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Oral Answers to Questions
(10 years ago)
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Pat Glass (North West Durham) (Lab)
1. What discussions she has had with Ministers in the Northern Ireland Executive on ensuring the Police Service of Northern Ireland is adequately resourced.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
May I first convey to the House the apologies of the Northern Ireland Minister who is chairing cross-party talks in Stormont today?
It is for the Executive to ensure that the PSNI is properly resourced, and the Government have provided significant additional funding to tackle terrorism, totalling £231 million. We are now working with the PSNI to understand the impact that funding reductions imposed by the Northern Ireland Executive will have on its ability to police the terrorist threat.
Pat Glass
The Police Service of Northern Ireland is experiencing budgetary shortfalls that the Chief Constable has said will leave it “unrecognisable”, and “put lives at risk.” What is the Secretary of State doing to ensure that budget cuts to the PSNI do not undermine the peace process or put lives at risk?
Mrs Villiers
This is a very serious matter, and as the hon. Lady has said, the Chief Constable is concerned about the extent of the reductions proposed. A real concern is that a number of the cuts are in-year cuts, which makes achieving them through efficiency reforms very difficult. The Government will continue to support the PSNI with substantial extra security funding, but the Chief Constable now believes that the reductions proposed by the Executive will impact on his ability to police terrorism. We are working closely with him to ascertain exactly what that impact will be, and to see what steps can be taken to mitigate it.
Mr Andrew Robathan (South Leicestershire) (Con)
13. I pay tribute to the PSNI, which does a marvellous job in very difficult circumstances. Will my right hon. Friend consider whether it would be assisted by the National Crime Agency operating in Northern Ireland, and in particular by tackling the gangs that are still operating down in South Armagh—the same gangs that used to shoot and murder British soldiers, and that are still trying to murder police officers? They should be brought to book by the NCA.
Mrs Villiers
I agree with my right hon. Friend in paying tribute to the PSNI, and allowing the NCA to operate with its full remit in Northern Ireland is essential if we are to combat organised crime effectively. This matter does impact on PSNI funding, because its inability to receive the full support of the NCA and having to do the work that the NCA would otherwise do for it places additional pressures on the PSNI.
Mr Ivan Lewis (Bury South) (Lab)
The Secretary of State will be aware that due to budget cuts the PSNI has effectively ceased all investigations into historical crimes associated with the troubles. Does she accept that that places a greater responsibility on all political parties to agree new mechanisms to deal with the past that put the needs of victims and their families first?
Mrs Villiers
It is very important that political parties in Northern Ireland find a way to agree a fresh approach to the past, and that is one reason why cross-party talks have been convened. We need to listen to the needs of victims, and we must also understand the increasing pressure on the PSNI and the criminal justice system. I believe it is important that we find a way forward on that, not least to relieve pressure on the PSNI so that it can concentrate on the important policing needs of today.
Mr Laurence Robertson (Tewkesbury) (Con)
Will the Secretary of State confirm that she will be having discussions with the Executive about Operation Red Field?
Mrs Villiers
I have regular discussions with the PSNI on the question of on-the-runs and Operation Red Field, and I will do so again. It is crucial that the Executive parties reach an agreement on the budget for next year, and that they take into account the crucial importance of appropriate resourcing for the PSNI, and of course the cost of policing the past.
Mr Nigel Dodds (Belfast North) (DUP)
The PSNI certainly needs to have adequate resources, not least to ensure that there are full and proper investigations into the continuing scandals involving Gerry Adams and Sinn Fein in relation to cases of sexual abuse, paedophilia, cover up, and the exiling of people from Northern Ireland to the Irish Republic. Does the Secretary of State agree that no amount of waffle or self-serving platitudes from Gerry Adams or the Sinn Fein leadership can distract or take away from the awfulness of those crimes, and the need for them to be brought fully to light?
Mrs Villiers
Any abuse or sex crime is appalling, and I entirely share the right hon. Gentleman’s concerns about the allegations made by Mairia Cahill. It is genuinely a very shocking, disturbing and distressing case, and all such crimes, whether the acts themselves or any purported cover-up, need to be fully investigated by the police. An independent review is set to take place into the way the original case around the allegations made by Mairia Cahill was handled.
Mr Dodds
I am grateful to the Secretary of State for her reply and for her reference to the independent investigation by Keir Starmer into Mairia Cahill’s allegations. However, does she understand the concern and anger of people right across the community in Northern Ireland in relation to the allegations against Gerry Adams about the cover-up of the sexual abuse by his brother and his refusal to go to the police or to alert people about what was going on within Sinn Fein and the republican movement, putting other children and young people at risk? We still have not had the publication of the report by the Public Prosecution Service or the police ombudsman. Does she accept that there can be no whitewash of the black sins of Sinn Fein in relation to sexual abuse and paedophilia?
Mrs Villiers
These are indeed shocking crimes and shocking allegations. I certainly would urge Sinn Fein to answer all the questions that have been put to them about this very disturbing case.
Sir Gerald Howarth (Aldershot) (Con)
Does my right hon. Friend accept that it is quite intolerable for my constituents in Aldershot who served with the Parachute Regiment in Northern Ireland to read in the newspapers that, because of lack of resources in the PSNI, so-called historic crimes will no longer be investigated or are in doubt? It is grossly unfair to my constituents, who have served this country to the best of their ability to try to keep the peace between the warring parties, still to be living with the threat, nearly 60 years on, of prosecution.
Mrs Villiers
I agree with my hon. Friend that there are many people who will suffer as a result of the announcements in recent days in relation to delays in legacy matters and criminal justice in Northern Ireland. That is an important reason to press ahead with a fresh approach on the past, to be agreed through the cross-party talks, but it is also a crucial reason for the Executive to agree a budget and to make sure that they give appropriate priority to the need for police resources when they reach that agreement.
Mr Speaker
May I just gently point out to the House that we have a lot of questions to get through and we need to speed up?
David Simpson (Upper Bann) (DUP)
2. What the geographical remit will be of the recently announced panel to discuss parading disputes in Northern Ireland.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
The proposal I announced on 7 October relates to disputed parades in the Twaddell and Ardoyne area of north Belfast, responding to the call by the Parades Commission for a wider, more structured process to address the issues around parades in the area.
David Simpson
I thank the Secretary of State for that clarification, but does she agree that resolution also needs to be found to the dispute in Drumcree in my constituency, which has been ongoing for the past 16 years?
Mrs Villiers
I recognise the grave disappointment that the hon. Gentleman and many in the Unionist and loyalist community feel about the situation in relation to that parade. It is important for all sides, wherever there is a dispute about a parade, to engage in a local dialogue to try to take things forward. In many parts of Northern Ireland that has proved successful in taking the tension out of parading and reaching an agreement with local residents affected.
Mr Peter Hain (Neath) (Lab)
On parading, does the Secretary of State agree that the current political paralysis in Northern Ireland is undermining already shaky local faith in its elected politicians? Although I wish the Secretary of State well, I do not believe that the Prime Minister has been engaging closely or energetically enough with the parties to ensure that the 2007 settlement remains in good faith. I make no party point on this: from experience, I know that Northern Ireland needs constant care and attention from No. 10 and I hope it will now get that.
Mrs Villiers
I assure the right hon. Gentleman that Northern Ireland does get constant care and attention from the Prime Minister, not just with his decision to bring the G8 to Northern Ireland, but everyday in focusing on the security situation and repairing the Northern Ireland economy and, of course, by closely following these talks. I agree that it is vital that we do not let disputes about parades, painful though they are, get in the way of the need to reach resolution on important issues such as the budget, flags and reform of parading decisions.
Stephen Mosley (City of Chester) (Con)
3. What steps the Government are taking to strengthen the Northern Ireland economy.
Neil Carmichael (Stroud) (Con)
6. What steps she is taking to promote economic growth in Northern Ireland.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
The Government’s long-term economic plan is working for Northern Ireland. Unemployment is falling and economic activity is increasing. We continue to work with the Executive on our shared objective to rebalance the Northern Ireland economy.
Stephen Mosley
The Northern Ireland science park recently published figures showing that the knowledge economy in Northern Ireland grew by 33% over the past five years, which is better than pretty much every other region in the UK. What action is my right hon. Friend taking to ensure that science and technology play a massive role in the future of the Northern Ireland economy?
Mrs Villiers
The economic pact signed between the Government and the Executive contained an important programme to support aerospace research with Bombardier and to promote Northern Ireland’s economic activity in the aerospace and space sector. That work is going well and will continue.
Neil Carmichael
News that the economy in Northern Ireland is growing is extremely welcome, especially with the increase in employment, but one potential drag on it might be the shortage of HGV drivers. What steps is my right hon. Friend taking to encourage young people to take up training opportunities to become such drivers?
Mrs Villiers
These are matters for the Northern Ireland Executive, but the UK Government recognise the crucial importance of the haulage industry, which is one of the reasons why we have frozen fuel duty, which is saving the haulage industry millions of pounds every year.
Mark Durkan (Foyle) (SDLP)
The Government cite city deals as a way to support the economy in the cities and regions on this island. If the Executive put forward a proposition for a city deal for Derry, would the Secretary of State work with the Treasury and other colleagues to support and deliver that deal as a way of implementing a lot of the key targets of the One Plan?
Mrs Villiers
The economic pact between the Executive and the Government was modelled on some of the approaches we take with city deals, but I would be delighted to talk to the hon. Gentleman about any proposals he might have to replicate the city deal model for Derry/Londonderry.
Mr Ivan Lewis (Bury South) (Lab)
The Secretary of State will agree that the current political paralysis has a corrosive impact on business confidence and therefore the Northern Ireland economy. Can she clarify whether the all-party talks she is chairing are dealing with all issues simultaneously that are causing the stalemate or focusing exclusively on the budget crisis?
Mrs Villiers
The talks are dealing with a long list of issues. We have taken them day by day—we did the budget, then we moved on to the legacy issues of flags, parades and the past. We will be looking at institutional questions today, and there are also proposals to look at unfinished businesses from the Belfast agreement. All these issues are important, but most crucial is that the budget is agreed, so that it is no longer causing instability in the Northern Ireland institutions.
Mr Lewis
Economic inactivity and worklessness are major underlying causes of instability and insecurity in Northern Ireland. Will the Secretary of State therefore undertake to ensure that the Northern Ireland Office gives its full support to the Heenan-Anderson commission, which we have established with a brief to come up with proposals for how the UK Government and Northern Ireland Executive can tackle the problems of worklessness in a more effective way?
Mrs Villiers
I am certainly prepared to look at whatever findings that body comes up with. I was slightly surprised to see that Deirdre Heenan had tweeted that Labour did not have any policies, which I thought was quite an unusual start to the commission’s work. It is important to recognise that in this country we have had the largest annual fall in unemployment since records began. In Northern Ireland, the claimant count has fallen for 21 consecutive months. That is providing more peace of mind and security for thousands of people in Northern Ireland and it is the result of the Government’s long-term economic plan.
Chris Evans (Islwyn) (Lab/Co-op)
4. What steps she is taking to tackle youth unemployment in Northern Ireland.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
The October labour market survey reports that the unemployment rate in Northern Ireland for 18 to 24-year-olds has come down 4.2 percentage points over the year. The Government’s policy of reducing the largest structural deficit in UK peacetime history is delivering a sustainable economic recovery and assisting young people into employment.
Chris Evans
As the Secretary of State will know, youth unemployment is still stubbornly high in Northern Ireland. Jobs Growth Wales has created 12,000 opportunities for young people living in Wales. Has she had the chance to study the programme with the Executive, with the hope of adopting it?
Mrs Villiers
The Government are working hard to support a balanced economic recovery right across the United Kingdom. We welcome the fact that the UK economy is now growing faster than any major developed economy and that we have seen record falls in unemployment. We will continue to work hard on reducing the deficit, keeping mortgage rates low and reducing business taxes to encourage employers to take on more people in the workplace, particularly young people.
Mr William Bain (Glasgow North East) (Lab)
9. PricewaterhouseCoopers has noted that unemployment in Northern Ireland is falling at half the rate of the rest of the United Kingdom. Will the Secretary of State discuss with the Northern Ireland Executive some specific proposals, such as Labour’s plan for a one-year national insurance tax break for all small firms that take on new workers? Would that not help to promote employment in Northern Ireland and the rest of the UK?
Mrs Villiers
We are doing better than that. We are actually cutting national insurance contributions for employers across the whole of the United Kingdom. As from April, employers in Northern Ireland—just as in the rest of the UK—will not pay any national insurance contributions at all on the people they employ who are under 21. That is real action, helping young people in Northern Ireland into jobs.
Mr Gregory Campbell (East Londonderry) (DUP)
Young people in Northern Ireland can be exploited rather than given employment opportunities. Tomorrow night in Londonderry an event is scheduled to mark the 40th anniversary of a young man of 16, having been recruited to the IRA, killing himself in a bomb explosion. Does the Secretary of State agree with me that Sinn Fein representatives in Northern Ireland should be helping to create employment opportunities for young people rather than trying to rewrite history about a small number of young people being given instructions to carry out bomb attacks who ended up destroying their own lives and the lives of others?
Mrs Villiers
I urge anyone who is planning any form of commemoration to consider the impacts of their decisions and choices on people from all sides of the community. I certainly have concerns about the sort of commemoration to which the hon. Gentleman referred. As well as addressing matters relating to the past, it is important for both the Executive and the UK Government to focus strongly on sustaining the recovery in Northern Ireland’s economy. It is going well—unemployment is falling—but there is, of course, more to do to tackle youth unemployment. This Government will continue to do so through their long-term economic plan.
Andrew Gwynne (Denton and Reddish) (Lab)
5. What recent assessment she has made of the effect of the non-implementation of welfare reform on the Northern Ireland Executive’s budget.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
The failure of the Executive to implement welfare reform means that Northern Ireland is retaining a system that too often fails the people it is supposed to help by trapping them in dependency and discouraging work. This failure also means that financial savings are being forgone and other areas of public spending in Northern Ireland are being cut as a result—for example, the budget for policing and justice.
Andrew Gwynne
I think I am grateful to the Secretary of State for that garbled answer. Will she confirm that she is in agreement with all the Northern Ireland parties that the bedroom tax is a pernicious policy? Given that, will she tell us what proportion of the overall budget cuts proposed for Northern Ireland are directly related to the non-implementation of welfare reform?
Mrs Villiers
I believe that of the £87 million of savings forgone for this year, around £16 million relates to the spare room subsidy, which is all about fairness to ensure that the rules for the social sector are the same as those for the private rented sector. I do not think that is an unreasonable position. The reality is that our welfare reforms are about encouraging people into work, reforming the system to ensure that work always pays and ending the perversities and arbitrary cliff edges that saw people trapped on benefits under the old system, which Labour manifestly failed to reform.
Ian Paisley (North Antrim) (DUP)
Sinn Fein MPs claim to be fighting welfare reform. When did the Secretary of State last directly challenge Sinn Fein MPs to come to this House, to take up their places and to fight it from these Benches? If they are not prepared to do that, when is she going to remove the £600,000 a year they receive for not coming to this House?
Mrs Villiers
I think it would be far better if Sinn Fein took their seats. That would give them the opportunity to debate these important Northern Ireland matters. I know that the contribution of all the Northern Ireland parties who take their seats in this House to the debate on welfare reform was very much welcomed. Now is the time to get on with this. Failing to implement welfare reform is putting severe pressures on departmental spending in a range of other areas for the Executive, including policing.
Dr William McCrea (South Antrim) (DUP)
7. When she expects the National Crime Agency to be fully operational in Northern Ireland.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
Justice Minister Ford has submitted a paper to the political parties which sets out enhanced accountability arrangements for the National Crime Agency in Northern Ireland. I would urge all parties in the Executive to accept the full implementation of the NCA’s remit without further delay.
Dr McCrea
Bearing in mind last week’s statement by the Under-Secretary of State for the Home Department, the hon. Member for Staffordshire Moorlands (Karen Bradley) that the consequences of not acting on the NCA was potentially devastating, with drugs and violence on our streets, children being abused and vulnerable people defrauded, how can the Secretary of State justify that Minister going on to say
“If agreement is not reached, we will have to accept that the NCA will not be fully operational for the foreseeable future”?—[Official Report, 22 October 2014; Vol. 586, c. 967.]
Surely that is an intolerable situation, handing a veto to Sinn Fein.
Mrs Villiers
The Government take their obligations under the devolution settlement very seriously, but there is no escaping the fact that this is a matter for the political parties in Northern Ireland to decide, and that choice has consequences. As the hon. Gentleman said, the decision by the two nationalist parties to reject the NCA’s remit means criminals not arrested, assets not seized, and victims suffering.
Mr Speaker
Order. These are very important matters appertaining to Northern Ireland. Let us have a bit of quiet for Lady Hermon.
Lady Hermon (North Down) (Ind)
Thank you, Mr Speaker. That was very gracious of you.
In the absence of the operation of the National Crime Agency in Northern Ireland, what steps are this Government taking to ensure that Northern Ireland does not again become a honeypot for human traffickers, drug traffickers and other gangs of organised criminals?
Mrs Villiers
We have been working with the NCA, Minister Ford and the Police Service of Northern Ireland to ensure that the NCA can do everything possible to help Northern Ireland, within the constraints of being able to operate only within the devolved field. It is able to do some work on human trafficking, for example, and significant effort has gone into ensuring that it can take over the cases involving proceeds of crime that it inherited from the Serious Organised Crime Agency. We are doing all that we can to maximise the support that the NCA can give in Northern Ireland, within the limitations set by the Executive.
Jim Shannon (Strangford) (DUP)
8. What steps she is taking to ensure that the change in Northern Ireland’s unemployment rates is similar to that of the rest of the UK.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
Northern Ireland’s claimant count has fallen for 21 consecutive months, which shows that the Government’s long-term economic plan is working. The latest labour market survey shows that the level of unemployment in Northern Ireland is 6.1%, which is only marginally higher than the United Kingdom figure.
Jim Shannon
As the Secretary of State well knows, unemployment has been reduced in parts of Northern Ireland, but we can do more. The agri-industry in my constituency can provide more jobs if it is helped to do so, and the same applies to the pharmaceutical industry and tourism. What can the Secretary of State do, along with other Ministers here on the mainland, to enable those sectors to expand and provide more employment for young people and those aged over 50?
Mrs Villiers
One of the main ways in which we can help is through the tax system. That is why we have cut corporation tax, which will be the lowest in the G20 by April, and why we are cutting job taxes for employers for the benefit of, in particular, young unemployed people. We think that it is vital for more people to have the security of a pay packet to take home to their families, and our tax policy has been driven by that.
Sammy Wilson (East Antrim) (DUP)
10. What the cost to her Department was of the Parades Commission in each of the last five years.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
The cost of the Parades Commission was £1.01 million in 2013-14. In the preceding four years it was £1.37 million, £0.93 million, £1.07 million and £1.01 million respectively.
Sammy Wilson
Rather than reducing the tension surrounding parades, the Parades Commission has actually contributed to further tension because of its bias against the Orange Order, its incompetence, and its propensity to give in to republican protesters. Does the Secretary of State agree that we now need a root-and-branch change in the way in which contentious parades are dealt with in Northern Ireland?
Mrs Villiers
The Parades Commission faces a hugely difficult task in adjudicating on highly sensitive parades, and I think that it performs that task well. If the political parties in Northern Ireland want a different system for parading, that is open to them, but the only way in which to achieve that is to get round the table and consider future reform in the cross-party talks that are now under way.
Naomi Long (Belfast East) (Alliance)
11. What lessons have been learnt from the previous talks processes, and what outcomes she expects from the current round of talks.
The Secretary of State for Northern Ireland (Mrs Theresa Villiers)
Previous talks processes have demonstrated what can be achieved when political parties engage seriously and constructively, and are prepared to make difficult decisions in order to reach an accommodation.
Naomi Long
The lack of serious political engagement in the current round of talks, which is characterised by the fact that parties are still squabbling over whether or not they are attending the talks, does not bode well for the future. Meanwhile, in my constituency, a young man has been hospitalised with head injuries, police officers have been injured, and pensioners have been terrified in their own homes after three successive nights of violence. What sanctions will the Secretary of State impose on the parties that fail to show the will to resolve the outstanding issues in this process?
Mrs Villiers
It is important that all the five parties are engaging in this talks process, and I would encourage them to take this very seriously. It is crucial that we find a way forward on these matters. I wholeheartedly condemn what has gone on in the hon. Lady’s constituency not just over the last few days but over a series of weeks. There have been continuing problems with that interface. It is utterly disgraceful that the teenage boy was hospitalised as a result of this sectarian violence, and I hope it will be tackled with the full force of the law.
Ian Lucas (Wrexham) (Lab)
Q1. If he will list his official engagements for Wednesday 29 October.
The Prime Minister (Mr David Cameron)
This morning, I had meetings with ministerial colleagues and others and in addition to my duties in this House I shall have further such meetings later today.
Ian Lucas
As I walked to Parliament this morning past the increasing numbers of people who are sleeping on Victoria street pavement, I reflected that this Government are the first since the 1920s to have presided over a real-terms fall in average wages for their people. Is this record of failure really the best this Prime Minister can offer to the United Kingdom?
The Prime Minister
What we have actually seen under this Government is a record fall in the number of unemployed people over the last year. Also, the hon. Gentleman might want to make reference to the fact that this morning, the Office for National Statistics has produced the figures to show that the number of workless households going down by 671,000 in our country. The number of children growing up in a home where nobody works is down by 387,000. What that means is all those children growing up seeing one of their parents going out to work, putting food on the table, providing for that family, proving a role model for their children. That is a record to be proud of.
Sir William Cash (Stone) (Con)
Nicola Sturgeon this morning has called for a separate majority for Scotland in the event of an EU referendum, which is a reserved matter in respect of the Scotland Act 1998. Will the Prime Minister refuse her request—or demand—and will he also condemn the Liberal Democrats for what appears to be a veto over our referendum Bill?
The Prime Minister
We are one United Kingdom, there will be one in/out referendum and that will be decided on a majority of those who vote. That is how the rules should work. I am very disappointed that we will not be able to take forward the referendum Bill in this Parliament—it was not possible to get agreement on a money resolution—but people should be in no doubt: if they want an in/out referendum, there is only one way to get it, and that is to return a Conservative Government.
Edward Miliband (Doncaster North) (Lab)
A vital tool that has helped to bring murderers, rapists and paedophiles to justice is the European arrest warrant. Why is the Prime Minister delaying having a vote on it?
The Prime Minister
I am not delaying having a vote on it. There will be a vote on it. We need, in order to have a vote on it, the small matter of a negotiation to take place within Europe, which up to now the Spanish have been blocking. I think the Spanish will shortly remove their block, and at that moment we will be able to have a vote.
Edward Miliband
We all know the reason why the Prime Minister is not having a vote: it is the by-election in Rochester and Strood. He is paralysed by fear of another Back-Bench rebellion on Europe. So I want to make an offer to him. We have a Labour Opposition day next week. We will give him the time for a vote on the European arrest warrant, and we will help him to get it through.
The Prime Minister
There is only one problem with the right hon. Gentleman’s second question: we are going to have a vote, we going to have it before the Rochester by-election—his questions have just collapsed.
Edward Miliband
All I can say is that I look forward to us walking through the Lobby together to vote for the European arrest warrant: two parties working together in the national interest—or maybe, given the Prime Minister’s Back Benchers, one and a half parties working together in the national interest.
Turning from Home Office dithering to Home Office incompetence, can the Prime Minister explain why the number of asylum applicants awaiting a decision has risen by 70% in the last year?
The Prime Minister
First of all, let me just add some details of the vote on the European arrest warrant, because this is an important issue. What we have achieved with the Justice and Home Affairs opt-out is the biggest transfer of power from Brussels back to Britain by opting out of over 100 measures, but it is important that we take action to keep Britain safe, particularly from serious criminals and terrorists, and the European arrest warrant offers the best way of doing that. I would stress to those who are concerned about this that the European arrest warrant is very different from the arrest warrant that was first introduced under the last Labour Government. A person cannot now be extradited for something that is not a crime in Britain, and judges are now able to reject European arrest warrants and have done so in many cases. Nor can a person be extradited if there is going to be a long period of detention. These are all important considerations.
I am sure that the right hon. Gentleman is looking forward to walking through the Lobby with somebody, because he has had rather a lonely week, with the loss of his leader in Scotland, the total shambles in Yorkshire and all the other problems that he has. His next question was, I think, about asylum and immigration. Let me just say that we inherited from Labour a complete and utter shambles: a Department that was not fit for purpose, computer programmes that did not work and an immigration system that was a complete mess. Before he asks his next question, he might want to apologise for the mess that Labour made.
Edward Miliband
On this day of all days, there is only one person who should be apologising on immigration, and it is the right hon. Gentleman, for his total failure. He is not putting it right; he is making it worse. Since 2010, the backlog has gone up, not down, and this Government have wasted £1 billion on failed IT projects and lost track of 50,000 people. What was his promise before the election? He said that he would reduce net immigration to tens of thousands a year. What is net migration now?
The Prime Minister
Net migration is down a quarter from its peak under Labour, and net migration from outside the European Union is down to its lowest level since 1998. The right hon. Gentleman talks about records; I am happy to contrast our records any time. Under Labour, net migration quadrupled and 2.5 million extra people came into our country. In 2004, Labour gave eight new European countries unrestricted access to our labour markets. He forgot to mention immigration in his conference speech altogether. And of course there was that remark by Peter Mandelson admitting that the last Labour Government sent out “search parties” to look for extra migrants to bring to this country. I ask the right hon. Gentleman again: get up and apologise for your record.
Edward Miliband
The right hon. Gentleman could not tell us the figure. He made a promise of tens of thousands, but it is now 243,000. He published his contract with the British people at the election. On immigration, he said:
“If we don’t deliver our side of the bargain, vote us out in five years’ time.”
Why does he not just own up? He has broken his promise.
The Prime Minister
We have cut immigration from outside the EU by a third, we have closed down 700 bogus colleges and we have introduced new rules on benefits—all this clearing up the shocking shambles and mess left by the last Labour Government. Will the right hon. Gentleman just accept one thing—namely, that in 2004, the decision to allow every single new member state to come to Britain was a catastrophically bad decision? We opposed it at the time and I ask him again: will he apologise for that appalling decision?
Edward Miliband
The right hon. Gentleman has been Prime Minister for four and a half years, and it has got worse, not better. On immigration, this Government combine callousness with incompetence. They do not show basic humanity, saying that rescuing drowning people is a “pull factor” for immigration, and they are so incompetent that they cannot deliver their basic promises. Why does he not just admit that, on immigration, he has failed?
The Prime Minister
On immigration, we inherited the biggest mess this country has ever seen. Immigration from outside the EU down, benefits restricted and proper rules when new members join the European Union—all that is clearing up the mess made by Labour. What did we hear today? Not a single word of apology from a party that sent out search parties to look for more migrants. The British people know we are making every effort to control migration and that the right hon. Gentleman would make no effort at all, because he has got no leadership.
Andrew George (St Ives) (LD)
If the Prime Minister wants his European Union (Referendum) Bill to proceed, as he claims he does, all he needs to do is demonstrate a level of mature engagement on the granting of money resolutions. Is he proud of the fact that his party is abusing the privilege of Executive power and denying the clear will of this House by denying the money resolution for the private Member’s Bill to protect the vulnerable and disabled from the bedroom tax?
The Prime Minister
I am afraid the problem with my hon. Friend’s point is that his Bill is literally a bill: it would cost more than a billion pounds for the British taxpayer. That is why it would not be right to give it a money resolution. But if he believed in democracy, he would recognise that the European Union (Referendum) Bill passed this House with a massive majority and went into the House of Lords. We should reintroduce it as a Government Bill—that is what ought to happen.
Kelvin Hopkins (Luton North) (Lab)
Q2. The tax gap has been calculated at a massive £119.3 billion, even a quarter of which would transform public finances, yet the Government have chosen to cut Her Majesty’s Revenue and Customs’ staffing by more than 11,000 since 2010 and have utterly failed to close that tax gap. Instead, they are squeezing the poor and cutting the real wages of millions of low-paid workers. Are the Government simply protecting their fat-cat billionaire pals from paying their taxes?
The Prime Minister
Let me tell the hon. Gentleman what is actually happening on taxation: we have taken 3 million of the lowest-paid people out of tax altogether, and the fact that that means less work for HMRC is welcome; and the top 1% of taxpayers are paying 27% of all income tax—a higher percentage than ever happened under the last Labour Government.
Dr Liam Fox (North Somerset) (Con)
The preposterous demand for more British money for Brussels is a small part of a much bigger picture. The big picture is that the eurozone is failing and threatening global financial stability. Countries in the eurozone have higher unemployment, lower growth and a higher risk of deflation. Why should Britain be paying for the failures of the eurozone? Does the Prime Minister agree that European leaders’ denial of the reality of the eurozone is turning it into the European economic horror version of the emperor’s new clothes?
The Prime Minister
My right hon. Friend makes an important point, which is that there is a risk the eurozone could go into its third recession in just six years, given how low growth rates are at the moment, and obviously we are not immune from that. So one of the problems we have, whether on the EU budget or on the issue of migration, is that we are the victims of the success of our economy and its growth in comparison with the eurozone. Just on the issue of the £1.7 billion bill, it is worth recalling what the Dutch Finance Minister said in an interview yesterday. He said:
“I must be able to defend it in front of the Dutch people and Parliament. As long as I can’t see the numbers, I can’t defend it and then I won’t pay before 1 December.”
I think he is right.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Q3. I am sure the Prime Minister cares about families, particularly those under great stress. Is he aware that up and down our country there are stressed families with a challenged or challenging child who cannot obtain any help from mental health services. Research that I have conducted shows that in two thirds of our country the access is not there—not in three months, not in six months and not in a year. What can we together do to stop this dreadful system?
The Prime Minister
I agree with the hon. Gentleman about the importance of mental health services. We have taken some important steps forward, for instance, giving parity of esteem for mental health in the NHS constitution, and recently announcing additional money and additional waiting time targets for mental health services. We all know from our constituency surgeries how many people are in need of these services, which may actually help them and prevent there being further pressures on the NHS if they are given.
John Glen (Salisbury) (Con)
The Prime Minister will be aware of the outstanding work done at Porton Down in my constituency to combat Ebola. However, Public Health England has refused to evaluate fully an option to create a UK centre for global response to infectious diseases at Porton and instead persists with its recommendation to move many key scientists elsewhere. Will the Prime Minister meet me to discuss that matter and ensure that the future of public health, the life sciences industry and the taxpayer are well served by the decision ultimately made for public health in England?
The Prime Minister
Let me, through my hon. Friend, thank everyone at Porton Down for the vital work they do on these sorts of diseases and indeed for the work they are doing on testing for Ebola, as it requires brave and courageous people to carry it out. On the meeting that he wants, the Health Secretary is sitting next to me and he says he is happy to meet him to discuss this issue in detail. We want to see life sciences and these areas succeed in Britain, and Porton Down has an important role to play.
Ian Austin (Dudley North) (Lab)
Q4. I have held a dozen public meetings on immigration over the past few weeks, and it is absolutely clear that my constituents in Dudley do not think it is fair that people should be able to come to the UK to be unemployed. They do not think that people should be able to claim benefits as soon as they arrive, or, as the Prime Minister proposes, after a few short months. They think that people should have to work and contribute and pay into the system first. They certainly do not think it is fair that people should be able to claim child benefit for children living abroad. When will he be able to sort out those things?
The Prime Minister
I do not want to be uncharitable to the hon. Gentleman, who put his question in a reasonable way, but I long remember the years when he sat behind the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as his Parliamentary Private Secretary, and I do not think that he whispered any of those things into his ear—he whispered quite a lot of other things into his ear by the way. I absolutely agree that we need to deal with this issue about sending benefits home, and we will . We have already lengthened the amount of time that people have to be here before they claim benefits, and we want to go further on that. But we must be frank about this: the British people are our boss, and they want this issue sorted. It is not simply about people coming here to claim or to abuse the system, but about the pressure on our health and education systems and on our schools and communities. The people want it addressed and they know that, with this party, we will address it.
Tessa Munt (Wells) (LD)
Q5. I thank the Prime Minister for meeting Lawrence Dallaglio and me to discuss the lack of innovative radiotherapy, and I welcome his help in trying to solve the problem, but is he aware that NHS England overspent the cancer drugs fund by £30 million last year and that it has taken that money from the radiotherapy budget? Will he look into that and get NHS England to put that money back into radiotherapy?
The Prime Minister
I very much enjoyed meeting the hon. Lady and Lawrence Dallaglio, who is doing excellent work on these more innovative radiotherapy treatments that should become more widespread; the case that he makes is extremely powerful. The overspend on the cancer drugs budget was the result not of some sort of maladministration but of more cancer victims wanting more drugs, and under this Government they are getting them. That is not disadvantaging other parts of the health service, but I will look very carefully at what she has said and ensure that these treatments go ahead.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
Given that the Prime Minister said that the Barnett formula is here to stay, is it not high time now to give Wales parity of funding with our friends in Scotland, and, once and for all, to give fair funding to Wales?
The Prime Minister
I know what I said about the Barnett formula, and I will not go away from that. What we need to see in Wales is a real debate about what I call a double yes—yes to another referendum on tax-raising powers and yes to those powers so that the Welsh Assembly takes greater responsibility for raising and spending more of its own money. That is the right pathway.
Glyn Davies (Montgomeryshire) (Con)
Q6. As there has never been a major hospital in Montgomeryshire, my Welsh constituents have always accessed treatment in England. They have to wait a minimum of 26 weeks for treatment. Their close neighbours living over the border wait a maximum of only 18 weeks. Does the Prime Minister think that that is fair?
The Prime Minister
I know that there are some real issues of fairness here, and that there are many more patients travelling from Wales to England than there are from England to Wales. Waiting times are quite different. For example, the typical average waiting time for a hip replacement in England is 70 days, but in Wales it is 170 days. That is not right. The Opposition cannot have it both ways. They want to blame the politicians in England for the NHS, but they take absolutely no blame for the appalling state of the NHS in Wales.
Hazel Blears (Salford and Eccles) (Lab)
This week, Jamshed Javeed, a young science teacher from Bolton, a husband and a father, has pleaded guilty to serious terrorist offences. Like hundreds of others, he has been radicalised by a poisonous ideology. The Home Secretary promised in her conference speech to make Prevent a statutory duty on all public sector organisations, and she promised a counter-extremism strategy that would tackle all forms of extremism. When will the Prime Minister take action and make the resources available necessary to implement that promise?
The Prime Minister
As the right hon. Lady knows, I have great sympathy with her views. I think there is cross-party agreement between at least me and her about the importance of combating not just violent extremism but all forms of extremism. She will be delighted to know that the Home Office is drawing up this strategy, and we had our first discussion of it in the extremism taskforce. Progress is good, and we do want, as she said, to put these arrangements on a statutory footing. There may be opportunities in the anti-terrorism legislation that will come before the House, and I want us to make progress on all these issues.
Mr David Amess (Southend West) (Con)
Q7. Does my right hon. Friend agree that the field of poppies at the Tower of London is a stunning and deeply moving way of honouring all those who lost their lives in the first world war? Does he further agree that it serves as a timely reminder that in any conflict there can be a terrible loss of human life?
The Prime Minister
My hon. Friend is absolutely right. It is a stunning display, and it is extremely poignant and reminds us of how many people gave their lives not just in that conflict, although obviously the slaughter was horrendous, but in so many conflicts since then where our armed services personnel have been defending our freedoms and our way of life. Perhaps it is particularly poignant in this week when we think about the final troops returning from Afghanistan, and the 453 servicemen and women who were lost and the many hundreds who will be living with life-changing injuries whom we must make sure we look after for the rest of their lives.
Heidi Alexander (Lewisham East) (Lab)
Last week, A and E figures showed that the four-hour waiting time target has been missed for the 65th week in a row. Does the Prime Minister honestly think this is acceptable?
The Prime Minister
Of course, we want to meet the A and E targets every week of the year, and that is our aim, and that is why we put £12.7 billion extra into the NHS. There are 800 more doctors working in our emergency departments than there were when I became Prime Minister. One of the pressures that we face is 1.3 million more patients every year going into accident and emergency. [Hon. Members: “Why?”] There are a lot of shouts of “Why” from Opposition Members. They might start with their own GP contract. They might think about that. We need to enhance GP services, put the resources into A and E, improve public health, help with our frail elderly—all the things set out in Simon Stevens’ excellent plan, which needs to be backed by the money and the successful economy that this Government are delivering.
Sir Bob Russell (Colchester) (LD)
Q8. More people live in Essex than voted yes in the Scottish referendum. With fairness needed for citizens in all parts of the United Kingdom, does the Prime Minister agree that what Scotland gets, so should the people of Essex and East Anglia?
The Prime Minister
This is becoming something of a theme in my hon. Friend’s questions. The best answer I can give is that if we are to keep all our promises to the people of Scotland in terms of additional powers to the Scottish Parliament, including tax-raising powers, as I believe we should, we must make sure that Members of Parliament for Essex or other counties and towns in England, have the ability to vote on these issues as they affect England in this House. My concern is that the Labour party seems to have completely given up on this issue. It is happy to have an all-party agreement when it comes to Scottish powers, it is happy to have an all-party agreement when it comes to Welsh powers, but for some reason, when it comes to England, it has absolutely nothing to say.
Kate Hoey (Vauxhall) (Lab)
Q9. Will the Prime Minister explain why, in Scotland, Northern Ireland and Wales, it has been possible to reach a settlement with the Fire Brigades Union on the question of pensions and early retirement, yet in England, where the new Minister was having constructive discussions, last week somebody above her said, “No, no more”, and now we face a four-day strike? Will the Prime Minister intervene, show some common sense, get the FBU round the table and sort this, because it could be sorted tomorrow?
The Prime Minister
I hope that the hon. Lady is right that this could be sorted out tomorrow, because I think that is what everyone wants to see. I am sure that all Members have met members of the Fire Brigades Union in our constituency surgeries and listened to their arguments, but in the end this has to be settled by the employers and the trade union. I know that the Minister will have listened very carefully to what the hon. Lady has said.
Mark Pritchard (The Wrekin) (Con)
Q10. Is the Prime Minister aware of Shropshire’s economic success? Over the past few months we have seen more jobs created in the county than ever before. In fact, since the previous Labour Government left office, we have seen a dramatic fall of up to 46% in the number of people claiming jobseeker’s allowance. In fact, today we have the lowest unemployment record ever in the county, and in The Wrekin parliamentary constituency it is just 1.9%. Is not that more evidence that the Government’s long-term economic plan is working?
The Prime Minister
I am grateful to my hon. Friend for bringing that to the House’s attention. The fact is that the claimant count in his constituency of The Wrekin is down by 40% over the past year alone, and we now have 2 million more people employed in the private sector since the election. As I said at the outset of Prime Minister’s questions today, the figures for the fall in the number of workless households—homes where no one has been working—including homes with children, are not just statistically important; it is a socially and morally important fact that children will grow up in homes where someone is working. The employment rate for lone parents has also gone up. [Interruption.] I know that Labour Members do not want to hear good news, but the fact is that, because our long-term economic plan is working, we are getting the British people back to work.
Jim Shannon (Strangford) (DUP)
Q11. I know that the Prime Minister, like me and the rest of the Democratic Unionist party, is fully committed to the full implementation of the military covenant. Why, then, have the Government failed to keep records for all the 30,000 personnel who served in Afghanistan and returned to the United Kingdom of Great Britain and Northern Ireland, many of whom came back with injuries that should have been given priority for treatment under the military covenant? What steps will he take to rectify that situation?
The Prime Minister
As the hon. Gentleman knows, we want to see the military covenant honoured properly in every part of the United Kingdom, including Northern Ireland, and I am happy to help with that. On the issue of how we keep in touch with veterans, I think that we have made some breakthroughs. The veterans information service now contacts all those who have been discharged from the armed forces a year after they leave, as set out by my hon. Friend the Member for South West Wiltshire (Dr Murrison) in his report. We are copying from the best countries around the world on how we help our veterans, and because we are taking the LIBOR funds—multimillion pound funds from the City—and putting them into veterans charities, there is real money to support our veterans.
Stephen Barclay (North East Cambridgeshire) (Con)
Does the Prime Minister agree with senior US officials who said last week that Qatar is still a permissive jurisdiction for terrorist finance? Will he press the emir and report back to the House on what action is being taken within Qatar and on those individuals named on the UK sanctions list?
Dan Jarvis (Barnsley Central) (Lab)
Q12. Research published this week shows that there are now more than 5 million workers stuck in low-paid jobs, women’s wages are lower now than they were a year ago and the gender pay gap is widening. We on the Opposition Benches have been clear about how we would strengthen the national minimum wage. What is the Prime Minister going to do to make work pay?
The Prime Minister
What we need is more jobs, which we are getting. We need to see the minimum wage increase, which it just has. Then we need to lift people out of tax by raising the tax threshold. We are doing all three of those things. On the minimum wage, we have just seen it go up to £6.50. What we have seen from the Labour party is a plan to put it up to £8 by 2020, but reasonable assumptions about inflation rates show that the minimum wage will have gone beyond that level by 2020. These geniuses on the Opposition Front Bench thought all summer about what would be a really good plan to help people, and they decided to cut the minimum wage. No wonder they are melting down in Scotland, they have a crisis in South Yorkshire, nobody trusts the shadow Chancellor and nobody believes the leader. It is the same old Labour party—a complete and utter shower.
