, raised a word of caution and talked about borrowing powers and their limits. All I will say is that the sooner the Welsh Assembly agrees to have a referendum, that referendum is won and an element of income tax is devolved to Wales, the greater the borrowing powers for the Welsh Assembly will be.
The noble Baroness, Lady Morgan, raised a couple of problems. I am new to this debate, but I am slightly surprised at the tone of the noble Baroness. She speaks of problems, of everything being difficult and of unforeseen circumstances. It is quite depressing. She asked about what would happen if London asked for control of its own stamp duty land tax. The English regions—not just London but the Core Cities Group, which represents all the northern cities as well as London—have argued that all property taxes should be devolved to them in the same way that stamp duty land tax will be devolved to Wales. I cannot see it being a problem for Wales as, in cash terms, stamp duty land tax is a very small proportion of the total tax take. It will not have a significant impact on the overall level of public expenditure by the UK. Therefore any Barnett consequentials, for example, of London having control of its own stamp duty land tax, would be minimal. I would have thought—and I know that this applies to my colleagues—that Wales would welcome the thought that England would benefit from a degree of devolution in the same way that Wales expects to benefit.
Baroness Morgan of Ely
If you just look at stamp duty in London, the estimate is that £1.3 billion is collected there. That is quite significant. It is worth pointing out that that is a concern. We want to see this devolved, but I thought that the whole point of the House of Lords was that we look at something and say that there may be a problem here—let us check it out. I thought that was the point of this place.
Lord Newby
We like to do it in a positive spirit. The truth is that stamp duty land tax is a very small proportion of the overall UK tax take compared to income tax, national insurance and VAT. It is only a couple of per cent of that. It is a small tax. It is important for local areas, and it will be interesting to see what Scotland proposes to do, now that it has powers over its stamp duty land tax, to shift the balance of where that tax is borne. One of the advantages of devolving the tax to Wales is that the Welsh Assembly can choose to do something similar if it wishes.
Lord Rowlands
I apologise for interrupting the Minister, but he has mentioned Scotland. Presumably the discussions between the Government and Scotland on how the reductions will take place in the block grant to Scotland are much further down the road. May we assume that our arrangements will be very similar to, if not the same as, what will be agreed in Scotland?
Lord Newby
There is a Joint Exchequer Committee in Scotland, as there is in Wales. It will be for the Welsh Assembly representatives to decide whether the approach that is eventually adopted in Scotland makes sense for Wales. I think that there is a presumption that it probably will. The less complexity that there is in how we do these things, the better. Although there may be a presumption in that respect, there is no rule that requires it. It will be for that committee to look at Scotland and other examples in making up their minds.
I hope that I have answered the principal questions that were raised and, on that basis, that the noble Lord will remove his objections to the clauses.
Lord Wigley
“Responsibility over fuel duty
Her Majesty may by Order in Council provide for the transfer of responsibility for varying fuel duty to the National Assembly for Wales.”
Lord Wigley
My Lords, I will also speak to Amendments 50 and 51, which each seek to transfer financial powers and hence strengthen the Assembly’s tax base.
Amendment 49 would transfer powers over fuel duty to the Welsh Government, so allowing that institution to address the concerns of the electorate relating to fuel costs, a problem which is particularly stark in rural areas, where people are forced to spend significantly more on fuel than in urban areas. The Office for National Statistics recognises that poorer families in rural areas spend more of their income on petrol than richer families. Plaid Cymru has long pushed for a genuine fuel duty stabiliser to cap prices at the pump when prices rise above expectations.
Amendment 50 provides the mechanism for a review of the tax receipts from Welsh natural resources. We believe that this should include the Crown Estate, which we believe should be the responsibility of the Assembly. Wales is an energy-rich nation, yet too many of its citizens live in fuel poverty. We believe that Wales should be properly recompensed for its natural resources.
Amendment 51 is aimed at transferring powers over corporation tax to Wales, in the event of this power being transferred to Scotland or Northern Ireland. I should point out that the draft Motion, standing in the name of all four party leaders in the National Assembly, supports the approach taken in Amendment 51 in relation to corporation tax, stating:
“The National Assembly for Wales … calls for the UK Government to ensure that the same powers are given to Wales regarding the devolution of corporation tax if they are provided to Northern Ireland and Scotland”.
Those are the words that are supported by all four party leaders in the National Assembly and that will be discussed on Tuesday.
We recognise that the Silk commission in its report did not support the transfer of corporation tax to Wales due to its volatility, but said that it should be considered if corporation tax were devolved to Northern Ireland, which was seen as most likely at that stage. We believe that it would be wholly unacceptable if these powers were granted to other countries and not to Wales. The amendment is drafted to ensure that, if these powers are given to those other countries, the same would happen for Wales to ensure that we are not left behind in this matter. I beg to move.
Lord Rowe-Beddoe (CB)
My Lords, I wish to speak to my Amendment 51A, which relates to air passenger duty devolution. I draw the attention of the Committee to the register of interests, in particular the reference to my chairmanship of Cardiff Wales Airport.
The UK Government’s stance on APD remains bafflingly inconsistent with the devo-zeitgeist, if I may call it that, that has so enraptured everyone over recent months. The decision to cherry pick parts of the Silk recommendations is a sad example of the short-sightedness that seems continually to put Wales behind. The Bill provides an opportunity to redress this state of affairs. I shall quote the relevant passage from Silk 1, so that I can put it on record. It states:
“We have also recommended the devolution of long haul rates of Air Passenger Duty, and consideration of full devolution in the future. We do this in the context of the wider consideration of regional airport developments across the United Kingdom associated with the independent commission on airport capacity, chaired by Sir Howard Davies”.
The UK Government position currently is that:
“APD devolution will distort competition”,
when applied to Cardiff and Bristol. This is unsound and I put it to your Lordships that that position is not supported by the European Commission guidance that defines the laws on support of regional airports. The European Commission in its latest guidelines on state aid to airports and airlines made it clear that airports with more than 5 million passengers per annum can and should run on their own steam, without any government support. Bristol has more than 6 million passengers. The Commission recognises that there is a case for government state aid being offered to smaller regional airports, and defines them as those that have between 1 million and 3 million passengers per annum. Cardiff currently handles just over 1 million. The Commission also states that if airports are more than 100 kilometres apart, then they have, by definition, different core catchments, and aid to one will not affect aid to the other. I can assure noble Lords that Cardiff Airport is more than 100 kilometres from Bristol Airport—I have actually used my tape measure—and each certainly has different core catchments. It is my contention that aid to one will not affect the other. It is therefore my contention that the UK Government’s current position is flawed because they could not make a legitimate case, underpinned by EC guidance, that aid to Cardiff distorted competition with Bristol.
The Welsh Government have a long-standing policy of lobbying for full devolution of air passenger duty, with a view to abolishing it. I was informed this afternoon that all four party leaders have agreed to propose again the abolition of long-haul air passenger duty. The Commission on Devolution in Wales, Silk 1, recommended that long-haul air passenger duty should be fully devolved. So where are we? This is a very important factor regarding competition. Belfast was given such devolution on the basis that it is near to Dublin. I do not think that it is 100 kilometres distant but Belfast was given it anyway by the UK Government. I bet my bottom dollar, if I may use such vulgarity in your Lordships’ House, that Edinburgh will be after this in a flash when it gets whatever it is going to get in the future.
I put it to noble Lords and the Government Front Bench that this situation is very serious for us in Wales. The Howard commission recognised the importance of regional airports. This is the one regional airport of our capital city in Wales, and has to be provided for and helped. That is the point of my amendment and I ask the Government to consider it.
Lord Anderson of Swansea
My Lords, I have two brief comments—one on the varying of fuel duty and the other on air passenger duty.
I hear what the noble Lord, Lord Wigley, says and the assumption is that we as a people are relatively poor in Wales in terms of prosperity when compared with much of the rest of the UK. That is certainly true and, therefore, the assumption is that he would wish to reduce fuel duty rather than increase it. If that duty were to decrease, I can imagine the Luxembourg precedent happening. Those of your Lordships who know that country will know that fuel duty is lower there than in the adjoining countries, so there are large queues at all the filling stations in Luxembourg of people who come across the border. One can imagine similar occurrences over the border in Cheshire, Herefordshire and elsewhere, the sorts of problems that would arise as a result, and the complaints that would be made if there were to be a reduction in fuel duty.
I hear what the noble Lord, Lord Rowe-Beddoe, said about air passenger duty and different core catchment areas. I come from Swansea and I should have thought that Bristol and Cardiff are, frankly, within the core catchment areas. I can see nodding from the direction of Newport. This is not like the precedent in Northern Ireland, where there is no immediate competitor. Bristol and Cardiff are very close and, in my judgment, the passenger catchment areas are similar. There is therefore a substantial difference in this situation and there could be real problems in seeking to provide greater competitiveness for Cardiff, which could only be at the expense of Bristol.
Lord Rowe-Beddoe
It is not my idea of a catchment area but the European Commission’s, and the figure of 100 kilometres between two regional airports is in the Commission’s guidance. I again submit that Cardiff and certainly Swansea are not within the Bristol catchment area, as defined by the European Commission.
Lord Anderson of Swansea
That may be the definition of the European Commission but I speak on a matter of reality and look at it from the perspective of those who travel from those airports.
Lord Rowe-Beddoe
With respect, the journey from Swansea to Bristol is considerably longer than the journey from Swansea to Cardiff.
Lord Thomas of Gresford
Surely the distance between Bristol and Cardiff and the services provided from Bristol are such that Bristol sucks people out of south Wales to use the additional services that fly there. That is why it seems to be in competition. What we are after is the development, the building-up, of Cardiff. If it comes within the European definition, that must be good enough.
On the issue of fuel duty, I understand that provisions have been made in Scotland to reduce fuel duty—I stand to be corrected—if you are more than 100 miles away from an oil refinery. In Wales, we have rural areas and people who are very much dependent on the use of motor vehicles—almost exclusively so in parts of Wales. However, Milford Haven, which is not built to supply Wales, happens to be within that 100-mile area in the south; and, of course, we have Ellesmere Port in the north. Consequently, the reduction of fuel duty, as happens in Scotland, does not happen in Wales. However, that ignores reality. It ignores the fact that the needs of the rural population of Wales are just as great as those in the highlands of Scotland. They suffer the same impoverishment as they do in the highlands of Scotland, perhaps even more, and accordingly there is a case for taking fuel duty under the wing of the Welsh Assembly. That does not necessarily mean applying it to the whole of Wales, so that we have queues of English people in Gresford from across the border, which is not something that I would wish to see. That is not the idea at all. It would enable the Welsh Assembly to vary fuel duty with regard to the needs of the people of Wales, which I think is very sensible.
Baroness Morgan of Ely
It is worth putting on record the Labour position on some of these points. First, in relation to fuel duty, we think it will be impossible to organise separate fuel duties within the United Kingdom and probably very difficult to comply with European Union rules within countries. Those cross-border issues we have just heard about could be quite complex and difficult to police. That would be a problem for us. Of course we have genuine sympathy for the problems relating to the cost of fuel in rural areas, but we do not think that this is the mechanism by which we should be addressing it.
On natural resources tax-sharing arrangements, we do not agree that this is a good idea. Wales is not sitting on vast quantities of oil like Scotland’s and a key point to remember is that we do not tax energy production from wind, wave and water in the same way as we do barrels of oil, so there would probably not be much in terms of tax return anyway—we would probably have to invent new taxes. On the issue of corporation tax, one of the most disappointing aspects of the Scottish referendum campaign was to see Plaid Cymru members actively supporting independence for Scotland. It was not surprising but was a little disappointing, because we know that one key thing Alex Salmond wanted to do was to reduce corporation tax 3% below that of the rest of the UK. That would have done untold damage to Welsh companies. It would have adversely affected Welsh companies, so we did not understand why Plaid Cymru was quite so enthusiastically supporting independence.
Lord Elis-Thomas
I spoke on this matter in this House during a debate in June. Let me make it clear that my support was for the right of the Scottish people to express their own self-determination. They have done so, with marvellous consequences for the rest of us. We would not be debating in the way we are tonight if they had not done that.
Baroness Morgan of Ely
That is great to hear, but there are some aspects of Salmond’s policy commitments that I think would have been problematic for Wales and it is worth noting those.
Lord Thomas of Gresford
Does the noble Baroness agree that all the things we have been discussing tonight are levers—things such as airport taxes—that we can use to increase prosperity in Wales to an equality with the rest of the United Kingdom? These are levers that would achieve a balance between the various nations in the United Kingdom. That is what it is all about. If you have a power to vary corporation tax, for example, it may be something that you exercise for a certain period in order to pull in industry, and then you may feel that you face competition from elsewhere and you should drop it. These things are all economic levers to achieve equality of prosperity in the United Kingdom.
Baroness Morgan of Ely
I understand that, but I also think that we should be aware of the dangers of a race to the bottom. That is my real concern. We have already seen that it is hard enough to get many of these corporations to pay their taxes at all, so for us to encourage corporation tax competition within the UK would be very problematic. The problem is that if you reduce the tax take, you start to have to cut services, and that becomes a problem. It means that our schools and hospitals have to be reduced.
On the issue of air passenger duty, it is worth noting that this is another issue where there has been cross-party agreement on devolution, on the basis that if this is provided to Scotland and Northern Ireland in the same way as corporation tax is, then we should be allowed to review it in Wales as well. The point is that if they are going to do it, of course we want to be part of that game. What we cannot have is them going off by themselves. That would be problematic. It is why Scottish independence was a problem for us.
Lord Wigley
I am grateful to the noble Baroness for giving way. She has warned about a race to the bottom as a reason to avoid this, but she then says that Scotland might do it, that that is the first step in a race to the bottom and that we should then do it. Is she not embarrassed by the fact that her party leader signed up to this in the Assembly and she has difficulty in selling it to her group here?
Baroness Morgan of Ely
Not at all. Let me be clear: we in the Labour Party are not encouraging this; we do not want it to happen. At the moment we are not in charge of the government of this country. If it is introduced by the Government, then, of course, we want to make sure that we have a fair crack of the whip, so that Wales can compete as well. We are not encouraging this, though.
Lord Newby
I shall take the amendments in turn. Amendments 49 and 51A seek to include explicit provision in the Bill for fuel duty and air passenger duty to be devolved to the Welsh Assembly. First, I remind noble Lords that Clause 6 of the Bill already contains the power for further taxes to be devolved to the Assembly by Order in Council and therefore the Bill does not rule out in perpetuity any tax being devolved at a future point if there is agreement to do so. I shall explain why we are not devolving these powers in the Bill, starting with air passenger duty. As has been pointed out, the Silk commission recommended that long-haul rates should initially be devolved with devolution of all rates considered subsequently. In the Government’s response to the Silk commission we highlighted HMRC research which suggested that differential rates of APD could end up redistributing passengers rather than creating additional growth. This potential distortion, despite what the noble Lord has said, is particularly acute in relation to Wales, given the short distance between Cardiff and Bristol airports. As the noble Lord, Lord Anderson, pointed out, for many people who fly from south Wales and just across the Severn there is a real and immediate choice between those airports, which they see as close competitors.
Lord Rowe-Beddoe
Let me just point out that Cardiff—perhaps noble Lords do not know—has lost more than 1 million passengers to Bristol in the past five years. This happened because of the management of the airport at the time and the company that owned it, but there was a bleeding of that number of people. We have got to get the passengers back. It is not a distortion of competition; it is to restore the services. You require two things for an airport: good customer experience and a plane that goes where the passenger wants to go. We are desperately trying to bring people back; this is a levelling to help that situation. It is not a question of distortion. We have heard about the 100 kilometres, or whatever. Forgive me—go around the Midlands and see where the airports are. It is not a question of distortion in that sense.
Lord Newby
The noble Lord has just made my point that they are part of a single market for passengers in south Wales, or there would not have been that bleeding away. Passengers are not bleeding away from south Wales to Manchester airport because it is just too far. The point is that Bristol is within a relatively easy ambit and people are going there. The noble Lord discussed the question of distortion in respect of strict EU law, but the kind of competition we have been debating—and, indeed, his description of what has happened and how he wishes to reverse it—suggests that if we were to devolve this power and APD was reduced it could and probably would contravene the third principle of devolution, which we discussed earlier, that any change in one part of the UK should not be to the detriment of another part of the UK. The noble Lord wants it to be to the detriment of Bristol, so that there will be a balancing away from Bristol towards Cardiff.
Lord Thomas of Gresford
If I may interrupt, the noble Lord, Lord Rowe-Beddoe, does not want to do something to the detriment of Bristol—he wants to do something for the people of south Wales so that they have easy access to an airport and do not have to go more than 60 miles down the road to Bristol. I really do not see why it is not possible for the Assembly to have this power of setting a lower airport tax so that it attracts people in. It might then be possible to balance, with the use of that lever, the number of passengers going to Bristol or Cardiff; those coming from Swansea or further west may think, “Well, I’d rather go to Cardiff than to Bristol”. Eventually, you could start equalising the airport tax again, if the economics are correct. I am sorry to repeat myself, but we are talking about putting levers into the hands of the Welsh Government. I should have thought that the Government of the noble Baroness, Lady Morgan, in Wales would welcome levers of that sort to try to do something about the Welsh economy—otherwise we are just stuck with what we have got.
Lord Newby
Noble Lords are, as ever, extremely eloquently making a case for preferential treatment for Wales, which would benefit Wales. I am just making the point that it might well benefit Cardiff Airport but that would be to the detriment of Bristol Airport. That only stands to reason. There is not going to be a sudden explosion of long-haul traffic because of a tax change.
Lord Rowe-Beddoe
In my definition of a regional airport, I made it very clear that it had between 1 million and 3 million passengers. We want to develop regional airports. Howard Davies’s commission refers to this. That is what we are talking about. Of course it would benefit Wales, if it were ever to happen. Cardiff Airport falls exactly within the categorisation made by Howard Davies and the EU.
Lord Newby
My Lords, I am sure that the Welsh Assembly, which I believe—including the Labour element of it—is in favour of devolution of air passenger duty to Wales, will continue to make the case. However, I am afraid that the Government are not at this point persuaded of it. The situation in Northern Ireland is completely different, in that it shares a land border with the Republic, which has a significantly lower rate of air passenger duty. That is its competitor.
The Silk commission recommended against devolution of fuel duty largely on the basis that member states must set a single rate for each fuel under the EU energy products directive. It also highlighted that fuel duty is a highly mobile tax base—no pun intended. As noble Lords have made clear, we could very easily see queues of motorists across the border if there was a significant disparity, which in itself makes it an unlikely candidate for devolution. So the Government accepted the Silk commission conclusion on that.
The noble Lord, Lord Thomas of Gresford, referred to the issue of whether the rural fuel scheme in Scotland might be extended to Wales. The Silk commission recommended that the Government assess whether the rural fuels scheme should be extended to remote and rural areas of Wales. It now operates in the Scottish islands and the Isles of Scilly. The Government have applied to the European Commission to extend the current scheme to areas on the UK mainland that meet strict criteria around pump price, population density and cost of fuel transportation. However, no areas in Wales were included, because they were not felt to meet the objective criteria. The Government believe that areas should experience similar characteristics to the islands in the current scheme to make the strongest possible case to the European Commission. The Government have yet to receive a response from the Commission to their existing proposal.
Amendment 51 would devolve corporation tax to the Welsh Assembly if it is devolved to either Scotland or Northern Ireland. The Government have been consistently clear that the devolved countries are different and that it is therefore right that decisions on devolution are treated on their own merits. In relation to corporation tax, the Government are committed to making a decision on devolving rate-setting powers to Northern Ireland by the time of the Autumn Statement. However, similar to the position on long-haul rates of air passenger duty, the potential devolution of corporation tax to Northern Ireland is being considered in the light of two unique features. First, Northern Ireland is competing against the Republic, which has a much lower headline rate of corporation tax. Secondly, the stated purpose of tax devolution in Northern Ireland is to help to rebalance the Northern Ireland economy. In Wales, as noble Lords will be aware, the principal aim of devolution is to increase the accountability of the Welsh Assembly and Welsh Government. Different objectives potentially require different decisions on devolution; it is therefore right that the UK Government retain the flexibility to take the right decisions for each part of the UK.
Finally, I turn to Amendment 50, which would require the publication of an independent report on options for the UK and Welsh Governments to share tax revenues from natural resources in Wales. The noble Lord in moving the amendment spoke about the resources available potentially to the Crown Estate and referred to energy. With regard to the Crown Estate, there are no provisions in the Bill to change its status, and I find it difficult to envisage circumstances in which that would happen. Therefore, I am not sure how relevant that is. On energy, I can only agree with the comments of the noble Baroness, Lady Morgan, about the fact that one does not tax wind power in the same way as one taxes a barrel of oil, and it is very difficult to envisage that we ever would do so. So I do not think that an independent report as proposed by the noble Lord would be of any real value.
In the light of my remarks, I hope that all noble Lords who have proposed amendments in this group will feel able not to press them.
Lord Wigley
I am grateful to noble Lords who have taken part in this short debate. On the amendment proposed by the noble Lord, Lord Rowe-Beddoe, on Cardiff Airport, of course we need intervention—that is the whole point of government. If we just leave it to free market forces, those areas that have difficulties with the economy will get worse and worse. I am amazed that the Government look at devolution and powers of the Assembly only in terms of answerability and do not see the central need to have intervention in the economy to build it up. In Wales, the GDP per head is 25% below the UK average, so something is going wrong. If London is not capable of sorting that out, and Westminster is not capable of sorting it out, we have to do the job ourselves. But we need the tools to do that job and to intervene, as the noble Lord, Lord Thomas of Gresford, said. Some tools may be more appropriate than others, but in the case of Cardiff Airport, when all the effort that is being made to rebuild it at the moment is in question, I find it staggering that they want just to turn it down on that basis.
On the other amendments and the reasons given against them, with regard to petrol charges we already have a massive differential. We do not see people queuing from north Wales to Chester to find cheaper fuel because there is a cost involved in travelling. The need to get fair play in rural areas should be recognised by the Government. Goodness only knows that life is difficult enough as it is without the very high petrol taxes that we have.
On the natural resources of Wales, we hear so much about fracking coming along, and we know it is a matter of considerable concern. That is a new source of energy, and it may be something that comes into the purview of government in those terms. We need those powers to be there.
On corporation tax, I again underline that there is unanimity within the Assembly to have those powers, if they are going to Scotland and Northern Ireland, and the Government in fairness should allow it for Wales, which is in competition for inward investment against the Irish Republic. The Irish Republic has this advantage, so why do we not? We need that in order to rebuild our economy. It is something that the First Minister of Wales has very reasonably asked for and I hope that the Opposition Front Bench will support the First Minister in those representations.
I was heartened by the comments made by the Minister that there are provisions for other taxes to be devolved by order. We shall have to look to the order-making system to try to ensure that we have the tools necessary to do the job.
Lord Thomas of Gresford
Does the noble Lord not agree that, if the Welsh Labour Government are not prepared to use the tools, there is no point in having these powers?
Lord Wigley
That is true of all the powers, and we have to look to the Assembly to take a responsible attitude. Obviously there are questions to consider—cross-border questions and all the rest—and the Assembly needs to make these powers work, so it is not going to do stupid things. It will take up the powers and use them in a way that moves our economy forward. I am quite happy to trust that people who give priority to the needs of Wales will do this, from whichever party they come. All I want them to have is the tools to do the job. I beg leave to withdraw the amendment.
Energy: Onshore Wind Farming
(9 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Quin
To ask Her Majesty’s Government what is their assessment of the extent of onshore wind farming in the county of Northumberland.
Lord Gardiner of Kimble (Con)
My Lords, perhaps I may respectfully remind noble Lords that we are very tight for time in this forthcoming debate. When the clock says four, noble Lords will have had their time.
Baroness Quin (Lab)
My Lords, I am delighted to introduce this debate about onshore wind farming in the county of Northumberland. I should say from the outset that the idea of having such a debate was not mine alone but that of a group of Members of the House who live in Northumberland or who are very familiar with it and who care passionately about its landscape and its communities. I am pleased that members of that informal group are in the House today and plan to take part in the debate. The noble Lord, Lord Walton of Detchant, the noble Viscount, Lord Ridley, the right reverend Prelate the Bishop of Newcastle and the noble Lord, Lord Wrigglesworth, have all been part of a combined effort to express concern about some of the negative effects the proliferation of wind turbines in Northumberland and the number of applications for further schemes which are in the pipeline have caused. I know, too, how concerned about these issues are the noble Lord, Lord Vinson, the noble Lord, Lord Shipley, and other Members of this House.
In bringing forward this debate, I should like to stress that we have had strong support from the Northumberland section of the Campaign to Protect Rural England and the Northumberland and Newcastle Society—an organisation now in its 90th year and which has, throughout its proud history, promoted the historic buildings and the special and beautiful landscapes of our part of the world. I know that the views of these organisations are shared by many local communities and by people in Northumberland who have been affected by inappropriate onshore wind farm developments. I also recognise the role of the local and regional media in highlighting these issues. The Newcastle Journal and the Northumberland Gazette have supported many local communities in their efforts to get a fair hearing for their views.
Let me say from the outset that, in my view, this debate is not about energy policy generally or about the role that renewables can and could play in our energy mix. Among the members of our informal group, we have not discussed these matters and probably have different views about them—certainly about the energy priorities that the UK Government should have. Speaking for myself, I see an important role for renewables. By coincidence, in the week that I was involved in lobbying a Minister in opposition to a particular wind farm scheme in Northumberland, I was also having solar panels installed on the roof of my home in that county.
I am also proud to be one of the city of Sunderland’s ambassadors. I applaud the efforts of that city in seeking to establish itself as a low carbon hub—indeed the Government have recognised it as one of the low carbon economic areas. I applaud its efforts in offshore wind development and its commitment to the Dogger Bank project which could be important both to our renewables commitments and also in terms of jobs in manufacturing and maintenance. Indeed, the four north-eastern ports of Sunderland, Seaham, Blyth and Tyne are all well placed to support offshore projects of this kind.
No, my Lords, this debate is essentially about onshore wind farms which are in the wrong places and which we feel should not have been given planning permission. It is also about expressing concern over the disproportionate amount of onshore wind in Northumberland and the fears of many of us that more and more developments are going ahead, despite the near unanimous objections to them from the county council and from local communities. I look forward to the Minister’s reply in due course, but she will appreciate that some of the issues raised in this debate also relate to the work of her colleagues in the Department for Communities and Local Government. I ask her to commit herself to discussing our debate and the contributions made with her colleagues in the other department so that our concerns can be fully considered.
A lot of statistics have been produced by the Minister’s department and by interested organisations which, I believe, show how much wind farming there is in Northumberland compared to other counties of England. I shall refer to some of these. However, it is not just a question of numbers because, in a county such as Northumberland, with its distinctive landscape of sweeping views to distant hills and to its magnificent coastline, even just one wind farm inappropriately placed can have a damaging effect over a wide area.
Indeed, I first became involved in this issue when I took a friend up to the ancient hill fort, Ros Castle, to admire the outstanding view of coast and countryside from the top. It was a clear day and I promised my friend a superb view of Dunstanburgh Castle. I was utterly dismayed to find that the view of Dustanburgh’s very distinctive silhouette was totally obscured by phalanxes of turbines.