Mr James Gray (North Wiltshire) (Con)
At 3.30 this afternoon, 120 members of the Royal Navy, the Royal Marines and the Royal Fleet Auxiliary will march through Carriage Gates down to the North Door of Westminster Hall in commemoration of all they have done for this nation in Afghanistan and across the globe. Will the Prime Minister, other Members from both Houses and staff throughout the Palace find time to join me at the great North Door of Westminster Hall to thank them for all they have done?
The Prime Minister
I will certainly encourage all hon. Members to do this and I will examine my own diary to see whether there is any chance that I can come along too. We should take every opportunity to thank our armed services personnel, particularly for what they have done in Afghanistan. Fourteen long years we have served and many people have been there once, twice or even on three different tours. They deserve our thanks and congratulations for their service and courage.
Margaret Beckett (Derby South) (Lab)
Q13. Last week, the Prime Minister was asked why 16 health organisations, which include doctors, nurses and patients, say that health and social care services in England—that is the bit he is responsible for—are at breaking point. He has made a lot of allegations about the position in Wales. Can we now have an English answer to an English question?
The Prime Minister
What I would say to the right hon. Lady is that of course there are pressures in the NHS but I think it is worth listening to the new chief executive of NHS England—someone who worked for the Labour party when it was in government—who said:
“Over the past five years…the NHS has been remarkably successful…We’re treating millions more patients than five years ago...the NHS has become some £20 billion more efficient”.
Those are things that we should recognise. Of course there are pressures, but what we need, and Simon Stevens says this very clearly, is improved efficiency and to make sure that we get rid of unnecessary demand for the NHS by investing in public health—and, yes, money is required. But as Simon Stevens puts it, we get more money only if we have a successful economy. As he said,
“a tax-funded health service requires a healthy UK economy”.
We have a healthy UK economy, and we will have a strong NHS.
Henry Smith (Crawley) (Con)
Q14. A recent TaxPayers Alliance study revealed that the amount of taxpayers’ money being spent on union office space is the equivalent of £27.4 million at London market value, with a square footage equivalent to that of the Kremlin. Does my right hon. Friend agree that it is time for further political funding reform?
The Prime Minister
I think it is necessary to cap the donations that unions make to parties and that should be introduced. My hon. Friend comes up with an ingenious idea: if trade unions have so much extra space, maybe they should do what the Government are doing and make additional space available to entrepreneurs so that we can have more start-ups and more enterprise. That is a contribution that the trade unions could make.
Joan Walley (Stoke-on-Trent North) (Lab)
Q15. May I tell the Prime Minister that sadly my constituent better known as Boomer, Port Vale football club’s beloved mascot, had a stroke last week? He was discharged home only to be told that he could face an eight-week wait for urgent speech and language therapy. Can the Prime Minister set out how the Government will ensure that there are community stroke specialists and speech and language teams giving the right community care support from day one, in both Stoke-on-Trent and the rest of England?
The Prime Minister
The hon. Lady is absolutely right that we need to do better in treating the consequences of a stroke. The NHS has made some very big improvements on diagnosing and treating stroke victims as a stroke happens; we have seen that with the better arrangements for taking people to hospitals that have that expertise. But what is now required is more effort really to look at how we can make someone who has had a stroke have a better quality of life. More money is going into that. More research and effort are being done, and I am happy to look at her particular case.
Petition
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I wish to present a petition.
The petition states:
The Petition of residents of the UK,
Declares that the Petitioners believe in fighting to defend the NHS, believe in fighting to defend the NHS services in East Cleveland and Park End, Middlesbrough, and oppose cuts inflicted by the Conservative-led government’s Health and Social Care Act 2012; further that the Petitioners believe that proposals to scrap GP services at Skelton Medical Centre should be abandoned; further that proposals to scrap GP services at Park End Medical Centre should also be abandoned; further that the Petitioners believe that South Tees clinical commissioning group’s plans to close East Cleveland Hospital’s and Guisborough Hospital’s minor injuries units is short-sighted given the £30 million deficit of South Tees Hospitals NHS Foundation Trust; and further that the Petitioners condemn South Tees clinical commissioning group’s decision to close Skelton’s NHS walk-in centre.
The Petitioners therefore request that the House of Commons urges the Government to encourage NHS England and South Tees clinical commissioning group to reverse plans to close Park End Medical Centre, Skelton Medical Centre, its NHS walk-in centre and East Cleveland and Guisborough Hospital’s minor injury units.
And the Petitioners remain, etc.
[P001357]
Points of Order
Mr John Baron (Basildon and Billericay) (Con)
On a point of order, Mr Speaker. Following the failure of the European Union (Referendum) Bill because the Labour and Liberal leaderships will not trust the British electorate on this issue, what guidance can you give on how best to proceed given that there is no money resolution?
Mr Speaker
I have to say to the hon. Gentleman that it is not for me to offer guidance on that matter. Procedural matters relating to Bills which have been committed to Public Bill Committees are matters exclusively within the competence of the Chair of the said Committee. Moreover, as I rather imagine that he knows, but I emphasise for the awareness of Members of the House more widely, money resolutions are exclusively a matter for the Government. Those are waters in which the Speaker does not tread.
Mr Speaker
If the hon. Gentleman will forgive me, I will take the point of order from Mr Andrew George first, and then I will come to him.
Andrew George (St Ives) (LD)
Further to that point of order, Mr Speaker. In respect of the provision and tabling of money resolutions, and further to your advice a moment ago, can you please tell the House on what previous occasions there have been circumstances where, on Second Reading of a private Member’s Bill, the will of this House has been clearly demonstrated through a desire to proceed with that Bill but has been frustrated by an Executive who are clearly abusing the privilege of their Executive power in the way that they are with the private Member’s Bill on affordable homes?
Mr Speaker
I do not wish any discourtesy to the hon. Gentleman, but it is not for the Chair either to be subject to, or the purveyor of, a history lesson on these matters. I would say to the hon. Gentleman, who is nothing if not an eager beaver, that he should consult the Journal Office, and I think that he will go away, as a result of so doing, significantly better informed.
John Mann
On a point of order, Mr Speaker. Following the most violent and vitriolic abuse, using Twitter, of my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), an individual was jailed for four weeks. Despite this, or perhaps because of it, the abuse has worsened and deepened on precisely the same issue in the same violent way. If the medium used were a newspaper, I am quite certain that the House would demand that the editor be dragged to the Bar of the House and forced to explain himself or herself. What advice would you give, Mr Speaker, on how to handle the internet, and specifically Twitter, which is the medium by which this abuse against one of the Members of this House is continuing on a most violent and daily basis?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order. My immediate reaction is twofold. First, where a crime has been committed—he referenced at the outset of his point of order the fact of a crime and, indeed, of a conviction—that is a matter for the police and the prosecuting authorities. Secondly, and more widely, in so far as the hon. Gentleman has referenced an outrageous instance, or series of instances, of anti-Semitic abuse, I think that the whole House would be united in concluding that that behaviour was both despicable and beneath contempt. Although I would not ordinarily seek to personalise such matters, as the hon. Gentleman referred to the hon. Member for Liverpool, Wavertree (Luciana Berger) being on the receiving end of this abuse, I think that decent people throughout the House and across the country would empathise entirely with the hon. Lady and share my own assessment of the people responsible for that gratuitous abuse. [Hon. Members: “Hear, hear.”]
Mr Speaker
I am not sure that there is much further, but I will hear the hon. Gentleman.
John Mann
The issue of criminality is well understood and is a matter for the police, not the House, but this is about the medium of communication. If it were a newspaper, then the newspaper would not be committing criminality by allowing itself to be used as the vehicle, and the House would want to have a view on how that newspaper should be held to account. There is precedent from 1956, with John Junor, on how that was done. How can the House hold Twitter to account for its failure to act to stop its platform being used for this abuse?
Mr Speaker
The short answer to the hon. Gentleman is that the House can debate whatever the House wants to debate, and hon. Members can seek opportunities to air matters in the usual way. I have a hunch—it is reinforced by the wry grin emerging on the hon. Gentleman’s face—that the idea will by now have occurred to him, if it had not already done so, that he could seek to raise these matters in an Adjournment debate. I just have the sense, although I am of course not psychic, that his application will be winging its way to the appropriate quarter before the close of the day.
Greg Mulholland (Leeds North West) (LD)
On a point of order, Mr Speaker. We now finally have the overarching report into the suspension of the Leeds children’s heart unit, which has exposed very serious failures in the safe and sustainable review process and clear abuse of whistleblowing by both NHS medical professionals and officials. We have not heard anything about any statement, which we clearly need from a Minister at the Dispatch Box, finally to put this matter to rest and allow Members to contribute to that closure so that all such units can move on. May I seek your advice on how we might be able to do that?
Mr Speaker
If memory serves me correctly, Health questions took place relatively recently so it may be some little while before the next scheduled session takes place. However, the hon. Gentleman will be aware that as he raised his point of order, no less illustrious a figure than the Deputy Chief Whip, the right hon. Member for Chelsea and Fulham (Greg Hands), was sitting, as he still is, on the Treasury Bench, and his point will have been heard. Furthermore, the hon. Gentleman will know that we have business questions tomorrow, and I just have a sense that he will be in his place to raise this matter and to demand a statement from the Government.
Kevin Brennan (Cardiff West) (Lab)
He will have to cancel his train ticket now. [Interruption.]
Mr Speaker
People are going on about train tickets. I am sure that the hon. Member for Leeds North West (Greg Mulholland) was not proposing to toddle off to Leeds tomorrow morning, but if he was, he might decide to reconsider and to be present for business questions. Only time will tell; we shall see.
Railways (Public Sector Operators)
12:56 - The House divided: - Ayes: 196 / Noes: 38 - Question accordingly agreed to.
Andy Sawford (Corby) (Lab/Co-op)
I beg to move,
That leave be given to bring in a Bill to amend the Railways Act 1993 to permit public sector railway operators; and for connected purposes.
Twenty years after privatisation, it is clear that passengers are getting a raw deal. The Tories’ botched privatisation in the 1990s has led to a fragmented railway, which is less efficient to run and more expensive to use than other networks across Europe. The franchise process simply does not work in its current form. The collapse of the west coast main line franchise, at a cost of more than £55 million to the taxpayer, shows just how broken the system is.
On the east coast, where a public operator has performed really well in recent years, it is banned by law from seeking to carry on as the operator. How can it be right that East Coast Main Line Ltd is the only operator in the world that cannot bid to run this service in the future, despite a track record of success? East Coast has shown that a public option can work for our railways. Every penny of profit that it makes has been reinvested back into the service. For example, East Coast contributed £1.3 million to the £3.3 million upgrade of Peterborough station, which I and my constituents use.
Instead of continuing this success story, the Government want to re-privatise the east coast main line at an estimated cost of £6 million. That money would be better spent on improving the service, rather than satisfying the Tory obsession with privatisation. Labour is the only party with a plan to reform the railways and put passengers first. With this Bill, I am very pleased to support the brilliant work of my hon. Friend the Member for Nottingham South (Lilian Greenwood), the shadow rail Minister, and my hon. Friend the Member for Wakefield (Mary Creagh), the shadow Transport Secretary, who have set out the reforms that we need.
The next Labour Government will review this Government’s failed franchising process as a priority. After the chaos of recent years, we will act to safeguard taxpayer and passenger interests by putting in place a system that is fit for purpose. We will learn the lessons of the east coast main line, where we have seen the benefits of a not-for-dividend operator, by legislating to allow a public sector operator to take on lines and challenge the train operators on a genuinely level playing field and in the public interest. That will help to secure value for money for passengers and taxpayers.
As a Co-operative MP, I am pleased that we have pledged that the next Labour Government will explore co-operative and mutual solutions and the benefits of co-operative principles, and increase the involvement of passengers and employees in transport by giving them a much greater say in the industry. The Co-operative party’s reports, “Rail Cymru” and “A People’s Railway for Scotland”, explore the options for Scotland and Wales. As a localist, I am pleased that Labour is committed to devolving decisions across all areas of the UK on the running of regional and local services, so that areas can bring trains, buses, ferries and trams together into a single network.
We must tackle the monopoly market for rail rolling stock by giving Network Rail greater responsibility for developing a long-term plan for the procurement and leasing of new rail rolling stock. We will create a guiding mind for the railways by bringing Network Rail together with a representative passenger rail body to contract routes; co-ordinate services and skills in the industry; oversee stations, fares and tickets; and ensure that there is customer satisfaction across the network. We will ease the pressure on fare payers through the efficiencies that our reforms release, by capping annual fare rises on every route, by simplifying fare structures and by creating a new legal right to the cheapest ticket. I know that those proposals will be welcomed by many of my constituents.
Corby and east Northamptonshire are served by private and public sector rail operators. The contrasting experiences of my constituents demonstrate the need for my Bill. Corby, which is served by East Midlands Trains, recently celebrated five years since Labour opened the new railway station. Corby is the fastest growing town in the country. It was once known as the largest town in Europe without access to a railway system. Use of the station has doubled since it was opened in 2009. It takes 70 minutes on the train from St Pancras. The station is a symbol of Labour’s investment in the regeneration of Corby and it has given a big boost to the local economy. It was campaigned for by the former Labour MP, Phil Hope, and by Labour councillors, and it was delivered by a Labour Government. We are now working to increase the frequency of trains and calling for new northbound services.
However, we cannot celebrate the fares that passengers face. They are way too high and they price out many people. A constituent told me the other day that he had a medical appointment in London, but he did not know how he would find the more than £100 needed to get there. A Corby to London season ticket costs £7,400 and an open return costs £105. Many constituents in the east Northamptonshire side of my constituency, such as those who live in the town of Oundle or in villages such as Warmington, travel from Peterborough station on the east coast line.
Although the fares on the east coast main line are still high, the rate at which they have increased has been hugely different. Since 2010, a standard anytime open return ticket from Peterborough to London has increased by £12, or 14%. The equivalent fare from Corby on East Midlands Trains has risen by £20 since 2010, which is almost twice the rate of increase at 24%. This year, East Coast has raised its fares by an average of 1.21%, which represents a genuine real-terms cut in the cost of living for passengers. No private franchisee has taken that step. It would be fair to say that many of my constituents who use Peterborough station still feel that fares are too high, but by comparison, East Coast is keeping fare rises down.
More than that, East Coast is performing better for passengers. It has achieved record passenger satisfaction and punctuality rates since 2009. It has introduced almost 7,000 more trains a year, and 500,000 more passengers are travelling on the franchise. East Coast has partly funded and helped to deliver a major programme of station upgrades, including at Peterborough station. It is also performing for the taxpayer, having returned more than £800 million to the Treasury.
East Coast’s passengers and the employees who have worked to make East Coast a success in public hands will not understand why the operator is prevented from taking on the running of other lines, let alone why it is banned from continuing to operate the east coast line. Because of the Tory rules, we will have a situation where European public rail companies can run lines in this country, but our British-owned operator cannot.
I completely agree with my hon. Friends the Members for Wakefield and for Nottingham South that, instead of Tory dogma and an obsession with privatisation, we need a different approach that puts the public interest first, that reverses the presumption against the public sector and that serves the passenger properly. It is time for reform of an industry that sucks up a vast amount of subsidy, and seems loth to invest it back into the service of which it is custodian, and that provides little redress for passengers stung by ever-increasing fare hikes—[Interruption.]
The Tories and the Lib Dems are wedded to the status quo: only Labour has a plan for reforming the railways—a new model, with a strong voice from and control by the people who pay for the railways, the taxpayer and the fare payer, and a strong voice for employees who stay working on the railway no matter the colour of the uniform or the paint on the trains. The next Labour Government will review the failed franchising process; legislate to allow a public sector operator to take on the lines; devolve decisions over the running of regional and local services; tackle the monopoly market for rail rolling stock; address the cost of living by capping annual fare rises on every route; simplify fare structures; create a new legal right to the cheapest ticket; and, as Conservative Members have shown today, we will do it all in the face of their opposition. They are standing up for the wrong people. The Bill is just the first step to a railway in which passengers are put first.
Martin Vickers (Cleethorpes) (Con)
I oppose the motion and urge the House to reject the arguments put forward. The privatised industry is actually a success—freight tonnage is up and passenger numbers continue to rise. What we have heard from the hon. Member for Corby (Andy Sawford) will be detrimental to the industry, to employees and especially to passengers. It is based on a redundant political dogma. Labour Members who yearn for bygone days when people were prepared to look to the state to run their buses and trains should come to terms with the modern world.
Wisely, the previous Labour Government made no attempt to reverse the policy during their 13 years of misrule—[Interruption.] Thirteen wasted years, indeed. The change in direction since the days of Tony Blair is striking. The Opposition clearly have no ambition to win elections any more. The very phrase “directly operated railways” conjures memories of a past in which giant state conglomerates ran great swathes of our industry at enormous expense to the taxpayer—[Interruption.] The eyes of Labour Members light up at talk of subsidy. They yearn for the opportunity to subsidise failed industries again—[Interruption.]
Mr Speaker
Order. That is very unseemly conduct from the hon. Member for Easington (Grahame M. Morris). I know you are an excitable chap and a keen parliamentarian, but the voice of Cleethorpes must be heard.
Martin Vickers
Subsidies and propping up ailing businesses at taxpayers’ expense are things that Labour Members understand, but taxpayers want value for money. They want reduced fares, lower taxes and a good railway, which is what we are achieving under the privatised system. Is Labour actually advocating renationalisation? That is what it sounds like. The plan would take us back a generation. It would create a rigged market and passengers would suffer. Under Labour’s plan, the state would write the rules of the franchise, then the state would bid and then the state would decide who had won the race. It would be complex, costly and about an ideological obsession.
The east coast is a service on life support. It was rescued by the Department for Transport and it does not pay the same access charges. Labour’s plan would be costly—up to £500 million. First, the state would have to pay the cost of compiling the bids at up to £10 million a bid. With 15 franchises in England alone, the bill could be more than £100 million. The hon. Member for Corby did not say where that money would be found. Presumably, in line with normal Labour practice, it would be an additional burden on the taxpayer. Secondly, under Labour’s plan, the state would also have to take on the working capital cost of any franchise it operated, amounting to £400 million for the network. In addition, if the bidding process were to be truly level, performance bonds, season ticket bonds, risk capital and default would all have to be taken into account.
My constituency takes its name from the east coast’s premier seaside resort, but it also contains the largest port complex in the UK, an international airport and 10 railway stations. Only last week, a parliamentary Committee gave the go-ahead for the development of the south Humber marine energy park by Able UK, with 4,000 potential jobs. That further strengthens the need for better connectivity and the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry)—whom I was delighted to welcome to Cleethorpes only two weeks ago—will know that that would improve the potential of south Humber and north Lincolnshire even more.
It is private sector railway companies that will provide better services. I remember the days when I could jump on a train in Cleethorpes to go to Doncaster and I would share the carriage with one man and his dog. Thanks to the private operator First TransPennine Express, we have an excellent hourly service and I have every confidence that the Minister will maintain it. We need services expanding and electrification of the line into Immingham, where 25% of the nation’s rail freight starts or ends. I urge the House to reject the motion. The Bill would be a step backwards that my party and I will not support.
Question put (Standing Order No. 23).
National Audit Office
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Prime Minister (Mr David Cameron)
I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Lord Bichard KCB to the Office of Chair of the National Audit Office.
This is only the second time that a Prime Minister has moved a motion to appoint the chair of the National Audit Office and the first time the process has been applied to someone new to the role. It is a direct result of our Budget Responsibility and National Audit Act 2011 to strengthen the governance of the National Audit Office. At a time when we are working hard to deal with our debts, it reflects the critical role of the NAO in scrutinising public expenditure and safeguarding the interests of hard-working taxpayers.
First, I would like to thank Professor Sir Andrew Likierman who is standing down when his term of office ends in January. As the NAO’s inaugural independent chair, he has played a vital role in establishing the NAO board as an effective governance body.
The proposed new chair, Lord Bichard, has been chosen following an open competition by a selection panel that included the Chair of the Public Accounts Committee, the Auditor General for Scotland and the permanent secretary of the Treasury. Lord Bichard has had a distinguished career in local and central Government. His many roles have included chief executive of Brent and Gloucestershire local authorities, chief executive of the Benefits Agency and permanent secretary of the Department for Employment, which then became the Department for Education and Employment. He led the vital inquiry into child protection measures following the horrific Soham murders, and also served as chair of the Legal Services Commission, chair of the Design Council and founding director at the Institute for Government.
I believe Lord Bichard’s extensive experience across the public sector makes him an outstanding choice as the independent chair of the National Audit Office, and I have no hesitation in commending this motion to the House.
Margaret Hodge (Barking) (Lab)
This is the second occasion when we have had time set aside in the House to debate the public appointment of the chair of the National Audit Office. I warmly welcome and support the process whereby both the Executive and the legislature are involved in the appointment to this important post, and the fact that the Prime Minister is present to propose to the House the appointment of Lord Bichard. I join him in thanking Sir Andrew Likierman for his excellent stewardship of the organisation over the past few years since its inception.
I have known Michael Bichard for many years. Indeed, I first met him before he joined the civil service when he was working as a chief executive in local government. He is a man of outstanding ability and clear judgment, and he brings to the role vast experience across the public sector from his roles in local government, leading a government agency and leading a Government Department. He has also run a very successful higher education institution and was involved in establishing the Institute for Government as its first director. I have every confidence in his ability to fulfil this new role.
I agree with the Prime Minister that in the current times, with continuing pressures to reduce public expenditure and borrowing, we need a strong, fearless and high quality National Audit Office to provide well-evidenced information on how the taxpayers’ pound is being spent. Sir Michael’s long experience and undoubted knowledge and expertise make him an excellent choice as chair of this important institution. I am delighted to be able to support the motion before the House.
Mr Richard Bacon (South Norfolk) (Con)
I support the motion. Two years ago, when the Budget Responsibility and National Audit Act 2011 set up the chair of the National Audit Office, there were two chief concerns: to strengthen the governance of the National Audit Office in a way which, it was widely agreed, it could benefit from; and to ensure at the same time the continued statutory independence of the Comptroller and Auditor General in exercising his statutory functions. The CAG is an officer of the House of Commons, and it is vital that his independence and ability to undertake inquiries, wherever he—or she, were there a female doing the job—feels necessary, is unfettered. The 2011 Act needed to pull off the trick of providing both for the chair to have the ability to advise the CAG, and for the CAG to have regard to that advice while at the same time continuing to have
“complete discretion in the carrying out of…functions”.
This House owes a debt of gratitude to Professor Sir Andrew Likierman for the way he has carried out that task. I have every confidence that Lord Bichard, who has a very distinguished career in public service, will be able to perform the same function with equal skill. I have no hesitation in commending the motion to the House.
Question put and agreed to.
Taxation of Pensions Bill
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Financial Secretary to the Treasury (Mr David Gauke)
I beg to move, That the Bill be now read a Second time.
Security in retirement has been a central part of the Government’s agenda. It is important that we adapt to the needs of a population who live longer and who are increasingly active in old age. In the course of this Parliament we have significantly improved the state support on offer to pensioners. From April 2016, the new state pension will give people certainty about what they can expect from the state during their retirement and reduce the likelihood that they will require means-tested benefits. The triple lock introduced at the beginning of this Parliament ensures that increases for the basic state pension will not be outstripped by earnings, growth or inflation. This means that pensioners are now £440 a year better off than they would have been had the state pension only been increased by average earnings since 2011.
We have also taken steps to help people saving for their retirement. Automatic enrolment, introduced in 2012, gives all employers a duty to enrol all eligible employees into a qualifying pension scheme. In the past two years, approximately 4 million people have been newly enrolled into a pension. By the time the programme is fully rolled out in 2016 up to 9 million will be newly saving for their retirement. This radical reform will transform our culture of saving and increase the amount being saved in workplace pensions by about £11 billion a year.
Automatic enrolment will ensure that individuals have the opportunity to save into a pension, but we also need to ensure that when they come to access those savings they get a fair deal. This Government have always believed in personal responsibility. If people work hard and save all their lives, when they reach retirement they should be given the freedom to choose how they spend those savings. Through the Bill, we are introducing fundamental reforms to how people can access their defined contribution pension savings. This is the most radical change in the way people take their pensions for almost a century. The Bill contains provisions to: remove the limits on withdrawals from drawdown; make annuities more flexible; create a new way to take money directly from one’s pension savings; prevent the reforms from being exploited for unintended tax purposes; and restrict and reduce tax charges payable on certain lump sum death benefits.
We have consulted extensively on how best to implement these changes. Given that it is a highly technical and complex area, we have also taken the step of publishing a briefing, available on gov.uk, which explains clearly what each section of the Bill does. Alongside that, Her Majesty’s Revenue and Customs guidance, which is also on the gov.uk website, explains in more detail how the changes are intended to work. The Department for Work and Pensions’ Pension Schemes Bill, which is in Committee, covers the regulatory side to those freedoms, notably the guidance guarantee. These issues are being debated thoroughly as part of the Bill.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the Minister explain why there has been a change in terminology from “advice”—which the Chancellor mentioned in his introduction of the proposed measures—to “guidance”, which, unlike advice, legal protections are not associated with?
Mr Gauke
We made it clear, in the documentation that was published at the time of the March Budget, that the legal status of the support we have provided is “guidance”. That means that there is not a recommendation of a specific product; none the less, that support will be hugely helpful for those who will face choices. It is right that the role that we play—or facilitate—is about providing support in the form of guidance, rather than making recommendations of particular products.
I would like to provide Members with an overview of the different parts of the Bill. At Budget 2014, the Chancellor announced that everyone with a defined contribution pension could take it as they wished from age 55, and would no longer be subject to drawdown limits or income tests before being able to take their money flexibly. The current system denies people flexibility at the point of taking their pension. For those with the smallest and largest pension savings, there is the option to take their pension as cash, but for everyone else there are considerable restrictions. They have two main options: purchase an annuity or enter capped drawdown. Capped drawdown limits how much someone can take out each year to an amount calculated by reference to the amount they might have received from an annuity purchased with their fund.
Flexible drawdown already lets those with very high levels of savings to take their money however they want, taxed at their marginal rate, if they can prove that they have a guaranteed pension income for the rest of their life of at least £12,000. The Government have already reduced that from £20,000 to give many more people flexibility, but the first main change provided for in the Bill goes much further, making unlimited drawdown available to anyone with a defined-contribution pension and removing the limits on what can be withdrawn from those funds.
The Bill also ensures that existing drawdown funds can, if the individual wants, be converted to flexi-access drawdown, so that those currently in capped drawdown will be able to benefit too. The aim of the changes is to give all the 320,000 people who retire every year with defined contribution savings greater choice about how to access those savings, regardless of how big their pension pot is. The changes will take effect from 6 April 2015.
Some people think that this change—allowing everyone access to their own hard-earned money—will cause people to spend recklessly what they made sacrifices to save. The Government do not agree. Those who have saved the money over a lifetime should be trusted to make their own decisions about how best to use it to provide themselves with an income in retirement. Through the guidance guarantee, we are making sure that customers have access to impartial guidance on how to make the most of their money.
Dame Anne Begg
We agree that it is important that people can access their money and use it how they best see fit, but might not the introduction of these flexibilities lead to there being so many products on offer that some unscrupulous people might offer individuals unsuitable products? What will the Government do to ensure that people are not mis-sold products that are not suitable for them or, indeed, that err on the side of illegality?
Mr Gauke
The hon. Lady raises an important point. First, the guidance guarantee will ensure that guidance is available to people on what their options might be, to point them in the right direction. Secondly, we recognise that the regulators have an important role to play. The Financial Conduct Authority is very engaged in this matter, setting standards and ensuring proper enforcement. She is right that we must deal seriously with any unscrupulous businesses out there that seek to exploit people, but we have a regulatory regime in place to address that very point.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Will the Minister elaborate on the tax implications for the Treasury of these legislative and policy changes?
Tom Blenkinsop
What are the Treasury’s estimates of the tax take to the Revenue arising from this Bill?
Mr Gauke
At the time of the Budget, we set out our estimates of the implications for the public finances, certified by the Office for Budget Responsibility. We have also made a number of announcements since the Budget that will have a revenue impact. The Office for Budget Responsibility will return to this issue at the autumn statement, when it will set out its numbers in the usual way. The estimates have yet to be certified by the Office for Budget Responsibility—as one would expect, given that we are still some way from the autumn statement—but an update on the numbers that were published in March will also be set out in December.
The changes we have announced have resulted in moving some revenue from one year to another, rather than fundamentally changing the face of the public finances, so in broad terms their overall tax impact is not considerable, certainly when compared with the substantial changes that the Government have made, such as increasing the state retirement age or reforming public sector pensions.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
To follow up the question from my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), there has been a suggestion that the change could lead to a windfall for the Treasury at a time when that would be very helpful for future Budgets. What does the Minister say to that suggestion, which has been made by some in the real world out there?
Mr Gauke
The numbers that we and the OBR believe are likely to be changed as a consequence of the policy were set out in the March document. We very much doubt that there will be a huge windfall for the Exchequer as a consequence of these changes, whatever the appeal of that might be. As I have said, some revenues have been moved from future years into earlier years, but some of the claims about the impact are somewhat exaggerated and highly unlikely.
Lady Hermon (North Down) (Ind)
To pick up on the important point made by the Chair of the Work and Pensions Committee, will the Minister seriously consider putting on the face of the Bill a criminal offence of trying to deceive people out of their pension savings? That will act as a deterrent to unscrupulous organisations or individuals from the moment the legislation goes on to the statute book.
Mr Gauke
The Financial Conduct Authority has already made it clear that if, for example, anyone attempts to present themselves as providing guidance under the guidance guarantee when they are not in a position to do so, that will be looked at very seriously. There is a strong determination to ensure that the dishonest, the unscrupulous and those seeking to mislead people are treated very seriously indeed. We are talking, after all, about a regulated sector, and those who try to conduct regulated activities who are not properly regulated already face offences. I recognise the hon. Lady’s concern about whether we are determined to address those who try to defraud our constituents. Yes, we are absolutely determined to address that, and the FCA is very engaged in that process.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I, too, would like to press the Minister on the issue of consumer protection. At the moment, if someone gets bad advice from a financial adviser, they have a degree of protection through the FCA. If people receive advice from those who are not professionals in financial matters—the Minister has conceded that these are complex matters—what comeback will they have?
Mr Gauke
As I say, the FCA is very engaged in this area and has already set out its determination to ensure that those seeking to mislead face punishment. The FCA has responsibility for ensuring that regulated firms treat their customers fairly and communicate in a way that is clear and not misleading. We believe that it has considerable powers here. Of course, the Pension Schemes Bill is also important in ensuring that the FCA puts in place standards for the guidance guarantee—standards that anyone delivering that service must comply with.
Lady Hermon
I am extremely grateful to the Minister for taking a second intervention so quickly. He has been careful in his words regarding the FCA. We are talking about those who are manipulative and try to deceive people out of their entire life’s pension; it is a really serious issue. I would like him to confirm that when he refers to “serious” punishment and this being taken “very seriously”, it means a criminal conviction for these people. Will he confirm that that is how seriously the FCA will treat this offence?
Mr Gauke
The FCA will certainly treat this extremely seriously. I entirely share the hon. Lady’s view that this is an important matter and that it is right to take the strongest action to ensure that those who attempt to defraud our constituents of their life savings face severe sanctions. This Bill is about the tax changes; the Pension Schemes Bill deals with the wider issues, and it gives the FCA powers to set standards for the guidance guarantee. Regulated firms have responsibilities to treat their customers fairly, and the FCA has made it clear that it expects firms to comply with that, in this context as in others.
Dame Anne Begg
Even the Association of British Insurers says that there should be more regulation around this issue. Is the Minister listening closely to what the ABI is saying?
Mr Gauke
We of course engage closely with the ABI and other bodies involved in this area. Indeed, the work in this Bill and in the Pension Schemes Bill is a result of close engagement with the ABI. The Government are determined to ensure that we have a regulatory system that protects our constituents from the unscrupulous. This is principally an issue for the FCA, but we are determined to ensure that it has the powers that it needs. Much in the Pension Schemes Bill relates to that.
Nigel Mills (Amber Valley) (Con)
May I remind the Minister that one reason for bringing forward these freedoms was to try to tackle the mis-selling that already goes on, whereby people are effectively forced by the law to buy annuities, which in many cases are totally unsuitable for them? That has led to real cases of detriment. The mis-selling issues under these freedoms are not new; they have been around for a long time.
Mr Gauke
I would like to make a little progress. That brings me to the second main change in the Bill, which is to make annuities more flexible. Current tax legislation caters for two broad categories of retirement income: lifetime annuities and drawdown. As I have set out, we are making drawdown much more flexible. Let me explain how we are doing the same for annuities.
We think annuities will still be the right product for many people, as they provide the valuable security of a guaranteed income for life. The current requirements for a lifetime annuity, however, lead to an inflexible and restrictive product, and there is a clear demand for more flexible ways of getting income from one’s pension pot. We want these reforms to stimulate competition and innovation in the retirement income market. We want providers to innovate and create new products that will more closely reflect the changing needs of their customers. We have consulted extensively with industry on the changes that it would like us to make to enable this kind of innovation. The Bill will deliver those changes by allowing annuities to decrease, and by removing the 10-year guarantee period for guaranteed annuities. That gives significantly more flexibility to providers to offer products that meet individuals’ needs more closely. Those changes will apply to annuities sold after 6 April 2015.
The third major change in the Bill is a new method by which people can access their pension. Currently, people who want to take their pension as cash have to take their whole tax-free lump sum—25% of their fund—and place the other 75% in a drawdown fund. Any money they then draw down is taxed at their marginal rate. The Bill will introduce a new option by giving individuals the flexibility to take one or more lump sums from their pension fund—with 25% of each payment tax-free and 75% taxed at their marginal rate—without having to enter into drawdown. This lump sum is known as an uncrystallised funds pension lump sum, or an UFPLS. [Interruption.] It is perhaps not the most elegant of names, but try doing better with “uncrystallised funds pension lump sum”. These payments can be taken from funds that are uncrystallised—that is, have not yet been accessed. It will be open to schemes to provide this option from 6 April 2015 onwards. This does not change the amount of tax people pay on their pension, but it does provide them with extra flexibility and further choice about when and how to access their savings in a way that suits them.
I want highlight changes that we are making through the Bill to ensure that these reforms, which are intended to give individuals more choices about their income in retirement, are not exploited for tax purposes. If the Government were to take no action, an individual over the age of 55 could divert their salary each year into their pension, take it out immediately and receive 25% of it tax-free, thus avoiding income tax and national insurance contributions on their employment income. That is not the intention of the reforms.
The Government spend a considerable amount a year on pensions tax relief and have a responsibility to ensure that the money is used for genuine pension saving. Under the current system, individuals in flexible drawdown have no annual allowance. They are not entitled to tax relief on anything that they contribute to their pension after they have accessed it flexibly. Extending this rule under the new system would be disproportionate and would disadvantage average savers. We are in an era of much more flexible retirement. An individual might access their pension flexibly and then decide to return to work, or access it while working. They might still want to save into a pension. They might be automatically enrolled into a pension and be subject to a tax charge on the amount contributed. If we kept the current system, there would be a strong incentive to opt out of auto-enrolment.
Instead of having no annual allowance, individuals who access their pensions flexibly will, under the new system, have a lower annual allowance of £10,000, which will apply to their defined contribution savings. This approach allows people the flexibility to contribute to their pension even when they have flexibly accessed their pension rights. At the same time, it ensures that individuals do not use the new flexibilities to avoid paying tax on their current earnings. It will prevent those with the means to divert large sums into pensions from doing so, while allowing the vast majority of individuals to continue to save. The Government have worked very closely with industry to develop this measure, and will continue to do so to ensure that it remains fair and proportionate.
Tom Blenkinsop
The Minister will be aware that the Pension Schemes Bill is in Committee. I am a member of that Committee, and in our fourth sitting, on Thursday 23 October 2014, a gentleman called Mr John Greenwood, a Financial Times journalist who has written quite a lot on this subject, said that the Treasury’s new policy to limit the amount of money that could be taken out at once
“will impact on only 2% of the population”.
Mr Gauke
That is true. However, as I have said, we have tried to ensure that we do not give people an opportunity to use the new arrangements as a way of avoiding substantial amounts of tax, while also ensuring that, in an era of more flexible working, we do not prevent people from gaining access to their pensions and then making further contributions in the circumstances that I have described. We concluded that introducing a reduced £10,000 personal allowance was the best way of striking a balance between those two objectives. We will, of course, continue to look at the matter closely to ensure that the system is not exploited at a significant cost to the Exchequer.
Tom Blenkinsop
The Minister is being very generous with his time. He is also, potentially, being very generous with the Treasury’s coffers. Mr Greenwood said that the allowance
“will impact on only 2% of the population, so it is a penalty with no teeth for 98% of the population.” ––[Official Report, Pension Schemes Public Bill Committee, 23 October 2014; c. 126, Q284.]
What is the Treasury’s forecast of the potential loss of national insurance contributions?
Mr Gauke
The Office for Budget Responsibility will return to the issue of the forecast at the time of the autumn statement. Mr Greenwood’s evidence featured some eye-watering numbers, but they were based on extraordinary assumptions about behaviour. All the changes resulting from the reforms that we have announced since the Budget will be announced in the autumn statement in the usual way. We certainly do not recognise some of the numbers that have been floated in relation to cost, but the numbers have not yet been certified by the OBR, so I cannot give the hon. Gentleman the answer that he seeks at this stage. Of course we have been mindful of the impact on the Exchequer, but we believe that our proposals will not put it at risk of losing substantial sums. As I have said, we are not preventing people over 55 from drawing down part of their pensions while continuing to make contributions, or retaining the flexibility to do so. We might have closed off that option, but we decided not to.
Debbie Abrahams
The Minister is indeed being generous with his time. May I ask when the Treasury is likely to publish its assessment of the risks associated with the delivery of this project? It has obviously identified a number of such risks, and it would be helpful for everyone to see the assessment.
Mr Gauke
A number of elements are involved. We have already estimated the costs resulting from the Budget announcement, and, as is customary, we will update the House about the cost of further changes that we have made in the autumn statement. We need to take account of a number of policy announcements that have been made since the Budget. The information will be available once the numbers have been certified by the Office for Budget Responsibility—that is, at the time of the autumn statement.
The last change that I want to explain is the change that the Government are making to the tax charges on pensions when someone dies. We will table amendments in due course to enact those changes in detail, but the Bill currently provides for certain lump sums to be paid from pension schemes when someone dies under the age of 75. It ensures that when someone dies with money in a drawdown account before reaching the age of 75 and a lump sum is paid from it, that sum can be paid tax-free. It also ensures that if someone dies with a pension after reaching the age of 75, the tax charge on a lump sum paid from it is reduced from 55% to 45%, and it reduces the tax charge when someone over 75 receives a serious ill-health lump sum to 45%.
The Bill makes a number of other changes, which I will summarise briefly. They include the introduction of a permissive statutory override, which will allow schemes to make the types of payments set out in this Bill without the need to change their scheme rules; provisions to ensure that the new system is reflected in the rules governing overseas schemes involving UK tax-relieved funds; allowing payments from guaranteed annuities to be paid to beneficiaries as a lump sum if they are under £30,000; and measures to ensure that people cannot gain an unintended tax advantage by becoming temporarily non-resident.
Our pension reforms have been extensive and fundamental. We have taken steps to provide a solid foundation for private saving by reforming the state support that is on offer and introducing automatic enrolment. However, it is also vital to give people an informed choice, and the Bill introduces welcome changes to ensure that that happens. It makes the tax system fairer by ensuring that people have more choice in regard to how they access their savings, while also preventing people from exploiting the new flexibility in order to gain unintended tax advantages. At the heart of it are three key principles: responsibility, fairness, and individual choice. I commend it to the House.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I look forward to an interesting debate on the detail of the Bill, both today and in Committee.
Opening the debate on Second Reading of the Pension Schemes Bill, the Minister for Pensions said:
“we will be very busy over the remaining months…taking the pensions system to a…better place.”—[Official Report, 2 September 2014; Vol. 585, c. 195.]
I agree with the first part of that statement: we will indeed be very busy. As for the second part, the extent to which we can improve the Bill remains to be seen. The efficacy of any Bill should be judged only according to its outcomes, and at this stage there are a number of concerns about the outcomes of this Bill, which are far from certain. There are a number of unanswered questions. My hon. Friends have asked a number of them today, and I am sure that more will arise during the Bill’s passage.
As the Institute for Fiscal Studies said at the time of the Budget, the reforms in the Bill will change the pensions landscape dramatically, in the ways in which people take income in retirement and the pensions industry is structured. As the Minister has explained, from 6 April 2015 those aged 55 and older—I should perhaps declare an interest, as I am a member of that age group—will be granted far more freedom. They will be able to gain access to as much of their pension savings as they wish, as often as they wish.
The Minister for Pensions has described the Opposition’s view of the new freedom as “ambivalent”, but that is something of a misrepresentation. We are not ambivalent about what the Bill purports to achieve. Since the reforms were announced in the Budget statement, our position has been consistent, but, for the avoidance of doubt, I shall restate it. We support increased flexibility and choice for savers, which is why we have long advocated reform of the annuities market to help people shop around to get a better deal. However, it would be remiss of us not to identify and highlight the potential problems and pitfalls that the Bill presents. One of my main concerns, which has already been raised today, relates not just to what it seeks to achieve, but to the speed at which it seeks to achieve it.