Another striking example concerns the ancient monument which we, rightly in my view, refer to as Northumberland’s Stonehenge—the Duddo stone circle in its tranquil and timeless setting. I was delighted when the Government decided not to defend the legal challenge in that case earlier this year, but the threat to this very special monument has not gone away as a further appeal to install a tall turbine has been lodged. Obviously I hope that this will be unsuccessful. I ask noble Lords not from the north-east to imagine what the national outcry would be if a similar proposal were being envisaged for Avebury, or indeed for Stonehenge itself.
Northumberland’s contribution to onshore wind capacity in our country is already very considerable and we produce far more than we consume. Northumberland’s consumption of electrical energy is just over 0.5% of total consumption, yet it accounts for 10% of all consented onshore wind power. From the department’s own figures, we see that our county has virtually twice as much onshore wind consented in our one county as in all seven Home Counties—Berkshire, Buckinghamshire, Essex, Hertfordshire, Kent, Surrey and Sussex combined.
The Northumberland and Newcastle Society points out that over half of the counties of England have approved less wind than a tenth of that approved in Northumberland. In a perhaps entertaining statistic, Northumberland has apparently over 100 times as much wind capacity as that permitted in the home counties of Ministers of the Department of Energy and Climate Change. Yet, despite such figures, there is an argument for saying that the terrain of Northumberland—due to the Pennine hills and the Cheviots—is not ideal for onshore wind because the fundamental wind resource is not strong. So why is there such huge pressure on this unspoilt county to accept more and more unwelcome developments?
Particularly worrying are the figures which seem to show that there are more examples in Northumberland of schemes which have been opposed both by local people and the county council and then subsequently overturned and allowed by national inspectors and therefore by national government. My understanding is that Northumberland has been overruled at a rate twice that of the next county in that particular league table.
We have also seen that the level of subsidies for such onshore wind schemes have proved particularly attractive to outside investors, but these same investors often have little or no loyalty to the local communities who have to live daily with the effects of the investment. It is true that such subsidies can be accompanied by pledges on the part of the investor to give a financial donation to some local amenity. However, this is little consolation to those communities where over 90% of the people objected to the scheme in the first place, and indeed such promises of local financial aid are often viewed as little more than a bribe. Sometimes these investors are seen as the new generation of Border Reivers—making a quick raid, for huge profit, and then disappearing without suffering the consequences.
Consumers ultimately have to pay for such generous subsidies, and this does look like an example of the poor subsidising the already well off. I should, however, like to pay tribute to those landowners in Northumberland who have resisted the temptation and refused the sizeable carrots dangled in front of them, and who have shown their concern for our landscapes, for our communities and for the future of tourism, which in recent years has become such an increasingly important part of our economy.
There is one other point which I have become aware of in the battles that have taken place on this subject. It is difficult in a county of low density and low income such as Northumberland to mount expensive legal challenges to the planning process. Therefore, I believe that those of us who are aware of these problems need to take every opportunity to highlight them.
I realise that time is short, so I say in conclusion that I hope that the Minister will be able to respond positively not only to the points raised by speakers today but to the concerns of the people of the affected communities. Indeed, I hope that the Minister and her colleagues will visit the county, see the actual and planned projects that I have mentioned, engage fully in tackling the problems which have already been created and act to prevent further damaging schemes going ahead. I look forward to hearing what other contributors have to say in this debate.
Viscount Ridley (Con)
My Lords, I congratulate the noble Baroness, Lady Quin, on securing this debate and on her eloquent introduction to it. She is truly a great champion of Northumberland and the north-east.
I declare my interests in the energy industries as listed in the register, and that includes an interest in opencast coal, so I am not against development in the countryside per se. As long as it provides good jobs, supplies affordable energy, does not stick up above the horizon and does not last for very long, I think it is an excellent idea.
Northumberland, as the noble Baroness, Lady Quin, said, is an incomparable county. It is the county of Cuthbert and Hotspur, of Cheviot and Bloodybush Edge, and of Delaval and Dunstanburgh. The battles of Otterburn and Flodden, which are redolent of our history, have now been joined by less bloody but still very contentious battles, such as Fenrother, Wandylaw and Middlemoor. These are names of wind turbines that have been bitterly opposed by local communities. Virtually no community in Northumberland has been unaffected by these battles, and often it has split them, and families, right down the middle.
Yet Northumberland is, on the whole, bearing this pain on behalf of others, because there is no great net benefit to the county itself. These wind farms do not create great numbers of jobs, most of the profits do not stay in the region or even in the country, and they leave a legacy of high electricity bills, which go to subsidise the rich and are mostly paid disproportionately by the poor. Therefore, I challenge the party opposite to follow the courage of the noble Baroness, Lady Quin, in questioning whether it really is such a good idea to champion this regressive policy.
Meanwhile, I would say that this form of energy is having very little measurable effect on the climate and is unlikely to do so. It produces very little measurable benefit for the bird life—in fact, on the contrary, birds such as eagles are often killed by these turbines—and there is no benefit for the landscape. Indeed, in particular it is blighting tourism in many parts of the world. Many people believe that Northumberland’s potential for tourism is being seriously affected by wind turbines.
And all this to provide electricity for others, because the juice goes south from Northumberland to provide other people with light. We are delighted that people in the south want to turn their lights on but, as the noble Baroness said, Northumberland consumes just 0.6% of England’s electricity but produces 10% of England’s wind energy. It is doing far, far more than its share. From wind electricity it produces 172% of its total electricity needs—in terms of ratio, double that of Scotland.
This issue is of course for the planners but the county council is often overwhelmed by applications. There are many of them. The council finds it very hard to get the resources together to deal with them, and it is in a very difficult position. It needs support and guidance from a national level on how to cope with this flood of applications. As the noble Baroness, Lady Quin, said, the county has a relatively small population to support battles of this kind.
I hope that the Minister will agree to look at this iniquitous imbalance, which was never envisaged when we embarked upon the dash for wind. We never envisaged that the weight of this industry would fall so heavily on one county rather than be distributed equally across the country. I hope that she will agree to look at the planning system to see whether there is some way of equalising the balance. Why must the people of Northumberland bear the brunt of this often bonkers policy? Why must we spoil our landscape so that rich landowners can grow richer and rich Greens can look more smug? As the noble Baroness, Lady Quin, said, here is the final irony: Northumberland is not even that windy a county.
Lord Giddens (Lab)
My Lords, I, too, congratulate my noble friend Lady Quin on having initiated this debate so ably. I want to take an unusual and, one might think, improbable tack in this debate.
Everything today is simultaneously local and global, so I am going to look at the case of Northumberland in relation to countries that have a lot of experience of wind power: Denmark, Portugal, Germany and Japan. There is a remarkable similarity across the world in terms of the dilemmas and struggles that arise. I shall mention three here. The first is “Not in my back yard”, which is more or less universal. Most people in most countries are in favour of wind power but much less so if it is very close to them. The second, which is the opposite to that and has just been referred to by the noble Viscount, Lord Ridley, is also found almost everywhere. It does not have an acronym, so I invented one. I call it GMPML, which stands for “Get maximum profit from my land”. It pits landowners against local communities everywhere. Thirdly, there are real and justifiable concerns in many cases about the harm done by wind farms to areas of natural beauty and wildlife. All three are visible in Northumberland.
We can and should learn a lot from other countries that have a longer experience of these problems than we do. Against this backdrop, it is not surprising that there has been so much turmoil in Northumberland, given the haphazard and erratic relation between the wind farm companies, local communities, local councils and national government. In my view, it is right that an increasing number of projects have been blocked. Radical localism, suggested by some, is not the answer. I agree with the recent report produced by the Campaign to Protect Rural England, which calls for:
“A strategic, plan-led approach to developing renewable energy infrastructure, locally and across planning boundaries”.
We should note that there have been very rapid developments in offshore wind power—these are not remote; they are here—such as those involving floating platforms. Investing in developing or appropriating such innovations should be a key part of national energy strategy. Problems of corrosion are being resolved. Moreover, out at sea there can be far higher continuity of operation, compensating in some part for the higher initial start-up costs as compared with onshore wind power. What is important in Northumberland, as it is throughout the country, is to get an appropriate mix of all these elements.
To conclude on a comparative note, however, I suppose that I feel more favourable towards wind power than the noble Viscount, Lord Ridley. There are some days, famously, in which Portugal has supplied more than 90% of its electricity from wind power alone, and that shows what can be achieved. However, I fully support the sentiments that have been echoed by the first two speakers.
Lord Wrigglesworth (LD)
My Lords, I strongly endorse the remarks made by the noble Baroness, Lady Quin, by my noble friend Lord Ridley and just now by the noble Lord, Lord Giddens. In case people think that we are protesting as nimbys who do not want these in our back yards, we are not. We do not mind having some in our back yards, but we do not want them stacked full of these wind farms. We are perfectly happy to have some, but we want a fair share rather than the massive numbers which have already been mentioned by the noble Baroness, Lady Quin, and others.
I want to dwell for a moment on the impact which this is having and will continue to have upon the very important tourist industry in the north-east and in Northumberland. I have been quite heavily involved in the tourism industry over recent years. I was chairman of the NewcastleGateshead Initiative, the destination marketing agency for Newcastle and Gateshead. I was chairman of the BALTIC Centre for Contemporary Art in Gateshead, the second largest arts space in the United Kingdom after the Tate Modern, and I was chairman of the Port of Tyne until 2012. All of those organisations had a direct interest in tourism in the north-east. It is tremendously important, accounting for more than £1 billion coming into the north-east. In a region suffering from deep economic problems which is trying to move rapidly into the 21st century with modern industries, the tourist industry is tremendously important to us.
Independent research by VisitScotland showed that wind farms are very unattractive to visitors, and indeed that they avoid staying in areas with wind farms. However, you do not need independent research to demonstrate the damage which these things are causing to the county. Some of the sites which have been affected by turbines have been mentioned, such as the site of the Battle of Flodden, Dunstanburgh Castle. Holy Island, of all places, cannot be seen from some sides without seeing a wind farm. Frankly, this is outrageous; we are seeking to attract many people to come to a region which is known for its outstanding natural beauty and its wonderful environment but which has been badly damaged by the turbines that have been erected.
I hope that the Government will respond positively to the plea we are making on behalf of Northumberland. We think we have our fair share, and are making an adequate contribution. I am in favour of the renewable energy sector, but I can tell you that in the Port of Tyne the interest is in offshore wind farms. As was said by the noble Lord, Lord Giddens, this is a rather better form of renewable energy than those turbines which are on land. The Dogger Bank is just off the mouth of the Port of Tyne. If substantial wind farms are built there, which I hope will happen—it is a pity that it has not started happening already—it will ensure a tremendous number of jobs and a tremendous industry based on the Tyne, which has strong engineering traditions. I hope that that will happen, but I hope that the Minister will give us some reassurances that this unfair and damaging incursion into Northumberland will be restrained in the future.
Lord Walton of Detchant (CB)
My Lords, I, too, am most grateful to the noble Baroness, Lady Quin, for enabling us to have this debate. I am a proud Northumbrian. I live in Belford, at the heart of some of the lovely Northumbrian countryside. I am also a past captain and chairman, and now president, of Bamburgh Castle Golf Club, which was described by a national newspaper some years ago as arguably the most scenically beautiful golf club in the United Kingdom.
Looking down from the top of that course, one can see the grandeur of Bamburgh Castle and out to sea the wonderful bird sanctuary of the Farne Islands, where St Aidan spent some time as a hermit, and even beyond that to Longstone Lighthouse, made famous by the exploits of Grace Darling. To the left of that are Holy Island and Lindisfarne, with the priory that was one of the cradles of the development of Christianity in northern England. There is also a lovely castle designed and built by the Lutyens family, and a wonderful walled garden designed by Gertrude Jekyll. If one then turns to the west, one can look at St Cuthbert’s Way and St Cuthbert’s Cave, where the monks carried Cuthbert’s body from Holy Island on its way to Durham Cathedral. Beyond that is Ros Hill, where Earl Grey sat when he was Foreign Secretary and looked at his land that lay all around him and at the timeless beauty of Northumbria, which he adored.
However, if one now looks down to the south, there are 24 rotating monsters at Wandylaw and Middlemoor. Their approval by the planning authority as the result of an appeal strikes me as amounting to arrant environmental vandalism. They have destroyed the views of some of the loveliest countryside in Britain. As others have said, this is crucial because Northumberland has borne more than its fair share of these developments. I admit that the past captain of Bamburgh golf club once said that it is not windy at Bamburgh when the ball will stay on the peg on the 15th tee. We have some wind, but that does not justify the desecration of these views and of these important cradles of Christianity, which have been damaged by this development.
There was recently a proposal to put up a whole series more of these wind farms at Belford Burn. Happily, the county council planning committee rejected this application. There were 500 letters of opposition from people in the local community, and five letters in support. However, it is probable that, again, this particular application may be subject to appeal. One of the problems in Northumberland is that more appeals on applications for wind farm development have been allowed than in any other county in England.
I invite the Minister to draw to the attention of the inspectors the clear recommendation made last year by the Government that, when considering planning applications, more account must be taken of the views of the local community. The local community in Northumberland is implacably opposed, not to wind farms on brownfield sites or where they do no great damage to the environment, but to those which damage the untold beauty of a wonderful piece of scenery.
The Lord Bishop of Newcastle
My Lords, last Friday I took a relatively short train journey from Waterloo to Winchester, in the heart of the Hampshire countryside. The journey took little more than an hour, about the same time as it takes me to travel through my diocese from Newcastle to the Scottish border. There was a striking difference between those two train journeys. Obviously, there was no beautiful coast or even the odd castle on my trip to Hampshire, and yet to me the most striking difference was that there was not a wind turbine—let alone a wind farm—in sight at all. This is hardly surprising when you consider that Northumberland now has more wind power capacity installed than 16 counties in the south of England put together. It is then hardly surprising that a recent survey claimed that 70% of the British public support onshore wind. The truth is that 70% of the British public live in places where they will never have to put up with the sight or the sound of a wind turbine, unlike the people who happen to live in the beautiful county of Northumberland. During my time as bishop, wind farms have proliferated across the countryside to an alarming degree.
The level of Northumberland’s contribution to the Government’s onshore wind targets has been disproportionately high, as we have heard. We contribute more than 10% of all England’s wind energy but consume just over 0.5% of England’s electricity. Nobody should accuse us of nimbyism. It is hardly surprising then that the message from this short debate is simply: enough is enough. The good people of Northumberland have had enough of onshore wind farms. That point has finally, if belatedly, been recognised by DCLG in recent guidance, which states that it does not mean that,
“the need for renewable energy … overrides environmental protection and the planning concerns of local communities”.
Of course, we all recognise the need for a greater reliance on renewable forms of energy. Our countryside needs to be protected, which is why the recent refusal of two more wind farm developments in Northumberland was so welcome, despite in one case more than £3 million being offered by developers to a small village community. Thankfully, the huge financial inducement—I will not call it a bribe—did not sway the local people. Money cannot buy what the residents are being asked to give up. That was the message of the local people. The trouble is that so many of the most beautiful parts of the Northumberland landscapes have already been scarred and disfigured, despite the fact that, as we have heard, the wind does not blow as well as in other areas of the country, and there being no evidence that I have seen that wind will ever provide the reliable, controllable energy that we need.
We all have a duty and responsibility to care for our environment and to exercise wise stewardship over God’s creation. We are custodians of the future for our children and our children’s children. That is why I urge the Minister to take back to DECC the case for ending any further subsidies for onshore wind, especially in Northumberland, and for deploying those funds more sensibly and more wisely on other forms of renewable energy.
Lord Vinson (Con)
My Lords, this debate is on a serious matter because, bluntly, government-subsidised foreign companies are destroying Northumberland’s heritage. This must be prevented. We are grateful to the noble Baroness, Lady Quin, for raising the matter so eloquently.
Like so many things in life, it is the unintended consequence of a poorly thought out government programme being rushed through to try to save the globe from overheating through excessive CO2 emissions caused not just by fossil fuels but by the consequences of the huge growth in world population—an aspect that is seldom mentioned. It is quite proper in this debate to ask whether it is sensible for taxpayers and all users of electricity to continue massively to subsidise the erection of wind turbines, which can produce only sporadic energy and need coal-fired polluting back-up to support them, when there are alternatives. If the wind programme were going to save the globe, many of us might accept its harmful consequences, but the whole exercise serves no good purpose. It is estimated that it will cost some £4,000 per family over the life of the turbines. Consequently, many now doubt the wisdom of this regressive programme. That is the background to our county’s problems.
From the turbine developers’ point of view, Northumberland is a sitting duck because it has fewer people to complain and who can afford to challenge their subsidised ambitions. That may explain why Northumberland is chosen, but why do so many of its appeals against development fail when examined by departmental inspectors? These inspectors may be ex-lawyers or judges but they are human beings. They are encouraged by their departmental brief to help the Government meet their targets. Many cases that come before them are obviously borderline. They obviously regard the development near our historic Duddo Stones as a borderline case.
Like our local planners, they are wrestling with the two-way pull of government advice on the one hand and citizens’ objections on the other. So I hope this debate will be brought before them and will help them to take a more considered view of the two-way pull now that the Government’s targets have been met and Northumberland has had more than its fair share of development—a point so well raised hitherto in this debate. To date, they have taken insufficient account and failed to recognise adequately the seething anger within our county. The Government’s pledges on localism and respect for the regional view have been overridden, and with them our custodianship of our wonderful historic landscape.
The inappropriateness of the wind turbine programme should be at the back of every inspector’s mind when weighing priorities, as there are alternatives. In Northumberland, we have lived for 40 years within a few miles of massive nuclear power stations, which have quietly and safely produced some 7% of the country’s need for electricity throughout that period. New forms of nuclear power—small modular reactors, factory-built and inherently safe—are on their way. America and other countries are pouring billions into their development, seeing this as a long-term solution to producing abundant energy that is relatively cheap and CO2-free. We can do the same in the north-east and create many jobs.
There are better, longer-term and more effective ways of reducing the world’s CO2 output. For that reason, we do not want to see the heritage of our beautiful county destroyed wholly and unnecessarily. The Duddo Stones are the north of England’s Stonehenge and just as old. We have had our fair share of wind turbines. As the right reverend Prelate said, enough is enough on all counts. Finally, this debate will have been worth while only if the Minister undertakes to make certain that any new briefing given to the planning inspectors draws their attention to the balanced arguments have been put forward today in the Chamber and suggests that they well regard them. Will the Minister assure us that that will happen?
Lord Shipley (LD)
My Lords, I thank the noble Baroness, Lady Quin, for initiating this debate.
I received a few days ago a copy of the National Trust members’ magazine. In it was an article entitled Powering the Future. It talked of the role of that great industrialist and inventor Lord Armstrong, who introduced renewable energy to his home at Cragside in Northumberland, which is now owned by the trust. It was encouraging to read of the National Trust’s pledge to generate 50% of its energy use from renewable sources by 2020. I was also pleased to read the comment against a photograph of wind turbines on the Cumbrian coast near Whitehaven which said that,
“the trust supports the sensitive use of renewables such as wind turbines”.
I agree with the National Trust. The crucial word here is “sensitive”, which is at the heart of the debate. We should not allow visually intrusive development in areas of outstanding natural beauty. We should not lose the tranquillity that Northumberland is renowned for, and we should not damage tourism, which is such a fundamental part of Northumberland’s economy. I am pleased that Northumberland County Council is doing an impact study of wind farms on tourism to assess the perceptions of visitors.
The north-east like all regions needs to play its part in energy generation. However, I am grateful to the Campaign to Protect Rural England and to the Northumberland and Newcastle Society for pointing out in a letter earlier this year that while they are supportive of the development of renewable energy they feel that too many wind farms are being built in Northumberland, which has twice the megawatt consents for onshore wind generation of the nine home counties put together. They have a point; the wind does blow in the home counties.
We have to think very carefully, however, about energy security. I do not want the lights to go out and so I believe that we need to promote every form of sustainable energy that we can. We should note that last year, onshore wind turbines produced 5% of our electricity. They help to keep the lights on, supplying 3 million homes. A recent poll I saw showed that two-thirds of people support onshore wind energy production. However, as has been pointed out this evening, local people quite rightly want a bigger say over where onshore wind installations are permitted, and I am pleased that the Government have responded, delivering a fivefold increase in the benefits that communities in England can receive worth up to £100,000 per year for a medium-sized development. The crude block on onshore wind energy that some are calling for would seriously risk investment in the UK’s renewable energy market, which has the potential to create 200,000 new green jobs by 2020.
There are very few sources of energy that do not arouse strong opposition. Nuclear, wind and shale all have active opposition, but banning wind farms would drive up consumers’ energy bills because onshore wind is the cheapest type of renewable energy. At the same time, we have to protect our natural environment, so we need a balance between keeping the lights on and protecting areas of natural beauty.
In conclusion, I hope that the Minister will think carefully about what has been said this evening and I hope that it will be possible to have the discussion that the noble Baroness, Lady Quin, asked for. I find it hard to understand why Northumberland is producing 10% of onshore power while consuming well under 1% of the electricity generated by onshore wind. We have heard very clearly what the impact has been in some areas of outstanding natural beauty in Northumberland, and I hope that the Minister will take note.
Lord Berkeley of Knighton (CB)
My Lords, I know and love the Belford area and I objected to the wind farm there, just as I did to one in mid-Wales which is close to Offa’s Dyke and the grade 1 Repton-designed gardens at Stanage Park. Everyone has made the point that this is not about denying the need for renewables, but about trying to look at their value, particularly when we do have offshore as another possibility and, in the not too distant future, I am sure, wave power. Nothing is more certain in life than that while we are here, the waves will continue to come in. We need to look at these things because I feel that the dice are loaded against local people who try to object to a wind farm.
We have just heard an example of the kind of money people turn down in order to protect their local countryside. That should be combined with how much money people raise from their own pockets to fight these schemes. It really is a David and Goliath situation. I feel that one thing the Government could do is try to encourage inspectors to up the power they apportion to local opinion and beautiful landscapes. Trying to encourage further investment in wave power would immediately take a lot of pressure off the desire for onshore wind farms.
Like in Northumberland, there are a lot of wind farms in Wales and therefore in sensitive areas. I have to admit that the wind farms on old coalfields and in mining areas look beautiful and do not destroy the landscape, so I am certainly not against them per se. I just want us to look at those wind farms that are in sensitive areas that may not have been declared to be areas of outstanding natural beauty. That is a very important point. At the moment it is a loophole by which inspectors tend to find against objectors.
I was shocked to hear people who have been objecting in my area say that the only party that is representing little groups is UKIP. The Government should take note of that because it is a rather shocking thought. The noble Lord, Lord Gardiner, sitting opposite has said in the past that we must be sensitive about landscape and local opinion. My plea to the Government echoes the words used by the most reverend Primate the Archbishop of Canterbury at the finish of last night’s debate on bringing in women bishops. He simply said, “Listen, listen”.
Lord Grantchester (Lab)
My Lords, the decarbonised power sector is a prerequisite to tackling climate change and to achieving domestic and international commitments to reduce the UK’s carbon emissions. There is a place for all forms of renewable power in the UK’s energy mix, but they should be in the right place. Onshore wind is the cheapest form of generating low-carbon electricity and therefore must continue to be an essential part of the UK energy mix in order to limit the impact on consumer bills. Within this overall policy statement, however, there must be a balance between the various interests to establish the best solution in each individual development and locality. The planning system is meant to enable these contrasting interests to be taken into account. Guidance makes it clear that the need for renewable energy does not automatically override environmental protections.
However, something is clearly going wrong in Northumberland, and I am grateful to my noble friend Lady Quin for drawing attention to this problem in her much-loved county. While it may be the opinion of a Conservative former Minister in this House that renewable energies can be hosted in the north-east—or was that the north-west?—because not many people live there, my noble friend has drawn attention to the overwhelming concern of local communities that a disproportionate number of wind farms are in the area, to the detriment of many amenities that are vital to the visitor economy and tourism, even when cities such as Sunderland plan their future as a low-carbon hub.
Other contributors to this debate have drawn attention to the lack of strategic planning that would give balance to Northumberland and wind power more generally. In this it is instructive to look more critically at the guidance provided on renewables. Only last week, on 7 October, the Minister’s department published new guidance on community benefits and community engagement for onshore wind. It certainly recognises the wind industry’s commitment to local communities and it will encourage communities by providing a framework for communities, local authorities and developers to work together from the initial conception of a scheme. But what if there is widespread local opposition to schemes, as my noble friend has pointed out? Community engagement must work both ways, and the process needs to be seen to be accessible in order to give voice in areas where local residents lack the funds and expertise to mount a serious challenge to development. The guidance will go a long way towards reducing resentment and animosity, but it may miss the point if it is regarded only as an inducement to overcome serious local objections. Can the Minister clarify whether the guidance can provide a dialogue whereby the answer may be that the community would rather forgo the development altogether and that this will be noted in addition in the planning process?
While Northumberland can be congratulated on its embrace of new technologies, can the Minister confirm any evidence that Northumberland is being unfairly targeted from a desire to meet our national targets by a disproportionate predominance of refusals to developments in other, more Conservative-dominated counties? What is the Minister doing to encourage other areas to host their fair share of renewable onshore wind? The case stated tonight has come across very strongly and it needs an answer.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, I start by congratulating the noble Baroness, Lady Quin, on introducing this debate. All noble Lords have provided measured opinion and well-informed views of wind farms, and I think that there is general agreement around the House that wind has to be seen as part of the diverse energy mix that this country needs. But I listened carefully to everyone who spoke in the debate and of course there are concerns about where wind farms are located.
I know that the noble Baroness does not want to refer to the energy policy, but part of the debate has to refer back to why wind farms are part of the diverse mix. As the noble Lord, Lord Grantchester, said, we must have an energy policy that provides us with security of supply and ensures that we meet our national and international targets to reduce carbon emissions. The requirement for increasing renewable energy supplies is clear. Wind power provides clean energy and reduces our dependence on finite fossil fuel supplies. Also, as I have said, wind increases our energy security by reducing the need to import energy supplies from abroad. It also creates jobs and investment in the economy, with an estimated £29 billion invested in the economy since 2010. We need to increase the amount of energy produced by renewables to meet our legally binding targets by 2020 and the decarbonisation targets set for 2050 in the Climate Change Act 2008 by the previous Government. As the noble Lord, Lord Grantchester, said, it is the cheapest large-scale renewable energy source. Onshore wind plays a vital role in its contribution to the balanced energy mix that we need. Renewables provided around 17% of our electricity in quarter 2 of 2014, with almost a quarter of this generated by onshore wind.
Of course, I will resist the comments of the noble Lord, Lord Grantchester, referring to my colleague, because those comments were not helpful. We are to look at how we can improve the powers that local communities have and I think that was what the noble Baroness was asking me to take away from this debate today. Of course, wherever turbines are going to be located, the communities concerned must have a greater say on whether they want them there. We must be clear that it has been this Government who have taken those concerns very seriously, listened hard to what communities have said and taken action to respond to those communities, given that a lot of the planning for those turbines was already in the system when we came into Government.
We estimate that we need 11 gigawatts to 13 gigawatts of onshore wind within the energy mix to meet our goals by 2020. The UK pipeline of projects in planning and awaiting construction gives us confidence that onshore wind will be able to make the contribution we need. In Northumberland, I am told that there are four onshore wind farms awaiting construction and eight in planning. However, we should be clear that we cannot know that all of these specific turbines will be built. We know that not everything in planning will get planning consent and not everything that receives consent will be built. The planning system ensures that only well sited proposals are developed. Moreover, in addition to the planning system, through careful management of the levy control framework, we can ensure that only the most cost-effective developments are built, ensuring that we meet our deployment ambitions while delivering value for money to consumers. Ultimately, we have to look at that part of this very complex debate: what is the cost to the consumer in the round of energy?