Sammy Wilson (East Antrim) (DUP)
Does the shadow Minister agree that, given the increasing array of choices now available, one of the most important decisions anyone can make will be how comfortably can they live in retirement? The guidance and help the Government provide on making these difficult choices is very poor.
Cathy Jamieson
The hon. Gentleman makes a very important point which I will deal with in some detail. It is one of the most crucial issues not just in respect of the Bill, but of the wider pensions landscape.
Dame Anne Begg
There is confusion as to what the proposals will mean in practice because there has not been the discussion across the political spectrum and among social partners that took place for the accumulation stage—making sure that more people save for their retirement. There has been little if any discussion about the decumulation stage, beyond criticising annuities. That is part of the problem with this process: the Government pulled a rabbit out of a hat at the Budget, without building a broad consensus to ensure that everybody is on board.
Cathy Jamieson
My hon. Friend makes a valuable point which I will address in due course. Before I do so, I want to put on the record one of the concerns expressed by the TUC, which, in keeping with the point made by my hon. Friend, said that it believes that
“the measures contained in the Bill are being rushed in, thus overturning the emphasis on consensus and consultation that has been a positive feature of pensions policy making over the last decade.”
Sheila Gilmore (Edinburgh East) (Lab)
Is my hon. Friend concerned that, given the speed of these changes, some of the other longer-term reforms such as auto-enrolment may be impacted on? Is she worried that these issues might not have been properly looked at?
Cathy Jamieson
There are two pension Bills running side by side in the House and I do not want to stray into discussing the detail of the other one which is being considered in Committee—I am sure you would not allow me to do so, Mr Deputy Speaker. However, my hon. Friend makes a valuable point.
Lady Hermon
The hon. Lady is being very generous in taking a number of interventions. She has the opportunity to confirm that the Labour party would support an amendment to the Bill to make it a specific criminal offence for unscrupulous, so-called pensions advisers to swindle innocent people out of their pensions and lifetime savings. Is that not a valuable amendment that could easily be made and confirmed by the Financial Secretary this afternoon?
Cathy Jamieson
The hon. Lady makes an important point, and I listened carefully to her intervention on the Financial Secretary. As a constituency MP, I am aware of people who have been swindled out of their life savings through unregulated, unscrupulous people giving them bad advice; indeed, the Financial Secretary has heard me talk about this issue when considering other Bills. I am very interested in what the hon. Lady said about such an amendment, which we would want to consider to give as much protection as possible to consumers.
Sammy Wilson
A point that the Financial Secretary skirted round when he announced the changes to annuities was that they can now go down, as well as up, as a result of this legislation. Does that not bear out the concern raised by the hon. Member for North Down (Lady Hermon)? If such flexibility is provided for the providers, there is a real danger that people could be sold a pup and find that their income unexpectedly diminishes over time?
Cathy Jamieson
That is an important point, and these are exactly the reasons why it might have been useful if more time had been provided for discussion within the industry and with the partners in the process, so that we can get to that better place that I talked about at the outset. It is not just about giving people more choice; it is about giving them the ability to make choices that are wise not only at the moment when they choose to draw down or take part of the lump sum, but that are based on providing for the future.
One of our concerns is that although the reforms may well give greater choice, we have to consider whether that greater choice translates into better value and a better deal for those involved in the process. People making use of the flexibility will of course have new opportunities, but as we have heard, new opportunities potentially bring new risks. Those who purchase the wrong products, invest unwisely or fall victim to unscrupulous practices in the unregulated market will see their money swiftly evaporate. Those who use the new flexibility to take out cash from their pension savings may find that they are paying a higher rate of tax. We can also expect a deluge of new products to flood the market, and while some of them may well be good, by the very nature of things, some may well be less so. That is why it is important that people get good-quality guidance to help them make the right choice.
Debbie Abrahams
Is my hon. Friend concerned about the question of the capacity to deliver the advice that the guidance guarantee is meant to supply? According to evidence that the Pension Schemes Bill Committee took last week, the figure is less than 25%. It is not just that poor advice might be given; there may be none at all.
Cathy Jamieson
My hon. Friend makes an important point, and I read with interest the transcript of the Committee’s evidence session. People need good-quality guidance to help them make the right choices. We must guard against mis-selling, for example—we cannot afford a repeat of the payment protection insurance scandal. We must prevent people from falling victim to exploitation and illegality. We know that pension liberation fraud has already endangered millions of pounds in savings, affecting many people. That is the reason why I am concerned about the way the Government have handled these reforms, which to some seem a bit rushed and haphazard.
Barbara Keeley (Worsley and Eccles South) (Lab)
Is there not also the concern that people will end up spending a lot more of the pensions they have drawn down into savings accounts on social care? This Government have forcibly removed £4 billion from adult social care budgets, so we know that people are paying more for social care. If the money is held just in savings accounts, many more people will end up being liable for those costs.
Cathy Jamieson
The point my hon. Friend makes is absolutely crucial for many people, which it is why it is so important that they get guidance, so they can make sensible decisions to provide for the long term. I will say a bit more about social care and other services later, if I have the opportunity to do so.
After the Chancellor announced the overall pensions reforms to the House in the Budget statement, we set out three tests against which we believe they should be measured. The first was the advice test: would there be robust advice for people on providing for their retirement and measures to prevent mis-selling? The second was the fairness test: that the new system would be fair, with those on middle and low incomes still being able to access the products that give them the certainty in retirement that they want. The third was the cost test: that the Government must ensure that these reforms do not result in extra costs to the state, either through social care or pensioners falling back at a later stage on means-tested benefits such as housing benefit. We stand by those tests and would argue that so far, the Government have been unable to give assurances on any of those points.
Mr Andrew Love (Edmonton) (Lab/Co-op)
Is my hon. Friend aware of a study carried out by Ipsos MORI which showed that 12% of those who were eligible to do so would withdraw their pension pot entirely next year? When asked what they would do with it, one in five suggested that they would use at least part of it for a holiday.
Cathy Jamieson
Yes, I am indeed aware of that report. I shall go on to raise similar concerns and seek answers from the Minister to them in due course.
In addition to setting the three tests, we have also commissioned a retirement income taskforce, chaired by Professor David Blake of the pensions institute at the Cass business school. We wanted to look at how we could enhance retirement income and ensure that savers had access to good-value products alongside the support that they needed.
I would argue that our position on pensions has been consistent ever since our time in government. When the Labour Government took office in 1997, there was a crisis of pensioner poverty resulting from a decline in the value of the state pension under the Conservatives. There was also a crisis of trust in private pension provision following the mis-selling scandals that previous reforms had opened the way to. Responding to those challenges, the Labour Government built a robust regulatory framework to police and protect people’s pensions. That framework included the Pension Protection Fund. We also laid the groundwork for the universal state pension with a triple lock guarantee, and established the National Employment Savings Trust to help people to save for their retirement.
The reason that I mention those reforms is that none of them was rushed through. They were all based on sound evidence and consultation, and they had the common aim of helping people to make the right choices while affording them the certainty and security in retirement that they deserved. We now have to consider whether the present Government’s approach to pension reform has been consistent, or whether it seems at times to be erratic and contradictory.
To be fair, things began well for this Government. The single-tier pension and the auto-enrolment legislation represented positive steps to build on the progress made by the previous Government. Those reforms were based on evidence, consultation and consensus. That was acknowledged by, among others, Otto Thoresen, the director-general of the Association of British Insurers, who said that
“good consultation and a good period to execute”
improved the chances of legislation being successful.
However, the Government’s approach to the latest pension reforms, announced in the Budget statement, appears disjointed. Prior to announcing the reforms, they did not consult, either consumers or the industry. This has resulted in some of the issues that have been raised today not being flagged up at that time, and in the Government’s argument losing some of its intellectual rigour.
I would like to draw the House’s attention to the comments of the shadow Minister for Pensions, my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East on Second Reading of the Pension Schemes Bill, in which he highlighted the discord between the Government’s stance on pensions in the accumulation and retirement phases. That has been commented on today as well. In the accumulation phase, the Government’s approach—one that the Labour Government had fostered—is founded on the recognition that the pensions landscape is complex and difficult to navigate. That approach harnesses inertia to encourage pension savings, with individuals employed without pension schemes being placed on them by default. That is a sensible approach and it has proved effective.
However, the Government’s approach to the retirement stage, as outlined in the latest reforms, departs from that model, shifting the emphasis from the importance of accumulation to the ease of access. This Bill places the onus of choice back on the individual, working on the assumption that they will be able successfully to navigate what my hon. Friend the shadow Pensions Minister has called the “jungle of financial products”. He referred to there being a “tension” between the two approaches. He has been a friend of mine for many years, and I think that that is typical of his diplomatic way of expressing himself. The Association of British Insurers has also noted that tension, observing that:
“Automatic enrolment has seen millions more people saving for their retirement and further pension reforms should build on this. We are very concerned that the focus of recent discussion around the Freedom and Choice reforms is on early access to cash at age 55 rather than on building assets for income in retirement.”
The Minister referred to the fact that the Bill introduces the option of taking uncrystallised funds pension lump sums. I have to say that I have not been able to think of a better acronym than the one he came up with, try as I might. As he said, that provision will allow people to withdraw money directly from their pensions without first designating it for drawdown. Individuals will be able to take 75% of each withdrawal tax free, with the rest taxed at the marginal rate. This has been described by some as allowing people to use their pension almost like a bank account. More than any other measure in this Bill, it will expedite people’s access to their pension.
I should like to probe the Government’s thinking on this point a bit further. In searching for greater clarity, I repeat the question that my hon. Friend the shadow Minister put to the Pensions Minister in the earlier debate. He asked:
“If auto-enrolment policy was correct to assume that individuals need to be guided, helped and encouraged into better pension decisions, why do we no longer think that is the case at retirement?”—[Official Report, 2 September 2014; Vol. 585, c. 206.]
Perhaps the Minister will be able to respond to that question when he sums up the debate today.
In the meantime, I think we all agree that the Bill will increase innovation and result in a raft of new pension products entering the market. In many ways, that would be a good thing but, as I have said before, the flipside to freedom and choice is risk and complexity.
Mr Gauke
As ever, the hon. Lady is making a thoughtful and probing speech. It would be fair to say, however, that her tone is not one of great enthusiasm for greater flexibility and choice in the pensions system. Will she tell the House whether her party is considering reversing the changes that we are introducing today?
Cathy Jamieson
I am surprised by the Minister’s comment. I see it as my duty and responsibility as the shadow Minister to make thoughtful and probing speeches. I also said at the outset that we welcomed the opportunities that increased flexibility would bring, but people need to understand that the flipside to that freedom and choice will be risk and complexity. This is the place in which we should debate that, as we discuss the principles behind the Bill. We will also probe the matter further in Committee. The Financial Conduct Authority has observed that firms might devise
“complex, opaque and overpriced products”
that do not represent good value for customers. It is incumbent on us to understand that risk, and to ask questions about how such products would be regulated. Furthermore, the marketing of those new products might not always clearly articulate the risks involved.
Cathy Jamieson
I agree with my hon. Friend. That fiasco is a recent memory for many of us, and it is our responsibility to ensure that all the risks, as well as all the upsides, are explored.
I should like to quote the ABI, which has stated:
“Giving customers more choice is welcome but it is also imperative to recognise that good guidance and advice is vital to prevent people making decisions which could lead to retirement poverty and/or to them giving up valuable benefits.”
That is a very important point. People in the industry also recognise that we need to have some caution and ensure that we do the right thing.
That brings me neatly to the fraught issue of the guidance guarantee. The Minister talked a bit about that in responding to interventions, and although I recognise that it is not within the specific ambit of the Bill, it has a great bearing on it. That guarantee is integral to the measures in the Bill, because if the Bill is to be a success, the guidance must be fit for purpose. It is not unfair to say that the continuing concerns and confusion over the guidance guarantee do not give confidence to people who are worried about how they are going to access the guidance. It seems as though the guidance was a secondary consideration. As I have said, the pension reforms were announced without the prior consultation with the industry that we might have expected. Some of the confusion was added to when the Chancellor stated that his reforms would be accompanied by advice, given that we know that what he really meant to say, and what was promised in the Budget, was unregulated guidance.
We then had the unedifying and unhelpful intervention by the Pensions Minister, who appeared to make light of the need for guidance by saying:
“If people…get a Lamborghini, and end up on the state pension, the state is much less concerned about that, and that is their choice.”
That is not helpful at all and has not been during the process. On Second Reading of the Pension Schemes Bill, the hon. Member for Reigate (Crispin Blunt), who is in his place, asked for clarification on how the guidance guarantee would be funded. The Pensions Minister answered by saying that
“the £20 million is not an estimate of the annual recurring cost of providing guidance; it is a one-off seedcorn, getting-the-thing-going fund…if we need to set up websites, produce literature and create infrastructure, the £20 million will enable us to do so.”—[Official Report, 2 September 2014; Vol. 585, c. 198-99.]
That is a bit vague and non-specific. Less than a year from when this Bill comes into force, surely he should know exactly what the guidance will look like.
We now know that the Government propose to deliver the guidance across three platforms, only one of which will be face to-face guidance—that was what was initially promised. We also know that the Money Advice Service will not be involved in the delivery. The three agencies involved will be: the Pensions Advisory Service, which will provide over-the-phone guidance; Citizens Advice, providing face-to-face guidance; and gov.uk, to which this Minister referred. That raises the question of how the Government will ensure that guidance delivered across three different mediums will be of a consistent standard.
The crux of the matter, and what the consumer needs to understand, is: what will the guidance consist of? Will it be an interactive exchange, or will it be a list of questions that must be asked and areas that must be covered? The Financial Conduct Authority appears to think it will be the former, saying it should cover:
“the key facts and consequences of each”—
option—
including financial consequences, e.g. tax implications.”
The Pensions Minister, however, seems to think it will be the latter. He has said that there is a “world of difference” between
“a guidance conversation to get people to base camp”
and a
“sophisticated, individualised, tailored piece of…financial advice recommending products.”
The Pensions Minister has, however, been keen to assure us that the guidance is not being offered on the cheap—his preferred epithet is “budget”. The levy on the pensions industry will not be set at the level required to pay for
“full-blown, regulated, independent, tailored financial advice.”—[Official Report, 2 September 2014; Vol. 585, c. 199.]
Rather, it will be designed to generate only so much as is required to pay for what he terms the “cost-efficient” guidance version. To summarise, the guidance guarantee seems to amount to the following: it will not be regulated, personalised, or product-specific; it will be “cost efficient”, “substantially cheaper” than advice and funded by a “modest” levy on the industry—enough to get people to “base camp.”
That was what was said almost two months ago, but, sadly, judging by the evidence given to the Pension Schemes Bill Committee, things have not progressed much since. So bereft has been the Government’s approach to information gathering and analysis that we still do not know how many people are likely to take advantage of the new flexibilities. In evidence to the Work and Pensions Committee in April, the Pensions Minister was unable to give any firm indication. He said:
“I am not sure there is much point in me guessing. As I say, HMRC assumed that about 30% would take the cash...some of the annuity providers are saying it might be 70%- odd. We do not know.”
We are also reduced to guessing because, despite a freedom of information request from the shadow Pensions Minister, the Government have refused to publish any analysis they have conducted of the behavioural impact of these reforms. We do not know how many people are likely to make use of the new guidance, but a guidance pilot conducted by Legal & General found that only 2.5% of those offered guidance accepted it. The Pensions Advisory Service has estimated that take-up in the first year will be about 25%, so what happens in respect of the 75% who do not take the guidance? What backstop measures, or second line of defence, will be in place for those who do not take up the offer of guidance? In the first year at least, the answer appears that there will be none at all.
Again, the FCA has raised concerns about that, saying,
“we will have the usual supervisory work going on keeping a very close eye on products as they develop. If people choose not to take the guidance, they choose not to take the guidance.”
That means that, potentially, up to 75% of people using the flexibility in the first year will access their pensions and use the money without taking any guidance at all. I do not know whether the Minister finds that concerning, but I do, and I am not the only one. Just Retirement has described the lack of a backstop as
“a massive threat to the pensions freedom reforms.”
The need to install a second line of defence was endorsed by others within the pensions industry, including the ABI, which also expressed doubt about the rigour of the FCA’s consultation on guidance.
The ABI’s head of policy said:
“We have discussed it with our members. We are a little concerned the FCA consultation…was narrowly drawn, which is understandable because it didn’t have much time.”
Why did it not have much time? Is it because the Government are in such a terrific hurry to force these reforms through? We are being left in a situation where the first tranche of people taking advantage of these reforms could be seen to be the guinea pigs in this process, and that is not acceptable.
Let me deal with a point that my colleague raised about the Ipsos MORI research. The extent of the concern has been laid bare by that, because it found that up to 200,000 pension investors could take advantage of the new flexibility in the first year alone. It is estimated that that would generate an additional £1.6 billion of pension income for Treasury coffers, which is why I was asking the Minister what estimate he had made as to what the Treasury would receive. It might be seen as good news for the Treasury, but perhaps not as such great news for savers, because only 38% of these pension investors were able to state accurately how much tax would be deducted from a medium-sized pot and only 6% could accurately predict what rate of tax would be applied to large pension pots.
Sammy Wilson
I know that the shadow spokesperson is not as cynical as I would be about some of this, but does she accept that HMRC’s own figures indicate that over the next budget period there will be a £4 billion windfall to the Treasury as a result of these changes? Of course, in the much longer term tax revenues will fall because there will be less income from the tax on annuities.
Cathy Jamieson
I would never suggest that the hon. Gentleman is cynical. He raises an important point, which again shows why I was trying to press the Minister on some of that.
I realise that I have taken up a considerable amount of time, and I want to give opportunities for other hon. Members to speak. However, I wish to raise just one other issue as I draw to a conclusion. I have mentioned the areas of uncertainty about the guidance versus advice debate, but I ask the Minister also to comment on the announcement about the abolition of the 55% tax on pensions at death—the so-called “death tax announcement”—made at the conference recently. I think that, at the time, the Minister said that annuities would not benefit from the tax cut. But it was certainly my understanding—the Minister can correct me if I have misunderstood—that the so-called value protected annuities will certainly so benefit, and that is still on the Treasury website. I have written to the Chancellor to ask for information, but I have not yet had a response. Clearly, uncertainty remains over the added potential for tax avoidance, which has been produced by the Bill.
In order to deter avoidance, the Government have introduced money purchase annual allowance rules, which, as the Minister said, places a £10,000 limit on the annual amount that can be saved tax free through money purchase agreements. The intention is to ensure that individuals do not use the new flexibilities to avoid tax on their current earnings. However, the rules still allow for £2,500 a year of salary to be “washed” tax free through salary sacrifice arrangements. I am interested to hear what the Government have done to address that risk and what further action they plan to take to guard against the new flexibilities being used in such a way.
Mr Love
When it was suggested to the Pension Schemes Bill Committee that there would be ways in which people, especially those over the age of 55, could use the new flexibilities to avoid taxation, the Minister did not seem to be at all concerned. Is the shadow Minister concerned, and will it be an issue for the Bill?
Cathy Jamieson
Yes, the shadow Minister is concerned as, I am sure, are the Ministers on the Front Bench, who will have to say something in response as they wind up the debate this afternoon. It is a matter that we will have to explore further in the Bill.
In conclusion, we are serious about getting pension reform right. We want people to have the freedom to choose the retirement product that works for them, and we want them to have good products from which to choose. It would have been better if the Government had consulted further on the reforms and conducted a full and thorough analysis of all the tax implications before they announced the Bill. None the less, we still have the opportunity to look at the Bill in greater detail and on that basis we will not be opposing it today.
Crispin Blunt (Reigate) (Con)
I am obliged to the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) for her reference to my intervention on Second Reading of the Pensions Schemes Bill. Much of her speech was about the guidance, which is covered in that Bill. Obviously, there is a significant amount of overlap between the two pension Bills.
I represent four of the most significant players in the United Kingdom pensions market: Just Retirement, Legal & General, Partnership, and Fidelity, all of which provide a significant proportion of the jobs in my constituency. As specialist annuity providers, Partnership and Just Retirement have grown like Topsy over the past decade. They are creative and entrepreneurial companies that have found ways of providing different classes of annuitants with significantly enhanced value. The changes that the Bill introduces and that were announced in the Budget caught the whole market by surprise and have led to a particularly challenging six months for these two companies. Understandably, as more options will soon be available, there has been a significant reduction in the number of people buying annuities. Consumers and financial advisers are continuing to assess the best options for individuals as these reforms are developed.
Despite this difficult time, the very reasons that allowed those two companies to succeed so spectacularly over the past decade are the same as those that are enabling them to weather this sudden strategic change in the operating environment. The companies are well-led and fleet-footed and are now in the business of identifying new products to meet the new environment. However, they deserve certainty about the regulatory framework as soon as reasonably practicable so that they can bring new products to the market as soon as possible.
The Budget announcements made earlier this year were the culmination of a drive by both coalition partners towards greater consumer autonomy in the pensions market. For anyone who believes in freedom and responsibility, such a reform can only be right. The paternalistic status quo has long been out of step with a society that is happy with financial self-determination before retirement. Moreover, with annuity rates having dropped significantly over the past two decades, diversification, many hope, may be just what the market needs to invigorate it and produce the most innovative and well-suited options for consumers.
However, the pensions market has long been distorted by a deficit of consumer awareness. The 2012 survey of the Department for Work and Pensions, “Attitudes to Pensions”, found that 49% had no knowledge of the need to annuitise. Financial self-determination is an honourable and desirable goal, but the transition may be very bumpy if people purchasing pension products are unable to approach the open market with the requisite knowledge to plan for their retirement.
The Financial Conduct Authority, in its consultation “CP14/11: Retirement reforms and the guidance guarantee”, has identified that people who make large withdrawals from their defined contribution pension savings are at risk of not understanding the income tax implications of their decisions. Unsurprisingly, most people will be completely unaware that their tax may not be settled until a year after they have accessed their funds through a self-assessment process. There are a number of other equally important decisions that people must make, and if, through inertia or misunderstanding, they make a poor decision, it will be to their and their family’s material and financial detriment.
During the evidence presented to the Pensions Schemes Public Bill Committee last week, a number of experts called on the Financial Conduct Authority to use its existing powers to mandate those firms that hold people’s pensions savings to be required actively to engage with their customers who do not take up the Government’s guidance guarantee and to ask a small number of questions that would prompt them to consider the choices they are making. Hopefully, that will avoid the most common errors that have led to poor consumer outcomes. With current estimates of the guidance uptake veering from 4% to 92%, a range of basic security questions will be a necessity, not a luxury.
The Pensions Schemes Bill will have a major impact on the successful outcome of this legislation and vice versa. These reforms could provide an unhappy example of the costs of liberalisation if consumers are not aware of the freedoms that they now have.
Mr Love
There is a lot of debate in the Committee and on the Floor of the House today about a second line of defence. Would it not be appropriate that when an individual approaches a pension company and asks to take out either some or all of their pension pot, they are asked whether they have received the guidance guarantee? If they have not, they should be referred back to the guarantee before they take an irrevocable decision on their pension.
Crispin Blunt
The hon. Gentleman tempts me down the path of discussing what is in the Pension Schemes Bill, which, although not the subject of today’s debate, is closely linked with the Taxation of Pensions Bill. I presume by his presence that he is on the Committee, as is the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop). I sincerely hope that the Committee will carefully examine this matter. It is subject to a current consultation by the FCA, to which I have submitted my evidence. This is an immensely important issue. To make the reforms in the Bill successful, we have to make a success of the guidance. We will not get it right first time. It will have to be capable of being improved in the light of experience, so that we do not end up with a mis-selling disaster or simply consumers not being informed enough to make appropriate choices.
We are giving people freedom, and with freedom comes responsibility. Sadly, that means that some people will make poor choices. The hon. Member for Edmonton (Mr Love) has spoken about people making poor choices, or taking a holiday; at least, that was the implication behind his remarks. I think taking a holiday is probably a thoroughly good choice, but he and I may differ. His Scottish Presbyterian background may be coming into play there. I will leave that as speculation.
Ian Swales (Redcar) (LD)
The hon. Gentleman raised a point that I had not thought about, which is the tax consequences during payment. Normal annuities are paid out against a pre-determined tax code, and people have their tax deducted at source when they receive their payments. I know this from personal experience. Under the flexible rules, he suggests that the tax will be payable only at the time of self-assessment, much later. Does he believe that providers of these products should be looking at tax deductions at source?
Crispin Blunt
I would concede that this is not an area on which I feel a total authority. Hon. Members who have served on the Pension Schemes Bill Committee and made themselves authorities in this area must also take seriously the advice of experts and industry to address precisely the kind of question that my hon. Friend raises. We cannot afford to leave consumers adrift while we make the transition from a highly regulated, paternalistic and rather depressingly inefficient market to one that provides much better returns and is much more competitive, but which needs better informed consumers to drive it.
Chris Evans (Islwyn) (Lab/Co-op)
Having worked in the industry myself, I share many of the hon. Gentleman’s frustrations. Does he believe that half an hour of independent guidance is enough for people on the journey of managing a pension pot that has to last them 30 years? How does he see that relationship developing so that they make the right decisions along that 30-year journey?
Crispin Blunt
Obviously, the precise mechanism that ends up being set up by the FCA is immensely important. If it is as the hon. Gentleman characterises, and it does not lead people to come to a proper assessment of their situation, we will be left where we are now. Companies such as Partnership and Just Retirement, operating in the annuities industry, have been brilliantly successful because when people examine their situation it usually makes sense for them to move to such companies when they annuitise, rather than stay with their existing provider. The only problem is that people have been subject to consumer inertia and have not been aware that at that point they should be making the decision in the current market. The great thing about this liberalising reform, and the anxiety shared across the House to make sure that the guidance works, is that we will now be waking people up to the opportunities presented to them. If we have many tens of thousands of pounds in our retirement fund, a half-hour chat is probably insufficient. Many people will have hundreds of thousands of pounds available to them after a lifetime of saving into a pension fund, and it will pay them to take serious, proper, independent advice. They will need to pay for that, but it will represent serious value for money if they get proper advice. If the guidance can push people in that direction, to properly regulated and properly informed independent financial advisers, we will have properly informed consumers making proper choices.
The Financial Secretary and the Treasury will need to assure themselves that the FCA is alert to the needs of all consumers with direct-contribution pension benefits ahead of April 2015, and ensure that their delivery is closely monitored as these important reforms are made. As I said, we will not get this right first time, and whatever system is set up will need the capacity to improve as we learn how to improve the capacity of consumers to take informed decisions.
Additionally, the companies in my constituency continue to be concerned that the regulatory rules affecting a number of key changes in the Bill are still not clear. The Association of British Insurers is discussing these points with the Government and the FCA, but without clarity soon there is a risk of some customers not being able to access flexibility and there could be an uncertain environment and an uneven playing field between different types of product and providers. This is not solely the role of the FCA. It requires coherent and achievable measures from the Treasury, Her Majesty’s Revenue and Customs, the Department for Work and Pensions, the FCA and the Pensions Regulator.
For instance, the regulatory position on accessing a pension pot in one lump sum, whether through flexi-access drawdown, or an uncrystallised funds pension lump sum—I am grateful to the Financial Secretary for UFPLS. I had a go at “golden annuity uncrystallised kapital enhancement” fund, a GAUKE, which would rely on “capital” being spelled as in “Das Kapital”, which may mean it loses some of its attraction, but I guess we will have to settle for UFPLS. I am sorry that the imagination of Her Majesty’s Treasury officials was not able to produce a real GAUKE for him, to leave his impact on these highly important, liberalising measures for all time.
To return to the substantive point, the regulatory position around those two funds remains unclear, making it very difficult for providers to plan and develop requisite systems. This is despite taking a pension pot in this way being a key expectation raised as a result of the Budget reforms. Indeed, the whole regulatory regime around the uncrystallised funds pension lump sum route, which forms the basis of the Government’s pension bank account analogy, has yet to be resolved. In addition, there could be gaps in regulation between contract-based and trust-based schemes in two areas: how drawdown in trust-based schemes will be regulated, as well as protection for customers and expectations of providers if a customer wants to transfer out of a defined-benefit scheme after receiving advice not to do so.
My constituents welcomed the sensible reduction of the 55% tax charge on death, which the ABI had previously asked the Government to consider, which overtly conflicted with the wider Government policy of making pension saving more popular by giving people more options on how to use their retirement savings. However, without further clarification it creates an advantage for drawdown customers over annuity customers, which will change behaviour. To ensure that the policy is not skewed against income, tax on pension payments to a beneficiary after the customer’s death must be treated equally, whether paid through an annuity or drawdown, as income or as a lump sum.
I want to use the occasion of the Second Reading of this rather technical Bill, which in concert with the Pension Schemes Bill is a profoundly liberalising measure, to draw attention to other associated reforms that are interdependent. Our country has an obsession with investing in property, and there are vast reserves of wealth tied up in household equity. We face a growing crisis in our ability to provide decently for a rapidly growing older population. Failure to enable the equity release industry to grow in a competitive way to produce value-for-money products that look after the interests of the elderly and their families, rather than those of the estate agency industry, when we force people to realise their assets by expensively selling their homes when they do not need to do so and when they deserve stability in their lives with regard to their homes, will be critical to the well-being of every family in this country.
Last year, I led a delegation from the European equity release industry to lobby the European Parliament, the European Commission and the Council of Ministers, to seek changes in the trialogue stage of Solvency II to protect this industry. Under the leadership of my right hon. Friend the Member for Tunbridge Wells (Greg Clark), then the Paymaster General, the British team in Brussels helped to secure some useful space in the interpreting recitals to Solvency II that would help to ensure that the capitalisation demands placed on the equity release industry are significantly in the hands of national regulators. That is immensely important to this Bill, because the successful advance of the equity release industry and the successful development of freedom around pension provision go hand in hand. That relies on a sensible interpretation of the European Union’s Solvency II regime.
I am profoundly concerned that the hard-won space to enable the British equity release industry to advance, achieved by Ministers and their officials, alongside work done by the Equity Release Council, under the chairmanship of our former colleague Nigel Waterson, will, in the classic tradition of British gold-plating of European regulations and directives, be entirely undone by the implementation and regulation imposed by the FCA.
The Economic Secretary has assured me that the FCA is under thoroughly sensible and business-like leadership, and I believe that is the case, not least because last night I met the splendid Robert Taylor, who earlier this year became an excellent addition to the FCA’s senior leadership team. However, I have to say to the Financial Secretary that there are regrettable early signs, as the policy is being developed, that the overriding need to advance the equity release industry to support the reforms being implemented in the Bill, and unrealistic proposals around the matching adjustment that would apply to property as an asset, could seriously hamper the necessary growth of that industry.
If the FCA persists in its unnecessary programme of gold-plating, it will be all of us who have to pick up the bill, and it will be a profound missed opportunity for the United Kingdom, and not only for our citizens; it will be a missed opportunity for the industry to advance around the world, as many of our financial services industries have done, to the immense benefit of the people of the United Kingdom.
I joined the overwhelming tide of opinion that identified that measure as one of the most profound and welcome changes being made by this Administration. The Chancellor of the Exchequer is rightly winning the admiration of his fellow Finance Ministers for the remarkable transformation of the British economy under his leadership. That measure will be a profound part of his and his Treasury colleagues’ legacy. It remains up to them to ensure that it is delivered effectively in detail so that it can be an unalloyed adornment to their golden record.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
As has been mentioned, I am a member of the Pension Schemes Bill Committee, as are a number of colleagues who are present today. We are here to find out about the technical elements that will affect that Bill, because some taxation issues have been brought to our attention during the Committee’s evidence sessions. I want to refer to the evidence given by Mr John Greenwood, who is editor of Corporate Adviser magazine—it is given out to pension professionals—author of the “Financial Times Guide to Pensions and Wealth in Retirement” and a freelance journalist for national newspapers.
The issue emerged between May and July this year and concerns how individuals can avoid national insurance contributions by using the Government’s newly announced scheme to divert their income through a pension fund, rather than receiving it in a traditional salary. I will dip in and out of the evidence Mr Greenwood gave during the Committee’s fourth sitting, on Thursday 23 October, because I think that it is pertinent to the Pension Schemes Bill Committee’s considerations and to the debate on the Taxation of Pensions Bill, both here and in Committee. Mr Greenwood, elaborating on his concerns, told the Pension Schemes Bill Committee:
“The new easy access rules create a huge risk of widespread tax avoidance. If everyone over 55 takes full advantage of them, the Treasury could lose £20 billion in 2015-16—obviously, that is a massive number. That will not happen, but if even a tenth of people do, that is still a £2 billion loss. That seems to make quite a hole in the Treasury’s optimistic projection of making £3 billion of profit out of the policy over the five years of the next Parliament.”––[Official Report, Pension Schemes Public Bill Committee, 23 October 2014; c. 117, Q249.]
The Financial Secretary said earlier that the Treasury had not yet given a forecast of how much it expects to make or lose on this policy, but we already know from Mr Greenwood’s inquiries that the Treasury had initially estimated a £3 billion profit. I think that is pertinent to today’s debate, because it is about the tax implications of the legislation and how they will affect the autumn statement, the Budget and what a future Government will be able to plan for with regard to incomings and outgoings.
Mr Greenwood went on to say:
“In layman’s terms, the Government’s position is that you can take your money as cash from 55. If you are an employee, you have two options. You could be paid into your current account through salary, which is taxed at 13.8% employer national insurance on everything over about £8,000 and the employee pays national insurance of 12% on everything above that figure, and then everything is taxed above the nil rate band. Obviously, you have to be paid the minimum wage of £11,500-ish, but above that, why would you be paid through your salary when you can pay into a pension and take it all out the next day? For payments into a pension, there is no employer or employee NI at all, and only three quarters of it is subject to income tax. The Bill effectively gives everyone over 55 a £10,000 NI-free allowance—four times that in the first year, if they draw their money early.
When the penny drops, people will suddenly realise how much loss there is there. If you are on £40,000 and you maximise this—there are currently no rules to say you cannot do this—the loss to the Treasury is 62% of the revenue they would have got from that person’s employment. That is quite a chunky amount. It is clear from the Budget documents that the Treasury had not spotted this, because if you look at the documents published alongside, and the risk assessment, there was no mention of national insurance at all. They have moved with a reduced annual allowance of £10,000 for those who take benefits early, which reduces it but does not stop it altogether.”––[Official Report, Pension Schemes Public Bill Committee, 23 October 2014; c. 117, Q250.]
I raised that point earlier with the Financial Secretary and asked whether he could tell me what percentage of people the £10,000 threshold would affect. He did not give me a response, so I told him that Mr Greenwood valued it at about 2% of the population, so 98% of the population would be exempted. The Financial Secretary responded that that was Mr Greenwood’s suggestion, but Mr Greenwood was actually referring to a response from the Treasury. That is deeply worrying, because we do not know the implications of the policy.
What we do know is that the Treasury’s policy at the moment is not to respond to Mr Greenwood, because he has written to the Treasury six or seven times without receiving a response. I understand that he has written to the Office for Budget Responsibility once to request a forecast but, as of last Thursday, has not yet received a reply—he might have had a phone call by now. I do not know about other colleagues in the Chamber, but I find that profoundly worrying, if we are potentially losing a considerable amount of money from the Treasury’s coffers—potentially £2 billion to £3 billion, if it is just 10%.
Mr Love
The most deeply worrying thing about the evidence presented to the Committee was the attitude of the Pensions Minister, who did not seem to think that there was a problem. Will my hon. Friend confirm that he spoke lightly about the potential consequences of this loophole?
Tom Blenkinsop
I thank my hon. Friend, who, as a fellow member of the Committee, attended those evidence sessions. The Pensions Minister confirmed that people can already use this tax scheme—there is no legislation to stop them doing so. The only difference is that the industry is gearing up for next April, and getting the HR processes in place, so that it can give people advice all at once, rather than employer by employer. Mr Greenwood said that he has talked with several people in the industry and that one company had already talked with 192 employers that are looking at that.
The ability to avoid NI in that way already exists, and the Government have a threshold of only £10,000 and nothing planned until after July as a response. That gives them a big headache, because the Prime Minister’s £7 billion tax give-away has been blown out of the water due to borrowing fears. Now another £2 billion or £3 billion is missing. That is £10 billion. The Government like to call the Opposition the debt party, but in fact it is they who have doubled the national debt. Now they will considerably increase borrowing because of the very fact that their own figures are out by a minimum of £10 billion.
Nigel Mills (Amber Valley) (Con)
I speak as a member of the Pension Schemes Bill Committee; for me, this has been a week of complicated pension rules.
I welcome the freedoms that the Taxation of Pensions Bill provides. We want people to save for pensions to provide for their own retirements; it has to be right to give them the freedom to use the money they have saved as they want to, without there being penal tax charges that might force their behaviour into certain directions. It is absolutely right for these choices to be added to the whole landscape.
We should bear the context of the current situation in mind. Basically, we force people with relatively small and medium-sized pension pots to take an annuity. The tragic thing is that in many cases those annuities are not suitable—people are mis-sold them, do not understand them and do not shop around or get the best deal for themselves. People cost themselves large amounts of their retirement money because the market simply does not work in a fair manner.
The Work and Pensions Committee and others have been trying to find various ways in which to reform the annuity market, to make it fairer and make it work better for people—to encourage shopping around, to stop mis-selling and to get people to think about whether their life expectancy might be shorter than the average. We need people to think about what will happen if they predecease their spouse. Will the product that they are buying provide for that person?
Of all the solutions brought forward, the Government’s is by far the most radical. It effectively says, “You don’t need to buy an annuity any more if that is not right for you. You can draw down in a much simpler, cheaper way and try to live off and control the savings that you have produced for yourself.” That sounds a fairer approach. If people have chosen to save money for their retirement, they can now choose how and when they spend that, in a flexible way. We should all want that to be available. That is not to say that that would be right for everyone; it might be entirely wrong for many people. There is absolutely no reason why we should take products away, but we need people to make informed choices about what they want in their retirement—how much income they want, how they want to spend it and over how many years. In that way, they will not be locked into a totally unsuitable situation.
There are various nightmare scenarios. One is when someone has run out of money—they have drawn down and spent too much. They never thought they would live past 75, but live until they are 93. They run out of money in their later years and do not have the standard of living that they wanted. We absolutely do not want that to happen. The flip side, of course, is that if someone buys an annuity at 66 and dies at 67 and has no protection, they have burned their whole pension pot for them and their family.
We need to find a way of taking those two extremes out of the situation. We want new products to smooth the situation out. People should be able to say that they want a product that not only guarantees a certain income for life—so they know they can pay the heating and food bills, have the annual holiday and treat the grandchildren—but allows the flexibility to spend money on a cruise or an active lifestyle when they first retire. They might want funding for care costs in their very late life; during the previous years, their income could dip a bit as they would not be so active or have such big bills. How do we get people to understand that they can make those choices? How do we get the products that fit those choices? Those questions are key.
I entirely agree with the comments made so far: getting people to understand the choices—what they need, want to do and can do—at the point of retirement is the secret, but also probably the hardest bit. That is why we need to get the guidance guarantee to work. I have tabled amendments to the Pension Schemes Bill to try to strengthen how that guidance will work. But we need to be careful: it is not when someone is 65 and a half and about to retire at 66 that they need to understand what is going on. Under the rules as they are today, that might be fine—the person saves into a pension scheme, which will assume that funds will move into an annuity when retirement age comes so plans can be made on the basis that the person will need their pot at 66. Funds can start to de-risk when the person gets to 56 on the central assumption that they will want a safe pot when they retire.
Once the changes come in, however, people might not want to do anything with their pots at age 66; they might stay in work until they are 70. They may want to use other savings or defer their pensions for a while. Do they want their pension scheme by default to start de-risking and reducing investment return 15 years before they want to retire? That would be disastrous for the pension pot.
Choices will have to be made about which pension scheme to join, about risk profile and about when de-risking should start. People will have to understand that when they are 40 or perhaps 35, not 65 and a half. There needs to be clear guidance to which people can be signposted. Pension funds need to say to people, “You have important choices to make all the way along the process. Here is what you need to know, here is how you can find it and here is what you should be doing.” If people do not get the message earlier, the guidance for those aged 65 and a half might well be, “Here is what you could have won, but sadly you have not won it because you did not do the right things earlier on.” When the guidance providers come in, they need to provide clear, web-based guidance that people can access at any age, rather than being locked out until they are 65 and a half.
We also need the regulator to think carefully about what pension schemes will do with people who just do not engage. Some people will be enrolled automatically; they do not really understand the system but they do not opt out. They are saving money and get to 55. They are asked whether they want to de-risk, but there is no reply. They get to 65 and are told that they can draw their pensions, but there is still no reply. What should be done with the pension pot in that situation? An annuity will not be bought, so what should the default be? Should there be some kind of drawdown so that the money is left sitting somewhere for a while under some strange investment profile?
In this landscape, we need to think about a lot of things on behalf of those who have choices to make and a pension pot about which it is worth making choices. I suspect that a sizeable number of people will have relatively small pension pots and that taking the cash, tax-free, will remain their best option. Those who have the pension choices but are not so well off that they can afford expensive advice are the ones who will need to understand the options and try to pick the right ones.