Furthermore, we understand that some people have concerns about developments. Every noble Lord who spoke today has raised those concerns. We have been clear that onshore wind planning applications will be accepted only where the impacts are, or can, be made acceptable. The right reverend Prelate the Bishop of Newcastle rightly referred to the new planning guidance for renewable energy that was published last year. That will help to deliver the balance required by the National Planning Policy Framework, making it clear that the need for renewable energy does not automatically override environmental protections and the planning concerns of local communities. Indeed, properly involving local communities in proposals that will affect them is a critical step in improving the quality of proposed onshore wind development. That is why we have made it compulsory for developers to have pre-application consultations with local communities for any onshore wind development of more than two turbines or where the hub height of any turbine exceeds 15 metres. This means that developers will need to engage very seriously with communities before even submitting a planning application.
Communities hosting renewable energy installations are playing a vital part in meeting a national need for secure, clean energy, including those in Northumberland. It is right, therefore, that local people should be recognised and rewarded for this contribution. That is why we worked with industry to secure a voluntary agreement that developers will contribute a minimum of £5,000 per megawatt per year to local communities hosting wind farms.
The tangible benefits from community benefits funds are clear to see. Some examples were quoted by my noble friend Lord Ridley and others of where they felt that turbines have been a blight, but Middlemoor wind farm in Northumberland has provided funding for roof repairs in the Eglingham village hall and learning resources, equipment and outdoor protective clothing for Little Acorns pre-school. There are other examples across the north-east and indeed the whole of the country where communities are seeing real benefits from hosting onshore wind farms. To improve the standards of engagement between developers, communities and local authorities for these developments, we published best practice guidance on 7 October. These documents will provide communities with information as to what to expect, in terms of both engagement and community benefits, and when to expect them.
There were a number of questions raised to which I would like to respond before closing my remarks. My noble friend Lord Ridley seemed to be a little pessimistic about the creation of jobs, but according to industry estimates, onshore wind has supported around 17,000 jobs in 2012-13 in the UK. We in the department estimate that about £7.6 billion has been invested in the UK in onshore wind between 2010 and 2013, in 2012 prices. Since 2010, we have recorded announcements of £1.9 billion worth of private sector investment in renewable electricity in the north-east. This has the potential to support an area where we need to see job creation and around 2,190 jobs will be supported.
My noble friend also raised a question on the impact of these turbines on birds. The Royal Society for the Protection of Birds has noted in its own reports that the majority of studies indicate that bird collision mortality rates per turbine in the UK are incredibly low.
My noble friend Lord Vinson talked about planning practice guidance. Protecting the local environment is just as much a concern for the Government as protecting the global environment, but we are bound by targets that have been set within the Climate Change Act 2008.
Lord Vinson
Will the Minister assure the House that this debate is brought to the attention of the planning departments, and in particular, the planning inspectors? Unless they read this debate, it simply will not have the effect that we all think it should have.
Baroness Verma
My noble friend is absolutely right, and I have made a note to ensure that the Department for Communities and Local Government has sight of this debate, because it is really important. The noble Baroness, Lady Quin, asked for that too. This has been an informed debate and it had a lot of personal ownership behind it. It is only right, therefore, that it is seen by my right honourable friend Eric Pickles and his colleagues in the Department for Communities and Local Government, so I will ensure that it reaches them.
Last year, we published new planning guidance for renewable energy to help deliver the balance expected by the National Planning Policy Framework by making it clear that the need for renewable energy does not automatically override environmental protections and the planning concerns of local people. The new planning guidance has been published to assist local councils and, on my noble friend’s point, planning inspectors in their consideration of local plans and individual planning applications.
The noble Lord, Lord Walton, asked whether there was a way to check decisions after they had been made in line with new planning guidance. On 10 October last year, my right honourable friend the Secretary of State for Communities and Local Government announced a temporary change to appeals recovery criteria for a period of six months. On 9 April this year, he announced an extension to that temporary change—and that will continue. It allows him to consider recovery appeals for new energy developments for a further 12 months. There are processes in place that have been much better firmed up because we have taken the time to listen to those local community concerns raised by noble Lords here today.
In closing, the Government have three objectives for energy policy: to keep the lights on, keep energy bills affordable and deliver on climate change goals. Onshore wind will play a part in meeting those three objectives. To achieve the necessary change, we passed the Energy Act 2013 to provide the legal and financial mechanisms necessary to attract the investment we need. At the same time, we simplified and strengthened the planning process by creating the National Planning Policy Framework to ensure that only appropriately sited projects receive consent, taking into account the needs and concerns of local communities—I re-emphasise that: the needs and concerns of local communities. Taken together, this Act and our reforms will enable us to deliver the energy infrastructure we need to secure our future at the right price and in the right place. I thank all noble Lords for an excellent debate and will ensure that what has been said is taken back to the department.
Wales Bill
(9 years, 6 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wigley
“(5A) The Secretary of State shall make arrangements for an independent report to be compiled on the issuance of bonds by Welsh Ministers.
(5B) The Secretary of State shall lay a copy of the report specified in subsection (5A) before each House of Parliament within three months of this Act being passed.”
Lord Wigley (PC)
My Lords, I will also speak to Amendments 53 to 55. This group seeks to bolster the Assembly’s economic accountability and resources. We in Plaid Cymru believe that the Welsh Government should be able to issue bonds, just as the Scottish Government can. Amendment 52 would hence provide for a review into whether this could in fact take place. It is a very modest amendment giving the opportunity for this to be further investigated. I should point out that this was a recommendation of the Silk commission and is supported by the Welsh Government as well as by my own party.
Having this power would allow the Welsh Government to use innovative, less volatile ways of borrowing such as the Build for Wales scheme that we have championed. Such a project would create a new entity to invest in public infrastructure. At present, if the Welsh Government want to undertake large amounts of capital expenditure to invest in building schools, hospitals, roads and so on, they are unable to borrow and cannot raise enough by way of tax to provide the necessary resources. If they save the funds, the Treasury may claw the money back if it is not spent within a certain period—as was so disgracefully done in 2011 when savings prudently accumulated by the Welsh Government were ruthlessly purloined by Her Majesty’s Treasury. It is surely against common sense that the Welsh Government are unable to borrow funds long term to fund capital assets.
Amendments 53 to 55 would ensure that the threshold for the Assembly’s capital borrowing powers is raised from the £500 million in the Bill to £1,500 million—that is, £1.5 billion—which would make the Welsh Assembly more closely aligned to the £2.2 billion threshold afforded to the Scottish Parliament. We would feel very unhappy if the Scottish Parliament were able to borrow four times the sum that we can in Wales. We arrived at our figure by taking into consideration Wales’s population base as well as the fact that we have fewer PFI commitments than Scotland, hence giving us greater flexibility over repayments. I beg to move.
Lord Howarth of Newport (Lab)
My Lords, it is absurd that there should be a need for a review of such a matter. It is absurd that there should be limits on the ability of the Welsh Government to borrow. We all remember—I think we are all old enough—that in the 1960s and 1970s local authorities issued bonds, as did utilities. Much more recently, universities have issued bonds, notwithstanding that to a significant extent they are publicly funded. This is an elementary tool of financial management which, if the Assembly is to take serious responsibility for its own affairs, of course it ought to have.
My only complaint about Amendment 55, proposed by the noble Lord, Lord Wigley, is that he has been so modest. He wants to limit the amount that the Assembly is permitted to borrow to £1,500 million. There is a constraint on the amount of borrowing that rests in the ability of the Welsh Government to service the interest. That should be a sufficient discipline.
Baroness Morgan of Ely (Lab)
I will speak to Amendments 53 to 55, which are about increasing the amount that the Welsh Government should be allowed to borrow. One of the key reasons why the Assembly is so enthused about this Bill is that, for the first time, the Welsh Government will be able to access those borrowing powers. This is particularly important at the present time as £1.7 billion has been cut from the Welsh budget and the capital budget has been slashed by 33%. If the Welsh economy is to grow, it needs to invest in essential infrastructure. That ability to invest has been choked off by government cuts. It seems unfair that the Government connected the amount that the Welsh Government are able to borrow to the taxation revenue stream of the Welsh Government. Revenue streams in relation to stamp duty and landfill—two taxes that are, it is proposed, to be devolved initially—have proved to be extremely volatile in the past.
How was it determined how much the Welsh Government are allowed to borrow? It strikes me that the approach to Wales is very different from the approach adopted for the borrowing powers in Scotland, where a connection was not drawn to the funding stream but to the capital budget. The Scotland Act allows the Government to borrow 10% of the Scottish capital budget in any year to fund additional capital projects. That would be around £230 million in 2014, up to £2.2 billion in total. Scotland seems able to borrow proportionately considerably more, despite the fact that it has considerable PFI commitments—unlike the Welsh Government. This is not the case for Northern Ireland, where no revenue stream exists apart from the block grant. Yet, it is allowed to borrow.
This Bill allows the Welsh Government to borrow up to £125 million per year, up to a limit of £500 million. However, if the same rationale were used in Wales as in Scotland, so that borrowing was based on capital budget not tax revenue stream, Wales would be allowed to borrow up to £1.3 billion—or £130 million per year—reflecting that £1.3 billion capital budget in Wales. Ideally, we would like the Government to allow flexibility so that the Welsh Government can increase their borrowing powers at a time when the economy looks like it is much more on its feet. Could the Minister outline whether there is any mechanism through which that would be possible?
Lord Newby (LD)
My Lords, in this group of amendments on borrowing powers, I begin with Amendment 52, which would require the Secretary of State to lay an independent report on Welsh bonds before both Houses. As the Government have previously made clear, the subject of bond issuance by Welsh Ministers is something that the UK Government are willing to consider. Moreover, initial discussions have now taken place between the two Governments on the form that those considerations should take and we are keen to progress this work quickly and bring it to a conclusion.
The Government have previously committed to consider Scottish bonds and have agreed to make this source of borrowing available to the Scottish Government. Our record therefore demonstrates that we are able to consider such matters without legislation, and I therefore ask the noble Lord to withdraw his amendment on that basis.
I turn to the proposed amendments to the borrowing limits. The Government have consistently been clear that capital borrowing must be commensurate with the level of independent revenue available to support the costs of borrowing. This is an important principle that ensures borrowing remains affordable in much the same way as mortgage lending must reflect the capacity to service borrowing. It is also worth repeating that the £500 million capital borrowing limit is already substantial relative to the level of independent revenues that will be available to Welsh Ministers when stamp duty and landfill tax are devolved. In particular, the limit is far higher than it would have been had we simply applied the tax and borrowing ratios implemented by the Scotland Act. Such an approach would have given the Welsh Government capital borrowing of only £100 million rather than £500 million. Although the noble Baroness talks about the relationship between capital expenditure and borrowing powers as the consideration that she wants to underlie the amount that the Welsh Government can borrow, it has to be related to the Welsh Government’s management of their taxes; otherwise, by the same logic—perhaps she supports this—large cities and the English regions could also have large borrowing powers if they were simply related to the fact that they are already spending money on capital. The link between borrowing powers and the Assembly is secured by the fact that the Assembly has its own sources of revenue.
Baroness Morgan of Ely
Will the Minister explain how Northern Ireland is allowed to borrow when it does not have this income stream?
Lord Newby
My Lords, as we have discussed in respect of virtually every tax we have talked about today, the considerations in Northern Ireland, and the situation in Northern Ireland, are very different from those in all other parts of the United Kingdom. The noble Baroness is aware of the history of Northern Ireland and why we do things differently there. Noble Lords have made good points about read-across from Scotland to Wales, but it is a lot less easy to do the same with Northern Ireland. Very different considerations apply, and the nature of the economic challenges facing Northern Ireland is rather different.
I fully understand the desire to see as much investment as possible in Wales, but we must ensure that it is manageable for the Welsh Government. Not only must the Welsh Government repay borrowing, they must fund the associated interest payments. That is why we need to ensure appropriate independent funding streams are in place. I remind noble Lords that for every 1% that the Welsh Government have to pay in interest on their £500 million borrowing—if they reach that level—they will have to take £5 million from their overall budget. The maths is clear. It is a very significant amount that the Welsh Government will have to provide from their overall budget in any event.
We should be encouraging the Welsh Government to hold a referendum on income tax powers. If an element of income tax is devolved to Wales, that increased funding stream could allow Welsh Ministers to borrow around £1 billion. Our message to all parties in Wales is that it is time to get cracking, once we get this Bill through, and get that referendum held and the income tax powers devolved.
Finally, in order to manage forecast error, the Government have provided the Welsh Government with exactly the same £500 million of current borrowing as in the Scotland Act, despite the more limited tax powers initially being devolved to Wales. The Welsh Government’s current and capital borrowing limits are therefore relatively generous compared with Scotland, and I ask the noble Lord not to move his amendments.
Lord Wigley
I am very grateful to the Minister. I certainly welcome his announcement that progress has been made with the bonds issue, and I hope that the National Assembly can move forward rapidly to take advantage of that opportunity.
With regard to borrowing, the capital budget of the National Assembly was reduced by just over 40% when the changes introduced by the Government were brought in. That put an immense squeeze on, among other things, the capital requirements of Governments, such as the Government in Wales, with responsibility for roads, schools, hospitals and all the rest. To get the economy moving, we have to get the capital injection, particularly into the economic infrastructure. I entirely accept that there has to be a cash stream to service this, and the Minister once again mentioned the income tax proposals. As he knows, I welcome those and want to see them used. Are the Welsh Government constrained to income tax? There are other sources of taxation revenue, and there may be other sources of revenue as well. For example, in the next four or five years, the M4 tolls will be reconsidered and renewed. Is it not possible for the Welsh Government to use sources other than income tax to service the capital borrowing that they need? Can the Minister give any indication on that?
Lord Newby
As the noble Lord knows, the Bill is permissive in terms of additional taxes being established in Wales. My working assumption would be that if such new taxes were devolved or established, there would be a commensurate rise in borrowing powers. However, many of the taxes that people sometimes talk about do not necessarily raise a huge amount of money. Therefore even if you got a commensurate increase in borrowing it would not necessarily be a transformative amount on its own. However, I think that the principle is very clear. The Bill is permissive in terms of additional tax powers for the Assembly and, as it were, borrowing follows income.
Lord Wigley
I am glad that the Minister has emphasised that there is a basket of possible sources of revenue which would justify the capital that is needed. No doubt the Welsh Government will need to use the capital responsibly as it is for capital investment projects and not just to subsidise revenue budgets that are running at a loss. As far as that is concerned we are making progress. Can I just pick him up on the comments that he made about Northern Ireland when he said that the situation there is different. Of course the situation is different from Wales. I understand the historic difference and all the rest but in economic terms the challenges in Wales are just as great as those in Northern Ireland—they are in terms of the income per head, the GDA. Is the Minister aware that the GDA per head in areas such as Kensington and Chelsea is 10 times the GDA per head in the Gwent valleys and Anglesey? That is the scale of the discrepancy. We need to regenerate the economy, otherwise we are always going to be going down this spiral. We need the tools to do the job and quite clearly this will be a responsibility of the Welsh Government. All I would press for is for him to be as sympathetic to the economic needs of Wales as he clearly is to the economic needs of Northern Ireland. I beg leave to withdraw the amendment.
Lord Wigley
“Review of Barnett Formula
(1) The Secretary of State shall make arrangements for an independent review of options for reforming the Barnett Formula in order to meet the objective of calculating the block grant funding for Wales on the basis of need.
(2) The Secretary of State shall lay a copy of the report of the review specified in subsection (1) before each House of Parliament within 3 months of the passing of this Act.”
Lord Wigley
This amendment stands in my name and that of my noble friend Lord Elis-Thomas. Noble Lords will be glad to know that this is the final amendment tabled in our names for today’s debate. It deals with perhaps one of the most central questions of all. We are coming to it last: the much-beleaguered Barnett formula which every party in Wales accepts must be replaced. Unfortunately, for what appear to be narrow political reasons the parties up here do not agree on that point. Those of us in Wales who know how much Wales misses out on funding due to this formula were horrified to hear the government parties giving pledges to the Scottish electorate that they would keep the discredited system in place in the event of a no vote. If it is to stay in place without amendment it will have very dire consequences for Wales.
As the Minister will know, in Wales an independent commission, the Holtham commission, has shown how we are disadvantaged by the implementation of the Barnett formula which, as noble Lords will be aware, calculates how much consequential funding the devolved nations get based on the spending levels in England. The Holtham commission argued in 2010 that we in Wales are underfunded by between £300 million and £400 million every year. We believed at that time that it was probably an underestimate. Since 1999 the aggregate shortfall in Wales arising from the Barnett underfunding of the necessary services amounts to more than £5 billion. That is why our NHS, education system and local government have been inadequately financed. Services vital to the people of Wales are being squeezed because successive Governments at Westminster have not got to grips with this problem.
The Holtham commission argued that the formula should be replaced with a mechanism based on needs as opposed to the per head of population as is currently the case. This would allow for the fact that Wales has more vulnerable and disadvantaged people, including older people—many people retire to Wales—disabled people and those on benefits. The level per head of population is higher than the UK average. Even the noble Lord, Lord Barnett, has openly argued that the formula to which he gave his name should be replaced. A committee of this House came to the same conclusion.
Our amendment calls for a review of the options for replacing this formula. In the Motion to which I referred in earlier debates in the Chamber today there has been agreement between the four party leaders. There is a Motion coming up for debate on Tuesday in the name of the four party leaders, including the First Minister, Carwyn Jones. It states in the context of Barnett that the National Assembly for Wales,
“calls for bilateral talks that are informed by the Holtham and Silk 1 Commissions’ findings, including an updated assessment of the current level and likely future direction of Welsh relative funding”,
and,
“calls for those talks, which should begin immediately and be completed by January 2015, to have a particular focus on fair funding, with the goal of securing rapid implementation of a funding floor which both addresses underfunding in a way that is consistent with Welsh needs and halts future convergence”.
There are three steps that can be taken to sort this out and I put to the Minister that they are within the Government’s easy competence and can be achieved. The first is to determine the extent of the shortfall at present. I accept that it has come down because of the economic patterns and it may now be at £150 million to £200 million rather than the £400 million back in 2010, but it is almost certainly still there. If the Government were also to commit to a one-off adjustment to sort that out and bring in a floor so that as the economy picks up again we do not get the Barnett squeeze hitting us in the way that it has, and if the Barnett formula is adjusted to a percentage basis rather than an absolute one so that we do not lose out every time the absolute figure in Wales gives a lower percentage of benefit than happens elsewhere, it would be possible to live with the Barnett formula although it still does not give us a needs-based formula.
Ideally, however, what Wales needs—and what all the parties in Wales have been calling for—is a needs-based formula. At some point we are going to get some daylight on this. We cannot go on from year to year with this underfunding. I press the Government very strongly indeed, even if they cannot accept these amendments, to please give us some ray of hope that we might find our way out of the hole in which we find ourselves in Wales. I beg to move.
Lord Anderson of Swansea (Lab)
My Lords, my Amendment 59 has the same target as that of the amendment of the noble Lord, Lord Wigley, but approaches it in a different way. I ask that the tax reforms shall not come into force until a Welsh Government Minister has laid a report before the National Assembly containing a statement that the Welsh Government, with regard to the statement of funding policy, are content with the fairness of the allocation of funding arrangements from the UK Government to Wales. So this is effectively about fair funding, also known as the Barnett formula. I follow the noble Lord, Lord Wigley, in saying that in the current, somewhat depressed, economy, the gap has been narrowed. If there is positive economic development, that gap will be widened again.
The noble Lord, Lord Newby, asked us to be positive and not to be “moaning minnies”. I therefore turn to the front page of yesterday’s Western Mail, which quotes Shadow Welsh Secretary Owen Smith as saying after the discussions yesterday afternoon:
“I impressed on the Secretary of State the need for his Government to deliver fair funding for Wales”—
and here it is—
“and am pleased that he seemed prepared to address this issue”.
Well, if he is prepared to address it satisfactorily, I could sit down, I suppose. However, it is clearly a major issue in Wales.
Many years ago I sat at the feet of the noble Lord, Lord Morgan, who went on to become the vice-chancellor of Aberystwyth. He had come “al hoot” from Oxford and taught us poor undergraduates in Swansea new words such as “marginal”. He taught me about the great American labour leader Samuel Gompers, who was once asked, “What does American labour want?”. Some people expected him to suggest revolution or radical change. Samuel Gompers answered: “More”. If the grand public in north, south or mid-Wales were asked what they wanted, they would not enthuse about the proposed changes to landfill tax or income tax, or modified powers. They would say, “We want more”—because we are currently underfunded; the extent is uncertain, but we are certainly underfunded.
That was the position taken by the First Minister. I recall that immediately after the Scottish referendum he said something to the effect that Scotland has put the United Kingdom “through the grinder”—I think those were his words—and that the funding issue should now reappear: we should effectively shout more loudly. Scotland has been rewarded for it. Are we in Wales to continue to be taken for granted? We have played Mr Nice Guy and been ignored. Objectively, we have lost out financially.
Time is such that I will not detain the Committee, but I was impressed by an article by Alice Thomson in the Times of 24 September which—unusually, coming from a non-Welsh person—stated:
“While Scotland is being showered with largesse, Wales—failing and underfunded—has been pointedly ignored”.
She went on to give examples from Holtham:
“Last year under the Barnett formula, Scotland received £10,152 per head, while Wales, despite being much poorer, got £9,709. If Wales received the same levels of public spending per capita as Scotland, its public services would be boosted by £1.4 billion”.
Well, there may be argument about the exact amounts, but I cite what she says: Wales has been the orphan within the United Kingdom. She says:
“Wales is now barely acknowledged by politicians in Westminster … When I asked one English minister what the future held for Wales, he said: ‘Sheep and singing’”.
I hope that is not the attitude of other Ministers in this Government. I would ask noble Lords to read that article, which is very important.
It may well be that the shortfall could be remedied in other ways. I think it was the noble Lord, Lord Wigley, who mentioned a review of Severn Bridge funding. What is clear is that the Severn Bridge, with its substantial and increasing toll, is a major tax on Wales. There would be a big boost to the economy of Wales if that toll were to be removed. I would commend that to the Government. There may be other ways of making up that shortfall, but fair funding there should be.
I will end again on a positive note. I am encouraged by the way in which Owen Smith emerged from that conclave and said that he thought the Secretary of State was listening. Not just listening I hope, but ready to act.
Lord Richard (Lab)
My Lords, I start by declaring an interest. Some years ago, I had the privilege and honour of chairing the committee of your Lordships’ House that looked into the operation of the Barnett formula. It was an extraordinary committee. On it, among other people, we had a former Chancellor of the Exchequer, two former Secretaries of State for Scotland, assorted junior Ministers, and other Members of your Lordships’ House. The committee came to the unanimous conclusion, set out in a report, that the Barnett formula was out of date, inefficient, basically unfair and ought to be replaced. One of the most substantial parts of evidence we had was from my noble friend Lord Barnett himself. He said that he thought it was out of date and inefficient and was never intended to last this long—that it was introduced as a temporary measure in about 1977 or 1978 and not designed to be semi-permanent. It was meant to last a year or so and then expire. I put it to him whether it was fair to say that it ought to be replaced. He said, “Yes, perfectly fair.” He has persisted in that view.
Where are we on this issue? Here we have a formula, introduced nigh on 40 years ago, which still determines the basis of the block grants for Scotland, Wales and Northern Ireland. It is based on evidence garnered in the 1970s, and is not based on needs but rather on population. You hear the argument frequently that you cannot have a formula based on needs because it is too imprecise and difficult to do. I would commend that the people who veer in that direction of the argument read the evidence that we produced in that report about six years ago. There was a detailed examination of a needs-based formula and the evidence then seemed quite conclusive, as it does now. The Barnett formula is unjust and unfair. Wales is unfairly discriminated against as a result of the operation of the Barnett formula.
No Government in recent years have been prepared to take this issue on. In terms of the Labour Government which left office in 2010, the then Chief Secretary to the Treasury appeared before our committee and said that he thought the operation of the Barnett formula was broadly sort of fair. Indeed, the then Secretary of State for Wales even came in front of the committee and said he thought it was sort of fair. Of course, the Secretary of State for Scotland thought it was extremely fair. The Secretary of State for Northern Ireland also did not dissent from that general proposition. I was appalled, frankly, at the evidence that we got from the Chief Secretary to the Treasury and the Secretary of State for Wales. Nothing has changed. Things have not got better as far as the Barnett formula in Wales is concerned: on the contrary, they have got worse. Something has to be done about it. We really cannot go on with this.
Although I have held the view for some time that the formula’s time has come and that it should be quietly expunged from the public record, I was surprised and, indeed, somewhat appalled to see the three party leaders re-emphasise in the Scottish referendum campaign that it should continue to apply to Scotland. If it is said that it should continue to apply to Scotland, on what basis should it do so? Does that mean that it should continue to apply to Wales? If so, will Wales be asked to put up with what is, by almost everybody’s admission now, a basically unfair system of allocation of resources from central Government to Cardiff? Are we really going to be asked to put up with this because the party leaders went up to Scotland at the end of the referendum campaign and made what is, on the face of it, an extraordinary offer to the Scots? If the party leaders want to keep the Barnett formula for Scotland, so be it, but they should not be prepared to inflict it upon the Principality in perpetuity. It is basically unfair, unjust and out of date, and something should be done about it.
Lord Howarth of Newport
My Lords, it is enough to make one weep that, in the run-up to the Scottish referendum, political leaders felt themselves driven by expediency to pledge to retain the Barnett formula. As my noble friend Lord Richard explained to the Committee, it is one of the great injustices and malfunctions of government in this country over the past 40 years and a lamentable lack of statesmanship has prevented it being reformed. There was a great opportunity in 2010. The Conservatives had nothing to lose in Scotland. With universal recognition of the need for austerity, there was a political opportunity to deal with it then. That has been made infinitely harder now by the rash and unprincipled pledges that have recently been made.
The report of the committee of my noble friend Lord Richard is unanswerable. We debated it in your Lordships’ House and there was not a scintilla of a persuasive argument to defend the status quo. Indeed, I do not recollect anybody even trying to defend it. The pledges that have been made will come back to bite their authors because I cannot foresee how we can make progress towards new constitutional arrangements in this country following the referendum in Scotland and following the pledges that have been made in respect of devolution so long as there is such a fundamental inequity in public financing. I cannot see how there can be a fair and acceptable new set of arrangements while the Barnett formula is retained.
The noble Lord, Lord Wigley, spoke extremely well and constructively with his practical suggestions as to how we might try to develop a sort of fallback position. My noble friend Lord Richard suggested that if the Scots are to retain their advantage, it may none the less be possible to find ways at least to reduce the inequity for Wales. However, it seems to me that that path also bristles with political difficulties because, if public spending is a zero-sum game, if there is to be more for Wales, then it has to come from somewhere and if the Scots are allowed to retain their present advantages, then it will come from Northern Ireland or, more likely, from England. However, there is, rather belatedly, a growing recognition in the regions of England that the Barnett formula is a lousy deal for the English. I cannot see that there is a path towards remedying at least a part of the injustice from which the people of Wales suffer if it is to be done directly at the expense of the people of England. Hasty pledges have placed us all in immense difficulty but I look forward to hearing from the Minister or the noble Lord, Lord Bourne, who may be able to pluck a solution out of the hat, although I somehow doubt it.