I am left thinking that guidance is the right answer and advice is the wrong one. The risk with advice is that it is incredibly expensive; it would cost several hundred pounds at best to give people advice. The last thing we want someone who has been auto-enrolled into a pension pot to do is spend a large percentage of their pension on advice that they really do not need, because they do not have enough money to take advice on. We have to try to keep the cost of the guidance scheme low and make it a way of getting people to their first understanding and thought process about what they could do, rather than trying to put in place a gold-plated system that everyone has to pay for, even though most people would not be taken that far forward. We have the right idea, although we probably have a long journey before people have anywhere near the knowledge and understanding that they need, and that we need them to have.
Mr Love
We have to keep guaranteed guidance at a reasonable cost, but for that guidance to be effective there has to be personalisation to the individual circumstances of the person involved. All the evidence suggests that. The one balances against the other. The challenge is to find a way to make the guidance both cheap and effective.
Nigel Mills
The hon. Gentleman has to be right. The issue was raised in the Pension Schemes Bill Committee evidence sessions last week, and we will get to it again when we discuss the provisions on guidance. It is hard to work out the line between advice, which might say, “The best thing for you is to do x,” and guidance, which just says, “Here are the options and the various things to think about. Make sure you shop around. Thanks for calling.” Guidance such as that will not help people, who will forget it by the time they put the phone down or walk out of the meeting room.
We need the people getting the guidance to have worked out their financial situation—their pension pots, their debts, their other income, their state pensions and other employer provisions—so that when they go to get their guidance, they can set out their circumstances to the person guiding them, and that guidance can be focused on the sorts of choices they could reasonably make. That is probably about as far as we could get, because once someone says, “You should pay off your debts first”, they are getting into giving advice, and that may not always be right; it risks creating liabilities and people being mis-sold things. This will be an extremely hard balance to strike.
Lady Hermon
I apologise for having to leave the Chamber briefly to go to the Select Committee on Northern Ireland Affairs; duty called. I entirely agree that this is a radical and fundamental change to pensions entitlement, as regards when people can benefit from and draw down their pensions. Given that it is such a radical and fundamental change, does the hon. Gentleman share my disappointment that the Bill, which runs to 54 pages, I think, and has three clauses and a schedule, is so highly technical that no ordinary person in the street could possibly understand their pension entitlement?
Nigel Mills
It is certainly interesting that the Bill is 57 pages long and has only three clauses, with the rest dropped into a schedule at the back. However, complicated rules are being changed, to take away some penal tax charges, among other things, and I guess it does not matter how the provisions are drafted; whether they are in a schedule or a clause, we get to the same position in the end. One of the problems with pensions is that everything is so fiendishly complicated that almost nobody can understand what all the rules are.
I am concerned about the provision in which the Government seem to be repealing the requirement that people must, before buying an annuity, have had a chance to check the open market situation. Clearly, we are not taking away the chance for people to compare annuity rates, because we are not compelling them to buy an annuity, so that option will still be there. A fall-back is written into the rules that says that before somebody defaults into buying an annuity from their pension provider, they must, under regulations, have had the chance to shop around and to be given advice. That looks like a sensible provision that should perhaps be kept. Repealing it strikes me as being a little too optimistic about how well this market might work in the early years.
Moving on to the general principle of the Bill, these changes reopen the debate about how we use the tax system to encourage pensions. There is a huge annual bill for allowing people to put untaxed income into their pension scheme. According to the latest figure I have seen, the net cost is about £22.8 billion in income tax, plus £15 billion in national insurance, so we are talking about £38 billion of taxpayers’ money being used to incentivise pensions saving each year. Okay, some of that money comes back when pensions start to be drawn, but it is still a large amount. The more flexible we make savings arrangements, so that people can choose when they draw down their pension and can do so 10 years before they retire, the weaker we make the justification for saying, “We should do this pre-tax”, because we are distorting the savings market.
I suspect that the only reason most people would choose to save into a defined contribution pension, locking their money away at the whim of some unscrupulous pension provider who charges them for things they do not understand and finally getting their money back 30 years later, is that they get this huge tax advantage. If we are going to start enabling people to have large amounts of that money, tax-free, a long time before they retire, does that change the equation? Perhaps we should be thinking about these things. Is this the right way to distort the pensions market? Should we not equally incentivise people to put money into an individual savings account every year and have a bit more control over it and a bit more visibility? Is that better protection for them?
We desperately want people to save money for their retirement, and we want it locked away so that they cannot spend it each year, and I suspect that using the tax system to achieve that is still very much the right answer. However, we probably need to think again about how much we are spending on higher-rate tax relief on pension contributions in order to make the system more flexible.
Mike Freer (Finchley and Golders Green) (Con)
I am blessed with articulate constituents who understand pensions issues. One of the issues raised with me is that we are allowing people to take out the tax benefit that they have been given for free by the Government. Does my hon. Friend think it is worth looking at putting the tax relief into something like the protected rights pot that used to, or still may, be in place for personal pensions, so that the tax relief element could not be withdrawn, and only the contributions could be withdrawn?
Nigel Mills
That is an interesting idea. I am not sure how we would hypothecate part of a pension pot, and do I really care whether the 25% I am taking out is the tax bit, the bit I paid in, or the bit my employer paid in? If my hon. Friend means that I could not take out the 25% of tax benefits—I could take out only 18% of the pension pot, rather than 25% tax-free in a lump sum—I can see a certain logic to that. In effect, it would just reduce the tax-free lump sum that people can have.
The flipside of rethinking how much tax relief we allow for pension contributions is that it is probably unfair not to give people full tax relief on the way in and then still subject them to higher-rate or top-rate tax when they start drawing their pension. That is an interesting double charge for the Chancellor. If people do not get relief on the higher rate, should they have to pay tax at a higher rate when they draw the pension contribution back out? Frankly, why would somebody who was in that situation pay that amount each year? They would be far better off using the cash—probably to drive up property prices.
At some point after these changes, there will need to be a debate about how we are using the tax system to incentivise pensions. Is that still the right thing to do? Is it worth the cost incurred? Is it encouraging the right behaviours? Is the tax relief really getting more people to save for pensions? Is there evidence of that, and should we continue with it? I suspect that the answer will clearly be yes—we should. However, we are making such radical changes to the pensions landscape that once we have got through this flurry of activity it is worth taking a step back to look at the situation and ask whether we are really in the right place, in terms of how we encourage people to save for their retirement. Are pensions uniquely the best thing for everybody, or could people take up other options that might encourage them to save even more, because they had more control over their funds during their lifetime?
This Bill is absolutely the right thing to do. There are clearly issues to do with making the system work and ensuring that people who need to make choices are not disadvantaged by making the wrong ones. We are moving from a situation where people have, in effect, been forced by the law into choosing something that, sadly, was often wrong for them, towards a situation in which they can choose what they think is right for them. We need them to do that on an informed and fair basis; they must not be ripped off by the next round of mis-selling. I fear that somewhere in these freedoms there is the possibility that that will happen in the next decade, but there are things we can do to try to mitigate that.
Ian Swales (Redcar) (LD)
I should start by declaring an interest: I am well over 55 and have a pension pot that is subject to these provisions. I very much welcome the Bill because its measures are undoubtedly needed. I praise my right hon. Friend the Member for Thornbury and Yate (Steve Webb), who has been campaigning on these issues since 1999 and has done a terrific job in reforming pensions in his years as Pensions Minister.
The Bill is a revolution in terms of freedom. I am glad that defined-benefit schemes are excluded, because they were the source of much of the mis-selling that took place during the scandals that occurred, with people who had very secure local authority or teachers’ pensions, for example, being encouraged by unscrupulous advisers to cash them in and take out risky products. We have to try to avoid that.
People arrive at the time when they want to take their pension in many different circumstances. They may want to spend their money at different rates depending on their view of how they want to spend their retirement. They may have health issues that determine how they spend their money. They may make various different choices. Even though I was brought up as a Presbyterian by my Scottish parents, I have nothing against holidays, which are a perfectly good choice when one initially retires.
I know from talking to constituents that one of the main things people do these days is make a capital transfer to their children, particularly to buy a property. I can well understand why people whose income is okay might want to do so, and given that the new rules on inheritance are much less penal in cases of early death, funds that they have saved up will still be available to their family.
However—there are quite a few howevers about this Bill—annuities have a deservedly bad name in terms of value, mainly because low gilt rates mean that annuity providers can only offer low rates. Annuities do have a purpose. They are a pool, which is one of the things that I find constituents have difficulty in understanding. Perhaps even the hon. Member for Amber Valley (Nigel Mills) has difficulty in understanding that, given what he said; I know he does not, because he is an expert in this area. When people die soon after taking out an annuity, the insurance company does not get the money; the person who gets the money is someone who is lucky enough to live to be 100. That is what pooled annuities are all about.
By demonising annuities, we have caused people to forget that they do not know how long they are going to live. On average these days, somebody aged 65 will live until they are 83, but a lot live longer and quite a lot live less than that. The whole point about annuities is that they are a pool, and people bet against how long they are going to live. I think that the industry will come up with annuity-type products to meet the desire of many people for a secure income for as long as they live.
In financial services, it is always worth asking what is the worst that could happen, because it usually does happen. That is why we need to think about some of the unintended consequences, difficulties or gaps. Several speakers have mentioned the world of guidance. I was disturbed to hear the hon. Member for Reigate (Crispin Blunt), who is not in his place, say:
“We will not get it right first time.”
Let us remember that guidance in this area will be given only once for each individual. They cannot keep going back for more guidance: it happens once. If we do not get it right first time and the cohort of people in the first year do not get good advice, they will suffer for the rest of their lives. From our point of view, it might take a while to get the guidance right, but for the people getting the advice it must be right when they get it. The whole area of standards and regulation in relation to the Bill would bear more examination.
Advice needs to be impartial and transparent, and it should be based on straightforward products, but I worry about the level of knowledge of the people receiving advice. A few weeks ago, a constituent came to see me who had taken out a finance deal for some solar panels. It turned out that the combination of the savings on the solar panels and the finance deal meant that she had an overall penalty in her budget. The savings on the panels in no way paid for the cost of the finance, although she had been told that it would.
Barbara Keeley
The hon. Member for Amber Valley (Nigel Mills) spoke about someone who left work and needed their care costs to be covered at a certain point. In my view, that is another thing for which constituents do not plan. I have lost count of the number of my constituents who did not even know that they had to pay for social care and did not understand the thresholds. I am concerned that a lot of people will be tripped up if they draw down money and increase their savings, because they will suddenly find that they fall within the threshold at which they have to pay for social care. People commonly do not understand that, and it will not be covered by the guidance.
Ian Swales
That is a very good point. The guidance needs to be much more in the round on what may happen to people after retirement, but I suspect that that will not be mentioned in the guidance unless we can do something about it.
To go back to my example about the lady with the solar panels, I went through the documents with her, and they very clearly showed the numbers. There was no doubt: she had not been scammed. What she had signed up to was absolutely clear, and her signature was on all the documents. She said, “Oh, I just didn’t realise. I’ve an A-level in maths, so I should have realised.” What worries me is that we do not have to speak to many constituents before we realise that levels of knowledge about pensions are extremely low. As the hon. Member for Worsley and Eccles South (Barbara Keeley) has said, other consequential issues of getting older are sometimes even less clearly understood.
I am worried about the guidance, and I think that there will be concerns about whether it is appropriate and whether people have the financial awareness necessary to understand it. That goes back to the need to make people more financially literate from school onwards, but we will not solve that problem overnight. The industry is talking about having a second line of defence, and it needs to be listened to. It is a clear case of “They would say that, wouldn’t they?”—it is designed to get people to move towards the type of products that the industry is offering—but such a second line of defence might serve to protect people from themselves, as it were.
We need to watch out for scams. I listened carefully when the hon. Member for North Down (Lady Hermon) mentioned criminality in relation to people losing their pension savings. Pension release companies already impose extremely high charges for unlocking pension schemes and doing very little work. I am prepared to take an intervention from her if she so wishes, but I am a bit concerned about how to define criminality. People may make a bad decision, but that is not necessarily criminal. I agree with her, but I wonder what kind of products or service she means when she talks about criminalising those who end up losing their pension pots.
Lady Hermon
It is awfully nice of the hon. Gentleman and so kind of him to invite me to intervene. I absolutely do not want to criminalise people who draw down their pension. I am a huge fan of Radio 4, and I listen very carefully to its finance programmes. As has already been mentioned, we and many people—certainly constituents in my patch—are worried about unscrupulous so-called pension advisers who set themselves up so that people can go on to the internet, press a button and commit their life savings to them. I do not want to criminalise the person involved; I want to put into the Bill a deterrent against unscrupulous tax or pension advisers.
Ian Swales
I thank the hon. Lady for her clarification. I am sure that the Exchequer Secretary would be interested to hear more about how she defines “unscrupulous”. I agree with her, but there is more to do to be clear what that means or about conduct that the Financial Conduct Authority would regard as unscrupulous.
All this liberalisation of pensions, as the hon. Member for Amber Valley mentioned, makes pension savings more like other kinds of savings. We are also providing a big tax advantage. Removing restrictions on when pensions are taken and removing some of the tax charges and restrictions on death means that we are moving closer and closer to a simple tax-free savings market. Such a market is especially attractive for people who are very close to retirement. I have done some sums, and if one is about to take one’s pension pot, there is quite an incentive—because of the tax-free 25%—to throw in the maximum possible amount of money in the months before retirement. Somebody paying tax at the basic rate who puts a lot into their pension pot in March and starts their pension in April or May would make a 6% return on their money simply by putting it in and taking it back out again. A higher rate taxpayer would make a 16% return on their money simply by putting a lump sum into their pension pot immediately before they retire and then drawing it out again. There will therefore be clear consequences of the flexibility that we are creating. People will be more inclined to put their money in if they know that they will be able to get it out quickly. There are clear benefits to getting the tax-free amount very quickly.
We have heard about the possible later costs to the state in respect of care and so on. By definition, if people take more out of their pension pots earlier, more people will need state assistance later in life with health or care costs. I know that the Minister is aware of that issue, but I do not know whether the possible costs have been calculated or estimated.
I am more confident than most that the responsible part of the industry will come up with new products and innovations. As I said to somebody from Just Retirement last week, what people need is plain language. Even the word “annuity” is not plain language. People want a secure income in retirement. The vast majority of people who retire do not want to buy a sports car, but to have a certain income throughout their retirement. The more the industry wraps things up in mumbo-jumbo that people do not understand, the more suspicious people are of its motivations.
We are already seeing warning signs. For example, Fidelity is saying, “All this flexibility means complexity, which means higher costs, because we are not set up to run bank accounts.” I am concerned that the industry will see the changes as a new way to levy high charges. It will say that the very flexibility that the Government want to see is expensive to provide. I hope that we see the right level of competition in the market and that people come in who do not levy those high charges.
We have seen a huge fall in the number of annuities that have been taken out recently. Just Retirement has seen a 50% fall in demand for annuities. I suspect that that is partly due to uncertainty. People want to be clear what the new rules are before making a decision. Demand may pick up again, particularly if there are new products. However, there is no doubt that fewer people will take out annuity-type products.
Cathy Jamieson
I am listening carefully to what the hon. Gentleman is saying. Does he agree that there are concerns for people who have relatively small pots, because companies might feel that it is not in their financial interest to offer them products? How can we ensure that there is equality?
Ian Swales
The shadow Minister makes a good point. If we create a spectrum of products that is genuinely complex, the charges might be inappropriate even for those with medium-sized pots because of the flexibility that is offered. We need to hear more from the industry about that.
Finally, on timing, I know from personal experience that when the date that one has defined as a potential pension date is approaching, the industry offers what it calls warm-up packages. I have had my first warm-up package for next year. The industry is not waiting until April next year. It has to get on with this right now. If there is any uncertainty in the minds of Ministers, they had better get moving pretty quickly, because the industry has to get all its systems, documentation, regulations and new products in place so that it can offer them to the cohort that is approaching retirement in just a few months’ time—from April onwards. The ABI is already concerned that it is getting towards the eleventh hour, when clarity on all this will be needed.
Despite all the reservations that I have expressed, I very much support the Bill and commend it to the House. I am sure that when it emerges in its finished form, it will be an excellent piece of work.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
It is a pleasure to close this debate for the Opposition.
There have been only a few Back-Bench speeches, but they have all been insightful and valuable. The hon. Member for Reigate (Crispin Blunt) was spot on when he spoke about a deficit of consumer awareness and said that the FCA will have to be alert to the needs of all consumers across the spectrum.
My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) sits on the Pension Schemes Public Bill Committee. He spoke at length about the evidence that was given by Mr Greenwood. I am not on that Committee, but I found the points he made about that evidence telling and concerning. I hope that the Exchequer Secretary will respond to those issues.
In particular, my hon. Friend highlighted the potential opportunities for tax avoidance. I am sure that Members across the House will want to interrogate the measures in this Bill and the Pension Schemes Bill in detail to ensure that revenues to the Exchequer are protected. I hope that the Exchequer Secretary will say more about the Government’s view of the number of employers—my hon. Friend gave the figure of 192 from the evidence that was given to the Pension Schemes Public Bill Committee—who are looking at mechanisms to exploit the changes to the pension taxation rules as a ruse to reduce employer’s national insurance contributions.
The hon. Member for Amber Valley (Nigel Mills) was right to say that we want to avoid the two extremes that he highlighted. He was also right to speak about the importance of getting the guidance to work properly. He raised an important point in asking what will be the default setting for people who have been auto-enrolled and have a pot of money, but who simply do not engage with the process. It is important to get into the nitty-gritty of what will happen in practice in such scenarios. Again, I hope that the Exchequer Secretary will respond to those issues.
The hon. Member for Redcar (Ian Swales) was right to begin his speech by reminding us of previous scandals and the lengths to which unscrupulous individuals have gone, and he concentrated our minds on ensuring that such issues do not arise again. He was right to say that we must get the guidance right first time because it only happens once for each person. That should concentrate the minds of all Members on ensuring that we get the guidance absolutely right.
The shadow Financial Secretary, my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), made it clear that we support the principle of increased flexibility for people in retirement and the reform of the pensions market so that people get a better deal. We are therefore not against the principle that people should be allowed to exercise choice. However, this is a big Bill that contains big changes that will affect tens of thousands of people, if not more, immediately. Just this week, research published by Ipsos MORI suggested that 200,000 people may choose to take their entire pension in one go next April, creating a potential tax windfall for the Treasury of £1.6 billion.
It is fair to say that some issues that are debated in this place appear to be removed from the outside world. This is not one of those occasions, as the figures show. We therefore have a bigger immediate responsibility on this occasion to get the Bill absolutely right. Although I reiterate our support for increased flexibility, I do so with a word of caution, because that flexibility will be exercised by people who have a deeply variable understanding of the marketplace in which they are operating.
The Ipsos MORI poll also showed that only a third of those planning to take out their pension pot were aware of the tax that they would pay should they take out their entire sum in one go. The 2012 Department for Work and Pensions attitude to pensions survey noted that half the respondents had no prior knowledge of annuities before being asked the questions in the survey. The Financial Services Consumer Panel also published a report, in December 2013, which said that the
“market does not work well for the majority of consumers.”
One of its key findings was that consumers were poorly placed to drive effective competition among providers and distributers of annuities. It said:
“There are many barriers inhibiting consumers’ full engagement when they decide to annuitise: low financial capability; fear of product complexity and of making an irreversible, high-cost mistake; general distrust of professional advisers, and inability to find appropriate advice at acceptable cost.”
The Bill will operate in that context, not in some fantasy world in which the majority of the electorate has an in-depth understanding of the pension marketplace. That is not to say that a greater understanding cannot be fostered, because, as we know, the same DWP survey shows an increase in the awareness of annuities between 2012 and the previous survey in 2009. However, in some cases we start from a very low base.
We also have a social responsibility to get this right. This policy needs to be fair. Successive Governments have invested in pension relief to support people in retirement. As the Government have said, it is an annual investment of £22.8 billion, and it is important that we ensure that the taxpayer gets good value for money for that. It is money that belongs to all taxpayers, even those for whom a private pension or a workplace pension are out of reach. We must ensure that the relief given generates the consequences intended, the main one of which is income in retirement, not income for other things.
Ian Swales
The shadow Minister raises a good point about the relief, but pensions are taxable when they are paid out, so it is important not to suggest that £22.8 billion is the net cost of the pension system. The money may be taxed at a different rate, but it will be taxed when it comes out.
Shabana Mahmood
I was simply making the point that the reliefs are there for a reason and we have to ensure that they work for the benefit of all taxpayers, but the hon. Gentleman is right.
There is also the hard-nosed political test of making sure it is not the Government who are picking up the pieces if this all goes wrong. I reiterate our support for increased flexibility, but we have to acknowledge that this particular system has built-in risks. Under the new arrangements, a pension pot of £100,000 could be used to secure an annuity of about £6,500 that, added to the state pension, would yield the recipient a little over the UK’s national pension income, according to HMRC’s 2013 figures. Of course, it could be drawn out in one lump sum to buy the proverbial Lamborghini—it would probably have to be a second-hand one because they cost closer to £250,000 than £100,000. But what would happen then? If the recipient in question has not made the necessary contributions to receive the single-tier pension, when it comes in, will their pension be topped up to the accepted minimum level? That is not yet clear. This potentially leaves us in a dubious ethical position as well as a financially precarious one.
Our responsibilities to get this right are clear. It will affect many people, and we have both a social and financial responsibility to make sure that the changes work properly. Given that those changes are so significant, I would have expected extensive consultation by the Government before the announcements were made, but unfortunately that was not the case. As my hon. Friend the Member for Kilmarnock and Loudoun said, despite beginning well, with work on the single-tier pension and auto-enrolment—policies based on evidence, consultation and consensus, which built on the work of the previous Government—these reforms have been rushed and somewhat erratic. The Government did not consult before making the announcements, either with consumers or with the industry. Nor have the Government allowed sufficient time for the changes to be executed.
Despite the enormity of the change and the change of emphasis from the importance of accumulation to the ease of access, we are left in a situation in which outside experts are lamenting the lack of time to get this right. Regarding the need for proper guidance for consumers, the ABI’s director general said:
“The guidance guarantee is a crucial part of the Government’s pension reform, and the industry fully supports the Government’s intention to provide free, impartial guidance to savers on their options as from next April. But time is not on our side. No one should under-estimate the work that needs to be done to make this a reality, which is why the Government have some urgent decisions to make.”
We have to ask why the Government are in such a hurry to push through reforms when some of the essential underpinning to make them work seems to be missing. I have to say I am glad that I will not be in the first tranche of retirees to experience these reforms, unlike the hon. Member for Redcar.
That brings us to the issue of good guidance, or lack thereof. We know that changes of this magnitude will bring a significant number of new products to the market. That is not in itself a bad thing, as some products will be better than others; that is the nature of the marketplace. It is also well recognised that on the whole there is a requirement to ensure that consumers are far better informed—I have already outlined the evidence provided by the Financial Services Consumer Panel. However, in addition to extensive consultation, we would expect the Government to have done significant work on the guidance mechanisms before making the announcement in the Budget, but unfortunately that was not the case. From the start, a significant level of confusion has surrounded what the Government meant when they said that reforms would be accompanied by “advice”. It later transpired that it was not “advice” that would be provided, but rather “guidance”. That is an important distinction, as we have heard, since guidance carries none of the same legal protections as advice, which is regulated and therefore considerably more expensive to provide.
When the Government have been pushed on the matter, I am afraid their language has been far from reassuring, to the extent that the measure looks like a mere add-on to the whole pension reform programme. In my opinion, that suggests a slightly cavalier attitude, which may prove to be short-sighted. The Financial Conduct Authority’s consultation, “Retirement reforms and the Guidance Guarantee”, stated that,
“to be effective the guidance will need to be tailored, providing consumers with sufficient personalised information, so that they can understand their options and make confident, informed decisions about their retirement choices.”
We appear to be getting something far less useful. In evidence to the Work and Pensions Committee in April, the Pensions Minister suggested that guidance will be more general in nature:
“The thing we are talking about is free to the customer. There is no charge for it. It is what we call ‘guidance’, rather than independent financial advice, so it is not formal, detailed or product-specific; you can go and buy that if you want to, but this is familiarising people with the options they have, and some of the concepts, even. Most people do not know what an annuity is.”
There is much that we do not know. We do not know the detail of what will be funded, the level of levy used to pay for it, what the guidance will be expected to cover, or what it is expected to achieve. Even at the end of the debate, we appear to have more questions than answers—questions that go to the heart of issues that will be central to ensuring that the programme works. We will be picking up on those issues of detail, fairness and guidance when the Bill reaches Committee.
Michael Fabricant (Lichfield) (Con)
On a point of order, Madam Deputy Speaker. This is nothing to do with the debate—I apologise to my hon. Friend the Minister for interrupting it—but I was due to attend an event this evening at which I was, I believe, to receive an award. I understand at very short notice that I have been banned, along with a number of national journalists. The person who banned me was Mr Speaker, and I was wondering whether that is normal behaviour for a Speaker.
Madam Deputy Speaker (Mrs Eleanor Laing)
The hon. Gentleman has made his point most eloquently and the House has heard it. I confess to having no knowledge whatsoever of the matter to which he refers, and while I am certain that Mr Speaker would never wish any discourtesy to any Member of this House, the hon. Gentleman will understand that the matter he raises is not something on which the Chair can take any action at this moment.
The Exchequer Secretary to the Treasury (Priti Patel)
This has been a wide-ranging and constructive debate; it has been engaged and informed, and I thank everybody who has participated. Before I address some of the specific points raised, I wish to reiterate the main purpose of the Bill.
The Bill is intended to put in place the most radical reform to the way people take their pensions for nearly a century. It is a fundamental principle for this Government that those who have worked hard and saved all their lives should be free when they reach retirement to choose how they spend those savings. That is because we believe in personal responsibility, and that the money someone has earned is their money.
The Bill will remove the limits on withdrawals from drawdown and the restrictions on the shape of annuities, and it will create new and more flexible ways for someone to put the money in their pension pot to good use and provide for their future as they wish. As a result of the reforms, people will rightly have the freedom to choose how to spend their savings. That, in turn, will incentivise the pension industry to provide real choice through a range of innovative new products.
I would like to address points raised by the Opposition; first, the myth that the Government have not consulted. The Government have consulted extensively on implementation and legislation, and we have received wide support from consumer groups and the industry. I note that the hon. Member for Birmingham, Ladywood (Shabana Mahmood) quoted the chief executive of the ABI. He has also said that the ABI
“welcomed the reforms as good for those who were faced with the double challenges of increased longevity and very low interest rates when they came to make retirement decisions. The industry is behind these reforms. We want them to be a success and our members are working flat out to get everything ready for April 2015.”
The Government are putting in place comprehensive guidance. There has been discussion on guidance—I will come on to it in more detail—and I want to make it abundantly clear that we have brought forward an amendment to the Pension Scheme Bill to achieve just that.
On fairness, the old system was unfair and it disadvantaged those with a moderate amount of savings. Our Government reforms will make the system more flexible and fairer for all. On cost, as the Financial Secretary has clearly stated, we set out the costings at the Budget. Since the Budget, and as a result of consultation, we have introduced further changes and the OBR-certified update will be provided at the autumn statement.
There have been a number of positive views from the industry. It is wrong and misleading to imply that there is no support from the industry. The consultation has been extensive. There has been a 12-week consultation on the best way to implement the changes, followed by consultation on the Bill itself. It is important to move quickly, because people are making binding decisions every day with what are, frankly, limited choices in the current marketplace.
Cathy Jamieson
I am sure the Minister did not intend to suggest that I, or any other Opposition Member, said there was no support from industry. For the record, that is not what we said. We recognised that concerns had been expressed. That is different from saying there was no support.
Priti Patel
I am grateful for that clarification. There is extensive support from the industry. I pay tribute to the industry for the way it has worked with us through the consultation to bring the changes together in such a constructive and supportive way.
Crispin Blunt
On that point, two companies in my constituency, Partnership and Just Retirement, are specialist annuity providers and will be significantly affected. They contributed to the consultation and I know that the Government moved in response to that. I am grateful to the Minister and her officials for the attention they paid in the consultation process.
Priti Patel
I thank my hon. Friend for acknowledging that work and for his thoughtful contribution. He has many pension providers in his constituency. Those insights have helped to inform the debate and shape the Bill.
The aim of guidance is to empower consumers to make informed and confident decisions on how to use their pension savings in retirement. Information alone is not enough to change consumer behaviour. The Government are committed to maximising awareness of the guidance service. Key to that will be the regulatory requirements on providers and schemes to signpost to guidance at key points when individuals are trying to access their pension pot. In its recent consultation on the changes surrounding new pension flexibilities, the FCA has been clear about requiring genuine signposting, including rules that ensure firms cannot circumvent consumers’ right to guidance. An essential part of the development of the guidance will be determining what engages consumers effectively. The Government are assessing engagement and take-up rates, and testing different engagement strategies informed by behavioural insight teams as part of piloting work beginning this autumn. Again, this is about getting it right. My hon. Friend the Member for Redcar (Ian Swales) made an important point about that. We are getting one bite of the cherry and we need to make sure we get it right.
Ian Swales
Can the Minister say a little more about the timing? She said that a consultation is under way; presumably its outcome will affect what the Government do. People who are due to take pensions in April will be considering their options from January and February onwards, so when will we be clearer about the nature of the guidance and the universality of provision, and when will people be told about that?
Priti Patel
Let me assure my hon. Friend that guidance will be available in good time. It is also imperative that we get the guidance right, so we are working assiduously to do exactly that.
The scope of the high-level content of the guidance was set out in the FCA consultation that it ran in anticipation of its standard-setting role. The Treasury and its delivery partners, the Pensions Advisory Service and Citizens Advice, are working up the operational details and the context of the guidance while adhering to the FCA standards.
I will come to some of the other points raised by colleagues, but I would like first to touch on the Ipsos MORI poll that has been referred to. The poll also found that 88% of people would not draw down their entire fund. People said that rather than just spend their funds on a range of things, they would use them for good financial planning. That is exactly what these reforms are all about: trusting people with their money.
David Mowat (Warrington South) (Con)
The Minister talked about guidance a few moments ago. In the event that guidance is found to be inadequate or not to have been offered properly, would that potentially void any transaction made subsequently?
Priti Patel
The guidance that is provided will not make specific recommendations. Information will be provided to individuals not to make specific decisions, but to signpost and guide them through the areas I have touched on.
David Mowat
I thank the Minister for that answer, but if a supplier sold a product without offering any guidance and without checking whether that had happened—notwithstanding the question of its not being specific—would that be a problem and could it void the transaction?
Priti Patel
The FCA will be clear in setting out standards. However, I will come to that point shortly, because we have also discussed the consequences of mis-selling and fraud.
I would like to reply to a number of points made in the debate. The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) talked about the tax revenue implications of the annual allowance and highlighted the evidence given before the Pension Schemes Bill Committee on 23 October. As my hon. Friend the Financial Secretary outlined earlier, the assumptions made in that evidence generated a huge overestimation of the likely cost of the reforms to the Exchequer. The Government believe that the introduction of a £10,000 annual allowance is the appropriate approach to allow people the flexibility to withdraw or contribute to their pensions as they choose from age 55, while ensuring that individuals do not use the new flexibilities to avoid paying tax on current earnings. It will also avoid unnecessary complexity for both consumers and pension providers when the new system comes into place in April 2015.
I would like briefly to touch on the two other contributions. We heard from my hon. Friend the Member for Amber Valley (Nigel Mills), who I understand celebrated his 40th birthday yesterday. He seems far too young to be contributing to pensions debates, although I know he has specialist knowledge in this area. He made a thoughtful contribution and raised a number of points. He mentioned the open market option. To be clear, the open market option will continue to be highlighted in the information that pension schemes are required to provide to their members at retirement. We have simply removed the requirement under the tax rules for the member to have chosen the annuity provider in order for the annuity to be an authorised payment. It is not appropriate for the member to be charged tax because they have been deprived of the opportunity to select an annuity provider.
Other points were raised about a proposed criminal offence for mis-selling. FCA rules are clear and require the responsible sale of products to consumers in a way that is clear, fair and not misleading. The FCA also has powers to take action against firms engaged in authorised business, and is able to prosecute a number of criminal offences. I hope that clarification reassures the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), who was very explicit in her points. We are very clear on that. It goes without saying that the FCA and the Pensions Regulator will monitor this whole area to ensure that fraudsters do not use the reforms to take advantage of vulnerable people.
My hon. Friend the Member for Redcar touched on annuities, as did my hon. Friend the Member for Amber Valley. The Government are clear that annuities will remain the right choice for many at some point during their retirement. We believe that many people will still value the security of an annuity, but that is something that individuals—not the state—should decide. As all contributions have made clear, this is about individual choice and opening up the marketplace. As retirement changes, many people may, for example, opt to buy an annuity later in life, allowing them to benefit from higher annuity rates. It is for individuals to buy products that are best suited to their particular circumstances.
In response to my hon. Friend the Member for Redcar—who was firm on the need to get on with this—we understand the scale of the challenge. That is why we have appointed an implementation team in the Treasury for the guidance guarantee, and we are working closely with the industry to ensure that it is ready for April 2015.
Finally, the risk of people spending all their money at once was briefly mentioned. I would like to reiterate that the Government believe that people who have worked hard all their lives should have the freedom to decide how to use their savings and, importantly, should be trusted to do so. The Government do not dictate how people should spend their money generally, so why should it be any different when it comes to their pension savings?
I am grateful to have had the opportunity to explain the issues that have arisen today. We have had a good debate and look forward to more in Committee. A number of important points have been raised. I think all hon. Members have sensed that the main issue is the principle of empowerment and allowing individuals to make choices that are right for them, especially when they come to assess their pensions. The Bill is about choice and it will make that choice possible. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Taxation of Pensions Bill (programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Taxation of Pensions Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 20 November 2014.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Mr Gauke.)
Taxation of Pensions Bill (Ways and Means)
Resolved,
That, for the purposes of any Act resulting from the Taxation of Pensions Bill, it is expedient to authorise the making of provision in connection with the taxation of pensions.—(Gavin Barwell.)
NHS health services in Guisborough, Skelton, Brotton, Park End and Hemlington
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I wish to present a petition.
The petition states:
The Petition of residents of the UK,
Declares that the Petitioners believe in fighting to defend the NHS, believe in fighting to defend the NHS services in East Cleveland and Park End, Middlesbrough, and oppose cuts inflicted by the Conservative-led government’s Health and Social Care Act 2012; further that the Petitioners believe that proposals to scrap GP services at Skelton Medical Centre should be abandoned; further that proposals to scrap GP services at Park End Medical Centre should also be abandoned; further that the Petitioners believe that South Tees clinical commissioning group’s plans to close East Cleveland Hospital’s and Guisborough Hospital’s minor injuries units is short-sighted given the £30 million deficit of South Tees Hospitals NHS Foundation Trust; and further that the Petitioners condemn South Tees clinical commissioning group’s decision to close Skelton’s NHS walk-in centre.
The Petitioners therefore request that the House of Commons urges the Government to encourage NHS England and South Tees clinical commissioning group to reverse plans to close Park End Medical Centre, Skelton Medical Centre, its NHS walk-in centre and East Cleveland and Guisborough Hospital’s minor injury units.
And the Petitioners remain, etc.
[P001357]
Callum Wark (Sentencing of Foreign Drivers)
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Alec Shelbrooke (Elmet and Rothwell) (Con)
Members on both sides of the House will have experienced incredibly difficult cases in their constituency advice surgeries, but for me, few experiences have been as difficult as meeting my constituents Joanne and Robert Wark from Swillington in May this year.
Joanne and Robert came to talk to me about their son Callum. They described 3 March 1994, the day Callum was born, as the proudest day of their lives; he was a gift that completed their world. People say that a baby’s character shines a light on the adult whom the baby will become, and that was certainly true of Callum. This happy, well- behaved toddler grew up to be a kind, gentle person, and a thoughtful young man who loved his parents and grandparents dearly. As a child, Callum would regularly visit his gran and granddad, and was always eager to help with jobs around their house and garden. Joanne and Robert did a first-rate job in bringing up a child of whom any parent would be proud, a child of compassion and profound generosity.
Callum’s school reports talk of a child who did not always find school work easy, but always worked hard for every educational achievement. The phrase “a pleasure to teach” appeared regularly in his school reports. His family told me of a school sports day when a five-year-old Callum, already sports mad, stood on the starting line of a race that he was the favourite to win. After the klaxon had fired and halfway through the race, he turned around to see his friend—a friend with learning difficulties—standing rigid on the starting line. Callum turned around, ran back, and helped his friend to the finishing line. He lost that race, but he won many more after that.
Callum attended Brigshaw high school, an outstanding comprehensive school near Allerton Bywater in my constituency. On reaching the age of 16, he secured a part-time job at the well-known Strikes garden centre on Swillington Common, and decided that he wanted to go on to do an apprenticeship—to learn a skill for life, and then begin a career. He later secured a job locally, at the Wincanton warehouse. That job was a stop-gap, and while doing it he applied for many apprenticeships. He did not do too well in maths at school, but he needed it for the apprenticeships for which he was applying, so he took it upon himself to enrol on additional maths courses, which he attended on his days off.
I am sure the House will agree that Callum’s work ethic and self-motivation were qualities that we would wish to see in all young adults in Britain today. Just as I had to, Callum worked hard and saved up so that he could afford and insure his first car. He cherished that new-found freedom, as new drivers do, and his new car became his pride and joy. When I met Joanne and Robert for the first time, I noted that Callum’s placid, permanently selfless nature seemed quite uncommon among teenagers today. They were quick to assure me that Callum had “the usual teenage tantrums”, but they were equally quick to add that “he never caused us or anyone else any trouble.”
At 2.47 in the afternoon of 1 March this year, two days before his 20th birthday, Callum was killed when his Renault Clio was hit by a heavy goods vehicle on the A162 between Ledsham and Fairburn, just outside my constituency. The driver of that heavy goods vehicle, a Bulgarian national called Stoyan Andonov Stoyanov, was found to be under the influence of alcohol. He was jailed for just seven years, but is likely to serve only half that sentence, and was banned from driving in the UK for 10 years. Let me put that in context. In 2024, when Callum should have been celebrating his 30th birthday—perhaps with a family of his own, and a good career—his killer could be driving on UK roads again, enjoying all the freedoms of life that his reckless actions took away from Callum.
At the end of my initial meeting with Callum’s parents in Garforth library last May, Joanne turned to me and, with little hope left in her voice, thanked me—not for my offer of support, but for doing something that no one else had done. No one else had asked to hear about Callum the individual: the son, the grandson, the much-loved friend, the innocent teenager enthusiastic about the excitements of the life that he had yet to experience. Callum was not merely a number, nor is he now merely a road traffic fatality statistic. Those who knew him had little doubt that he would one day go on to great things, and today we can create a legacy in his memory. We can give his parents justice, and give a meaning to his untimely death by making an amendment to the law in the name of Callum Wark.
Stoyan Andonov Stoyanov was found to be more than three times over the legal drink-drive limit and admitted to drinking a full bottle of spirits in the 24 hours before the crash. Despite this, he knowingly placed himself behind the wheel of his heavy goods vehicle. There may have been no malice aforethought in his actions, but my constituents and hundreds of campaigners who have signed a petition believe that such actions certainly constitute unlawful act manslaughter. Those calling for stricter sentencing for drink-drivers who kill argue that the deterrent is not great enough. According to the west Yorkshire-based road safety charity, Brake, evidence suggests that the current system to tackle repeat drink-driving is not working: one in eight drink-drivers does it repeatedly, and as many as three in 10 high-risk offenders reoffend. Repeat offending is one of the major drink-driving issues, yet the penalties are the same no matter how many times an individual reoffends.
In 2004, the maximum penalty for causing death by dangerous driving when under the influence of alcohol or drugs was increased to 14 years. However, criminal justice statistics recently published by Brake show that fewer than three in five drink-drivers who kill receive a sentence of more than five years in prison. It is my understanding that a Sentencing Council review is soon to take place and therefore, on behalf of my constituents and all victims of death by drink-driving, I call on the Ministry of Justice to review charges under the Road Traffic Act 1991 and introduce a strict minimum sentence—an amendment to the law, in the name of Callum Wark—to ensure that those guilty of causing death while under the influence of alcohol or drugs serve a stricter minimum sentence in custody.
I dare say that nobody can begin to understand the emotional torment and heartbreak of the families of victims of road traffic fatalities. There is little one can say to offer comfort in those circumstances, but for my constituents, the difficulty of that experience was only made worse by the insensitivity of the Crown Prosecution Service, which, more than anything else, affirmed to my constituents that in the eyes of the CPS—and certainly of their CPS solicitor, Sarah Nelson—Callum was just another number, a statistic. Charities such as Brake offer fantastic support services to the victims of crime, and I know Members across the House will want to support their 17th annual road safety week on 17 November. However, although charities perform a vital role in bereavement support, from the experiences of my constituents, the same cannot be said for the CPS. This may not be the case across the board, and Members might know of cases where their constituents received excellent support from CPS lawyers, but I can only speak from the information relayed to me by my constituents, which showed that support for and understanding of victims’ families is desperately deficient. Perhaps the CPS might therefore look at additional training for those acting on behalf of those in bereavement.
Justice is often sought as a comfort. It is sought after the most horrific of events, but it rarely delivers the sense of closure that those who seek it desire. Justice is not about compensation; real justice is knowing that the killer of one’s child receives a custodial sentence befitting their crime. More than that, justice should be about triggering change: it should be a deterrent to prevent these terrible incidents from happening to another innocent victim.
Callum’s killer was a Bulgarian national, a European citizen. In recent months, there has been much discussion in this House and across my constituency of the advantages and disadvantages of the European Union. For now, at least, Britain is a member of that Union, and my constituents would expect the UK to use its position within it to bring about new measures to protect British citizens in the UK and in Europe. At present, there is no mutual recognition of driving disqualifications between EU member states, other than that between the UK and Ireland. In short, despite a 10-year ban from driving on UK roads, in three years’ time Mr Stoyanov could return to Bulgaria and resume driving anywhere within the European economic area. With 1.8 million Britons living and working in Europe, he will remain a threat to British citizens abroad, despite a 10-year driving ban in the UK.
On the top left-hand corner of my UK driving licence is the flag of the European Union. It suggests that it is an EU-wide driving licence, in a standard format recognisable by officials in all EU member states. That symbol is meant to make it harder for drivers banned in one country to carry on driving undetected in another, yet in practice it is meaningless.
According to the European Union’s mission statement, its second priority is
“to promote and protect democracy and universal rights in Europe”,
but with rights must come responsibility, and it cannot be right that a foreign national sentenced in the UK and banned from driving here can return to his native country—a country within the European Union—and avoid a ban imposed in UK courts. If the EU sees fits to protect universal rights in Europe, surely there must be an obligation on member states to ensure that responsibilities are universal, too. For without collective responsibilities, what is the Union but a talking shop of ideologies? On behalf of my constituents, I urge Ministers to open renegotiations with the European Commission, with a view to reaching mutual recognition of driving disqualifications across member states.
When sentencing Stoyan Andonov Stoyanov at York Crown court earlier this year, the judge indicated that the court would apply for a deportation order on completion of a custodial sentence. My constituents expect that this order will be granted and the individual deported, yet guidelines on the deportation of foreign national offenders under section 32 of the UK Borders Act 2007 highlight a discrepancy between nationals of countries within and nationals of countries outside the European economic area. For example, under present deportation threshold criteria, non-EEA nationals sentenced to 12 months or more are considered for deportation by the UK Border Agency, whereas deportation is considered for EEA nationals only if they are sentenced to 24 months or more, unless the offence relates to drugs, sex, violence or “other serious criminal activity”.
For the purposes of protecting British citizens at home, what is the difference between a foreign national offender from Bulgaria and, for example, a foreign national offender from a few miles over the border in Turkey? Is a criminal from Burgas any less of a criminal than one from Dereköy? Does membership of the European economic area suddenly make a member state’s criminals a lesser threat to UK citizens than those from another country? I think not. A foreign national convicted in a UK court should be subject to the same deportation threshold criteria irrespective of whether their home country is a member state of some international economic community. My constituents and I therefore urge Ministers to review deportation criteria for EEA foreign national offenders and decrease the deportation threshold to a sentence of 12 months, thereby removing the nepotism toward nationals from within the European economic area.
I make that request because it was evident from the court case that Callum’s killer had no better understanding of British law or customs merely because he was a foreign national from within the European Union. In court, it was evident that Mr Stoyanov knew little English, either to speak or understand. He claimed to know nothing about the highway code or about UK drink-driving laws. A broader political debate arises from these issues, but this debate is not the place to air those thoughts. It is evident that Mr Stoyanov and the foreign haulage company he worked for had no knowledge of, and had made no effort to understand, the UK highway code and our drink-drive laws before he entered the UK.
Let us be clear that the foreign haulage firm sending its heavy goods vehicles across Europe and into the United Kingdom has a duty of care to ensure that its employees understand the laws of the road in the UK. It says much about the kind of company that Mr Stoyanov worked for that the only interest it showed as regards the death of my constituent was in its repeat inquires about securing the return of its expensive heavy goods vehicle. Perhaps when Ministers next meet with Commissioners in the European Union, they might wish to address this issue and encourage member states to look at the effectiveness and content of assessments for the distribution of large goods vehicle licences across Europe.
Finally, for reasons that I have discussed, my constituents believe a review of sentencing of convicted foreign drivers is desperately needed. I do not believe that stricter custodial sentencing in the UK is enough to deter others from driving while drunk. For convicted foreign drivers such as Mr Stoyanov, driving is their livelihood. Sentencing guidelines, together with the absence of restrictions preventing those subject to a deportation order from one day reapplying for entry to the UK, mean that there is no reason why Callum’s killer cannot be back driving his HGV on UK roads in 10 years’ time. The United Kingdom needs to send a strong message to foreign nationals who choose to ignore, or plead ignorance of, our drink-drive laws. My constituents therefore ask Ministers to consider, when they review sentencing guidelines, imposing a lifetime ban on driving in the UK for foreign nationals convicted of causing death while driving under the influence of alcohol or drugs.
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for giving way, and I apologise for not being here at the beginning of the debate. I had a similar experience in my constituency; one of my constituents was killed by a foreign driver who had no insurance and was over the drink-drive limit. The hon. Gentleman has highlighted the need for legislative change, for punishment through the courts, and for Europe to work with the Minister here in the United Kingdom to ensure that those things happen. For those reasons, I wholly support what he says.
Alec Shelbrooke
I am most grateful for the hon. Gentleman’s support, and I know that the Minister will have heard his comments as well.
Joanne and Robert asked me to share these words with the House today:
“Callum was our only child; he was our world and our lives are now meaningless with no future to look forward to. We will never know if Callum would have been blessed with a family of his own, or if one day we could be a Grandma and Granddad ourselves. We will never get the chance to see Callum grow into the fine young man we know he would have been and we will never see our child achieve his goals and dreams. Next year was going to be a big year for family celebrations; Callum would have been 21 and we are celebrating our 25th wedding anniversary, but now our hearts and world have been torn apart and our lives destroyed. Yet in a few years, Callum’s killer will return to his family in Bulgaria and his life will carry on. Our lives stopped on 1 March.”
As their Member of Parliament, nothing I can do or say in this Chamber today will restore happiness for my constituents Joanne and Robert Wark, but we can restore their faith in the criminal justice system by making Callum’s death the reason for a stricter minimum sentence for causing death while under the influence of alcohol; for better victim support and understanding of bereavement within the Crown Prosecution Service; for the mutual recognition of driving disqualifications within the European Union; for the regulation of foreign haulage companies driving in the UK; for the deportation of convicted foreign nationals; and for a lifetime UK driving ban for foreign nationals convicted of causing death while driving under the influence of alcohol. It is too late to change what happened to my constituent on 1 March this year, but it is not too late to bring about justice for Callum Wark and make his untimely death the motivation for change.
The Parliamentary Under-Secretary of State for Justice (Andrew Selous)
I thank my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) for securing this important debate and highlighting the issues surrounding the tragic death of Callum Wark. In particular, I thank him for putting on record his comments about Callum’s personality in the House of Commons today. I am sure that others will also have been particularly touched by the story of Callum turning back during a race that he probably would have won to help a friend with learning disabilities. That speaks volumes about the kind of fine young man he clearly was.
Any death on our roads is a tragedy. Road deaths lead to unimaginable pain for the families and relatives of the victims. Such deaths are made worse when they are caused by bad driving under the influence of alcohol and could have been avoided. It is particularly troubling that Callum was only 19 and had his whole life ahead of him. Most Members will know of similar cases in their own constituencies—we have already heard from the hon. Member for Strangford (Jim Shannon) in that regard—but I hope that they will appreciate that I do not want to go into the details of their individual cases during this short debate.
As my hon. Friend the Member for Elmet and Rothwell has said, Callum Wark was killed by a lorry driver, a Bulgarian national, who was found to be driving dangerously and well over the drink-drive limit. The lorry driver entered a guilty plea to a number of offences including causing death by dangerous driving. He was sentenced to seven years and eight months’ imprisonment on 20 March this year. He was also banned from driving for 10 years.
My hon. Friend raised a number of issues that arise from this case and other similar cases, which I will try to deal with in my remarks. It is, of course, right that our independent courts should decide on the sentence for an offence. It is the court that has the full knowledge of the case and the offender, and it is best placed to decide on a just and appropriate sentence. It is also important to remember that we have sentencing guidelines that the courts are required to follow—unless it would be unjust to do so—which lead to greater transparency in the level of sentence likely to be imposed and increased consistency in sentencing practice. For certain offences, the Attorney-General can refer a case to the Court of Appeal on the basis that the sentence is unduly lenient—that includes cases involving causing death by dangerous driving. Anyone can make representations to the Attorney-General to consider making such a reference. There is a 28-day time limit to appeal against an unduly lenient sentence, and in this case no appeal was lodged.
In keeping with the current law and guidelines, the driver in this case had his sentence reduced for pleading guilty to the offence at an early stage. The reduction for an early guilty plea is not just about saving money and court time; it is designed to ensure that victims, their families and witnesses are not required to relive dreadful events in court. I pay tribute to North Yorkshire police and others in the criminal justice system in North Yorkshire for enabling this case to be concluded with sentencing occurring less than three weeks after the incident. As the police themselves have noted, the family were spared the trauma of sitting through a protracted court hearing.
My hon. Friend also raised concerns that the offender in this case will be released at the halfway point in his sentence. As my hon. Friend will know, release before the end of sentence is not new. Since legislation was introduced in 1967, successive Governments have maintained that approach, and the current arrangements are contained in the Criminal Justice Act 2003. In most driving cases, a standard determinate sentence will be imposed by the court, and the 2003 Act provides that such prisoners must be released automatically as soon as they have served half their sentence. The second part of a custodial sentence—the licence period—is an important part of the sentence, as it provides for the supervised transition of an offender into the community and the prospect of recall to prison for breach of the licence. If there were no licence period, offenders could be in prison for many years and then be released with no support or supervision, which would increase the risk of reoffending. If a foreign national prisoner is to be removed from the UK, it would make little sense to impose licence conditions to ensure an offender could be supervised in the community, given that they will not be released into our community. That is why after the period spent in custody for the purpose of punishment of the offence, we seek, where possible, to remove foreign national prisoners to their own country.
The driver in this case is a foreign national and, as a convicted offender, may be subject to deportation at the end of his sentence. I am aware that the judge in this case made a recommendation that the offender be deported after serving his sentence. The Government are committed to ensuring that foreign national offenders, including those committing serious driving offences, should be removed from the UK whenever possible. In some cases, offenders may serve some of their prison sentence in their own country under a prisoner transfer agreement. In other cases, an offender may be released from custody in order that they can be removed from the UK. A foreign national prisoner can be returned to their home country up to 270 days before the halfway point of their sentence, and we need to strike a balance between ensuring that foreign nationals are removed to their own country and ensuring that they are properly punished for the offences committed in this country.
On the wider issues of penalties, it is worth stressing that although sentencing is a matter for the courts, setting the framework that the courts work within is for Parliament. This Government want to see maximum penalties that allow the courts to respond to the full range of cases they are likely to face. The offence in this case, causing death by dangerous driving, already has a maximum penalty of 14 years’ imprisonment. The same maximum is available for causing death by careless driving while under the influence of drink or drugs. Where there is a failing in the law we have moved to remedy it. In the Legal Aid, Sentencing and Punishment of Offenders Act 2012 we created a new offence of causing serious injury by dangerous driving, with a five-year maximum penalty.
More recently, in response to the awful case of Paul Stock who was killed by a disqualified driver, we have, in the Criminal Justice and Courts Bill, proposed an increased maximum penalty for those disqualified drivers who kill or cause serious injury. The current maximum sentence is two years for causing death, but will increase to 10 years when those provisions become law.
Jim Shannon
I welcome what the Minister has said about more stringent and stronger penalties. I also want to hear whether he has had any correspondence or discussions with the relevant Minister in Northern Ireland as it is a devolved matter, but I want to ensure that there is some consistency in punishment and that we are, across the whole United Kingdom, Great Britain and Northern Ireland, working towards the same goal. Will the Minister tell us whether that is happening?
Andrew Selous
I am not aware of any communication between UK Ministers and Ministers in Northern Ireland. I will ask the Minister for Policing, Criminal Justice and Victims, within whose responsibilities this issue lies, to respond directly to the hon. Gentleman.
We recognise that it is important to respond quickly where there is a clear gap in the law or where a maximum penalty is clearly inadequate. We also need to ensure that there is a consistent and proportionate sentencing framework. That is why earlier this year we announced our intention to look, across the board, at the maximum penalties for offences involving bad driving. That review, which looks at a number of issues that many Members of this House have already raised, is currently under way and being conducted by the Ministry of Justice working with the Department for Transport. I am particularly pleased that the Under-Secretary of State for Transport, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), is here on the Bench with me this afternoon. The review will focus on the maximum penalties and gaps in current offences. It will soon be taking the views of victims, families of victims, road users and criminal justice professionals. I do not want to pre-empt any findings, but I hope that the review will lead to recommendations that the next Government can act on in the early stages of the next Parliament.
In addition to the custodial sentence imposed in this case, the offender was also banned from driving for 10 years. He was also ordered to complete an extended driving test before he can regain a licence to drive in the UK. Driving disqualification and extended testing requirements are an important element of dealing with drivers who kill and are a mandatory requirement.
The length of a driving ban is for the court to set. Guidance already makes it clear that the court should consider the time spent in custody so that the ban is not extinguished or severely diminished by the time the offender is released. Provisions in the Coroners and Justice Act 2009 reinforce that message by placing a statutory duty on courts to extend driving bans when imposing a custodial sentence. We have recently sought to make amendments to that legislation in the Criminal Justice and Courts Bill to enable those important provisions to be commenced as soon as possible.
My hon. Friend raised concerns about the Crown Prosecution Service and its understanding of bereavement. Let me say that in any case involving a death, the CPS should be sensitive to the need to minimise the extra distress criminal proceedings are likely to cause the victim’s family and friends. The CPS guidance on that is very clear. In murder, manslaughter and fatal road traffic cases, the CPS will provide an enhanced service to family members. In such cases, the prosecutor should offer to meet the victim’s family from an early stage to explain how the case will be handled and what is expected to happen at each court hearing. The prosecutor will also explain the likely sentence should the defendant be convicted. The prosecutor will inform the victim's family that they can make a victim personal statement, and he will bring the statement to the attention of the court. If my hon. Friend has a specific concern about the handling of this case, I would be happy to pass that on to the Director of Public Prosecutions who has responsibility for the CPS.
On the question of mutual recognition of driving bans across the EU, I should say that such a system is in place with the Republic of Ireland, but not, as my hon. Friend says, for other countries in the EU. We agree, in principle, that co-operation over disqualifications between member states, other than Ireland, is desirable. Any EU member state may wish to enter into similar arrangements to those we have with Ireland in the future. It is important to understand that a practical and effective system of mutual recognition across the EU would have to be ratified by the vast majority of member states. In the case of the existing 1998 convention, only a small number of states have ratified. I should stress that the offender in this case will not be able to drive in the UK as a result of the driving disqualification for a decade.
My hon. Friend also raised the question of deportation of foreign national offenders. The Home Office considers for deportation all foreign national offenders who are sentenced to a period of imprisonment following a criminal conviction. For European economic area nationals, the deportation consideration process takes account of the Immigration (European Economic Area) Regulations 2006. Deportation will normally be pursued where the person is sentenced to two years’ imprisonment or more, as in this case, or 12 months’ imprisonment for a sexual, drug or violent offence. Where an EEA offender receives a shorter sentence, deportation will be pursued where it can be justified in accordance with the Immigration (European Economic Area) Regulations, taking into account the particular circumstances of the case. For non-EEA nationals, there is a duty for the Secretary of State to deport a non-EEA foreign national who is sentenced to a period of imprisonment of 12 months or more.
My hon. Friend will know that the regulations covering cross-border haulage firms are detailed, and are governed in the UK by the Department for Transport. In short, those who operate commercial vehicles on international journeys will need a number of authorisations and permits. The authorisations will depend on the countries in which the vehicle is to travel, but include driver certificates of professional competence, community licences and a standard international operator’s licence. These requirements include regulating the amount of time a driver spends at the wheel through the EU drivers’ hours rule, as well as a requirement for an EU driver to have undertaken the certificate of professional competence. The principal aim here is to ensure better trained drivers across the EU, who are up to date with current legislation. As my hon. Friend will realise, this is a technical area of regulation, and I would be happy to pass on specific concerns raised by my hon. Friend to my colleagues in the Department for Transport.
My hon. Friend also raised the question of the length of a driving ban and suggested that there should be a lifetime ban for those who cause death. The length of a driving ban is a decision for the judge in the individual case. In some cases a driving ban of a specific length provides an incentive for offenders to comply with their sentence in order that in time they can regain their licence. Where offenders are given a life ban, they may be more likely to flout that ban and drive illegally and irresponsibly. But I do recognise the point that my hon. Friend makes in regard to those who cause death, especially by dangerous drink-driving. We will be looking at the current sentencing practice and driving ban lengths as part of the driving penalties review, which will report early next year. I suggest that my hon. Friend sends a copy of this debate and a submission to that review, and that will be most welcome.
Let me conclude by again thanking my hon. Friend for securing this short but important debate, and by offering my own condolences to the family and friends of Callum Wark. Mercifully, the number of people dying on our roads continues to fall, aided by better cars, better roads, more awareness of road safety, better policing and advances in emergency medicine. But I know that that will be of no consolation to the family of Callum and his many friends.
But the criminal justice system also has an important role to play in dealing with those who continue to drive badly and put themselves and others at risk. The Government have already shown their willingness to ensure that the courts have the powers they need to deal effectively with drivers who kill or cause serious injury to other road users. We have created new offences where there was a gap in the law, and we have increased maximum penalties where the courts were frustrated by a lack of sentencing power. We are now actively reviewing the sentencing framework for the range of driving offences. We want to ensure that sentences are consistent and proportionate, but that the law also ensures that those who kill innocent people, such as Callum Wark, are punished appropriately.
Question put and agreed to.
Ministerial Correction
(10 years ago)
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Business, Innovation and Skills
(10 years ago)
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Mr Nigel Evans
To ask the Secretary of State for Business, Innovation and Skills what estimate he has made of the net benefit to the UK export sector as a result of the recent Farnborough Airshow.
[Official Report, 10 September 2014, Vol. 585, c. 623W.]
Letter of correction from Matthew Hancock:
An error has been identified in the written answer given to my hon. Friend the Member for Ribble Valley (Mr Evans) on 10 September 2014.
The full answer was given as follows:
Matthew Hancock
There has been significant interest in UK Export Finance’s (UKEF) Direct Lending Facility (DLF) since its enhancements were announced in the Budget. Since it was relaunched on 30 June 2014, the pipeline of potential export contracts has developed and now involves 28 UK-based exporters of varying size and export experience. As it stands, the pipeline has 35 potential export contracts that range from £3 million to over £350 million. Most importantly, the DLF pipeline is growing.
The correct answer should have been:
Matthew Hancock
Farnborough is an important showcase for the UK aerospace sector. The Department does not make estimates of aerospace expenditure arising as a result of the Farnborough Airshow. However, given the UK’s position as a leading supplier to the world’s aerospace industry, our industry is likely to be a major beneficiary of many of the new orders announced at the Show.
Recent data from the Aerospace Defence and Security trade association show aerospace exports grew by 12% in 2013 to £25 billion.
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Chilcot Inquiry (Costs)
(10 years ago)
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Mr Keith Simpson (Broadland) (Con)
It is a great pleasure to serve under your chairmanship, Mr Howarth. I congratulate the Minister on his new appointment. He understands the problems of research, writing and getting things cleared, as the author of a much respected book, “5 Days to Power”, on the formation of the coalition in 2010. He had perhaps a slightly less happy experience on publishing “The Eye of the Storm: The View from the Centre of a Political Scandal” in 2014, as it might have delayed his promotion to the Front Bench. I am also grateful that the hon. Member for Wigan (Lisa Nandy), the main Opposition spokeswoman on this subject, made it—just in time—for the debate.
The full house we have here today enables me to range fairly widely over the important subject of the Chilcot inquiry. I should explain that when I applied for the debate, the Clerks quite rightly made it clear to me that I would not get a debate if I called it merely “The Chilcot inquiry”, as the Government do not have responsibility for the inquiry, which is independent. However, it is legitimate to ask about the costs of the inquiry, and I will be interpreting “costs” in a fairly broad way, so that we can have a proper debate.
My purpose is not to second-guess the content or conclusion of the inquiry’s report, nor, I emphasise, to raise the inquiry for party political reasons. As a Conservative Front-Bench spokesman at the time, I supported and voted with the then Government in nearly all the relevant major debates, including the one about going to war, even though, along with other colleagues, I expressed some concern or reservations about some aspects of the policy and the operational decisions.
I am raising the topic because the costs of the Chilcot inquiry do include not just the financial costs. There are the costs to relevance and timeliness because of the length of time the inquiry has taken so far, which is just over four years; costs to reputations, past and present, of Ministers, the military, the intelligence services and civil servants; the costs to public confidence in government, transparency and the decision to go to war; and, last but not least, the costs in terms of the anguish of relatives of those of our servicemen and women who were killed and wounded in the conflict, and who want to know why and how it happened.
A lot of expectations have built up about the inquiry’s final report. I fear that many members of the public have already made their minds up about the inquiry, and are not only allocating blame but have the fear that, somehow or other, it is an establishment stitch-up. That view was expressed at the time, even before the inquiry was announced by the then Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). He announced the establishment of the inquiry in June 2009. Hearings began in November that year and the final public hearing was on 2 February 2011. To date, we have had no real indication from Sir John Chilcot of when he intends to publish the results of his inquiry, and we have received mixed messages about the delay.
Frustrations at that delay have been expressed by Members of both Houses of Parliament in questions and debates, as well as by the media and relatives of those killed and wounded. There may be good reasons for it, but neither Sir John Chilcot nor the Government have really adequately explained them. That has exaggerated the suspicion that the inquiry is an establishment stitch-up or is not a proper inquiry. At the end of the day, some people are asking: to whose benefit is it that there is a delay? I suspect that I am probably more of the view that there are understandable reasons and, perhaps, cock-ups behind the delay than I am in the camp of conspiracy.
Are the administrative costs of the inquiry related to its terms of reference? Do those costs reflect the fact that the riding instruction for the initial inquiry was too broad and comprehensive? I remind hon. Members of the instructions laid down by the then Prime Minister in June 2009. He announced that it would be
“an independent Privy Counsellor committee of inquiry which will consider the period from summer 2001, before military operations began in March 2003, and our subsequent involvement in Iraq right up to the end of July this year”—
meaning 2009. He went on:
“The inquiry is essential because it will ensure that, by learning lessons, we strengthen the health of our democracy, our diplomacy and our military…Its scope is unprecedented. It covers an eight-year period, including the run-up to the conflict and the full period of conflict and reconstruction. The committee of inquiry will have access to the fullest range of information, including secret information. In other words, its investigation can range across all papers, all documents and all material. It can ask for any British document to be brought before it, and for any British citizen to appear. No British document and no British witness will be beyond the scope of the inquiry. I have asked the members of the committee to ensure that the final report will be able to disclose all but the most sensitive information—that is, all information except that which is essential to our national security.”—[Official Report, 15 June 2009; Vol. 494, c. 23.]
It is important to note that, in that original riding instruction, the then Prime Minister kept emphasising “British”. One problem the Chilcot inquiry has faced is that a considerable amount of evidence and a considerable number of individuals were from or in the United States of America. Understandably, that caused major problems.
Sir John Chilcot, in replying to then Prime Minister, wrote:
“Our terms of reference are very broad, but the essential points, as set out by the Prime Minister and agreed by the House of Commons, are that this is an Inquiry by a committee of Privy Counsellors”.
He went on to explain that the inquiry would consider the long period stated. He also emphasised the importance of the lessons of the inquiry:
“Those lessons will help ensure that, if we face similar situations in future, the government of the day is best equipped to respond to those situations in the most effective manner in the best interests of the country.”
There is a problem with that. The Chilcot inquiry has not reported and we do not yet know what lessons have been learned. Yet, ironically, in the past year, roughly, we have faced two situations in which the Prime Minister has tried to get the House of Commons to support military action. The first, last year, was over Syria, which—
Mr George Howarth (in the Chair)
Order. The title of the debate focuses on the costs of the Chilcot inquiry. In his opening remarks, the hon. Gentleman chose to interpret “costs” in quite a wide way, and I am mindful of that. However, the direction of his speech needs constantly to refer back to the title of the debate. He is not out of order, but I am trying to be helpful by steering him in a direction that will keep him in order for the remainder of his speech.
Mr Simpson
I am grateful, Mr Howarth, and take note of that. I am not going off into a byway—one of my interpretations of “costs” is to do with the lessons of the inquiry, which I think have direct relevance not only to this debate but to the interests of nearly all colleagues in the House of Commons. Naturally, I will take note of what you have said.
The problem always was that the inquiry’s sheer breadth would incur extra costs in every possible sense of the word. Interestingly, the Government considered the historical precedents for the inquiry. They included the two inquiries from the first world war—the special commissions on the Dardanelles and on Mesopotamia—both of which were relatively cheap. The Mesopotamia inquiry reported within a year, and its lessons were immediately applied in 1917, while the financial costs of the Dardanelles inquiry, which lasted until 1919, were also pretty reasonable, although the inquiry did not, of course, have an impact on the conduct of the war. As far as the Government were concerned, however, the immediate precedent was what was called the Falklands inquiry, or the Franks inquiry, which was also a Privy Council inquiry. It reported within six months of being established and, once again, cost a relatively small amount. Once again, however, there was controversy because of the different interpretations regarding how the inquiry was set up and what lessons could possibly be learned from it.
In historical cases, as well as in the Chilcot inquiry, terms of reference are crucial. The important point about the Chilcot inquiry is that it is independent of the Government but relies on them for resources, so there is a cost factor. It is also reliant on them in terms of the cost of clearing secret and confidential documents, including those between the United States President and the British Prime Minister and those involving Departments and intelligence agencies. Will the Minister tell us, based on Government sources, the extent to which such procedures have held up the drafting of the final report, and whether Sir John Chilcot is satisfied that all those matters are now resolved? I will return to that point in greater detail.
In a letter Sir John Chilcot wrote to Sir Jeremy Heywood, the Cabinet Secretary, dated 28 May 2014, he said that, in principle, agreement had been reached with the Government on the intelligence and other materials that might be released. Can the Minister tell us what documentation and information has been withheld? If any has been, will that be reflected in the final report? In other words—this may cost more—will sections of the report be flagged up as having been redacted?
A great deal of the delay has been attributed to what is called the Maxwellisation process. For those colleagues who are not too sure what that means, it is the process of warning those who have been criticised in a report and allowing them to respond before publication. It takes its name from the experience of Robert Maxwell, who was criticised in a Department of Trade and Industry report in 1969 and took the Department to court, where the judge ruled he had been unfairly treated. In future, therefore, individuals who were to be criticised would be given advance notice and a chance to comment. Obviously, the Government wanted to allow that not only because there had been a legal judgment, but because they did not—once again, Mr Howarth, I am following your direction—want to incur the costs of legal action.
From Sir John Chilcot’s letter to Sir Jeremy Heywood in May, we can see that the process of Maxwellisation has, in one sense, only just begun. Sir John Chilcot makes it quite clear that, now that everything else has been cleared in principle, it is possible to start the process of Maxwellisation. From reading the documents, I conclude that the delay has been in two parts. One was the negotiation between Chilcot and the Cabinet Office over the US-UK political and intelligence documentation. In addition, until that was resolved, the process of Maxwellisation could not seriously begin—in fact, it has only just begun. We will therefore see more financial costs one way or another.
Given the Cabinet Office discussions with Chilcot, what is the time scale for publication? Can we realistically expect Sir John Chilcot to publish his report before May 2015? That is important because there will be a cut-off date around Christmas—probably just into the new year—when the civil service will say that Chilcot forms part of the pre-election purdah, so the report will be postponed. That has financial costs, but I would suggest that it also has costs relating to the reputation of the British Government and the individuals concerned.
Of course, Chilcot is an independent inquiry into the Iraq war, but can the Minister tell us what departmental inquiries have been held into general or specific aspects of the war, from policy through to implementation and lessons learned, by the Cabinet Office, the National Security Council, the Foreign and Commonwealth Office, the Ministry of Defence, the Department for International Development, and perhaps the intelligence agencies? We have no idea what individual departmental reports have been done, and whether Sir John Chilcot has had access to them. If he has, that might cut down the time he needs to investigate and the cost of the overall report. Does the Minister have details of any US Government or congressional inquiries into the Iraq war, which may have published documentation that would have been relevant to Chilcot or saved time?
I now return to—literally—the costs of the Chilcot inquiry. According to a House of Commons document, the total financial cost incurred by the inquiry, from its establishment on 15 June 2009 to 31 March this year, was £9,016,500. There is an additional cost of about £1 million for the rest of this year, so we are talking so far about £10 million. Compared with the cost of the major public inquiries, that is not a large amount. Nevertheless, it is a cost on the public purse.
There is also the cost to the reputations, past and present, of Ministers, the military, the intelligence services and the civil service. We in this House would want Sir John Chilcot to be as fair as possible in any criticism he makes of any individuals, so that they have the right not only in law, but in terms of natural justice, to respond. The trouble is that that could go on for a long time, and Sir John Chilcot must have a cut-off point in mind. Has he perhaps indicated what it is to Sir Jeremy Heywood, the Cabinet Secretary?
On the costs in terms of public confidence in Government transparency and the decision to go to war, I understand the practical problems behind the delay, which I have outlined, but the longer the Chilcot inquiry continues without publication, the greater will be the public’s suspicion that the process is not transparent. In addition, the central part of the report, which is about learning lessons, will become mainly historical, although we know that such lessons could have been relevant to more recent events.
Then there is the cost in terms of the relatives’ anguish. The Chilcot inquiry will perhaps not satisfy many of them, but there is a wound there that many of them feel. They want, as far as possible, to get at the truth, and Sir John Chilcot is only too well aware of that.
On the procedures connected with the eventual publication of the Chilcot inquiry, there will presumably be a press conference, and the full report and evidence will go online—we are talking about a report of, possibly, 500 or 600 pages, with several thousand pages of evidence. From Parliament’s point of view, the danger will be that a lot of this will be in the public domain. There will be headlines naming and shaming individuals or organisations before Members of this House and the other place have the benefit of being able to debate the issue. Does the Minister think that the Prime Minister of the day will make a formal statement to the House, which will be duplicated in the other place? Will there be an opportunity for a full parliamentary debate? Colleagues will expect that, and there may even be pressure to have a vote. Will the Government accept the recommendations of the Chilcot inquiry, or will they pick and mix? Does the Minister think that the process will be rather like what happens with a Select Committee, when the publication of a report is followed by a Government response that accepts, or does not accept, some or all of the report?
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate the hon. Gentleman on securing the debate. He makes a point about a pick-and-mix approach to the report. Although the Saville inquiry was quite different in nature and content, it was also exceptionally expensive and long. However, when it was concluded, the Prime Minister thought and hoped that that would be an end to the matter which, it transpired, was not the case. Does the hon. Gentleman agree that it is important that the expense should be limited and there should be caps on legal fees, but that there should be no pick-and-mix approach on the outcome?
Mr Simpson
I have every sympathy for Sir John Chilcot and his inquiry. With such a broad inquiry, he has been tasked almost with an impossibility. On the one hand he wants to get to the truth, within the riding instructions, and wants to be fair to individuals, Departments and agencies. However, at the same time he has been aware—I suspect he would argue this—that the delay has not been his fault, as the Government of the day had major problems in getting agreement about putting information from the Americans in the public domain. It is understandable, for intelligence and security reasons, that there must be negotiation on what can be put in the public domain.
So far, the financial cost has, I think, been reasonable. My concern is that we are almost there, and Sir John Chilcot needs to be minded that while Parliament accepts the pressures on him, we would like the process to be concluded as reasonably as possible. He will present his report with recommendations, and will take questions on that. It will then be up to the Government of the day to say, “We accept all these recommendations,” or “In fact, we only accept some of them.” I suspect that Sir John Chilcot will be criticised by individuals, groups and some of the media for a range of issues that I have raised. As to what some of the families may conclude, if no one is put in the dock as responsible overall for mistakes that were made—taking the country to war illegally and such issues as are all out in the public domain—I suspect that the final Chilcot inquiry report will not end the matter. The Government of the day will have to take a view. It is right for Parliament to debate the matter. Colleagues in both Houses were active in government at the relevant time and will have a view. I fear that if things continue as they are for much longer, Sir John Chilcot will, through no fault of his own, lose public sympathy and perhaps come in for unfair criticism.
The Government do not have direct responsibility for the Chilcot inquiry, which is independent, but they have acted, as it were, as a control mechanism, because they control the flow of Government and non-Government foreign information. I do not think that they have tried to slow the process down, but nevertheless I suspect that the situation has at times proved very frustrating to the inquiry. We live in an age in which more and more people are suspicious of government. When a Government say that there are good intelligence and security reasons for doing something, a significant part of the public no longer accept that, even in terms of our physical security. When we debate issues such as the European arrest warrant, arguments will focus narrowly on that.
I hope that the Minister will be able to answer my questions. In particular, I should like to know from him whether he has had any indication through Sir John Chilcot of a likely notional date for the report to be published, and whether he thinks that there is a cut-off point, when the civil service will say that the period of purdah before the general election is approaching, meaning that that publication may be postponed until after the election.
Lisa Nandy (Wigan) (Lab)
I want to express our gratitude to the hon. Member for Broadland (Mr Simpson) for securing this important debate, which we welcome. His tone and approach were exactly right. One of the difficulties of trying to take a forensic approach to such complex and controversial events as the Iraq war is that often the facts are clouded or distorted by people’s emotions. The hon. Gentleman chose the right approach, trying to ensure that we record, and keep in the public mind, something so important to the British people. He was right, also, to say that we need to learn the lessons of the event, and consider the costs—both the financial costs, and costs in the fullest sense.
Many hon. Members, including me, represent families that have been deeply affected by the conflict. The report is important to them, and it will be difficult for them to bear it, when it is published. I agree that their lack of certainty is difficult, and that as far as possible we should try to ensure that they know what to expect, and when to expect it. I shall listen with interest to what the Minister says about those points.
The Iraq war was a crucial moment in our history. It was complex and controversial, dividing the nation, friends and families. Feelings about the events leading up to the war, the war itself, and the aftermath in this country and throughout the world, are still strong. The eyes of the world will be on us as we publish the report. The war was a key moment in our history and it matters that we should learn the lessons. The then Prime Minister said when he announced the inquiry in 2009 that it would
“strengthen the health of our democracy, our diplomacy and our military”—[Official Report, 15 June 2009; Vol. 494, c. 23.]
It was right to announce the inquiry: it was the right thing to do then, and it remains the right thing now.
Given the context, it was also right to establish the inquiry as fully independent of Government. The hon. Member for Broadland referred to that fact. We recognise and accept that there will be certain things that the Government can and cannot do in relation to the inquiry. That is right and proper. Given the circumstances of the conflict, there is no other basis on which the inquiry could have had the necessary legitimacy. It was also essential to give it a broad remit, including the time span of 2001 to 2009, which I understand was unprecedented. It covered the run-up to the conflict, the action itself and the aftermath. The Prime Minister said at the time that the report would
“disclose all but the most sensitive information”—[Official Report, 15 June 2009; Vol. 494, c. 23.]
That was extremely important, and we have learned from past inquiries how important it is to get that right at the very beginning. However it was always going to be complex in practice. It was to be expected that it would take time to work through that.
Of course a balance is needed between the time it takes to conduct an inquiry, the costs incurred, and the need to put as much information in the public domain as possible without compromising our security or stability, or people’s lives. I shall listen with interest to the Minister when he tells us what he can about the progress that has been made in that important respect.
The hon. Member for East Londonderry (Mr Campbell) was right to draw attention to the Saville inquiry. For me, the events around Hillsborough are also very close to home. I represent many of the Hillsborough families, and we have learned many things from that awful event and from the process which has been drawn out for nearly a quarter of a century, with families fighting for justice.
If we do not take the time to get this right, to put as much information as possible in the public domain and to support a thorough investigation that commands families’ confidence, we shall compound their misery and anxiety for a very long time. Families here and in Iraq will be watching closely. I know from working with Hillsborough families that when the report is published, the families involved will relive their experience all over again. It is important to take the time to get the inquiry right and to recognise that the balancing act is difficult because of the costs and the period between the Iraq war and when the report is published.
In initiating this debate, the hon. Member for Broadland (Mr Simpson) has helped to keep the matter in the public’s mind, and for that we are extremely grateful.
The Minister for Civil Society (Mr Rob Wilson)
I congratulate my hon. Friend the Member for Broadland (Mr Simpson) on securing this important debate and thank him for his kind words of congratulation. I also thank him for his impressive and detailed speech which was measured and touched on all the key issues that should be discussed. I expect nothing less from someone with his great experience in foreign affairs and defence matters and who is a historian.
I am sure that not many of us here this morning would have expected to be still debating this matter in 2014, but I am sure that everyone here accepts this inquiry and agrees that it is unprecedented in its scope and scale. Never before has a UK public inquiry examined in such depth and detail a decision to go to war and its consequences, although I am sure that some individuals will be assured of that when the report is published.
I shall deal with some of the cost issues of the inquiry so that they are on the record. Until 31 March 2014, the total cost was £9 million. The breakdown for each financial year is as follows: £2.27million in 2009-10, £2.43 million in 2010-11, £1.43 million in 2011-12, £1.35 million in 2012-13, and £1.54 million in 2013-14. The inquiry has been open and transparent about its costs and lists a detailed breakdown for each financial year on its website.
The costs in both 2009-10 and 2010-11 were significantly higher than in subsequent years. That was due mainly to the cost of running the public hearings and increased staffing levels. The costs over the last three financial years have been relatively stable. The major costs cover the employment of the inquiry’s secretariat, committee and advisers and office accommodation.
The final cost of the inquiry will, of course, be higher as it will include running costs for the current financial year and is also likely to include the costs of Maxwellisation and publication. However, I do not expect current total expenditure to rise significantly. The sum of £9 million is not insignificant, but comparing it with the cost of the Bloody Sunday inquiry, which came in at over £100 million, demonstrates that the cost to taxpayers has been significantly lower than might have been expected.
The Chilcot inquiry was announced in June 2009 by the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), to identify lessons that can be learned from the Iraq conflict. The terms of reference set out by Sir John Chilcot on 30 July 2009 were very broad, but the essential points set out by the then Prime Minister and the House were to examine the UK’s involvement in Iraq from the summer of 2001 to the end of July 2009, embracing the run-up to the conflict, the military action and its aftermath, and the way decisions were taken, to establish as accurately as possible what happened and to identify lessons to be learned. Those lessons will help to ensure that if we face similar situations in future, the Government of the day will be best equipped to respond in the most effective way and in the best interests of the country.
The inquiry consists of five Privy Counsellors: Sir John Chilcot, who is its chairman, Sir Lawrence Freedman, Sir Martin Gilbert, Sir Roderic Lyne and Baroness Usha Prashar. Unfortunately, Sir Martin Gilbert has been unable to fulfil his duties since 2012 owing to serious illness.
The last such inquiry was the Franks report on the Falklands war; it too consisted of Privy Counsellors. It met and took evidence in private, and when its report was published there were accusations of an establishment stitch-up. This inquiry is completely different. It has been open and transparent, taking oral evidence in public and publishing it with written evidence and declassified documents on its website. When the report is published, thousands of other official documents, including once highly classified material, will be published. They will include whole Cabinet records and other previously secret material.
Since 2009, the inquiry has taken evidence from more than 150 witnesses. It has travelled to Baghdad and Irbil for discussions with Iraqi politicians, to Washington to meet officials of the United States Government, and to France to talk to French officials. It has met the families of UK personnel killed in Iraq and has read tens of thousands of UK Government documents.
When the right hon. Member for Kirkcaldy and Cowdenbeath announced the inquiry in the House, he said that Sir John and his colleagues would have access to the fullest range of papers, including secret and other highly sensitive material. He also made it clear that
“No British document and no British witness will be beyond the scope of the inquiry.”— [Official Report, 15 June 2009; Vol. 494, c. 23.]
Throughout that time, the Government have co-operated fully with the inquiry so why has it taken so long to report? Its scope is unprecedented and it is examining difficult and complex issues. It has estimated that its final report will be more than 1 million words. As part of the process of drafting the report, the inquiry has sought the declassification of material from many thousands of Government documents. The process, as Sir John Chilcot has acknowledged, is labour-intensive for both the Government and the inquiry. It has included extremely sensitive documents. To gain some idea of the scale of this exercise, it has requested the declassification of just over 7,000 documents, of which 1,400 will be disclosed as whole documents. During the past two years alone, it has made more than 200 separate requests, including 100 since July 2013, to declassify official documents.
Sir John wrote to Jeremy Heywood on 28 May to say that agreement had been reached on the principles underpinning disclosure of material from Cabinet-level discussions and communications between the UK Prime Minister and the President of the United States which the inquiry has asked to use in its report. Disclosure of this material raises difficult issues of long-standing principle, which took some time to resolve. In doing so, the Government recognised the wholly exceptional nature of the inquiry and the importance of material to enable it to articulate its conclusions. The agreement on disclosure of Cabinet records includes the publication of full extracts from key Cabinet meetings. The principles governing communications between the UK Prime Minister and the US President will allow disclosure of gists and quotes, which the inquiry has concluded are sufficient to explain its conclusions.