Baroness Morgan of Ely
Today, the First Minister called again for a new funding system that meets the public service requirements in Wales. He likened the Barnett formula to,
“fixing a hole in the roof with Blu Tack and cardboard”.
It is no secret that Wales does not do well out of the Barnett formula. However, we know, following the Scottish referendum, that that formula is not in danger of dying any time soon. Indeed, the Prime Minister made his sentiments on the issue quite clear last week, when he reiterated that he had no intention of reopening the debate on providing a fair funding mechanism for Wales. That seems very different from the position of the Secretary of State for Wales, who said yesterday that he is prepared to address the issue. It would be nice to hear which one of those statements is correct.
At present, the block grant provides 113% of the English level of spending on devolved services, while the Holtham report found that Wales’s relative needs were between 114% and 117%. The noble Lord, Lord Newby, has asked me to be more positive, so I will give it a good go. The good news is that an arrangement was put in place in October 2012 that established a process to review the relative funding of Wales to England in advance of every spending review. If it looked like convergence were happening—for example, if the level of funding between England and Wales looked like it was becoming more equal, despite Wales’s needs being greater, due to things such as ageing population and rurality—then the Government would discuss options to address the issue in a fair and affordable manner. That is the good news.
The problem is that there is no guarantee. It is purely up to the good will and subjective decision-making of the respective Ministers in Cardiff Bay and Westminster. The Labour Party has acknowledged that there is a specific funding problem in Wales and that we will address the issue when we are in office.
I am sorry, but I am afraid that I must return to my negatives. One of the problems with the income tax recommendations is that this issue is compounded by the problem of the devolution of income tax in Wales. It is clear from David Cameron’s insistence that Wales should just pick up that offer of income tax powers that he has not understood the link between underfunding in Wales and the method through which the block grant will be reduced in future, should Wales pick up the option of introducing the Welsh income tax. While it is worth re-emphasising that we agree with the principle of income tax devolution, it is also worth underlining the risks that Wales would be undertaking if we were to devolve income tax powers without changing the Barnett formula.
The idea is that, if the Government suggest that in the first year of operation 10 points of personal income tax receipts are yielded to Wales, then the equivalent amount will be deducted from the Welsh block grant. That cut is then adjusted proportionately in subsequent years. The Government have suggested that the indexed deduction method, as recommended by Gerry Holtham, is used as a method to determine what that proportional cut would be. The problem is that if the block grant fails to produce a fair level of funding relative to need at the outset, as every subsequent change will be based on that initial level of funding, any cut in grant in future, however it will be adjusted, will probably make matters worse as convergence happens.
On the one hand, we are saying that we need fiscal accountability in Wales. On the other hand, we need to ensure that before we set out on this path we start from a fair position. It is critical that a fair funding mechanism is established from the outset, otherwise that unfairness will be locked into the system for the long term.
I know that the Minister is intensely aware of this issue. She has her fingers all over it and has been discussing it for years. However, I ask her to reiterate what the Secretary of State said this week: that he is prepared to look at this issue.
Lord Thomas of Gresford (LD)
The noble Baroness said that a future Labour Government would address the Barnett formula. Well, they addressed it in the last Labour Government; they appointed the noble Lord, Lord Richard, and his commission to produce a report and then ignored his findings.
Lord Richard
That is not right. I was appointed by this House, in accordance with the usual rules for the appointment of chairmen of committees.
Lord Thomas of Gresford
I withdraw the term “appointed” but I am sure that the idea was generated by the Labour Government of the day. It was not something that this House thought up of its own accord.
Lord Richard
I am sorry but it was an ad hoc committee, which was set up after the Liaison Committee decided that that was one of the subjects on which the House should have an ad hoc committee. That is how the committee came into existence and I was then asked to chair it.
Lord Thomas of Gresford
I had misunderstood the basis of that committee, so I withdraw what I said first of all—that the last Labour Government addressed the Barnett formula. They clearly did not and it was a committee of this House, chaired by the noble Lord, Lord Richard, which did address it. The Government then ignored its findings. That is what I am told. I am told that there was a second committee but I am not particularly aware of it.
Where the problem really arises is that the Barnett formula is used as an excuse for the failures of the Welsh Labour Government in the fields of education and other devolved areas. They say, “We don’t get enough money”. As soon as I read of the vows given to the Scottish people by the three leaders, it seemed to me that at that moment the concept of having a formula that could apply equally in Scotland and Wales was dead because one surely has to decouple whatever funding formula eventually applies in Scotland when it exercises its powers from whatever formula happens in Wales when it exercises different and more limited powers. Accordingly, we need something specific to Wales through looking at the needs of its people as opposed simply to dividing money on a population basis.
The whole point of the social contract is that taxes are paid—not to be divided equally per head of population but so that services according to need can be paid for by the government of the day. That is the principle that must be the basis of the way in which Wales is funded in the future.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)
My Lords, as ever, a debate on the Barnett formula is interesting but I am afraid that from my perspective it is rather too well worn territory.
I start by responding to the comments of the noble Lord, Lord Wigley, in relation to the £300 million to which he referred as the funding gap identified in the Holtham report. The gap has indeed come down in size and it would be very useful to determine the current shortfall. It is particularly important to point out that when the agreement was made between Jane Hutt and the Chief Secretary to the Treasury in an exchange of letters in October 2012, it acknowledged that convergence had ceased to take place, that there was, in fact, divergence and that Welsh funding was within the region of what the Holtham report regarded as fair funding. Therefore, at the moment, there is not a major issue of unfair funding. There may be issues at the edge, but it is not a big problem at the moment, as was acknowledged by the Welsh Government. Of course, that does not solve the problem, because convergence is predicted to start again around 2018. That issue has to be addressed if the gap is not going to widen again. I agree that there is a need to deal with this in the scope of the devolution discussions because it distorts the political debate in Wales. Funding is quite simply blamed for every policy failure. Even if we take the figure of £300 million, in a budget of £15 billion, £300 million is a significant amount of money, but it is not something that could possibly be blamed for every health failure, every education failure and every social problem within Wales. It is not so massive that it is fundamental to the problems that we all acknowledge are faced in Welsh society.
The noble Lord, Lord Anderson, is absolutely right in saying that it is the funding issue that the public are interested in. They do not worry too much in general about devolution, but they are interested in fair funding. The noble Lord, Lord Anderson, referred to the Severn tolls. I look forward to our debates on that in the next Government. Whoever wins the election, there will be debates on the Severn tolls because, of course, the end of that franchise is due in the mid-years of the next Government.
I strongly welcome the acknowledgment by the noble Lord, Lord Richard, that the Labour Party did not deal with the problems of Barnett. Indeed, the Labour Party refused for 13 years to agree publicly that there was any problem with the Barnett formula and it was in those years that convergence was taking place and the funding gap was really growing. It would certainly be the case that Wales would have fewer problems now if that had not been neglected. It is my view, and the Secretary of State certainly agrees, that it is time to look at the funding formula for Wales, and it is my view that one could do this even with the constraints of the agreement that Scotland will retain its current funding. One can look at Wales on a unilateral basis.
The noble Baroness, Lady Morgan, asked me to clarify the Prime Minister’s statement. He simply restated the oft-stated government position on funding in Wales, which is that because the problem of the deficit is our priority, no additional funding can be provided within this Government. That is in no way at odds with the Secretary of State saying that the long-term funding position of Wales needs to be looked at. There is an immediate situation and a long-term situation. The noble Baroness also asked for clarification on the impact of having income tax powers on the block grant and so on and referred to the index deduction method. The purpose of the index deduction method was to protect Wales from big swings in the economy as a whole and the sort of big swings that are due to UK government policy. However, I point out yet again that the Welsh Government have acknowledged that funding is fair at this point, within the region of fairness. Given that the Welsh Government acknowledged that we were in that sort of territory two years ago, it would be a good idea to go for a referendum on income tax powers as soon as possible to give the Welsh Government the maximum opportunities to use the taxation system to increase prosperity in Wales.
I shall very briefly look at the technical details of the amendments. Amendment 56 would require the Secretary of State to lay an independent report on options to replace the Barnett formula. Amendments 59 and 60 would seek to make the devolution of an element of income tax conditional on dealing with the funding formula. They specifically say that income tax can devolve only when the Welsh Government confirm that they are content with how funds are allocated. The progress that this Government have made on working towards fair funding, with the significant exchange of letters in 2012 between the Ministers in the two Governments, can be built on. I urge the noble Lord to withdraw his amendment.
Lord Richard
Can I be perfectly clear as to what the Minister has just said? As I understand it, she is saying that the fact that a vow has been given to Scotland that the Barnett formula should continue to apply there is no bar to the funding arrangements for Wales being reconsidered, and that it is the Government’s position that those funding arrangements for Wales will be reconsidered.
Baroness Randerson
I am saying that I do not believe that it is impossible to overcome the issue of the commitments made to Scotland and that you can honour those commitments and look separately and independently at the funding for Wales. Northern Ireland is also funded via the Barnett formula but from time to time gets additional funding for specific things. I cannot see why Wales cannot be treated, as Northern Ireland is, as a separate thing, as a matter of principle. Having said that, I am simply arguing the case—it is not government policy to do that. I am firmly saying that the Secretary of State for Wales has made it absolutely clear that it is his view that fair funding needs to be looked at in the context of the devolution settlement and the discussions that are going on about it. In that case, I am confident that those discussions will encompass the issue of funding, although I cannot predict the outcome.
Lord Richard
So that is government policy—what the Secretary of State said?
Baroness Randerson
Yes, that is policy, announced by the Secretary of State for Wales.
Lord Wigley
And of course, every word uttered from the Dispatch Box is government policy, as well. What I am trying to reconcile from the Minister’s response are the comments that things are more or less right now and that there is a need to look at fair funding. There is something a little bit contradictory about that. They are not absolutely right now, or at least we do not know that they are. That is the argument in favour of having more investigation.
The Holtham methodology may or may not have been right, though it has generally been accepted that it was. That indicates there has been a closure of the gap, though there probably is still a gap, of maybe £200 million rather than £300 million to £400 million. We do not know. Taking the comments that the Minister made a moment ago in response to the noble Lord, Lord Richard, if there is a gap of £200 million which could be put right, it would bring us on to roughly what a needs-based formula would generate.
The assumption is that Holtham was looking for a communality of standards in public services in Wales, as might be expected in England. Whether it be £300 million or £400 million as it was, or £200 million as it is now, if that could happen with a one-off adjustment and by bringing in a floor and making sure that the changes—convergence or divergence—were on percentage rather than absolute terms, so that we are not missing out, we would at least have a system that would be sort of needs-based. It is not the radical needs-based formula that a lot of us are looking for, where you have determinants that generate entitlement to certain funding, but at least it would meet the Holtham assessment of the needs as he saw them at that point in time.
Lord Anderson of Swansea
“(1A) Subject to the other provision made by this section, Parts 1, 2 and 3 come into force on such day as the National Assembly for Wales shall determine.
(1B) Parts 1, 2 and 3 may not come into force until the recommendations of a constitutional convention examining the distribution of power between Wales and the rest of the United Kingdom have been considered and voted upon by each House of Parliament.
( ) Subsection (1A)”
Lord Anderson of Swansea
My Lords, the last two amendments—and I hope I will not detain your Lordships too long—are in my name. They refer to the constitutional convention and the relevance of the Williams report: a report which is not mainly about the structure of local government but which contains important clauses on that. My contention would be that, just as we have looked at the relationship between the component parts of the United Kingdom, we should look also at the relationship between the Welsh Government and local government in Wales.
On the constitutional convention, there seems to be an increasing consensus that we need to look at the British constitution in the round. I fear that the response of the Minister would be: if you are so keen on your constitutional convention, why not put it in the manifesto for the next election when it can be debated? But that was Monday’s argument—since when, as we say, an amendment has been moved.
As an assiduous reader of the Western Mail I notice that, on the front page of yesterday’s paper, the Secretary of State, no less, is quoted as saying:
“Up to now, we’ve been saying, ‘Well, these are just matters for the individual parties and their manifestos at the next election’, but actually I think we can do better than that”.
Clearly, the noble Baroness appeared not to be on message on Monday; perhaps she will be a bit more on message today when she comes to respond.
So there is an increasing consensus. I hear the argument from time to time that to suggest a constitutional convention is no more than a device for delay and for kicking the matter into the long grass. The answer is that promises were made to Scotland—and some might argue that never has so much response been made by parties in the United Kingdom to one maverick opinion poll. When the Sunday Times YouGov poll suggested that there was a majority for independence, there was a certain panic among all parties, resulting in a response that may now be regretted at leisure.
The promises made to Scotland are clear and should be honoured, but they can be implemented on their own grounds. However, there are implications for the rest of the United Kingdom and, in my judgment, for the constitution—and I think that the Liberal Democrats have broadly been the leaders in this field. Clearly, the quasi-federal constitution needs to be viewed with all the difficulties that may arise. We need to have concern across the board, including in relation to your Lordships’ House. If there is to be a new regionalism, it should be reflected in the way that this House is elected, directly or indirectly—possibly, as in France, using the notables from local authorities. I think that the electorate of the French Senate is roughly 80,000. These are the people who are in the localities, the regional assemblies and the local authorities, and they come together having been elected indirectly to work together in the Senate. Your Lordships’ House should not be excluded from this consideration.
I think it was Alastair Campbell who said, “We don’t do religion”. That may or may not be the case but in the United Kingdom we don’t do constitutions—except for other people. We are pretty keen on delivering constitutions to colonial powers from high to low but we are not so good at doing it for ourselves. I have spoken to many groups from the Commonwealth Parliamentary Association and have been tempted to use the phrase “the Mother of Parliaments”, but clearly things are creaking in our own constitutional structures at the moment. Perhaps the 45% vote for independence in Scotland is a means of alerting us to the fact that the status quo cannot continue.