My hon. Friend asked about redactions, which have been made to some documents that we published alongside the report. The redacted passages will be flagged up. The report itself will not include any redactions.
When declassification has been completed, Maxwellisation can begin. That will offer individuals facing criticism the opportunity to make representations to the inquiry. It has said that it is determined to adopt an approach to Maxwellisation that is balanced, considered and fair. It is a confidential process and the inquiry will not comment on the number or the identity of those subject to criticism. It expects a similar duty of confidentiality from those concerned. The inquiry is not a court of law and nobody is on trial. As Sir John said in his evidence to the Select Committee on the Inquiries Act 2005, the absence of judicial leadership has not hindered the inquiry, which has been able to focus on learning lessons rather than on apportioning blame, although Sir John also said that the inquiry would not shrink from criticism where it was justified.
My hon. Friend the Member for Broadland asked about the report’s publication. I cannot say when the report will be published—that is a matter for the inquiry. As he has noted, it is fully independent of the Government. However, technically it can be published right up to the end of February if publication is to be before the May general election. All I can do is echo the recent words of both the Prime Minister and the Leader of the House that the report will be published shortly, and I hope that it will be published as soon as possible. Sir John Chilcot has said that the report will be presented to the Prime Minister once the Maxwellisation process has been completed.
As I have said, the inquiry is completely independent of the Government, who have absolutely no input into what the report will say. On the Government’s responsibilities, we have given the inquiry full, unfettered access to all the Government papers that it has wanted to see. At the outset of the inquiry, the Government assured the inquiry of their full co-operation. They continue to support the inquiry fully. Sir John Chilcot has confirmed that the material the inquiry has requested is sufficient to explain its conclusions. He has also been grateful for the Government’s assurances that they will do everything possible to assist the inquiry in submitting its report to the Prime Minister as soon as possible.
Once the final report has been presented to the Prime Minister, he will make a statement to Parliament and there will be an opportunity to debate its findings in both Houses. In relation to accepting any recommendations that the report may make, it would be wrong to pre-empt the inquiry’s findings. It will be for the Prime Minister and Parliament to decide how to proceed once the report is published.
The Iraq conflict was, as we were reminded by the Opposition spokeswoman, a seismic political event, which still evokes strong feelings on all sides of the political debate. The Government recognise that it is of paramount importance that the inquiry is able to complete its work, and to provide a publicly persuasive, balanced, evidence-based report, which shows why decisions were made and the lessons that can be learned.
It is important to re-emphasise a point made in June 2009 by the then Prime Minister which was that, although the inquiry receives the full co-operation of the Government, it is fully independent of the Government. The costs of the inquiry and the completion of its report are a matter for the inquiry. Sir John said on 28 May that it is the inquiry’s intention to submit its report to the Prime Minister as soon as possible—a sentiment we all share and support.
Morecambe Bay (Tunnel)
(10 years ago)
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David Morris (Morecambe and Lunesdale) (Con)
It is a pleasure to serve under your chairmanship, Mr Howarth. I secured the debate to discuss the idea of a transport tunnel across Morecambe bay—or, more to the point, under it—starting at Heysham, in my constituency, and hopefully going all the way to Barrow.
Since I was elected as Member of Parliament for Morecambe and Lunesdale in 2010, I have secured £123 million of investment from the Government for the Heysham-M6 link connecting Heysham and Morecambe to the M6 at Lancaster. That vital route has been in the planning stage for more than 60 years, and my constituents, who can now see it being built, are grateful to the Department for Transport for giving the road the green light. It brought with it an upgrade to the port, a footprint for the third nuclear power station in Heysham and countless contracts for businesses in the White Lund business district, not to mention a projected rise of house prices in the area.
Now that the route is well under way, it is time to look to the future and new infrastructure links that could be built. The most obvious next step is a tunnel under Morecambe bay towards the Furness peninsula, which would not only link the M6 to the port and nuclear power stations in Heysham, but create a streamlined route to nuclear installations and BAE Systems on the Cumbrian coast. I would like a tunnel that would allow two-way traffic to travel between Heysham and the Barrow area. Currently, that journey takes approximately one hour and 30 minutes, but with the tunnel, it would be cut down to 20 to 30 minutes, or even less, meaning a saving of more than two thirds in the journey time. Traffic would also be freed up from roads in a vast rural area.
The inspiration for the tunnel is twofold. For many years, various groups have discussed how to link together these two strategic areas. There have been ideas for a cableway across the bay and a barrage bridge over the sand. Before the general election, it was reported that £700 million was on the table from the Bank of Scotland to construct a barrage. However, as Morecambe bay is a site of special scientific interest and a habitat for rare birds and wildlife, that idea did not become a reality. Nevertheless, it showed that there is a commercial interest in linking together these two areas of vital strategic importance.
Earlier this year, I was approached by National Grid. As part of work on connecting new energy installations in Cumbria, it came up with the idea of constructing a power cable under Morecambe bay. That idea is subject to consultation, but National Grid believes that as the tunnel will go under the sands completely without disrupting the wildlife, it will not come up against environmental constraints, as the barrage project did. National Grid invited me to Willesden Junction in London to see how its London power tunnel project is being built. I saw that the machines being used for that tunnel could work in the same manner on a larger scale. I was fascinated by that visit, because it showed me that in this country we have not only the technology for a tunnel, but some of the best tunnelling experts in the world. If a power tunnel can go ahead in the sands, there is no reason why a transport tunnel is not a viable option.
My constituency is becoming a bottleneck of funding. Since becoming its MP, I have secured nearly £700 million of investment from the Government and the area as a whole is booming with success. Opening the area up to other parts of the Furness peninsula would greatly benefit the many manufacturing and energy companies in my constituency and on the other side of the bay. On the Cumbria coast, we have BAE Systems, and also Sellafield and the National Nuclear Laboratory. If the workers in my constituency at Heysham power station could access those sites more easily, there would be more scope for the sites to work together. A tunnel would also create more employment opportunities in the science and technology sectors for young people in my constituency. These two areas have expertise in energy and engineering, and linking them would create an “Aberdeen effect” for skilled workers in both of them. It could only be a good thing for my area and Barrow as a whole.
Due to the M6 link project, the port of Heysham is receiving an upgrade so that it will be able to process more ships. A faster link to Furness would mean that more companies in the Isle of Man, Northern Ireland and Cumbria would be able to use the port which, again, would create more jobs and economic benefits for the area.
A link under the bay would also help my local NHS trust. University Hospitals of Morecambe Bay NHS Foundation Trust has always said that it needs faster links between its hospitals. Under the previous Government, the trust faced a lot of problems, but that situation has already been talked about too often in the main Chamber. A link between the hospital sites would benefit both sides of Morecambe bay, as well as people in Cumbria, including in the Barrow area, and in my constituency of Morecambe and Lunesdale. At the moment, it is difficult to transport staff and patients between the two trust sites, and even more difficult to practise a joined-up approach across the sites. The tunnel that I propose would at least halve the journey time between the sites, which would allow them to work together more easily.
The proposed tunnel would not go into Barrow itself, but would go from coast to coast, from Heysham, and join up with the existing road network. In recent weeks, residents from both sides of the bay have been contacting me about the scheme. In fact, on Radio Cumbria this morning, a lot of people from Barrow said what a good idea it would be. This scheme could only benefit the public and the businesses in the area.
However, if such a project is to go ahead, we will need to attract private investment and get some sort of Government funding. As I said, £700 million was on the table for a barrage five years ago, so there is no reason why such a project should not attract the same kind of investment. To attract such investment, the project would need some form of Government help so that a business case for the proposal could be compiled. Support would be needed from the Treasury, the Department for Transport or the local enterprise partnership—or a combination of the three—so that a feasibility study could be carried out.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I congratulate the hon. Gentleman on securing this debate. May I be clear about what he is saying about this project? When he originally mooted it, I thought it was directly tied to the tunnel being built for power lines under the bay. Is he now saying that this is an entirely separate venture? I ask that because, of course, National Grid says that if this tunnel scheme was to be part of the work to put power lines under the bay, that would be delayed by at least a decade, and probably more.
David Morris
I can clarify that this project would have nothing to do with the power cabling. Originally, when the tunnelling experts and I talked, it was suggested that the transport tunnel would have been an escape route for the power lines tunnel, but now the transport tunnel would not be the same tunnel at all. The transport tunnel is a completely separate project from that proposed by National Grid, which already has investment for the power lines tunnel. However, if National Grid would like to come on board with this project, I am absolutely certain that bodies can talk together and reach agreement.
I understand that this transport tunnel is a big idea and will require considerable investment, but I have a can do attitude. I firmly believe that, having secured funding for the M6 link project after it had been planned for 60 years, there is no scheme too big to be delivered. I look for guidance from my hon. Friend the Minister about how best to go about the scheme, and how to make it a reality that would economically boost both my constituency of Morecambe and Lunesdale, and the Barrow peninsula, as phase two of my infrastructure plan.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
It is always a joy to serve under your chairmanship, Mr Howarth.
I congratulate my hon. Friend the Member for Morecambe and Lunesdale (David Morris)on securing this debate about a tunnel under Morecambe bay, and on his vision and ambition for transport as a driver of growth. This Government recognise the crucial role that effective transport plays in facilitating growth across the country, in creating a more balanced economy and in connecting communities and enabling people to access jobs, services and leisure. That is why we have been determined to secure significant levels of investment in infrastructure, and in road, rail and other public transport services. We are committed to ensuring that this investment benefits all parts of the country, from north to south.
Before setting out how much we are doing to deliver real change for transport in the north, I must make it clear that the tunnel my hon. Friend referred to forms one of the options that National Grid is currently consulting on, regarding the proposal to connect the proposed Moorside nuclear power station to the electricity transmission network, although—as he made clear in his speech—the two tunnels may not be co-located. His suggestion is for a tunnel separate from the one that National Grid is proposing. Nevertheless, I must say that any subsequent planning application by National Grid will be decided on by the appropriate planning authorities and Ministers. Therefore, it would not be appropriate for me to give a view on the particular details of this transport tunnel project, as I am sure my hon. Friend will understand.
I must also point out that this tunnel scheme is not a new idea. Indeed, I have a record of the debate that took place in the House on 10 May 1965, when Hector Munro—who I recall would go on to become Sir Hector Munro—asked a question of the Minister for Land and Natural resources:
“If he will make a sum of money available to Strathclyde University and to universities in England to enable them to investigate the Solway and Morecambe barrage schemes.”
The Minister in question—the hon. Member for Sunderland North, Mr Frederick Willey—replied:
“Not at this stage. The Water Resources Board is now conducting feasibility studies into the Morecambe Bay barrage project and jointly with the Scottish Office, into that for Solway Firth. We must first see how these studies progress.”
Hector Munro came back:
“Is the right hon. Gentleman aware that three Ministries have been making enthusiastic statements about these barrages for six months but that not a penny has been made available to the universities to set up study groups?”
In turn, Mr Willey came back, saying:
“I am anxious to encourage co-operation with the universities, but in this particular case we have feasibility studies in hand and we must see how they go. These are properly with the Water Resources Board and the engineering consultants.”
I have to say that that is just the sort of stuff my officials give me to read out from time to time. More importantly, the hon. Member for Farnham—a Conservative, Sir Godfrey Nicholson—asked:
“Is the Minister aware that in Morecambe Bay there are millions of shrimps? Who will watch their interests?”—[Official Report, 10 May 1965; Vol. 712, c. 15-16.]
However, it was not clear whether he had an environmental or gastronomic interest in the shrimps.
This country certainly leads the world in tunnelling. Indeed, in my own constituency there is an application for a potash mine that would incorporate two 23-mile tunnels carrying conveyor belts from the mine to Teesside. Tunnelling has come on a long way.
I now turn to transport in the north in general. I have a very clear view about the benefits that this Government’s strong commitment to transport is delivering. For example, in my hon. Friend’s constituency, after years of prevarication and delay by previous Governments we are finally delivering the £120 million-plus Heysham link road, which will link the port at Heysham with the M6 and thereby significantly enhance growth opportunities locally.
That is just one example of the way in which this Government have taken decisive action to tackle long-standing problems in the north-west. We have listened to what local businesses, organisations and communities have told us, and we have responded by investing in all modes of transport, to improve connectivity across the north-west and between the north-west and other parts of the country.
Regarding this Government’s commitment to infrastructure investment, we have already announced increased levels of Government funding to deliver improvements all around the strategic road network, which are targeted at supporting economic growth. Our commitment to deliver a step change in future investment in transport infrastructure was made clear by the Chancellor of the Exchequer in his statement in June 2013, which announced the conclusions of the Government’s 2013 spending review.
John Woodcock
I thank the Minister for giving way; he read my mind. I would love to be able to magic up a tunnel under Morecambe bay. I would love to be able to promise my constituents a personal helipad or a teleporter in Barrow town hall to take them anywhere in the country. If I did that six months before an election, my constituents would rightly think that I was just making something up to appear more electable and would not give me much credibility. Does the Minister agree that perhaps the best thing for the Government to do is to find funds to give the hon. Member for Morecambe and Lunesdale (David Morris) a spade and then ask him to get digging? That may be the most realistic way of making the tunnel happen in the near future.
Mr Goodwill
The hon. Gentleman produces a wish list of projects, but I must make it clear that there is no point in a wish list if there is no budget to go with it. The Government are committed to putting in £3 billion a year—some £24 billion—into roads over the next five to six years, which is more than three times the previous Government’s investment. Indeed, I seem to recall that when the Blair Government came to power in 1997 they announced a moratorium on road building, which was not good news for people struggling with congestion in the north. Coupled with the investment already mentioned, we are investing £38 billion in the classic rail network. In addition, we have ambitious plans for high-speed rail in the north, which will from day one connect the north—cities such as Carlisle and Glasgow—and will not stop at Birmingham, but will keep going.
David Morris
I thank the Minister for that point. Before becoming MP for Morecambe and Lunesdale, I secured funding for a bypass that had been discussed for 60 years. I have wish lists that actually become reality.
Mr Goodwill
My hon. Friend need not convince us of his campaigning zeal in getting the best deal for his constituents and ensuring that they and the north get their fair share of the pot. I also represent the north, so I am conscious of the criticism that all the money is being invested in London’s infrastructure and big projects such as Crossrail. It is important that the north gets its fair share in the Chancellor’s vision for High Speed 3.
The Treasury’s Command Paper “Investing in Britain’s Future” set out the fact that the Government will invest over £28 billion in enhancements and maintenance of both national and local roads in the period up to 2021, including £10.7 billion for major national road projects and £4.9 billion for local major projects. More than £12 billion has been allocated for maintenance, with nearly £6 billion for repairs to local roads and £6 billion for maintenance of strategic roads, including resurfacing 80% of the network.
On future investment planning processes, my hon. Friend will be aware that the Highways Agency is currently conducting its route strategy process. Route strategies will provide a smarter approach to investment planning across the network and see greater collaboration with stakeholders to determine the nature, need and timing of future investment that may be needed on the network. A set of strategies is being developed for the entire strategic road network, covering Lancashire, Cumbria and the north-west, London to Scotland west, and the south and north Pennines.
The route strategies are to be delivered in two stages. The first stage identified performance issues on routes, future challenges and growth opportunities, taking full account of local priorities and aspirations. Using that evidence base, the Highways Agency will establish and outline operational and investment priorities for all routes on the strategic road network. The first stage is now complete, and finalised evidence reports were published on 23 April. The second stage will use the evidence to prioritise and take forward a programme of work to identify indicative solutions to cover operational, maintenance and, if appropriate, road improvement schemes to inform future investment plans.
We are also taking action on the strategic road network in Lancashire and Cumbria now by delivering junction improvements at, for example, junction 32 of the M6 and junction 1 of the M55, on the A585 at Windy Harbour, and at junction 65 on the M65, and making safety improvements on the A590 to Barrow at Greenodd roundabout and at the A595 Mirehouse road junction near Sellafield in west Cumbria. The Highways Agency is also currently developing a scheme for a new junction on the M55 to support the Preston city deal, as well as proposals to feed into the roads investment strategy that we will announce later this year.
The schemes are tackling problems that were flagged up to us by local authorities, local enterprise partnerships and the business community—
John Woodcock
And me! On the Greenodd roundabout, it was me and the hon. Member for Westmorland and Lonsdale (Tim Farron).
Mr George Howarth (in the Chair)
Order. If the hon. Gentleman wants to intervene, I suggest that he does so, rather than making comments from a sedentary position.
Mr Goodwill
I am happy to give way to the hon. Gentleman if he wants to ask about that particular example.
John Woodcock
I am sorry. Just on the Greenodd tunnel, the hon. Member for Westmorland and Lonsdale and I pushed rather hard over a considerable number of years to get that, so the Minister might want to mention it.
Mr Goodwill
This Government are always keen to take representations from all sections of the political community. Indeed, looking at some of the investment projects, we can certainly not be accused of pork barrel politics given that much of our investment priority is for the north of England. Indeed, we have been collaborating with the leaders of the great cities in the north to ensure that projects that will support prosperity are delivered.
The Government are also investing significantly in local roads. Through our current “local majors” programme, we are making significant resources available to local authorities to take forward the transport schemes that their areas need. For example, as already highlighted, we are providing £111 million to Lancashire county council towards the £123 million Heysham link road, which will provide a much needed and long-overdue improved link to the port at Heysham, as well as providing congestion relief to the centre of Lancashire.
We are not just working on major programmes. Our pinch point programme is helping local authorities to tackle the hotspots and constraints on local roads that are holding up economic growth. Over the four rounds of the local pinch point programme, we are funding four schemes in Lancashire and Cumbria that are vital to the connectivity needs of local businesses and communities. All are due to be completed next year.
The Government recognise that the local road network is one of this country’s most valuable public assets and that we therefore need to ensure that our local roads are fit for purpose. That is why the Government are providing over £4.7 billion between 2010 to 2015 to local highway authorities in England for the roads that they are responsible for, including the £200 million we provided to councils in March 2011 to help repair damage to local roads caused by the 2010 winter, and the further £183.5 million in March 2014 following the wettest winter on record. More recently, we announced a further £168 million to councils through the pothole fund in the 2014 Budget. The 2013 spending round confirmed that just under £6 billion will be given to local highway authorities over the six-year period from April 2015 to March 2021, equating to £976 million per year and highlighting our commitment to maintaining the road network.
The Government believe that local people and organisations are best placed to understand the needs of their areas to support and boost growth. That is why we are devolving significant resources through the local growth fund to local enterprise partnerships. In the first wave of growth deals announced on 7 July, funding of up to £6 billion for local projects was awarded to the 39 LEPs, including some £3 billion of Government funding for new local transport schemes, reflecting local priorities for what is needed to support local economy growth.
The two LEPs in Lancashire and Cumbria secured significant growth deals with Government. The Lancashire LEP was awarded over £233 million, including over £70 million for vital road infrastructure around Preston to support its city deal growth aspirations, for vital rail schemes in Blackburn, a range of transport improvements in Blackpool, including an extension to the town’s iconic tram service, and a new link road in St Annes. The Cumbria LEP received over £26 million to improve station facilities at Maryport and Workington in west Cumbria as well as to address congestion in Ulverston and Kendal to support growth. Both LEPs will now be able to take forward a range of transport schemes that will support their growth aspirations.
In conclusion, I again thank my hon. Friend the Member for Morecambe and Lunesdale for securing this debate. I hope that what I have said today demonstrates the Government’s real commitment to transport in Lancashire, Cumbria and the north in general.
John Woodcock
The Minister has not said anything about the prospect of a tunnel under Morecambe bay, unless I fell asleep during that bit. Does he think it is remotely realistic?
Mr Goodwill
It is certainly a scheme that would need a lot more work before the viability could be seen. One would need to see the cost-benefit ratios for any such scheme. Any scheme would have to be subject to planning and other considerations, which as a Minister it would be inappropriate for me to talk about at this time. It is absolutely clear that there is a real need for transport infrastructure in all parts of the country, particularly in the north with the development of nuclear power stations and the vital national asset that is the Sellafield plant. We all understand that it is important that it can get goods and people in and out to enable it to flourish.
It is clear that my hon. Friend the Member for Morecambe and Lunesdale has a bold vision of how transport investment, through the provision of a tunnel under Morecambe bay, can support local growth. The Government believe that local people and organisations are best placed to understand the needs of their areas and support and boost growth. Therefore, while I support his ambition, I suggest that he engages actively with the Lancashire and Cumbria LEPs to promote this matter further.
Domestic Violence
(10 years ago)
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David Simpson (Upper Bann) (DUP)
It is a privilege to serve under your chairmanship, Dr McCrea, as we discuss such an important issue. I pay tribute to the House of Commons Library and to Women’s Aid, both of which have been extremely forthcoming with information and statistics for today’s debate.
Domestic violence is a serious crime that costs the lives of innocent women and men across the UK on a weekly basis. The impact of domestic violence on women and children, and indeed men, is devastating and long-lasting.
What is domestic violence or abuse? Scottish Women’s Aid defines it well, saying:
“Domestic abuse is persistent and controlling behaviour by a partner or ex-partner which causes physical, sexual and/or emotional harm. It often gets worse over time…Domestic abuse is not an isolated incident; it isn’t a fight or an argument. There may be no bruises. It is a pattern of dominating and isolating someone through fear and threats or undermining their self-confidence and self-esteem. It can happen if you live with your partner, or if you don’t…It can happen if you have children, and if you don’t…It often involves serious and sustained physical and sexual abuse which can cause injuries and lead to long-term health problems. It can take the form of withholding money and finances, monitoring women and children’s movements, restricting what they wear, who they see, where they go and what they say, on and offline. It can be threatening to or distributing intimate images. It can be manipulating or forcing someone to do something sexual that they don’t want to. It can involve stalking, and isolating women from their friends and family. It can involve physical violence. Women (and their children) are sometimes killed by a partner or ex-partner. It is about control, manipulation and humiliation.”
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
I warmly congratulate the hon. Gentleman on securing this debate on an important subject. Does he agree that the coercive behaviour that is implicit in domestic violence is not currently covered by the law?
David Simpson
The hon. Lady is exactly right, and I will deal with that excellent point as the debate goes on.
The definition continues—here is the important point in all this—to say that domestic violence
“cuts across class, ethnic and social boundaries…The effects of domestic abuse are wide-ranging; much more than the stereotypical image of the bruised woman. Domestic abuse impacts on health, safety, prevents women and children being able to stay in their own home, limits their education and work opportunities—in short, there is no area of life into which domestic abuse doesn’t intrude.”
All that said, domestic violence is unfortunately not viewed by some as one of the highest profile problems in society, because it quite often happens behind closed doors. Today, I want to challenge the existing mindset, and I stand here to raise awareness and to pledge to my constituents that I will fight against this scourge. I will not wash my hands of this issue and say that it is for other agencies to deal with. I will seek to bring about a change in legislation and an awareness-raising campaign. I want our security forces to dedicate resources to fighting and tackling this hidden scourge.
Mr Gregory Campbell (East Londonderry) (DUP)
I congratulate my hon. Friend on securing today’s debate. He talks about challenging the mindset. Does he also meet people in his constituency clinics who have been so abused, and in such an all-pervasive manner, that they think it is a normal part of domestic life? We need to challenge that mindset, because it is only when people realise how exceptionally bad and appalling the behaviour is that they seek help.
David Simpson
My hon. Friend is exactly right. Abuse can go on for so long that it becomes the norm and a way of life, but I will deal with that when I move on to reporting.
Andrew Percy (Brigg and Goole) (Con)
I congratulate the hon. Gentleman—my hon. Friend—on securing this important debate. He is quite right to say that domestic violence cuts across sex, race and socio-economic boundaries, but it often involves men committing violence against women. He mentioned his pledge a moment ago, and I commend to him the White Ribbon campaign, which urges men to sign a pledge
“never to commit, condone, or remain silent about men’s violence against women in all its forms.”
We could all show some leadership by signing that pledge and by hosting public signings in our constituencies, as I plan to do at the end of the month.
David Simpson
The hon. Gentleman is absolutely right. Folk need to sign that pledge. Violence against women, men and children is totally wrong.
Today, people in my constituency are suffering at the hands of brutal, self-centred, manipulative individuals who are intent on destroying the lives of their partners and children. It is time that their actions were halted. I have spoken with women, men and children from Lurgan, Banbridge, Portadown and more rural areas who have been subjected to domestic violence, and I recognise the need for the abuse to stop. While this is a debate for the whole UK, I beg your indulgence, Dr McCrea, as I shall speak primarily about my constituency and Northern Ireland.
Research on domestic violence in Northern Ireland shows that one in four women have experienced or currently experience domestic violence, and that it accounts for approximately one fifth of all recorded violent crime in the Province. Over the past few years, an average of five people have been killed each year as a direct result of domestic violence. The Police Service of Northern Ireland attends an average of 60 domestic violence-related incidents a day, but it recognises that a large amount of such crime goes unreported. Every week, on average, police attend over 400 domestic incidents and deal with more than 100 domestic assaults. If there are 400 incidents in each of the 52 weeks of the year, that equates to over 20,000 call outs relating to domestic violence. It is well known that over 30% of all domestic violence starts during pregnancy. Since 1999, Women’s Aid across Northern Ireland gave refuge to 14,714 women, and 14,356 children and young people.
Mark Tami (Alyn and Deeside) (Lab)
I join others in welcoming the hon. Gentleman’s securing of the debate. On Friday, I was at a fundraising event in Shotton for the Domestic Abuse Safety Unit, which has been operating for 25 years. Does he agree that such organisations give people hope and enable them to take the courageous first step towards escaping from abusive people?
David Simpson
The hon. Gentleman is absolutely right about the courage involved in taking that action. We should encourage such organisations, but Women’s Aid and others face massive funding problems.
During the past 16 years in the Province, Women’s Aid Federation Northern Ireland managed 282,869 calls to the 24-hour domestic and sexual violence helpline. According to an estimate in the Government strategy “Tackling Violence at Home”, the cost of domestic violence in Northern Ireland, including the potential loss of economic output, could amount to somewhere in the region of £180 million each year. Women’s Aid is at the forefront of providing care and support to the victims of domestic violence. I commend it on its most recent initiative, “SOS: Save Refuges, Save Lives”. It is the victims who need to be protected and supported, so I call on the House to ensure that victims and those at risk are kept at the centre of all that we do.
UNICEF research from 2006 shows that figures on incidences per capita indicate that up to 32,000 children and young people live with domestic violence in Northern Ireland. Domestic violence has an extremely worrying effect on children. In fact, I would go as far as saying that children are the hidden victims of domestic violence. In 90% of violent incidents, children are in the same or the next room. They witness the attack and often feel compelled to intervene. Within Northern Ireland, more than 100,000 children were affected last year. Some 1,077 women and 854 children were accommodated in refuges, while 2,938 women and 3,617 children were supported to remain in their home in the community. An astounding 32,349 calls were made to the domestic violence helpline, which represented a 17% increase on the previous year. The issue therefore affects many people, male and female, as well as many thousands of children and the entire family.
Mr Iain McKenzie (Inverclyde) (Lab)
It is a pleasure to serve under your chairmanship, Dr McCrea. I, too, congratulate the hon. Gentleman on securing this important debate. He was right to say that children are sometimes the forgotten victims, because they will bear the scars down the years. We must stop children who see such violent confrontation from thinking that that is how they should go about a relationship.
David Simpson
The hon. Gentleman is right that children suffer, and not only in childhood, but as they grow into adulthood. The experience remains with them and the visions of what they saw as children stick with them, and they might affect their own relationships, because they could feel that such behaviour is the right and natural thing to do.
Andrew Percy
I fully support what has been said. May I give a real example? Recently, I joined the police on patrol as part of the police parliamentary scheme and we attended a young lady who told us that she had been violently assaulted by her partner on no fewer than 50 occasions. Apart from her physical injuries, the saddest thing that evening was the story she told about her four-year-old son now hitting her. Making children witness domestic violence is child abuse and should be dealt with as such.
David Simpson
Absolutely. It almost becomes a natural thing for children to do, because they witness it and think it is the right thing to do.
I am aware that the PSNI is actively seeking to tackle the crime in Northern Ireland. It is startling to see that within the Province 9,546 crimes with a domestic abuse motivation were recorded in 2011-12, which was more than the total for robbery, armed robbery, hijacking, theft, arson, dangerous driving, recorded sexual offences, handling stolen goods and offences under anti-terrorism legislation put together. We can thus see the significance of domestic violence in Northern Ireland alone.
The statistics make that a bit more real: the PSNI responded to a domestic incident every 23 minutes; there was a domestic crime every 60 minutes, approximately; there were 20 recorded offences of murder, seven of which, or 35%, were classed as having a domestic motivation; and 550 people were raped or suffered attempted rape. The statistics are harrowing and that is why priority must be given by the Government and by the devolved regions to tackling the problem head on. Under-reporting is key, given that only around 25% of women ever report their worst assault to the police, and on average a victim is assaulted 35 times before reporting the incident or seeking support. That should not be the case, and it is time for us and for the Government to put our heads above the parapet and to be counted when it comes to tackling such behaviour.
I briefly mentioned the economic cost, but it is well documented that on average domestic violence costs the economy £180 million a year, owing to victims’ absence from work because of injury or disability, and the time taken by criminal justice and support agencies to seek alternative housing, financial and schooling solutions for victims and their children. Those are simply a few of the critical realities and choices that victims face when they seek to escape or address violence and abuse in their own home. Domestic violence also has a significant impact on the cost to our health service as a whole and to our policing and justice system. Nor can it be ignored, especially at a time of budgetary cuts and economic recession. Clearly, it is a significant sum of money and another reason, if one is needed, why it is important for the issue to be a priority.
We have looked at Northern Ireland and domestic violence-related statistics there, but the issue is a UK-wide one, which we should all take seriously. Let us look at the UK as a whole. Data from the crime survey suggest that 30% of women and 16.3% of men in England and Wales will experience domestic violence in their lifetime. In 2012-13 there were 1.2 million female and 700,000 male victims of domestic abuse in England and Wales, while 60,080 incidents of domestic abuse were recorded by the police in Scotland, compared with 59,847 incidents in 2011-12, according to Government websites.
I welcome the efforts of the Home Office, in particular the proposals to strengthen the law on domestic abuse, a consultation on which was published in August 2014 by the Home Secretary. Furthermore, I welcome the four key principles of the approach in the strategy paper—to prevent, to provide support, to work in partnership and to take action to reduce the risk—and the extension of the definition which aims to increase awareness that young people in the age group between 16 and 17 can experience domestic violence, to encourage more of them to come forward to get the support that they need. There is also the work on domestic violence protection orders which, following the successful pilot scheme, have been rolled out across England and Wales from March this year. DVPOs give the police more powers in the immediate aftermath of a domestic violence attack, in particular the power to ban a perpetrator from returning home and from having contact with the victim for up to 28 days.
The domestic violence disclosure scheme, commonly known as Clare’s law, is also commendable, as is the fact that it was rolled out across England and Wales from March 2014. Under the scheme an individual can ask the police to check whether a new or existing partner has a violent past—the “right to ask”. If the checks show that a person may be at risk of domestic violence from their partner, the police will consider disclosing the information.
I have mentioned a few initiatives across England and Wales that I believe have gone some way in helping to address domestic violence. I am interested in hearing the opinions of other Members on those initiatives, and, in particular, their assessment of how successful the measures have been in their constituencies. However, the initiatives need to be rolled out across the whole of the UK. This House should also work with the devolved Governments to develop best practice that can be applied across the entire kingdom. The problem is too vast for us to bury our heads in the sand and say that we have tried our best; we need to redouble our efforts and work towards a zero tolerance of such dastardly deeds.
We also need to look, as a whole, at the increased dependency on refuges. Statements have been made about refuges such as:
“Going into a refuge saved my life, and gave hope and a future to my children”.
Another lady said that going into a refuge had given her
“the support and strength that has helped me rebuild my life”.
On hearing statements such as those, one would have to be a very hard individual not to stop and think about the need for such centres and the impact for good they have had.
We all know, however, that to better protect women and children who are survivors of domestic violence and empower them to access the Women’s Aid national network of specialist domestic violence refuges, that network needs to be protected and a new model of funding for refuges has to be developed. The law also needs to be strengthened to recognise coercive control, which is the essence of domestic violence. Women’s Aid has a leading national network of refuges, but we know that it is facing an urgent crisis. Across England, more and more specialist refuges are experiencing massive funding cuts and are being closed down. That crisis will cost lives.
Ultimately more funding is required to tackle these problems, and reform of domestic violence law is needed. We must ask ourselves as legislators whether there is a criminalisation gap that ensures that the pattern of domestic violence and coercive control remains outside the reach of the existing criminal law, which prohibits only single incidents of physical injury. That is food for thought for us all.
A recent report by Her Majesty’s inspectorate of constabulary on police responses to domestic violence found
“alarming and unacceptable weaknesses in some core policing activity”.
It highlighted that the police often did not recognise or respond appropriately to domestic violence and coercive control. HMIC made particular recommendations about training for police and also recommended that there be a renewed effort to tackle domestic violence.
The HMIC report, work by Victim’s Voice and surveys by front-line domestic violence professionals all clearly underline the need for change, to create a culture in which victims report much earlier and are believed when they do, and where the dynamics and patterns of abuse are recognised and understood. I believe, as does Women’s Aid, that criminalising coercive control, psychological abuse and patterns of abusive behaviour would go some way to assisting in stamping out such activity.
I am well aware that these problems cannot be solved overnight. Addressing the issue of domestic violence will not be easy. It will require a great deal of hard work and co-operation. However, I hope that this debate will send a clear message to people in Northern Ireland—and, indeed, the rest of the United Kingdom—that domestic violence is never acceptable. It is my sincere desire that those who are suffering abuse will realise that this Government take the matter seriously, and that we will use the powers available to us to ensure that those who are at risk are protected, so that those who are guilty of the crime will have no hiding place in this society.
Justin Tomlinson (North Swindon) (Con)
It is a pleasure to serve under your chairmanship, Dr McCrea. I was not intending to speak, but I was very impressed by the thoughtful, sensible and incredibly important contribution of the hon. Member for Upper Bann (David Simpson).
I have had the pleasure of working with Women’s Aid on domestic violence. The point that domestic violence is out of sight and therefore out of mind was what struck me so strongly. In Swindon, between April 2012 and March 2013, there were 2,459 confirmed cases of domestic violence, but that is believed to be only 20% of the total, so the figures are just scratching the surface.
I visited Swindon’s women’s refuge with my hon. and learned Friend the Solicitor-General. Olwen Kelly and her team do a fantastic job. It is only on meeting and talking to victims that we can even start truly to understand the challenges and difficulties they face—the living nightmare that they, their families and their loved ones will go through.
It is always a challenge to secure sufficient funding for refuges, a point that the hon. Member for Upper Bann rightly highlighted. One of the biggest challenges is that, by their nature, refuges cannot showcase their fantastic work because they have to be hidden away in local communities. If all people could see that work, there would be a groundswell of support. I also pay tribute to Layla Allen and her team at the victim support unit at our local courts. They provide support and assistance for those who are brave enough to go through the legal challenges to bring those responsible to task.
Having met representatives of Women’s Aid, I said I wanted to play a small part and see how I could help to highlight domestic violence and deal with the fact that it is out of sight and out of mind. I was proud to help launch the “Football United Against Domestic Violence” campaign in Parliament. The Minister kindly came along and showed complete support for that initiative. At the launch were Polly Neate, the chief executive of Women’s Aid, and its ambassadors, Charlie Webster—she carried out her own fundraising, and reached her £100,000 target, by running 250 miles between the grounds of 40 football clubs—and Jahmene Douglas. Women’s Aid is using the medium of football to highlight domestic violence to a predominantly male audience. It managed—those who understand sport will know how incredibly difficult this is—to unite the Premier League, BT Sport and the Football Association. We had a truly united front to highlight this important issue, and there was fantastic cross-party support.
Collectively, we must do all we can to champion the work done—it is predominantly done by volunteers in our community—to highlight domestic violence. I simply wanted to make a short contribution to support this important debate.
Mr Iain McKenzie (Inverclyde) (Lab)
Once again, it is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate the hon. Member for Upper Bann (David Simpson) on securing this important debate.
Domestic abuse is the silent shame that exists in all our communities. It is never the shame of those who suffer abuse at the hands of the person who is supposed to love them, yet deep shame and self-blame are often felt by victims and their families, to the point of denial that abuse is happening. Even when it is obvious to others, there is always an excuse that victims can come up with to cover their perceived shame. What assistance can victims count on when our communities have for so long lived in denial, operating a practice of non-involvement? How often have we heard, “Don’t get involved—it’s a domestic. Don’t come between a husband and a wife”?
I will focus on Scotland in my remarks, although I acknowledge that domestic violence is a country-wide problem. In Scotland, a domestic violence incident is recorded every 10 minutes. One in five Scottish women experience domestic abuse, although I concede that men also suffer it. The Scottish police recorded 60,000 incidents of domestic abuse in 2012-13, which compares with more than 59,000 incidents recorded the previous year—the figure is increasing.
No one deserves to be abused and no-one should have to put up with abuse. Domestic abuse may affect any person, regardless of class, race or age. There is no typical abuser, and about 80% of incidents of domestic violence involve men attacking women. Women have been killed because of domestic violence by former or current partners. Some 61% of incidents reported to the police in 2012-13 involved victims who had already experienced abuse in their home. That figure has not declined since last year, and is significantly higher than a few years ago.
Half of all incidents recorded by the police in Scotland last year led to the recording of a crime or offence, the most common being common assault, which accounted for 42% of all incidents. The second most common crime or offence was threatening or abusive behaviour. Incidents with a female victim and a male perpetrator represented 80% of all domestic abuse reported in Scotland last year. The reported percentage of domestic abuse suffered by males was around 20%.
Domestic abuse causes serious and long-lasting harm. Apart from physical injury, it frequently causes psychological damage, and abused people may lose their jobs or homes. Domestic abuse also affects the children who witness it. It undermines their relationship with their mother, disrupts their education and can even turn them into abusers later in life. We must stop that vicious circle.
I frequently speak to Women’s Aid in Inverclyde, which secured much needed funding from a lottery grant to hire two full-time people to work with children from households experiencing domestic violence. Those kids are often identified by their disruptive behaviour in school or falling behind in lessons through disengagement or withdrawal. I was pleased to assist Women’s Aid in Inverclyde to raise funds and to put together equipment so that they could go into schools and the community and educate the next generation that such behaviour is unacceptable. The project helps by offering more than just temporary sanctuary away from the abuser, and is helping to break the cycle.
Domestic violence corrodes and damages our communities and our society. The extent of the problem in Scotland is shocking. It is our true hidden shame. It is often, but not always, fuelled by alcohol, and over-consumption of alcohol often brings out a change in character, and a change for the worse. It is no coincidence that a Scot wrote about Dr Jekyll and Mr Hyde and a potion releasing an evil personality. We need not look far to see where he took his inspiration from.
A recent study revealed at the Scottish Women’s Aid conference in Edinburgh showed that domestic violence in Scotland has risen by 66% in the past 10 years. That is an alarming increase. Dealing with the huge number of incidents in Scotland costs the economy £2.3 billion a year.
There is always a motivation behind the violence, whether it is physical or emotional. It is a way of maintaining control through fear. Unbelievably, many victims of domestic abuse blame themselves for the abuse. Over time, domestic abuse creates an emotional and psychological state that is unique among crimes and similar to the fear endured by survivors of violent atrocities.
It is essential to go into our schools to talk openly about this ongoing problem, and to educate the next generation that domestic abuse, whether physical, mental or sexual, is unacceptable, and in doing so hopefully to protect a future generation of women from violence. Society simply cannot go on closing our eyes and ears to domestic violence. It is disgraceful in this day and age that women are not safe in their own homes. There must be zero tolerance of domestic abuse. We must better protect women and children who survive domestic violence and give them access to specialist domestic violence services. The national network of specialist domestic violence refuges needs to be protected, a new model of funding for refuges needs to be developed, and the law needs to be strengthened to recognise coercive control, the very essence of domestic violence.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate my hon. Friend the Member for Upper Bann (David Simpson) on securing the debate. There is no doubt that those of us in the Chamber are well aware of the issue in our constituencies and the importance of highlighting it.
Domestic violence affects men and women, but people are sometimes under the impression that only women are subjected to it. That is not always so, and my hon. Friend made it clear that men may suffer, as do children. Hon. Members probably have varying statistics on domestic violence, but the fact is that a colossal number of people are directly involved. People are not aware of the frequency of domestic violence and who is affected. Many perceptions of domestic violence are simply not true, such as that men are never the ones abused, that the behaviour is due to the abuser’s problematic childhood, that someone can always leave their abuser, and—this is the one that really winds me up—that the abuse happens because it is deserved. No one ever deserves abuse and no one should be subject to it.
Domestic violence may be described as any incident of threatening behaviour, violence or abuse, whether psychological, physical, sexual, financial or emotional, between adults who have been intimate partners or family members. A relationship that was based on love may change completely, with violence becoming a key part of it. Figures show that one in four women and one in six men will experience domestic abuse. On average, a woman will experience violence 35 times before her first call to the police, which indicates that many women are long suffering, with a long time passing before they decide that they must take action. It might be helpful if they did so earlier, but they first must acknowledge that they need help.
Two women in England and Wales die each week because of domestic abuse, which is too many. Domestic abuse is never justifiable but it is on the rise. In Northern Ireland, between 1 April 2013 and 31 March 2014, there were 27,628 domestic abuse incidents, which represented a 1.6% increase on the previous year. The situation is not regional, as the problem covers the whole United Kingdom: Scotland, Wales, England and Northern Ireland.
The British crime survey showed that, in 2003, there were around 12.9 million incidents of domestic violence against women and 2.5 million incidents against men. Since then, the figures have increased. Most people are aware to some degree of what domestic violence is, and most agree that it is completely wrong, yet the number of incidents continues to rise. Is there a problem of acceptability within society? If so, we must address that.
Domestic abuse is often not reported, yet a call is made to the police specifically about domestic abuse every minute. It is estimated that they receive more than 1,300 calls every day, and more than 570,000 every year, yet according to the British crime survey, which is specific to England, less than 40% of domestic violence crime is reported to the police. It is difficult to know why that is the case, but several factors play a part. Many sufferers love their partner or spouse and, despite the abuse, simply do not want to leave. Others have children and do not want to split the family up. Unfortunately, some have convinced themselves that they are simply getting what they deserve, but we should be quite clear that they are not. Some feel threatened and are afraid to contact the police, or to leave, because they have been told, “I will find you,” or “I will come after you.” There are many cases throughout the United Kingdom in which such threats have, unfortunately, become a reality, with the result of violence against a partner—more often the woman. There is no safety for any person; in cases of domestic abuse, threats are very real and can be vital in ensuring that the man or woman remains at home and stays quiet.
Some—often women—feel a sense of shame. Many know their abusers, and some may even be married to them, so they do not see what is happening as abuse, as my hon. Friend the Member for Upper Bann said. We need to change that aspect of the British mindset. I am British, as are you, Dr McCrea, and the other Members in the room—and we are proud to be so—but people sometimes have a British mindset when responding to things, so we need to address that.
There is also an idea that abuse is real only if it comes from a stranger. Men and women who are being abused by their partners often feel a sense of shame and are embarrassed to tell people that their husband or wife is abusing them. That is something that grieves me greatly, and it is particularly true of women who are raped by their husbands.
The crime survey research found that women are most commonly sexually assaulted by men they know. When the researchers asked women about the last incident of rape they had experienced since the age of 16, they found that 45% of respondents were raped by current husbands or partners, and 9% by former partners, while 29% of perpetrators were otherwise known to the victim. Only 17% of women were raped by strangers. Let us be clear: sexual abuse in some relationships is distinct, violent, real and brutal, and we need to address that.
The figures also show that 30% of domestic abuse starts or intensifies during pregnancy. It is hard to imagine that someone would violently abuse or beat up a lady who is pregnant, sometimes to try to abort the baby, but that is the extent of the violence to which some ladies are subjected.
The hon. Member for Inverclyde (Mr McKenzie) referred specifically to children. For 90% of domestic violence incidents in family households, children were in the same room or the next room, and in more than 50% of known domestic violence cases, they were also directly abused, either because they heard what took place, or because they were physically assaulted. In Northern Ireland, the PSNI domestic abuse crime statistics show that from 1 April 2013 to 31 March 2014, 11,000 children were living in homes in which domestic abuse was a daily reality. If a child experiences direct violence against their mother in their home, that will have a detrimental effect on them as they grow up. We cannot ignore that, and we must be aware of how it will shape the children of today and the adults of tomorrow.
In Northern Ireland, the Rowan sexual assault referral centre was established last year to meet the needs of those who have suffered sexual assaults by providing physical, emotional and psychological care. During its first 11 months of operation, from May 2013 to March 2014, the Rowan received 442 referrals. Of those, 182, or 41%, were children; 86% were female and 14% were male. The centre has been able to help in some way, but there is a greater need across the whole of Northern Ireland, as there is across the United Kingdom. Undoubtedly, as the figures show, domestic violence is very much a reality for men, women and children throughout the UK, and we must ensure that it stops.
Mr Nigel Dodds (Belfast North) (DUP)
I, too, congratulate my hon. Friend the Member for Upper Bann (David Simpson) on his sterling work in bringing the matter to the attention of the House and his work on human trafficking back home in Northern Ireland. He is to be commended on his tremendous work in those areas.
On the effects on children, is not one problem that, while a couple may be affected by domestic abuse—the victim is often the female—the damaging psychological effects on children, even if they are not directly assaulted or abused, but indirectly affected by what they hear or witness, will last for years or even a lifetime? However, children brought up in such an environment are not given a great deal of support, often because people are not aware of their background as they move on through education. More really needs to be done to help those children.
Jim Shannon
My right hon. Friend is right that we need to focus on the children of these broken relationships to help and mould them so that they are not seriously psychologically affected by what they see and experience in their homes over the years. We need better provision to do that, and I look forward to the Minister’s response, because I am keen to hear what the Government are doing collectively and what interaction there has been with other regions.
I want to mention some of the things that we have done in Northern Ireland. We have already had two strategies to defeat domestic violence—one in 2005 and one in 2008—and we are working on a new strategy for 2015. That is fantastic news, because we have made great progress as a result of those strategies, even though we have witnessed a 1.6% increase in domestic violence. It will take time for the strategies to filter through and for people to take on board the issues my right hon. Friend mentioned.
We cannot congratulate ourselves yet, because the figures for domestic abuse are still rising. We need to ensure that we change people’s mindsets towards domestic violence, and ensure that men, women and children have someone to speak to and are not afraid to contact the police. We also need to work on setting up a refuge facility—this is an issue we cannot ignore—for men who have been abused. Unfortunately, there is nothing for them at the moment. Just because they are fewer in number, that does not mean they should be ignored. Furthermore, evidence shows that the number of men subject to domestic abuse is much higher than we think. However, as a result of their pride and embarrassment, it often remains unknown.
We must do all that we can to guarantee the safety of men, women and children. When their safety, well-being and security are in jeopardy, we must make sure they have a safe place to turn to, where they need not feel shame, embarrassment or fear.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
It is a real pleasure to serve under your chairmanship, Dr McCrea. I am grateful for the opportunity to speak this afternoon. I congratulate the hon. Member for Upper Bann (David Simpson) on securing a debate on this important issue. I should say at the start that I have been a member of Scottish Women’s Aid for more than 30 years, in a paid and unpaid capacity. I am also a former chairwoman of Women’s Aid, and I currently chair my local group, East Ayrshire Women’s Aid.
Some years ago, we had a strategy of zero tolerance of violence against women to address such violence in general. It had three planks: prevention, protection and provision. We must acknowledge that domestic violence, like all violence against women, has its roots in the patriarchal structure of society throughout the world. It is about an abuse of power. There can be no equality in the public sphere until there is equality in the private sphere. Without that analysis of domestic violence, we will simply get nowhere.
On the issue of protecting those—mainly women, but also men—who have been subjected to domestic violence, we have come a long way. The hon. Member for Strangford (Jim Shannon) talked about a strategy in Northern Ireland; it is great that it is in place, and I think the situation is the same in Scotland and England. This is a UK issue, so we must acknowledge that there are no borders for domestic violence and work together as much as possible. However, strategies are no use without funding; they must be backed up by the funding to carry them through.
We have come a long way in recognising domestic violence as a criminal offence. Thirty years ago, when I got involved in the issue, it was not recognised as one, and certainly not by the police, but that situation has improved greatly. There is now far more inter-agency partnership working, there are things such as interdicts, and there is support for women at court. However, there have also been cuts to legal aid. As I understand it—the Minister will correct me if I am wrong—in England, unless abuse has been reported to the police, legal aid is not available. In most cases, as we all know, it takes a long time for women to report abuse to the police and to get into the court system. There are, however, several measures that some women might want to take, and they might need legal aid to do so.
On the subject of protection, and in line with the Women’s Aid campaign, we must recognise coercive control, and there must be a specific law to deal with it. That would represent a progression from all the laws of the past 30 to 40 years. It would recognise the nature and extent of domestic violence—that it is matter of control and an abuse of power, not just an individual instant when someone loses their temper. My hon. Friend the Member for Inverclyde (Mr McKenzie) rightly talked about Scottish men being like Jekyll and Hyde. I have witnessed that many times and concur with his view, but we must ask why that happens. Why do men and some women, not just in Scotland but throughout the world, behave in that manner? There must be something collective about it, not just an individual response. Clare’s law, which was mentioned, is being piloted in my constituency and it will be interesting to find out how that goes, and whether it can be applied throughout the country. I think it already is in England—[Interruption.] The Minister concurs.
It is disappointing that Women’s Aid in England has had to start an SOS campaign. It states that there is a risk of losing the network, and that some refuges have closed. How can that be called progress in 2014, after everything that we have achieved? I believed that there was a cross-party commitment throughout the UK to dealing with the issue, but that is a retrograde step and cannot be allowed to continue. Current provision needs to be maintained and we must have a new model for funding. I remember that in the 16 years when I worked full-time with Women’s Aid, all our time was spent thinking about how to get funding—from the lottery, and from this and that. That is all very well, but there is a need for secure provision, which means putting our money where our mouth is. We need secure funding for Women’s Aid throughout the UK, and I am very supportive of that aspect of the campaign.
The nature and extent of domestic violence is now recognised far more than previously, but still not to the extent it should be. The resources available are not adequate. Studies have shown that men as young as 15 believe that it is okay to hit their partner or girlfriend in certain circumstances. If that is the case, we are failing to educate young people. Last year or the year before, I took part in a cross-party inquiry with the hon. Members for Hastings and Rye (Amber Rudd) and for Solihull (Lorely Burt) about sex and relationship education for young people. One of our recommendations was to make that compulsory so that all young people should have not just sex education—about the mechanics of the situation—but the opportunity to learn about relationships, so how to conduct relationships in which people treat each other with respect. I know that that happens, but it is not compulsory, and I strongly believe that it should be.
I welcome this debate. I hope that the Government will take on board the concerns of Women’s Aid, although I know I would say that, because I am very much involved with it.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I extend my congratulations to the hon. Member for Upper Bann (David Simpson) on securing the debate. He powerfully set the scene in relation to domestic abuse and domestic violence, recognising the work of Women’s Aid, the wider issues of domestic and sexual abuse, controlling behaviour and the impact on children. He also raised the question of how domestic violence cuts across class, ethnicity and background, and the fact that it is an issue for all of us. He showed how important it is to recognise the impact of domestic abuse and violence on people’s life chances, education and so on.
It is clear that domestic and sexual violence is little short of a national scandal and we need to do much more. Statistics have been shared in the debate, and however we look at things, the scale of reported incidents is staggering. Women reported more than 12 million incidents of domestic abuse last year. At least 750,000 children a year in the UK witness violence in their home, and two women a week are killed by their partner, or an ex. In some areas almost one in five 999 calls is about domestic violence. We also know that one in three 16 to 18-year-old girls has experienced groping or otherwise unwanted sexual touching at school and elsewhere. There are wider issues as well, if we treat violence against women and girls as the broader theme: thousands of girls are at risk of female genital mutilation and others disappear to become victims of forced marriage or honour violence—and it has been more comfortable for us to turn a blind eye to those issues.
I was proud to be at the launch of Plan International’s campaign to face up to violence against girls, and the launch of the END FGM campaign at the south bank just a few weeks ago. I pay tribute to the work done by many campaigners to raise our awareness of these issues which take the lives and health of millions of women and girls around the world, and to enable them to tackle them in their own families and communities. Domestic violence is a huge drain on the economy, as well as a blight on society. Domestic abuse alone costs the UK almost £16 billion a year.
The hon. Member for North Swindon (Justin Tomlinson) talked about the importance of women’s refuges, and about under-reporting and funding issues. My hon. Friend the Member for Inverclyde (Mr McKenzie) described domestic abuse as a silent shame and spoke eloquently about those who suffer in silence, and about the need for support that victims can rely on. He also talked about our reluctance to get involved in what we see as something that happens behind closed doors, and about the idea that it is not for society to question what happens in the family sphere. We have come a long way from the time when rape in marriage was legal, but we have much further to go. The hon. Member for Strangford (Jim Shannon) spoke about strategies that are in play in Northern Ireland. Hon. Members are united in arguing that we need to do far more to prevent domestic abuse and domestic violence. My hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) talked about prevention, protection and provision—the core strands of the strategy that we need.
I have had some discussions since I took on my new role as the shadow Minister for preventing violence against women and girls, and I have heard of shocking experiences, but I want to speak about those things in the context of three important areas. The first is prevention, and stepping up the challenge. The history of the issue includes reforms made under the Labour Government, such as specialist domestic violence courts, multi-agency risk assessment conferences and independent domestic violence advisors. That work has continued under the present Government. If we consider things collectively, we see that we have not managed to stem the tide of the prevalence of domestic abuse and violence. The second area I want to mention is support services—something frequently raised by hon. Members in the debate. Those who are victims of domestic violence, men or women, should be able to have confidence that services are available for them, and that they will get such services without delay.
The third area is improved access to justice, which has also been raised today, in terms of the performance of police, and by the HMIC in its report earlier this year. Hon. Members who have talked to women in refuges will know the struggle that they have to be heard in the court system and the lack of speed with which our court systems work to tackle some issues of domestic violence and issues between couples—I am referring to both the civil and criminal courts.
Let me start with prevention. I want to talk a little bit about sex and relationship education, which has been raised. Let us consider the challenges that young people face today and what they experience: they are under a lot of pressure to conform, whether that is through accessing pornography online, or through gang culture in some areas and in our schools. Having compulsory sex and relationship education is important, and it is not just about theory. Talking to those who have been delivering courses in schools, I have heard about how young people have developed the confidence to start talking about what is happening to them at school and, sometimes, at home. It is not just about theory, but about giving young people the resilience to stand up and be able to voice what is going on in their lives, and to be able to make very positive choices for the future. It is also very important in interrupting behaviours that may be learned at home if young people are experiencing domestic violence themselves, and watching it happening between their parents. It is also true to say that 88% of parents want sex and relationship education to be compulsory to tackle the dangers of pornography.
Labour has called for SRE in all state-funded schools from key stage 1, because there are aspects of age-appropriate sex and relationship education that are important for every age. Many young children at school today are not part of a huge family. Many are single children or have siblings who are younger, and they are learning how to share and about relationships for the first time. Having a way in which children learn about the values of respect, with others their own age, is incredibly important. A mum called me about an experience that her six-year old daughter had in her school: she was effectively assaulted by young boys her age. The school did not take it seriously. The trauma that the girl went through could be regarded as parallel to that experienced by someone of 16 or 26. In the end, she left school, and her mum is campaigning for change.
On support services, I pay tribute to the work of Women’s Aid, the End Violence Against Women Coalition, Rape Crisis and others. They do incredible work, not only in delivering services but in raising the profile of issues at a national level, and in making sure that we are getting the message of prevention and support out there.
We have talked today about the importance of funding. Labour and the shadow Home Secretary have committed to a new £3 million annual fund for refuges supporting victims of domestic violence. As we have said, we want to see the continuation of a national network of refuges. A 31% cut in funding for refuges and specialist advice is undermining action against domestic violence. In some areas, there is absolutely no specialist refuge. Refuges have also been disproportionately affected by cuts to local government, and according to Women’s Aid, eight refuges are under imminent threat of closure and are currently running on reserves.
Labour’s commitment is fully funded, through a small percentage of savings from abolishing the expensive police and crime commissioner elections. We are also calling for new FGM protection orders to stop children suspected of being at risk of FGM being taken abroad. On that, there is some commonality but also some differences between us and the Government, and we are looking at other measures that we will be able to bring in from the women’s safety commission, led by Vera Baird, QC, and Diana Holland. We hope to be launching those next month.
Before closing, I want to say a few words about improved access to justice. We need to ensure that there is a joined-up justice system that works fast, gets it right and is cost-effective and easy to access. We believe that we need a new commissioner for domestic and sexual violence who sits at the heart of Government to ensure that victims’ voices are heard, that there is a way they are heard fast, and that there is a fast response to the challenges that are being raised. I am working closely on that with Keir Starmer, the former Director of Public Prosecutions, because we need to see a new agency—a new body—that can sit alongside the Victims’ Commissioner and the Children’s Commissioner to say we need to join this up, but we need some challenge to the centre in order to make sure that victims’ voices and victims’ challenges come through to the system as a whole.
We also need new national standards for policing to drive up performance across the board. We have all heard harrowing stories of victims who do not feel that they have been believed. I met a woman at a refuge who told me that the policeman who attended when she was a victim of serious violence at the hands of her partner thought that she was drunk when, in fact, she was concussed, having been hit around the head by her partner. Police training needs to be updated and refreshed. We need to make sure that there are minimum standards so that victims will be believed; so that we know such incidents will be dealt with within an allotted time; so that evidence will be collected and the follow-up will be done; and so that the Crown Prosecution Service’s advice will be sought early to build a case. Those are all vital to maintaining public confidence in policing.
I close by saying that this has been an incredibly important debate. We know that we are a long way from the end of this, and that we need to bring in measures, as Labour hopes to do in its first Queen’s Speech, in a Bill addressing violence against women and girls. The fact that we have come together in this debate this afternoon and that this debate has also been led by men is an incredibly important step that we are taking, collectively as the British Parliament, to say that we want to make sure that there is zero tolerance of violence in relationships, that that message goes early to schools and our young people, and that we address these matters with the utmost seriousness in every way that we can, from every part of Government.
The Minister for Crime Prevention (Norman Baker)
I begin by thanking the hon. Member for Upper Bann (David Simpson) for providing us with the opportunity to debate this important topic, and for the way in which he presented his case. It has been a useful debate and I am encouraged by the degree of agreement across all parties on tackling this appalling crime, and indeed, by the progress that has been made, not just in this House but in the public’s perception in recent years.
I want to put it on record right away that the coalition Government is absolutely determined to tackle domestic abuse, and indeed, I would argue, has a good record so far in doing so. It is a core priority for me and for the Home Secretary. Our approach is set out in the violence against women and girls action plan.
In the same way that the hon. Gentleman began the debate, let me say that I welcome the measures being taken by the devolved Administrations in tackling domestic abuse. I understand that the Northern Ireland Executive is currently developing a new joint domestic and sexual violence strategy, which builds on its five-year victim and witness strategy published in June 2013. I welcome that and I am sure that it will enhance services within Northern Ireland to protect victims of domestic abuse.
As has been said, domestic abuse is a sinister way of undermining the trust that those in close relationships place in one another. Most of the time it takes place behind closed doors, but of course that need not always be the case. It can, in the worst cases, lead to fatalities.
Domestic abuse happens every day in homes across the UK. In most cases, it goes unreported, which makes it difficult to know just how many people are affected. The crime survey for England and Wales estimates that 1.15 million were women victims of domestic abuse, of which 845,000 suffered partner abuse. In addition, 77 women were killed by their partner or ex-partner last year. That is the lowest number of intimate partner homicides since 1998, but of course everyone in the House would agree that any partner homicide is one too many.
We want to build a society in which violence against women and girls is not tolerated, in which people speak out and no victim has to suffer domestic abuse. The coalition Government’s strategy is backed by ring-fenced funding of nearly £40 million for specialist local domestic and sexual violence support services. Facilities funded with that money include 144 independent domestic violence advisers, who help victims of domestic violence to get their voices heard, and 54 multi-agency risk assessment co-ordinators, who protect the interests of those who are most at risk. Up to 60% of abuse victims report no further violence following intervention by independent advisers. However, all parts of the United Kingdom have a responsibility to ensure that we are doing all we can to reach out to those caught in cycles of abuse.
David Simpson
Although we have looked at the figures and the Minister has said that the Government will do all they can to help victims, there seems to be an issue to do with male reporting. Perhaps it is a masculine thing: men do not want people to know that they are being battered or whatever. We know that the vast majority of domestic violence is committed against women and children, but what more can the Government do to encourage men to come forward? There seems to be a lack of men coming forward.
Norman Baker
Some of the £40 million—not a great proportion, it has to be said—goes towards helping organisations that are there directly to provide an outlet for men who wish to report such matters. We think that the number of men who were victims of domestic abuse was 721,000, and of that number, 517,000 experienced partner abuse. That may be same-sex partner abuse or by women on men. Nevertheless, it is also a very high figure, and the hon. Gentleman is right to draw attention to it, although it would be wrong of me not to point out that the majority of domestic abuse is by men on women.
I was about to mention two powerful initiatives that we have been rolling out across England and Wales to support victims. The domestic violence disclosure scheme is a system whereby anyone can seek disclosure of a partner’s violent past. Those with the legal right to know are provided with information that could well save lives, empowering them to make an informed choice about their future. As the Minister for Crime Prevention, I say that if we can prevent crime in the first place, that is the best outcome.
Domestic violence protection orders offer respite to victims in the immediate aftermath of domestic abuse. They have the power to ban a perpetrator from the home and from having contact with the victim for up to 28 days. That offers both the victim and the perpetrator the chance to reflect on the incident. In the case of the victim, it provides an opportunity to determine the best course of action to end the cycle of abuse. In my view, it is a welcome change that it may be the perpetrator who is required to leave the house, rather than the victim leaving, as has all too often been the case in the past. Together, the two initiatives significantly improve the reality for victims of these appalling crimes.
Seema Malhotra
Will the Minister give his assessment of the take-up so far of domestic violence protection orders?
Norman Baker
The early indications are encouraging. The orders are certainly working, but as the hon. Lady will appreciate, we have rolled them out just recently so we do not have the full-year figures yet. Of course, we will, as a matter of course, publish those figures as and when they are available, but the early indications, as I said, are positive.
Also important is the Government’s decision in April 2011 to place domestic homicide reviews on a statutory footing. Now, every local report on a domestic homicide is reviewed and quality-assured by a panel of independent and Home Office experts. Each review results in a tailored action plan that must be delivered by the area in question to ensure that we learn from those individual tragedies. The Home Office has published a document collating the national lessons learned from those reviews and making recommendations to local areas to drive improvements in practice.
Of course, we have more to do. I think that the hon. Member for Strangford (Jim Shannon) said that every 30 seconds a victim of domestic abuse summons up the courage to call the police. That is a huge percentage of the number of calls that the police receive. When a victim reaches out for help, it is vital that the police are equipped to respond effectively and to end a cycle of abuse that in many cases will have been going on for years. Sometimes a person will have been subjected to abuse 50, 60 or 70 times before they make that call to the police. It is also vital that victims have confidence that the criminal justice system will prosecute the perpetrators of these appalling crimes and will work for the victims.
Following a dip in referrals from the police to the Crown Prosecution Service, I am encouraged to see that the volumes of referrals, prosecutions and successful convictions are rising. For example, the volume of referrals to the CPS rose to 103,569 in 2013-14. That represents a rise of 17.5% from the previous year and the highest level ever. It compares with 91,184 referrals in 2009-10. Following action that we have taken with the Attorney-General, the number of defendants being charged has risen from about 60,000 to almost 73,000 in the last year. That represents a 21% increase and, again, the highest level ever achieved. It is subsequently translating into a rise in conviction rates, from 72% of those facing a charge in 2009-10 to 74.6% in 2012-13. However, I am the first to say that, despite the encouraging rise in referrals and prosecutions, we need to do more to ensure that front-line agencies treat domestic abuse as the serious crime that it is.
Hon. Members will be aware that HMIC published its report in March this year on the police response to domestic abuse across all 43 forces in England and Wales. That report made for depressing reading. It showed that a combination of poor leadership, bad culture and basic policing skills being lacking was failing victims. For example, on leadership, the report found that many chief constables and their top teams still focused more on volume and acquisitive crime reduction than on domestic abuse. Leadership on domestic abuse was not present, translating into poor management and supervision in the police to reinforce the right behaviours, attitudes and actions of officers.
On culture, HMIC identified that there were many examples of officers who work tirelessly to keep victims safe and sometimes with little support from their wider force, but there were also officers who showed a poor attitude towards victims and failed to treat them with the empathy they deserve. Victims reported feeling judged and not taken seriously.
On core policing skills, basic evidence collection that could help to support a prosecution to bring a perpetrator to justice simply was not happening. When HMIC reviewed 615 actual bodily harm cases connected with domestic abuse, photographs of injuries were taken in only half the cases and, in 30% of cases, officers’ statements lacked important details about the crime scene or the victim.
The failings I have described meant that, crucially, the priority that police and crime commissioners give domestic abuse in their crime plans, which is quite general, I am happy to say, was not translating into operational reality. That is completely unacceptable. People in desperate circumstances should know that they can rely on the police to respond quickly, effectively and professionally. Chief constables must take urgent action to make significant changes to front-line policing so that victims are protected and perpetrators brought to justice.
To ensure that real change happens, the Home Secretary and I sit on a new national oversight group that she has established and that meets quarterly to drive through the recommendations in HMIC’s report. I am pleased to inform hon. Members that we will shortly publish our first progress report, a copy of which will be placed in the Library of the House.
All police forces in England and Wales have now submitted action plans to HMIC to address the report’s findings. HMIC will quality-assure those plans over the next two months with voluntary sector partners, and will report its findings at the next national oversight group meeting in December. I expect police and crime commissioners and the College Of Policing to use the plans, plus the outcomes arising from the national oversight group, to support their forces and hold them to account.
Some forces have already taken action to address the issues that HMIC has highlighted. Merseyside police identified a problem with the initial evidence collected by officers in domestic abuse cases and trained 1,500 front-line officers to improve their investigation skills. Following a re-inspection, Gloucestershire police have been deemed by HMIC to be much improved. We are seeing good progress, and it shows that the police can respond in a positive and effective way.
I am clear that the work that the police are undertaking to improve their response must be supported by the Government and the wider response of the criminal justice system. Last month, the Secretary of State for Justice announced a victims package, which launched a new package of reforms including the establishment of a new victims information service and strengthening the protection for vulnerable victims by improving the court experience. We are also piloting pre-trial cross-examination in three Crown courts, and the Director of Public Prosecutions is updating guidance for prosecutors to complement that work.
The Government will ensure that front-line criminal justice agencies have the tools they need to tackle domestic abuse effectively. Hon. Members will be aware that the Home Office has recently concluded a consultation on whether the law on domestic abuse needs to be strengthened, a point that many hon. Members have made this afternoon. There is widespread understanding that domestic abuse is not simply about physical violence, and the expanded definition that we introduced last year makes it clear that domestic abuse extends to coercive and controlling behaviour. We want to ensure that the legal framework is unambiguous in recognising and prosecuting domestic abuse in all its forms. We received more than 750 responses to our consultation, which we are currently analysing, and we will publish our response shortly.
Let me pick up some of the points that hon. Members have raised. I am grateful to the hon. Member for Upper Bann for referring to the White Ribbon pledge. I can inform him that I have signed it, because it was initiated by my local authority, which has a good record on the matter. I encourage other hon. Members to do likewise.
The hon. Gentleman was right to refer to the effect of domestic violence on children. That is a serious issue, and he is quite right that the effects can remain with children throughout their lives. Although I cannot provide a statistical analysis, I have a suspicion that those who witness or are subject to domestic violence at an early age may be more vulnerable to sexual violence later in life than those who do not. Witnessing violence in the home at an early age cannot be good for children.
Several hon. Members spoke about refuges. I have made it plain that local authorities that provide money for refuges should not see cutting refuges as an easy saving. I appreciate that local authorities are under considerable financial strain, but they should not be cutting services for vulnerable people. I understand that the case has been made for looking afresh at national funding for refuges, and I have met Women’s Aid and other groups to discuss the matter. We are currently considering where we go with that, but I want to make it plain that we should see no further closures of refuges in this country.
Although hon. Members have not raised this point, we must do everything we can to help local authorities to commission services properly, because there is clearly a problem with that. Some local authorities have commissioned services in a way that does not help refuges, and that must be addressed. For example, some refuges have said that they will accept references only from the local community, but if a woman has been subject to physical abuse, the last thing that she will want to do is to stay in her community. She will want to escape from it, so that condition, which some local authorities have imposed, is nonsensical. The Home Office is working with local authorities to help them with commissioning practices, to ensure that they get the best value for money and the best service for those—predominantly women—who use refuges. More can be done on that. Current commissioning practices waste money by imposing requirements that are not necessary for the operation of the refuge service, and that money could be better spent on protecting women.
My hon. Friend the Member for North Swindon (Justin Tomlinson) mentioned the engagement of football authorities. As he recognises, they responded quite well to the initiative that he mentioned. I have had a meeting with the various elements of football—the FA, the Premier League and others—to discuss what they might do further to deal with domestic violence, and how they might use their voices to help tackle that societal problem. They have gone away to consider what they can do to help, and I am waiting for them to come back with their offer. We are very much on the case with that, and I am grateful to the football authorities, in their various guises, for the positive way in which they have engaged with me and the women’s organisations to which my hon. Friend referred.
The hon. Member for Inverclyde (Mr McKenzie) mentioned a figure for the increase in domestic violence. I urge caution, because it can be difficult to determine to what extent there has been an increase in domestic violence, and to what extent there has been an increase in reporting. Those are not quite the same thing, as he will appreciate. The Government is encouraging victims of violence to come forward—that is a common approach across the House—and they are doing so, partly because they now have more confidence in the police than they used to. When we see figures for the number of reported incidents of domestic violence, we must be careful not to assume that that represents an increase, because it may simply represent a welcome increase in reporting. That is not to be in any way complacent about the figures, because they are far too high. I simply want to put a cautionary marker on the use of such figures. The hon. Member for Strangford raised that point as well, and I hope I picked his point up, too.
The question of legal aid was raised by the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne), and I want to provide her with some reassurance. We have retained legal aid in key areas that impact on women, particularly injunctions to protect victims from domestic abuse, and in family cases such as child contact or division of assets after separation where domestic violence is a feature. We continue to provide civil legal aid for the victims of domestic violence to apply for protected injunctions, such as non-molestation orders. We will also continue to waive the financial eligibility limits in such cases. Our changes to the scope of legal aid do not affect those cases.
The hon. Lady expressed her view that personal, social, health and economic education should be mandatory in state schools. The Home Office has done a great deal to help to educate boys, in particular, about the nature of appropriate relationships. We have run a successful campaign, as I hope the hon. Lady knows, called, “This is abuse”, involving stars from “Hollyoaks” and various pop bands. We have used MTV and other channels to ensure that the campaign reaches young people, and the response to it has been quite good. I understand entirely the point about compulsory PSHE, which several others have echoed, and I have raised that with the new Education Secretary. I do not want to commit her to anything, but I think she is prepared to look at the matter, so we might make some progress on that front.
I welcome the shadow Minister to her post, in what I believe is her first outing in such a debate, and I agree with much of what she said. I agree that we must have the confidence of victims if they are to come forward, and I have tried to address that point in my response. I also agree that the performance of the police and the Courts Service must improve. I hope she acknowledges that we are taking steps to bring about such improvements, as I have outlined.
The shadow Minister mentioned the figure of 31% in relation to cuts to refuges. That is not a figure I accept. It comes from a survey based on an average from 63 local authorities that made cuts to their refuge service, which did not take into account the responses from 201 authorities that did not make cuts. That figure, therefore, is inaccurate and misleading, and I would be grateful if she did not use it. As I have made clear, I am in no way complacent about refuges, but we must make sure that the figures we use are accurate.
The situation that faces us is no small challenge. The Government has introduced significant initiatives to enhance victim safety, but we have also made it clear that changes to the law or new powers alone are not sufficient. We must not fall into the trap of thinking that the statute book is the answer to everything, because it is not. The police have significant changes to make following HMIC’s report. I am determined to create an environment in which all victims of domestic abuse who find the courage to seek help have their needs met. That will, ultimately, encourage more victims to come forward, which will mean that more perpetrators are brought to justice, more cycles of abuse are disrupted and we take a giant step closer to becoming a society in which domestic abuse is a thing of the past.
Cavity Wall Insulation
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Hywel Williams (Arfon) (PC)
It is a great pleasure to serve under your chairmanship, Dr McCrea. I applied for the debate because I have come across a number of cases in my constituency where it is alleged that cavity wall insulation has been installed when it should not have been, first because of the climate, which in my constituency is primarily heavy rainfall and prevailing wind-driven rain. I understand that my constituency is a category 4 area—an area in which cavity wall insulation is unsuitable.
In preparation for this debate, I spoke to an industry specialist with decades of experience, and he told me that in his area of the west of England, they just do not install cavity wall insulation at all. I gather from him that the prevailing weather in his area is less extreme than that in mine. My constituency is coastal and mountainous. It faces prevailing westerly winds and we have very heavy rain. I have a number of questions for the Minister, one of which is whether cavity wall insulation should be installed in category 4 areas such as mine that have wind-driven rain.
The 2012 Office of Fair Trading report on the matter contains a great deal of interesting information. If I may be forgiven for quoting at length, page 52 of the report states:
“Consumer magazine Which? reported in April 2011 that it had invited eight companies to assess for cavity wall insulation (CWI) a house that its expert surveyor deemed unsuitable for this due to cracks in the external walls and its location in an extremely wet and exposed area”.
That is typical of many of the houses in my area of north-west Wales. The OFT report continues by stating that those are factors that
“industry guidelines warn could lead to damp in houses with CWI. All eight said the house was suitable for CWI and none warned that CWI might put the house at risk from damp.”
That was in 2011, so I accept that industry practice may have moved on, but that is an important point to make at the start of my speech, because I am mainly concerned with a number of historical cases of cavity wall insulation being installed 25 years ago, say, and people now wondering what redress they have as the system fails, or at least as they suspect that the system is failing.
Secondly, I have been repeatedly told of cases where cavity wall insulation has been installed inappropriately—this is perhaps the main point—given the condition of the building, especially if the rendering was cracked or missing. Buildings vary from area to area, of course. Some places have pointed brickwork, but in my area pebbledash and smooth rendering rule supreme, and they are of course subject to cracks. Once a crack appears, water can get behind the rendering and make its way into the building if the gap between the interior and exterior skins has been bridged by cavity wall insulation. That is the nature of buildings in my area—people pebbledash their houses because of the rain.
Thirdly, I have been told of cases where cavity wall insulation was installed badly and with a low standard of workmanship, leading to cold spots in houses. Essentially that means that when the material was pumped in, some areas were missed, so that, perhaps in the middle of a wall, there was an area with no cavity wall insulation. That area is literally a cold spot, and condensation and subsequent fungal growth are suffered haphazardly in the middle of the wall. People are surprised by that condensation because they have insulation, and they cannot understand why it happens. It is rather difficult to remedy that situation. I understand that the system involves drilling from the outside and literally patching the inside by pumping in more material. That is clearly far from satisfactory for the householder, although it might be an effective remedy.
In one case, a householder’s internal plastic cladding made it difficult to assess the location of the cold spots. He had obtained ribbed plastic cladding from a DIY store, as he thought that that would prevent further damp, but in fact it prevented him from seeing where the damp was. That is just one case, of course, so I am not making a general point.
Other constituents have told me that they are considerably worried about water penetration and damage in areas of their house that they cannot access either because that is difficult, or because they are now older or infirm. They might have had the cavity wall insulation installed 10 or 15 years ago, perhaps when they were in their 50s and renovating their house with a view to retirement, and they are now not in a condition to clamber into loft spaces. One lady said that she suspected that she had damp that was caused by cavity wall insulation, but that it was in the cupboard under the stairs. She had not been in there for a while, so I had a look. It was quite black, and the damp was in a very inaccessible place.
I have also been told that although some installers had accepted liability and tried to do something about the damp, their remedial action had been ineffective. In one case, such ineffective remedial action allegedly led to dry rot because water was coming into the house across the bridge of the cavity wall insulation and encouraging that rot. The installers, to their credit, removed the cavity wall insulation—thoroughly they thought—and then employed a specialist company to remove the dry rot, but my constituent tells me that the dry rot has returned, as it is wont to do. She has now decided to take the matter through the courts, but her case is an exception.
I have also been told that some of the remedial action has been carried out to a low standard of workmanship. I recently visited a house on a council estate in my constituency, and as I approached, I saw that the pebbledash rendering was clearly patched—I thought by someone with their eyes closed in the dark. It was clearly a terrible job. There were patches of about 1½ square feet on which there were no pebbles and the appearance of pebbledash had been achieved by making indentations with fingers so that it looked vaguely like the pebbledash next door. The elderly lady who lived there was at her wits’ end and did not know what to do.
In other cases, liability has been denied. Although householders are convinced that their damp problems are caused by cavity wall insulation, the installers have either gone bust or closed down, or the people who have taken over the companies deny any liability. When people appeal through the industry guarantee scheme, they believe that it operates with a very high bar that prevents proper redress in what they see as a legitimate case. The scheme makes an effort to be accessible, and I am sure it acts to proper standards, but my constituents have faced a difficult experience, which might be because some of them are elderly or infirm, or just not familiar with negotiating their way through official-ese. The 2012 OFT report criticised the industry guarantee scheme, and I am not sure whether measures have since been taken to improve the situation.
One company, to its credit, has worked well with me. We have reached a conclusion on some cases, while it denies liability in others. A number of cases are pending or have been referred to the industry guarantee scheme—the Cavity Insulation Guarantee Agency. However, the experience is very unsatisfactory for my constituents, who thought they were doing something good by installing cavity wall insulation, but found that that was not to be the case. The company, which I will not name, was not originally directly involved in the insulation scheme. It took over another company that had closed down, so the practice was not its primary responsibility. Another company that was working in my area has closed down, so any claims for compensation or redress must presumably go to CIGA, the industry-wide body, although there might be problems with doing that.
The situation causes less tangible effects, which some people say are more damaging to the individual than the building. People suffer long-term worry about what will happen to their homes and the possible costs of repair, as they might not be able to afford repairs or clamber into attics. We know that long-term worry has an effect on people’s physical health.
It is alleged that direct health effects arise due to the growth of mould. When I was considering what to call this matter—for the file, as it were—I thought of the Welsh phrase “waliau du”, which means “black walls”, because that is literally what is happening: people’s walls are turning black, and they do not understand why. I have been told that mould growth can worsen children’s asthma.
I must note that my constituents are really bemused, because they were urged to insulate their houses and install double glazing only then to be advised that to avoid condensation, they should leave their windows open. It is peculiar to give people such advice in mid-winter, because by letting out the steam, they also let out the heat that they have taken such steps to conserve.
My constituents believe that they have no means of redress—whether they do or not is another matter—and cannot afford to take civil action. The local citizens advice bureau works hard, but its resources are extremely limited. I have contacted the trading standards office of my local authority, Gwynedd county council. It has taken up some cases, but not all, and not all that have gone forward have been successful. Many of the people affected are of modest means. They were just trying to better their living conditions, to save energy and to do their bit on climate change. The insulation programme began in the 1980s, so people are coming to the end of their 25-year guarantee period without knowing whether their system is still viable. Those people are 25 years older than they were when the cavity wall insulation was installed, and so are less able to pursue their cases.
I came across the case of a young family who bought their house a few years ago only to find later that the cavity wall insulation was failing. However, the installer is unknown, as the installation took place a long time ago and no paperwork came with the house. The family think that they have cavity wall insulation—the walls are black—but they know nothing else. Their case is pressing, because they think the insulation was installed 25 years ago, so if there is a guarantee, it will be coming to an end.
My general point is that my constituents subscribed to what many thought, rightly or wrongly, was straightforwardly a Government scheme. Some were told that by the installers, while others assumed that, as the Government were funding the installation, the system was safe and effective, and that the installers were operating to an appropriate standard of practice. The OFT’s 2012 report noted that some people assumed that the installers’ practice was regulated and inspected, and that appropriate quality assurance measures were in place. Those people feel let down and believe that somebody—albeit an ill-defined somebody—should take responsibility.
The Government’s frankly disappointing response to the OFT’s report concentrates almost exclusively on the green deal—I understand why, as it was being put in place—but pays scant attention to the historical problems that concern me today. The OFT emphasised the importance of cavity wall insulation, saying:
“The home insulation sector had a value of around £700-800 million in 2010…Insulation can create important benefits for consumers”.
I do not decry insulation by any means; it is a very good thing. The OFT also said that
“if poor installation causes problems with damp, these may not become evident until a year or more after installation. Monitoring, which is typically done in the weeks following installation, cannot identify these longer-term problems…In relation to regulatory monitoring, Ofgem requires the energy suppliers to inspect five per cent of installations and provide a summary of these inspections to Ofgem.”
Is 5% sufficient? It is only one in 20. I have come across so many cases in a small town that I, a complete layman in these matters, suspect that a more intensive quality assurance system is needed.
Respondents to the OFT raised four issues, including, first, the quality of installation—whether it was installed to a high quality and in suitable premises—and, secondly, whether there is an adequate mechanism for redress if things go wrong. The OFT noted its
“concerns that, although offering an important source of redress, the current arrangements for consumer redress for faulty installation of cavity wall insulation could be improved.”
As I said, the Government’s response concentrated on the green deal.
After this debate was announced, I was contacted by Councillor Brian Heading of Belfast city council—you might know him, Dr McCrea—who told me that cavity wall insulation was widely installed during the housing boom in Ulster. He said that those private and public sector houses are now 30 to 40 years old and in need of renovation, including through the removal or updating of insulation. He told me that he knows of no body that systematically checks the condition of cavity wall insulation properly to assess the scale of the problem. He was keen to say that he suspects that European money is available to the devolved Assembly under the energy programme, so I must ask the Minister whether that is true. He is keen to access any source of money to take the matter further.