I recall Lord Weatherill, who was both a distinguished Speaker of the other place and the Convenor of the Cross-Bench Peers in this House, telling me a little story. He worked in the family firm of tailors and on his first day there was an old Jewish tailor to monitor him. One of the senior people came to the old Jewish tailor and said they wanted a suit made. He said, “Do you want it quick or do you want it good?”. There is an element of that in terms of constitutions. After all, we have agonised over changes for so long, going from precedent to precedent with a little tweak here and a little tweak there.
Now there must surely be a case for a group to make an initial analysis by looking at foreign examples and then for the elected representatives, so far as they are able, to take a considered view. It may be a federal system. Even within a federal system or a quasi-federal system one can have a range of very different powers. We know that in the different autonomía of Spain, for example, it is federalism à la carte. An autonomía such as Valencia has relatively limited powers, whereas Galicia and Catalonia have far more extensive powers—all within the same system. There is no reason why, according to demand, there should not be asymmetric devolution.
The key question is: are we happy to continue with constitutional tinkering or do we feel that we have reached the point where we need to look at the whole constitution from this place and the other place. I recall that one of the major cogent arguments used when we were discussing the future of this House was that there was no attempt to place it in the context of the relationship between this House and the House of Commons. We need to look at the devolved assemblies, and we also need to look at local authorities.
If we are not happy to continue tinkering, it is clearly right that we should now recognise that after the Scottish referendum we are in a new context, and that the status quo has proved insufficient. I recall that when the three party leaders made a vow, they came together quite properly. If they accept the case for a constitutional convention that is good although perhaps not quick, what is now stopping them? Is there not a reason for them to now make a similar vow on a consensual basis that this country deserves a constitutional convention?
I turn now to my second point, on which I shall be quite brief, which is the question of the Williams report. I submit that it would be wrong to ignore the position within Wales: that is, the relationship between the Assembly and the local authority. I recall that during the initial debates on devolution in the 1970s the Welsh Office, as it was then called, totally ignored local government. It was only at a fairly late stage of the debate that it was recognised and brought within the discussion that there were substantial implications for local government.
There is clearly a temptation for Cardiff Bay to hold on to what it has. However, I am encouraged by the response of the leader and, indeed, all the parties in the Assembly. Although the Williams commission hoped that there would be action by Easter of this year, we know that on 1 July the overview on broad public service recommendations was addressed, and on 8 July the local government reorganisation was addressed with a general White Paper. Now we are promised that on 28 November there will be a voluntary merger of local authorities. On 28 February there will be a White Paper setting out the process for merging councils that do not want to merge. There is already a timetable in process.
I will not labour the point that there is no ideal local government structure in Wales. I recall that many years ago when I was the Member for Monmouth there were certainly at least a dozen local authorities: rural district councils, urban district councils and town councils. That was done away with in the Walker reforms, with counties and districts. Clearly, it was right that the counties had responsibility for education and social services, but the divisions were not easily made.
We have now had further elements of reform. City regions are being considered. However, perhaps the failures over food safety are very good examples of the fact that, for certain areas of expertise, local authorities need to be able to employ experts in the field. I end on the plea that we do not forget local government. There appears to be a consensus within the Assembly on implementing the recommendations of the Williams commission, and the timetable is such that these could well be implemented before the provisions of the Wales Bill become law. I beg to move.
Lord Thomas of Gresford (LD)
My Lords, it is such a delight to hear from the noble Lord, Lord Anderson, who had a somewhat feckless youth when he was passionately anti-devolution. Clearly, somewhere between Monmouth and Swansea he was struck with the true light of liberal principle. As I understand his speech, he now supports not merely Liberal Democrat policy but also what was, in his feckless youth, Liberal policy.
Lord Anderson of Swansea
My position then was as it is now. Devolution within a unitary system is flawed in many respects, including the fact that there is no end position, whereas a federal or quasi-federal system with a constitutional court to adjudicate on the differences between the component parts is logical. We were embarking in the 1970s on a strange new journey and perhaps it was Mrs Thatcher, with her own form of centralisation, who was the major recruiting sergeant for me on that.
Lord Thomas of Gresford
The noble Lord, Lord Anderson, has disappointed me slightly with this recantation of what he said earlier, but never mind. I am entirely with him that we need a constitutional convention and that we should be looking for the abolition of the House of Lords and some form of federal, directly elected or proportionately elected Chamber that could consider the situation as a whole, perhaps with a Supreme Court charged with the sort of duties that attach to the Supreme Court in the United States. That is not, however, any reason for holding up the provisions of this Bill, which are urgent. The Bill needs to go through because Wales cannot wait for a future nirvana when we have got it all together, it is all very logical and all the problems are at an end. We cannot keep the Bill waiting for that moment.
Lord Howarth of Newport
If my noble friend Lord Anderson’s Amendment 57 is passed it will be a very long time before the provisions of this Bill are brought into force. I am against that delay because I want the Welsh Government and the people of Wales represented by them to have the new borrowing powers that are built into the Bill. However, if there is to be a constitutional convention, I am in favour of it taking its time. In the field of constitutional reform, more haste means less speed, as we saw rather painfully in the attempt at reform of your Lordships’ House in this Parliament.
I also think that the constitutional commission, if there is to be one, should be very much at arm’s length from the political parties and the Westminster and Whitehall establishment. It will be important that the public should not suppose that this is any kind of stitch-up or a device for the existing establishment to protect its own interests. The public would want to see that members of the commission were deeply versed in constitutional theory and constitutional law, and that while they may have close affiliations and loyalties to the different nations and regions of this country, they were prepared to take, as far as they could, an objective view of the long-term interests of the United Kingdom.
It would also be essential that they should receive submissions from the public. Those submissions would be numerous and would take a very long time to consider. I am sure that if a committee of wise people formed on these principles were to set to work, they would perform a valuable task in clarifying the issues, educating us all and pointing the way forward. They would probably succeed in coming up with a blueprint for a new federal model of the United Kingdom. However, it is one thing to come up with a blueprint; it is quite another to implement it, and then politics would re-enter. I anticipate that the processes of constitutional change would then be, as has always been the case in this country, incremental, and they would be the better for that.
I cannot support my noble friend’s amendment, but as we reflect on what we might be seeking in a constitutional commission we should disentangle it from our continuing day-to-day requirements of legislation and politics. We should get on with enacting this Bill. We should get on with implementing it and think generously, spaciously and patiently about how to develop a future framework for the government of the United Kingdom.
Baroness Morgan of Ely
My Lords, we have to understand what the Scotland referendum was really about. It was a cry from the people of Scotland who feel cut out of the political process. Of course, that has had an impact not just in Scotland because of the commitments that were made in the last days of the referendum, but it is having and will have an impact across the whole of the United Kingdom. It makes sense for us to place the discussion within a broader context.
We are not in favour of stopping this Bill in its tracks. A lot is in the Bill and there is a lot more to come with Silk 2. It is important that the Welsh devolution process does not stop because of a huge transformation in Scotland. However, it is worth saying that we have to think in a broader way about the constitutional arrangements of our country. What happens in Scotland is having an impact in Wales. Those commitments on Barnett are already having an impact in Wales and there is a problem if they continue to do so. We need to get the balance right and we need to have a broader discussion.
For two years the First Minister of Wales has been calling for a constitutional convention to be established where a discussion about the power relationship between Wales and the rest of the United Kingdom would be undertaken. Who would be on such a constitutional convention? Obviously there would have to be representatives from the devolved Administrations and local government representatives from England. But, crucially, we would also want to see representatives of civil society and the general public. The disconnection between politicians and the public absolutely has to be halted. We would need to work to a clear timetable. The last thing we want is a discussion that goes on for years and years without end. We would also need to think clearly about what the convention would do. We would have to define the core elements of a new constitution that would enshrine a programme of fundamental reform for the UK. The new settlement, while recognising the different circumstances of the four nations, must be based on common principles that reflect the multinational and multi-union character of our United Kingdom.
The referendum in Scotland was a wake-up call for all members of the political class. We must acknowledge the depth of disillusionment in this country and the distance that people feel from the political process. Through establishing a convention, we would have a one-off opportunity fundamentally to reform the system of governance of this country. A constitutional convention is needed and it is well overdue. We recognise, however, that the Wales Bill is not the ideal mechanism for introducing the idea of a constitutional convention, but it seems rather odd for us to be ploughing on with constitutional changes as if nothing has happened. As Carwyn Jones, the First Minister of Wales, has said, the current constitutional settlement is dead. We recognise the need and the demand for more devolution in Wales, but we need to set the whole within the broader UK framework. To proceed in isolation from the wider discussion would be to miss the opportunity to elaborate on a new vision and a constitution for this country, a constitution that would involve, include and invigorate the population so that people would feel as if they had ownership of their own country.
Baroness Randerson
My Lords, the noble Lord, Lord Anderson, has pointed out the flaws in the devolution settlement for Wales. I say to him that I have campaigned for devolution for virtually the whole of my adult life. I have faced downright nasty opposition at worst and a lack of enthusiasm and total incomprehension at best. Long ago, I came to the conclusion that the overwhelming majority of people simply were not interested. It is a really exciting time for me because devolution is suddenly fashionable and a lot more people understand what it is about. Noble Lords will not be surprised, therefore, that I am keen to seize the moment; I am keen to get this Bill through as a basis on which we can take the next step. The Bill is a very important step forward in devolution in its own right.
Yes, there is a great deal to be said for a constitutional convention. The noble Baroness, Lady Morgan, said that the First Minister has been calling for one for two years. My party has been calling for one for 40 years. On that basis, I would argue that one should not place too much faith in the immediate production of an outcome of the concept. I agree with the noble Lord, Lord Howarth, when he says that this is something that we need to think about widely and in the long term. The message from my noble friend Lord Thomas and the noble Lord, Lord Howarth, is that, despite the great advantages of a constitutional convention, we have to get on with it now.
To the noble Lord, Lord Anderson, I say that if I accepted his amendments, it would ensure that Parts 1 to 3 of the Wales Act could be commenced only by the Assembly on a day of its choosing, but the Assembly could not decide to commence the provisions until the recommendations of a constitutional convention had been voted on by both Houses of Parliament or until the Welsh Government had implemented the Williams report. I would say that would mean a minimum of five years. My noble friend Lord Bourne, being a member of the Williams commission, assures me that that should be implemented a lot sooner, but we all know that local government reform in Wales does not prove easy. Therefore, I am not betting my political reputation on the timescale for either of those events.
The last few months have been momentous for our United Kingdom. It is now time for us to come together and move forward, but we also accept that it is not “business as usual”. The referendum in Scotland has led to a demand for reform across the UK. We now have a chance—a great opportunity—to change the way we are governed, and change it for the better. The Government have made it clear that we want a debate on how to make the United Kingdom work for all its nations. We have introduced a new devolution committee, chaired by the Leader of the Commons, to consider how we can best do this. The Wales Office is fully represented on that committee and my right honourable friend the Secretary of State for Wales is also having meetings across the parties to pursue this agenda.
We have as a Government already committed to devolving further powers to Scotland as a result of the referendum, and we will deliver on that commitment. England, Wales and Northern Ireland are now on the agenda. This is the time to put our foot on the pedal of devolution. I regret that the noble Lord’s amendments would apply the handbrake. Wales needs the powers this Bill provides now, not in several years’ time, which would be the case if the noble Lord’s amendments were accepted.
The noble Lord’s amendments would also enable the Assembly to decide the commencement of the provisions in the Bill, subject to his other conditions being met. I regret to say that they are very imprecise conditions and it would be difficult to know when they are satisfied. We will of course—this is a commitment—work with the Welsh Government and the Assembly on the commencement and implementation of the provisions in a Wales Act.
The Bill is about creating truly accountable devolved government for Wales. It is about providing the Welsh Government with the levers to grow the economy in Wales and ensuring clarity for Welsh voters when they go to vote in 2016. All these things would be prevented if commencement of the Bill was delayed in any way, including through the amendments put forward by the noble Lord. I therefore respectfully ask him to withdraw his amendment.
Lord Anderson of Swansea
My Lords, the Minister vastly overstates her case by claiming that this Bill would lead to a truly accountable Welsh Government. If we look at this objectively, it is pretty small beer. It is a Wales (Miscellaneous Provisions) Bill. It was framed in a very different context from that which we have now, after the Scottish referendum. I assure her that the purpose of these two amendments—
Baroness Randerson
Is the noble Lord saying that a Bill that provides fiscal accountability for the very first time for the Welsh Assembly and Welsh Government is not a big step forward? Is he saying that the provision of borrowing powers for the first time for them is not also a big step forward? Does he not accept that the devolution settlement has been sadly lacking up to now because there has not been that proper accountability and that this is a vital development?
Lord Anderson of Swansea
I hear what the Minister says about accountability but given the relatively small changes and the small amount of money involved in these taxes which are to be transferred, I doubt that one can properly say that there is real accountability. There is considerable scepticism in the Assembly in relation to the tax powers, which may be stillborn in any event. Yes, I accept that borrowing powers are a major innovation in the Bill but these borrowing powers, albeit in diluted form, are available to local authorities in Wales in any event so why not to the National Assembly?
On the general point she made, my purpose in having this formula of,
“may not come into force until”,
was clearly only to provoke a debate. It was not intended as a freeze or delaying device. I accept that after the result of the Scottish referendum we cannot return to business as usual. Finally, I also accept the point made by my noble friend Lord Howarth that there are great problems in the concept of a constitutional convention. Even if we have the so-called constitutional experts, no doubt there will be minority opinions—as there have been on similar issues. It may be extremely difficult to find—as we saw in respect of reform of your Lordships’ House—any reasonable consensus following that.
Having provoked the debate that I set out to provoke by using the formula that, I say again, was not intended to freeze in any way the progress of the Wales (Miscellaneous Provisions) Bill, I will withdraw the amendment.
Baroness Randerson