Finally, I have also been contacted by representatives of a company in Lancashire that has a patent process for insulating houses from the outside with a coating. It also removes cavity wall insulation, albeit with difficulty. Full VAT is payable on its services but, in the company’s view, it would be reasonable to charge the lower rate. I concede that this matter may be for the Treasury, rather than the Minister, but I think it is a fair point. At the 2008 ECOFIN meeting in Helsinki, it was decided that countries can reduce the VAT rate from 20% to 5% for labour-intensive industries. The removal and renovation of botched cavity wall insulation would seem to be a prime candidate for a VAT reduction.
I will be grateful for the Minister’s response to my points, although I concede that I have made many of them. If she cannot respond today, I will be glad to receive a written reply when she has had time to consider the matter further.
The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd)
I congratulate the hon. Member for Arfon (Hywel Williams) on securing this debate on a subject that is very important to his constituents and to people suffering from cold homes generally.
The Government recognise that improving domestic energy efficiency helps consumers control energy bills and reduces fuel poverty. Of course, it also contributes to our challenging carbon reduction targets. We aim to reduce greenhouse gas emissions by at least 80% below 1990 levels by 2050. To drive up domestic energy efficiency, we have put in place a long-term and progressive programme focused on enabling consumers to improve the energy efficiency of their homes. We have set ourselves a target of ensuring 1 million homes make energy efficiency improvements by March 2015. The programme is innovative: the energy companies obligation, the green deal, the green deal home improvement fund and the renewable heat incentive are all world firsts. It takes time to establish and embed new markets, and to understand how incentives can work best with the grain of the market and in tune with our great diversity of households.
We have made significant progress. In total, around 797,000 homes had been improved by the end of August this year. There is still much to do and our programme reflects key underlying challenges: much of the easy energy efficiency work has been done; nearly all homes have had at least some loft insulation, although many could benefit from having it topped it up; and most of the easiest cavity walls have been filled. However, we need to move away from a culture of unsustainable grant-dependency to a different model—a more market-based approach. Our long-term aim is for consumers to be motivated to improve their homes and to be ready to meet some of the costs, with real and effective help for the most vulnerable. This is good for all bill-payers as subsidy goes where it can have most effect, and good for our economy as innovative businesses enter the market and develop better and cheaper products.
That is especially important as we start to tackle more expensive improvements, such as solid wall insulation. Only around 3% of about 8 million homes with potential solid wall insulation have been done, and yet the carbon saving from such improvements can be 10 times that of loft insulation. These challenges are not confined to the UK; other countries are closely watching what we are doing.
Cavity wall insulation has been a hugely popular measure, with around 2.6 million installations taking place under the predecessor to the ECO—the carbon emissions reduction target—between April 2008 and April 2012. Also, cavity wall insulations have accounted for 36% of all measures installed under the ECO.
Cavity wall insulation can be a highly effective means of improving the energy efficiency of homes, offering the potential for an average of 10% in energy savings. The vast majority of installations in homes have been successful and one leading industry body estimates that less than 1% of cavity wall insulations have caused consumer dissatisfaction. I know that British Gas is one firm that is now offering to install cavity wall insulation for free in nine out of 10 suitable properties, regardless of whether the occupant is a British Gas customer. This is a huge opportunity for consumers who could benefit from this measure.
However, it is important to recognise that cavity wall insulation is not suitable in certain areas of the UK, for example areas where wind-driven rain is prevalent, owing to increased exposure. The official British standard wind-driven rain index highlights the constituency of Arfon and surrounding areas as being high on the index, so the hon. Gentleman’s concerns about the suitability of properties in his constituency for cavity wall insulation may be well-founded.
Dampness in properties with cavity walls is almost always caused by rain rather than condensation, unless there is a problem with internal wall insulation. Rain gets into the cavity via a poorly maintained external wall—for example, rain can leak down pipes, gutters or poor pointing.
To establish whether cavity wall insulation should be installed, pre-installation surveys are essential, and the quality of the external brickwork is very important in areas of wind-driven rain. Surveys of the proper quality and robustness will identify those properties for which cavity wall insulation is suitable. Where cavity wall insulation is recommended, correct installation is of the utmost importance, as is the ongoing maintenance of the property. If these conditions are met, cavity wall insulation will be effective.
I am not in a position to comment on individual cases, although I appreciate that the hon. Gentleman specifically did not give any. However, I recognise the distress that this problem has caused a number of householders; we have corresponded on the matter. It may be helpful if I outline the consumer protections that are in place and the redress route for consumers.
The installation of cavity wall insulation must meet the requirements of the statutory Building Regulations 2000. The materials used to insulate cavity walls are also subject to specific standards. There is a range of qualifications and training for installers, but installers should follow British Board of Agrément or British Standards Institution regulations. Under the green deal and ECO schemes, installers must undergo a rigorous authorisation process to become authorised participants. They must then comply with a publicly available specification, which sets out requirements for the installation of energy efficiency measures in existing buildings, including cavity wall insulation. Furthermore, as the hon. Gentleman said, Ofgem requires ECO installers to contract independent inspections of 5% of all measures installed, including cavity wall insulation, to ensure that they meet required standards.
All insulation material installed under ECO’s predecessor scheme—CERT—was required to meet the regulations of the BBA or another UK Accreditation Service-accredited technical approval body for their thermal performance. In addition, all installers should have undertaken an inspection of the property to determine its suitability for cavity wall treatment. Moreover, all cavities insulated under CERT should have received a Cavity Insulation Guarantee Agency 25-year guarantee. This guarantee offers the assurance that defects will be fully investigated and rectified free of charge where that proves necessary, and I point out to the hon. Gentleman that the guarantee outlasts any company that may be liquidated.
I now turn to the general area referred to by the hon. Gentleman—his constituency and the surrounding areas. If the measure was installed under one of the predecessor schemes to the ECO—CERT or the community energy saving programme—consumers must first rely on the 25-year CIGA guarantee. If more than 25 years have passed, I recommend that the constituents consider seeking a new scheme, or going to their energy supplier to see what assistance it might be able to offer. If there is no effective guarantee in place, the energy company that originally funded the measure can be approached; it may be able to assist. Ofgem may help to trace that company. If Ofgem cannot help, a consumer may obtain further guidance from a local trading standards office or seek professional legal advice.
For vulnerable or low-income consumers, Citizens Advice may prove a useful contact. I note that the hon. Gentleman referred to his local citizens advice bureau. Nevertheless, if a group of citizens in his constituency are particularly affected by this issue, Citizens Advice might be a helpful sign-pointer or might give additional advice about other sources of support if it feels that the guarantee has not been properly looked at.
On learning of the hon. Gentleman’s concern about his constituency and the surrounding areas, staff in my office made inquiries and they have assured me that they have engaged with complainants on a case-by-case basis, and with the energy companies involved, and considered liability where that is appropriate. If he would like to pass me details about certain cases, I will take this issue up with CIGA, to ensure that the energy company responsible sticks to its obligations. I also understand that he has been in contact with CIGA; if he needs any assistance with that process, we will be delighted to follow up.
Cavity wall insulation is one measure that consumers can utilise to improve the efficiency of their homes. The successful implementation of our programme is dependent on encouraging consumers to take decisions to retrofit their homes with a range of measures that they can trust to deliver savings in energy consumption and in bills. I suggest that the hon. Gentleman encourage his constituents to consider other measures that may assist them in keeping their homes warmer for less.
We have put in place a robust framework that defines what measures are legally eligible for use within the green deal, alongside a robust methodology for estimating the savings that can be realised. To ensure that we are promoting the maximum number of energy efficiency measures possible and taking account of developments in energy efficiency product technology, we are committed to keeping our framework under review.
Earlier this year, we amended the Green Deal (Qualifying Energy Improvements) Order 2012 to allow two additional energy efficiency improvements to be installed under a green deal plan: more efficient circulator pumps; and storage waste water heat recovery devices, which are attached to baths or showers. Additional measures will also be included soon. There are energy efficient luminaires, including the first use of modern LED lighting in domestic properties; the use of replacement glazing panels for double-glazed windows; party wall insulation; and more efficient storage heaters.
My Department recently took over responsibility for household appliances. The cost of running household appliances has tumbled and in some cases halved, as tougher minimum performance standards have led to industry innovation and more and more energy-efficient products dominating the market.
Looking ahead, the smart meter roll-out will be an investment programme to modernise our outdated metering system and bring it into the digital age. I hope that when the hon. Gentleman’s constituents have their smart meters installed, it will make them more inclined to be aware of the opportunities for energy-saving devices and installations that are still around, which we hope can help them to make their homes warmer for less. The programme requires energy suppliers to complete the roll-out of smart meters to domestic and smaller non-domestic premises in Great Britain by 2020—
South West Trains
(10 years ago)
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Mr Dominic Raab (Esher and Walton) (Con)
It is an enormous pleasure to serve under your chairmanship, Dr McCrea, for what I think is the very first time. I would certainly remember if I had served under you before. May I take this opportunity to welcome the relatively new Minister to her job? I am sure she will bring her characteristic gusto and gumption to the role.
I raised the issue of value for money on South West Trains with the Minister’s predecessor in a similar Westminster Hall debate in March 2013. I have to say with an element of regret that the service is not getting significantly better 18 months on. I say that not only from the clear data available, but as a commuting MP. I stand on the platform with my constituents, directly accountable to them, paying an ever-increasing fare both for the service on the train and for the parking at the station. Together we have experienced the steadily increasing overcrowding of a prime commuter route.
Based on the 2013 data published last month by the Department for Transport, I was not surprised to learn that one particular service that I regularly use—the 7.32 am from Woking to Waterloo—has the largest number of passengers in excess of capacity of any service in the entire country. By the time it arrives at Esher at 7.52 am, it is packed to the gunnels. According to the official data from the Department, it has 540 passengers over the specified maximum capacity limit, amounting to a 73% breach of the ceiling. It is little wonder the Daily Mail has dubbed the service the “sardine express”.
It is not just one train or some extraordinary occurrence. The 7.32 am has consistently appeared in the top 10 overcrowded peak services in recent years. Nor is it a particularly freak time. For example, the 7.02 am service is almost as packed. My experience as a commuter tells me that acute overcrowding is a serious problem for at least half an hour at peak commuter times in the morning. I get on the service at Esher station. I know first hand how rammed the carriages are. Occasionally—I saw it recently—it is sometimes even impossible to get on the train, which has all sorts of implications. It is not only inconvenient, but there are economic costs to businesses and to people in their personal lives. Clearly, the Surrey network feels the pressure of a very high volume of commuters.
Caroline Dinenage (Gosport) (Con)
I congratulate my hon. Friend on securing this important debate. Does he agree that overcrowding is not the only problem? The Minister might be surprised to know that I never get complaints about the quality of the railway in the Gosport peninsula, because we are the largest town in the UK not to have any railway or indeed any station. However, we do get complaints about the Portsmouth service, which is not only overcrowded, but inadequate. It has slow journey times on a 1930s infrastructure, and eye-watering prices.
Mr Raab
My hon. Friend has raised her point with typical cogency and precision. I do not know all the facts of the case of that line, but I am not surprised, given my experience of South West Trains. She is certainly right that overcrowding is not the only problem, and I will come to some of the others. The overarching point, as my commuters tell me, is value for money.
Caroline Nokes (Romsey and Southampton North) (Con)
I, too, congratulate my hon. Friend on securing this important and, it appears, annual debate. He is moving on to an important point. One of my constituents said to me this morning that they would accept consistently increasing prices if the quality of service improved, and concluded by saying, “That is not the case currently.” Does my hon. Friend agree that the nub of the problem is that commuters are paying more for what they see as a worse service?
Mr Raab
My hon. Friend is absolutely bang on. That is the crux of the matter. We have heard interventions already about other parts of the country. I can speak for Elmbridge and for Surrey, but it is interesting to hear that the problems are systematic and not parochial.
Clearly, the Surrey network feels the pressure of a high volume of commuters. In Elmbridge borough alone, some 12 million people use our stations. The number of recorded journeys almost doubled between 2002 and 2010, so demand is high and increasing. Fares will rise by 2.5% again in the new year. The Minister will say that that is not a real-terms increase, so we thank heavens for small mercies, but none the less it is an increase. The fares are already some of the most expensive in Europe. A season ticket for the 25-minute journey from Esher to Waterloo currently costs just under £2,000, and many pay a good deal more.
What is hard to explain, let alone justify, to many passengers—I think my hon. Friends were making this point—is the enormous subsidy that they pay as passengers for other lines across the country. That is largely hidden from view. Of course, redistribution of wealth is a natural function of general taxation—it is the stuff of politics and Parliament to debate how much or how little there should be—but I doubt that many are aware of quite how stark the impact is. Certainly, in my area, Surrey residents contribute £6 billion to the Treasury, and we get back less than £1 billion in services. The point is that, on top of that redistribution of wealth via general taxation, Surrey rail passengers, through their fares, are not just paying high fares for the services that they use. They and many others using South West Trains are paying a whopping subsidy for investment in the rail network across the rest of the country.
In 2013-14, South West Trains passengers paid the Department for Transport the highest premium for their rail service at 5.2p per passenger per kilometre. That compares to the 13.1p subsidy doled out by the Government to Arriva Trains Wales, or the 2.8p subsidy received by London Midland, and the 2.2p subsidy received by Southeastern. Some train companies are therefore paying an inordinate amount for the right to run the service while others are effectively receiving a subsidy.
Over the past four years up to 2013-14, South West Trains passengers have effectively coughed up the largest subsidy to Government coffers of any train operating company, totalling just over £1 billion. That is the scale of the subsidisation of other lines by my commuters and other passengers using South West Trains. That is more than £1 billion over and above what is redistributed via general taxation. It is a staggering amount.
Aside from the scale and the volume or the amount, no one can explain to me how this allocation of premiums and subsidies across the train operators is calculated. I have looked at the franchise contracts for the train operating companies. They do not disclose the information. We are told it is too sensitive, and the Minister’s predecessor could not explain what the allocation or criteria are. It looks arbitrary in terms of the relative wealth of the areas concerned. For example, Southeastern received £97 million in 2013-14 to run the service, compared with South West Trains, which paid £312 million for the right. Will she, if she can, explain in plain language that my constituents can understand how the allocations—the premiums and the subsidies—are worked out? How are they calculated and how are they justified? In particular, how can they be justified given what we have heard about overcrowding, particularly on South West Trains?
I referred to the sardine express earlier, but that is just one service. In 2013, average overcrowding on South West Trains was the joint third highest in London and the south-east. Overcrowding increased in each of the preceding four years. South West Trains services featured three times in the top 10 most overcrowded services across England and Wales for 2012, and twice again in the Department’s spring 2013 data. To put those raw numbers into perspective, EU rules stipulate that calves, adult goats and unshorn sheep must be transported by train in an area of space of at least 0.3 square metres per unit of livestock, but the new Government standard for commissioning commuter services for humans is now 0.25 square metres, which is significantly less. I understand that the only train company operating to that standard is—you guessed it, Dr McCrea—South West Trains. Can the Minister explain why my constituents, who are paying ever-rising fares and doling out more than £1 billion to improve rail services for the rest of the UK that they will rarely use, do so for the privilege of travelling at one grade below cattle class on South West Trains?
The Minister will understand immediately why in Passenger Focus’s 2014 national survey, South West Trains passengers ranked their service the third worst in the country on value for money, with a bare 37% saying that they were getting bang for their buck. That dropped to 28%—barely a quarter—for peak-time passengers. Just in case anyone thinks that all passengers and commuters grumble, that compares with approval on value for money of 78% with Grand Central passengers and 61% with Virgin Trains passengers. It is not beyond the wit of man or woman.
I recognise that South West Trains will argue that it is playing the hand it was dealt by Government in the franchise agreement. That is the line, and there is obviously some truth to it. The Government ultimately decide on the premium or grant, and that very much conditions and influences the nature of the service that can be run and the resources available. That might, however, be a little easier to swallow if director remuneration at Stagecoach Group, which is the operating company, had not doubled between 2010 and 2014, just as these developments were taking place.
Nevertheless, with the fragmented nature of responsibility for rail services, it has got difficult to get straight answers to straight questions. As an MP, I find it difficult to explain to commuters and constituents why the high fares they pay deliver so little in return. My hon. Friends have made that point. What action has been taken to deliver a fairer deal for my constituents and the many others using South West Trains who feel as though they are treated like a cash cow, despite travelling in sub-cattle class conditions?
In particular, what progress has been made on expanding the platforms available at Waterloo into the international terminal that used to service the Eurostar routes? I understand from the managing director of South West Trains that that, at least in the short term, offers the greatest scope for lengthening platforms and trains, thereby easing overcrowding along the lines I have mentioned. Does the Minister agree with that analysis? If so, what is holding up progress in that direction? Will she update me on the options for Crossrail 2? I understand that her officials are looking carefully at the so-called regional option, which would link to the metro option, servicing south-west London, Surrey and Hertfordshire. That would substantially alleviate pressure on existing services, as well as carrying a multitude of other regional benefits. What is her view on the regional option?
Finally, we have been sweating under the franchise agreements signed off by the Labour Government. I have always argued that they bear the responsibility for the framework in which we are operating, but an extension to the South West Trains agreement was agreed in 2013, taking it to March 2019. I am sure the Minister’s Department looked carefully at the terms of the extension. Will she help me explain to my constituents what the premium or subsidy will be between now and 2019? What criteria are being used for that? What are the objective grounds justifying the different rates at which operating companies are being charged or paid?
My constituents have rather stoically endured the immediate frustration of high fares and acute overcrowding. We all know the financial situation the country faces, and that rising demand for rail services will continue for a range of demographic, economic and environmental reasons, but the raw truth is that, when I stand on that platform with my fellow constituents and take the sardine express up to Waterloo, I need to be able to explain in clear language how we will address over the long term the conditions of travel, which are often cramped and uncomfortable. I need to explain how we are going to deliver better value for money. I need to give them some light at the end of the tunnel. I hope the Minister can provide me with a degree of reassurance today.
Dr William McCrea (in the Chair)
I call the Minister to give a first-class carriage answer.
The Parliamentary Under-Secretary of State for Transport (Claire Perry)
Another great train analogy, Dr McCrea. It is a pleasure to work with you in your capacity as Chairman.
I congratulate my hon. Friend the Member for Esher and Walton (Mr Raab) on his refreshment of his ongoing assiduous focus on his train services. He certainly brings gusto and gumption to his campaigning on this issue for his constituents. I, like him, feel incredibly strongly about the points he raises, and I am doing my best in this new and enjoyable role, with the help of my superb team, to look at these things on a factual, common-sense basis. I, like him, travel on the train and have to explain to people why we say things are getting better when for some of them they are definitely not.
In one way, my hon. Friend would share with me the view that the huge demand we are seeing, with a doubling of passenger numbers since privatisation—numbers are rising by 5%, 6%, 7%, 8%, 9% or 10% in some parts of the country—is perversely a measure of success. We are seeing the most rapid rise in travel of anywhere in Europe. We have the safest and most punctual railways in Europe. We have the most improved railways in Europe, according to passengers. We are seeing an enormous rise in demand for these services. Clapham Junction, which he goes through and which I know well, sees 23 million people changing trains there every year. The South West franchise area is the busiest railway in Europe, and Waterloo is the busiest station in the UK. I was down there this morning, celebrating the 40th anniversary of the young person’s railcard, and it was teeming.
Caroline Dinenage
Does the Minister agree that it is not just about capacity? The problem is that if we are to see economic investment in the parts of the country and the parts of the south that really need it for regeneration, we need faster and better train routes. The journey between Portsmouth and London takes the same time as the journey from London to Doncaster, which is two and a half times as far. That is just not good enough for commuters on the south coast.
Claire Perry
As always, my hon. Friend hits the nail on the head. I have travelled that route, visiting one of her neighbouring constituencies, and I was struck by the pace at which some of those trains travel.
To return to the particular service mentioned by my hon. Friend the Member for Esher and Walton, the 7.32 train from Woking to Waterloo is, I think, the second most crowded passenger journey in the UK. I have been on that journey. I am in the process of mystery shopping the top 10 most crowded routes to see for myself what they are like. On that particular day, the operating company took four carriages out of the service for operational reasons, because of problems the day before. That meant that we were leaving passengers at the station pretty much all the way along the line.
It is incredibly important that the Government tackle these issues and deliver value for money in the eyes of passengers. My hon. Friends have alluded to that. The good news is that the Government recognise that. For the first time in a generation, we are reinvesting real money in the railways, with £38 billion being spent over this capital period to the end of 2019. That is the biggest investment in rail and rolling stock since Victorian times.
As my hon. Friend the Member for Esher and Walton pointed out, the franchise that we are debating was, like so many others, let under a previous Administration who thought that electrifying nine miles of track in 13 years was good enough. The franchises were let with no provision for growth and investment, which resulted in a huge squeeze for passengers. One of the things I am very proud of is that the Chancellor has for the second year delivered a real-terms freeze on fares, as well as scrapping the flex that enabled companies to put up their prices outside the regulated boundary willy-nilly. This Government understand value for money, unlike the previous Government.
The challenge that my hon. Friend outlined is how to pay for the investment, which gets to his point about subsidy versus premiums across the network. He does the analysis, as I do, so he knows that there are two ways to pay for investment in the railway: general taxation and a contribution from those using the railway. Only about 8% of commuters use the railway to get to work; twice as many take the bus and many more still walk, cycle or take their cars. Taxpayers of course contribute substantially to investment in railways through general taxation. In some cases, passengers contribute as well. Taxpayers and fare payers are often the same people, so they are right to feel aggrieved, particularly when their services are not running.
In general, the challenge as to which franchises are in receipt of subsidy and which are generating premiums is an operational negotiation at the time of letting the franchise and as patterns change as services unfold. Overall, however, the McNulty review found substantial operating costs right across the railways—far more than our European comparators—that need to be driven out, which we are working hard with Network Rail and the operating companies to achieve.
My hon. Friends each hit the nail on the head. Passengers often do not feel that they are getting value for money. They travel on slow, crowded trains and cannot understand why timetables get messed up and why the network’s resilience can fail if there is a fatality or some operational problem. All my hon. Friends will be delighted to hear that part of the £38 billion investment commitment is being spent on the South West Trains network. Just a few weeks ago, I was on the platform at Waterloo with South West Trains and its Network Rail alliance colleagues, Siemens and Angel Trains, to announce that 150 new vehicles are currently being made to be put into use on the franchise by the start of 2018. The introduction of the new trains will lead to the cascading of existing fleets, generating enough seats for 24,000 additional peak-time passengers. That is in addition to the carriages that are starting to arrive now which will also deliver additional seats.
My hon. Friend the Member for Esher and Walton made an interesting comparison with the rules for movement of livestock versus the space available for people. He and I have seen how crowded trains can be. It is not like being on a tube train, with another coming along behind. People are being made late for work if they cannot board their train. Part of calculating overcrowding is based on duration of journey. There is a strong expectation that nobody travelling for more than 20 minutes should be standing beyond that point. It is not always achieved, but that is the sort of standard that we seek.
My hon. Friend mentioned the work at Waterloo station, which is not only about new trains but about new platform capacity. Much of the network’s signalling needs to be renewed, which is happening. It is also important that the four unused platforms at the former Waterloo International Eurostar terminal are brought back into service. A few winters ago, I took my children to see the “The Railway Children”, which was a marvellous production featuring a steam train coming into the station. How strange it was that platforms at the busiest station in Britain were being used for theatre rather than letting people get on and off trains. That vital piece of infrastructure is now being restored for railway use and will be able to accommodate longer trains on platforms 1 to 4, removing a constraint that has bedevilled commuter journeys from my hon. Friends’ constituencies for many years.
Mr Raab
The Minister will want to get through the rest of what she has to impart, but I have two questions. First, given the investment and work going into expansion at Waterloo, has she received assurances or projections from South West Trains that it will be able to alleviate overcrowding by a certain amount as a result of the extra capacity? Secondly, she said that the decision on subsidies and premiums was an operational matter. There must be a public policy on the criteria, rather than there just being a negotiation haggle based on the bids coming in at the time. It must be more than a purely commercial decision. I should be grateful if she could give me some more detail on how the subsidies and premiums are decided, as it is the Government who sign them off.
Claire Perry
The problem is that people can turn up and pay to travel on our railways. It is not like an airline, which shuts the doors once a plane is full. While we hope that additional capacity will immediately reduce overcrowding, if more people choose to travel by train, that capacity will continue to be filled. Part of the problem is that the railways have for too long been treated as something that is in steady state. As my hon. Friend the Member for Gosport (Caroline Dinenage) said, we had not realised the importance of the railways in generating economic growth or just how valuable the services are to people who travel in and around the south-west and other parts of the country. While I cannot absolutely assure my hon. Friend the Member for Esher and Walton that overcrowding will drop by X per cent, this is the biggest investment in platform capacity and rolling stock for a generation. I hope that when he and I again take the 7.32 train, the situation for all busy services on the network will have changed.
The issue of premiums and subsidies is complicated and relates to predicted cost bases and revenues. In some cases, franchises deliver far more in premium, because passenger numbers go up so the amount from fares goes up. In other cases, there are cost relationships with Network Rail, depending on delays and performance. It is a franchise-specific issue, but I agree that it can be difficult to understand the situation in relation to a specific area. The fundamental problem is that we need to keep investing in the railways right across the country and to ensure that we are driving down operating costs. I am sure my hon. Friend has found that if he explains to passengers on the 7.32 or other trains that a bit of their ticket price is going into reinvestment in the railways to give them a better journey experience, they will feel better about it. That is value for money. The problem is paying for something and getting nothing back.
Mr Raab
The Minister is being generous with her time; I know that she has other points to make. It seems to me that it is a raw commercial decision. The fact is that South West Trains passengers will keep paying more and more and South West Trains will keep paying more and more, because there is inelasticity in demand, which ties in with her earlier points. I like to be honest with my constituents and talk to them in plain language. Are the Government saying that the high subsidy—it is called a premium, but it is effectively a subsidy—is what it is because that is what the Government can get away with?
Claire Perry
No, I am not saying that at all. My hon. Friend and I both know that passengers also pay, as we all do, for the underlying improvements in track, stations and signalling through general taxation as, indeed, do all the people who do not commute via train. There is general investment in the railways from all of us, as well as specific investments. The idea that captive passengers are treated as a commodity is absolutely 180° opposite to how I feel. Passenger experiences and value for money should be at the heart of every franchise and direct award that we let. My hon. Friend will be pleased to hear that that view is shared strongly by my team.
To touch on one of the things mentioned by my hon. Friend, the alliance between South West Trains and Network Rail is crucial to delivering some of the capacity unlocking that we have talked about. It has been a great success and has delivered things quickly, and its maintenance until the end of 2019 has led us to extend the direct award until then. The alliance is working hard to continue to improve punctuality and performance on the Wessex routes.
Value for money is at the heart of the debate. It is great that the Chancellor has frozen fares again for all regulated passengers, many of whom are season ticket holders. Many more things can be done around promotional fares. I do not know whether my hon. Friend has noticed that South West Trains has brought in a whole series of good-value promotional fares for those who have some flexibility about when they travel during 2014, in particular to coincide with the school holidays. It cannot be a coincidence that when I was in Waterloo this morning, I met two of my former neighbours from Salisbury who had travelled up on those great fares and were visiting London as a result.
My Department’s priority has to be to continue to manage investment in the railways in a way that delivers maximum benefits to passengers and the economy.
Mr Raab
The Minister has touched on all the points that I made; I am grateful to her for assiduously doing that. If she can, will she give me her snapshot of Crossrail 2 and the regional option? Does she have a view on that, or would she like to take it away and write to me later? It is a long-term investment, but it would be good to know her view.
Claire Perry
Crossrail 1 is delivering a huge amount of connectivity and releasing some capacity on our hard-pressed inner-city and inner-suburban services. May I write to my hon. Friend or, indeed, meet him over a cup of tea to discuss Crossrail 2, which is very much in the planning stage?
We have to keep investing and delivering efficiencies and, above all, we have to put passengers and their journey experience at the heart of everything we do. We are not moving air, or lumps of steel, aluminium, titanium or ceramics; we are moving people. I know from experience how miserable it can be to try to get on an overcrowded train and not to be able to do so. That is unacceptable and we must all work towards a new future for the railways.
Question put and agreed to.
Written Statements
Military Air Traffic Management
(10 years ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
I am pleased to announce the successful contract award worth £1.5 billion (ex VAT) to (AQUILA) Air Traffic Management Services to deliver the air traffic management (ATM) sustainment and replacement programme known as Marshall. The programme will last 22 years and covers the operation of more than 60 Ministry of Defence sites in the UK and overseas, including in Cyprus, Gibraltar, Falkland Islands and Ascension Islands.
This programme combines approximately 70 Ministry of Defence contracts into one and is expected to generate £1 billion savings when compared with the contracts it replaces. It will bring the Ministry of Defence up to date with the latest advances in civil ATM technology, improving reliability and streamlining the support chain.
The Ministry of Defence has a legal obligation as an air navigation service provider to ensure the safe operation of aircraft. The Marshall programme will fulfil this obligation by providing a sustainable military airfield ATM capability that will enable air vehicles to operate safely and effectively with tactical freedom, in all weather conditions and in any environment, within the UK areas of responsibility, including permanent overseas airfields, and in support of UK and coalition expeditionary forces worldwide. In addition it will enable compliance with forthcoming changes to ATM regulations.
The contractor will supply, maintain and install new and updated ATM equipment. There will be a £400 million investment in very advanced surveillance radars to equip Ministry of Defence airfields and ranges with sophisticated and robust ATM equipment, including navigation aids and radios.
The contractor will also train maintainers and operators and deliver the service at a high level of availability. The full service will be provided during and after an initial six-year transition period beginning on 1 April 2015, when the service provider will assume responsibility for the provision of the military air traffic management service in its current state. During the transition period the service provider will progressively remove old ATM equipment and replace it with new equipment.
Foreign Affairs Council and General Affairs Council
(10 years ago)
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The Minister for Europe (Mr David Lidington)
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs attended the Foreign Affairs Council on 20 October, and I attended the General Affairs Council on 21 October. The Foreign Affairs Council was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Baroness Ashton of Upholland, and the General Affairs Council was chaired by the Italian presidency. The meetings were held in Luxembourg.
Commissioner for Enlargement and European Neighbourhood Policy, Štefan Füle, Commissioner for International Co-operation, Humanitarian Aid and Crisis Response, Kristalina Georgieva, and Commissioner for Health, Tonio Borg, were in attendance for some of the discussions at the FAC. Commissioner for Inter-Institutional Relations and Administration, Maroš Šefcovic, was in attendance for some of the discussions at the GAC.
Foreign Affairs Council
A provisional report of the meeting and conclusions adopted can be found at: http://www.consilium.europa. eu/uedocs/cms data/docs/pressdata/EN/foraff/145218.pdf
Introductory remarks
Baroness Ashton expressed cautious optimism at the recent elections in Bosnia, and hoped for the quick formation of a new Government. She briefed Ministers on the E3 plus 3/Iran negotiations, where parties were still a long way apart on key issues.
Ebola
Ministers discussed the need for a rapid and significant increase in the response to the Ebola outbreak in west Africa. The Foreign Secretary called for a rapid and up-scaled response from the EU and its member states, and outlined the UK’s ongoing significant efforts in Sierra Leone. Ministers agreed conclusions which set out an EU guarantee of appropriate care for international health responders, including medical evacuation, and an EU “clearing house” system to help deploy more health workers more quickly.
Libya
Special Representative of the UN Secretary-General, Bernardino Leon, briefed that a deal among Libyans was achievable and the parties were not far apart. The threat of sanctions had provided leverage. The Foreign Secretary agreed and called on the international community to support the UN facilitated dialogue and to refrain from divisive actions. Ministers agreed conclusions reinforcing the 18 October E3, Italian and US joint statement urging all parties to observe a ceasefire and supporting Leon’s efforts to broker a political solution.
Ira/Syria/ISIL
Ministers agreed conclusions which firmly endorsed UK priorities, pledging EU action to defeat ISIL and supporting military action. They also endorsed a strategy to tackle foreign fighters and underlined that Assad cannot be a partner. Ministers agreed to ban the export of jet fuel to Syria and extended sanctions to 18 new entities associated with the Assad regime.
Middle east peace process
Baroness Ashton briefed Ministers on the 12 October Gaza reconstruction conference in Cairo, where the EU had pledged €450 million, and reiterated that the EU was ready to support a durable ceasefire. There was consensus that the EU should press for the Palestinian Authority to return to Gaza and for restrictions to be lifted, while expressing frustration at the lack of progress and continued Israeli settlement expansion. The Foreign Secretary welcomed international generosity at the Cairo conference. He stressed that the EU’s priority must be supporting a sustainable ceasefire in Gaza, including through a reactivated and potentially expanded border management mission (EUBAM Rafah).
Ukraine
The Foreign Secretary and a number of other Ministers set out the importance of maintaining pressure on Russia and enhancing support to Ukraine. The Commission outlined its financial support and preparations for a donors’ conference, but called for maintaining conditionality, highlighting the importance of reform. The Foreign Secretary and others pressed for a response to rising humanitarian needs as winter approached, and hoped for an early deal with Russia on gas. Ministers agreed conclusions stating that Russia must implement its commitments, including on: withdrawing troops/arms from eastern Ukraine, control of the border, and local elections in separatist-controlled areas.
Other business
Ministers agreed without discussion a number of other measures:
The Council adopted conclusions on Bosnia and Herzegovina; Yemen; Afghanistan; Sudan and Somalia.
The Council approved the 17th progress report on the implementation of the EU strategy to combat illicit accumulation and trafficking of small arms and light weapons and their ammunition covering the EU’s activities from 1 January to 30 June 2014.
The Council amended EU sanctions against Somalia.
The Council reinforced EU restrictive measures against the Syrian regime.
The Council amended the EU restrictive measures in view of the situation in Libya to take account of changes approved at the UN.
The Council extended the EU restrictive measures against five persons from the Republic of Guinea.
The Council approved the High Representative’s report on the 26th monthly review of Operation Althea.
The Council adopted the concept of operations and the operational plan for the EU advisory mission for civilian security sector reform Ukraine (EUAM Ukraine).
The Council approved the concept of operations for the EU common security and defence policy mission in Mali (EUCAP Sahel Mali).
The Council allocated a budget of €17.9 million for activities of the EU mission on regional maritime capacity building in the horn of Africa (EUCAP Nestor) for the period from 16 October 2014 to 15 October 2015.
General Affairs Council
The General Affairs Council (GAC) on 21 October focused on: the preparation of the European Council on 23 and 24 October 2014; the follow-up to the strategic agenda for the EU agreed at the June European Council; protocol 36 of the treaties; composition of the Committee of the Regions; and strengthening inter-institutional annual and multi-annual programming.
A provisional report of the meeting can be found at:
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/genaff/145257.pdf
The preparation of the October European Council
The GAC prepared the 23 and 24 October European Council, which the Prime Minister attended. The October European Council agenda is expected to include: the climate and energy policy framework 2030; economic issues; and external relations issues—including Ebola and Ukraine. We also expect the European Council to formally appoint the new Commission, following the vote by the European Parliament on 22 October.
On climate and energy, I emphasised the need for an ambitious 2030 agreement which gives member states flexibility to achieve the necessary reductions in greenhouse gas emissions in the most cost-effective way, and includes substantial measures to improve EU energy security and allow development of low-carbon technologies as core elements the package.
Follow-up to the June European Council
By way of follow-up to the June European Council the GAC held its second thematic discussion of the implementation of the “Strategic Agenda for the Union in times of change” which focused on freedom, security and justice. Due to the cross-border nature of key challenges facing member states, such as immigration and security, it was agreed that there was scope for the EU to add value in this area. The Italian presidency raised the need to deal with the threat posed by foreign fighters and stated that increased EU-level information and risk sharing, as well as further progress on the passenger name records (PNR) directive, would be crucial in tackling this issue.
Protocol 36 of the treaties
I updated the GAC on the UK’s intentions regarding the Prüm and probation decisions, as reflected in the Home Secretary’s statement of 10 July, and laid a statement into the Council minutes to that effect.
Composition of the Committee of the Regions
The GAC considered a Commission proposal to amend the composition of the Committee of the Regions, which would reduce the number of members from 353 to 350 as stipulated in the treaties. Following concerns raised by several member states on Commission handling, Ministers requested further work on the proposal and agreed to return to the matter at a subsequent meeting.
Strengthening inter-institutional annual and multi-annual programming
The Italian presidency outlined its proposals for the Council to examine the Commission’s draft 2015 work programme and establish a framework for working with the Commission and European Parliament on improving inter-institutional annual and multi-annual programming in future years.
I supported early engagement with the new Commission on its work programme and the need for the Council to be fully prepared for discussions with the Commission and European Parliament on strengthening inter-institutional programming. Both of these present an opportunity for the Council to ensure that the Commission’s work is focused on the implementation of the strategic agenda, as set out by the June European Council.
Rehabilitation Services (Reforms)
(10 years ago)
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The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
Today the Government took another major step forward in delivering their important reforms to rehabilitation services, announcing preferred bidders for 21 community rehabilitation company contracts. The competition for contracts was strong, with over 80 bids received and an average of four bidders in each area.
I have placed a copy of the list of preferred bidders in the Libraries of both Houses today. You will see that we have a strong and diverse market, with preferred bidders in all but one of the 21 contract areas including voluntary and social sector organisations as “top-tier” partners in their bids—the other preferred bidder is a medium-sized British business. Four probation staff mutuals are also represented as top-tier partners.
Grand Committee
Consumer Rights Bill
Lord Taverne
“Product description and advertisement
(1) Subject to subsection (2), where any specification, description or advertisement of goods, services or land or property offered for sale, hire or lease, or any instructions or maintenance manual relating to such goods or services includes one or more units of measurement, those units shall be—
(a) those set out in Schedule 1 to the Units of Measurement Regulations 1986 (as amended); or(b) any multiples or submultiples of those units as set out in Schedule 2 of those Regulations.(2) Subsection (1) shall not apply to products listed in Schedule (Product description and advertisement).
(3) Subject to subsection (4), supplementary indications may be used in addition to the units authorised in subsection (1).
(4) Where supplementary indications are used—
(a) in the case of a conflict between an indication of quantity expressed in an authorised unit and a supplementary indication, the authorised unit shall prevail; and(b) the authorised unit shall appear first, and any characters employed in the marking of quantity in relation to a supplementary indication shall be no larger and no more prominent than those employed in the marking of quantity expressed in the authorised unit.(5) In this section—
(a) an “authorised unit” means a unit of measurement specified in Schedule 1 to the Units of Measurement Regulations 1986 (as amended) or any multiples or submultiples of those units as set out in Schedule 2 to those Regulations,(b) a “supplementary indication” means one or more indications of quantity expressed in a unit of measurement, other than an authorised unit, which is used in conjunction with an indication of quantity expressed in an authorised unit,(c) “unit of measurement” does not include arbitrary sizes such as sizes of shoes or clothing, paper and stationery or eggs,(d) a “year” is not to be treated as a unit of measurement.”
Lord Taverne (LD)
My Lords, I apologise for not having taken part in the discussions on this very welcome Bill but my special concern is with the particular and rather unfashionable subject of metrication. The Bill offers an opportunity to clear up some anomalies in the law as it stands that can only confuse consumers and also to promote some modest steps towards a simpler and more rational system of measurements that has been promised for many centuries.
The first commitment was made in Magna Carta. It required one measure for wine, corn and cloth throughout the realm, and similarly for weights. This was to stop consumers being ripped off. Since then, progress has been rather slow. Four and half centuries later, in 1668, Bishop John Wilkins proposed a universal decimal system of measurement in England. Similar proposals were made from time to time but mostly came to nothing. I will refer to only a few of them. Skipping two centuries, in 1895, the Commons Select Committee recommended that the metric system should become compulsory after two years and be taught in elementary schools. In 1904, the House of Lords voted for a compulsory change to a metric system but the Bill failed in the Commons.
Yet 1971 was a star year when we changed to a decimal currency—a major operation that I remember well because I was Financial Secretary in 1970, when Roy Jenkins was Chancellor. I was involved in preparations for the change, which many prophesised would cause chaos. It went through very smoothly. The following year, a Conservative Government produced a White Paper that recommended a gradual but not compulsory change to metrication. A Metrication Board was set up then, but a few years later it was abolished—perhaps because, more recently, metrication has become associated with Brussels. Most Commonwealth countries have adopted metrication. That is nothing to do with a Brussels agenda but because it is much simpler and more commercially convenient. That is also why British schoolchildren are taught the metric system.
However, we still allow two separate systems to exist side by side in a number of commercial transactions. My amendments seek to dispel the confusion that this can cause. They bring product description and advertising in line with the rules for package labelling and for the sale of loose goods from bulk. At present, package labels must give the metric quantity with the option of a supplementary indication in imperial measurements—for example, “568 millilitres, equal to 1 pint”. Pricing of goods must be by metric quantity—for example, “tomatoes at £2.50 per kilogram”, with the option of a supplementary indication of “£1.14 per pound”.
However, these rules do not apply to product descriptions and advertising, which can prove thoroughly confusing for purchasers. A carpet can be described as measuring “eight feet six inches by 16 feet three inches”, with no indication of metric measurements. We also have the absurd situation that manufacturers and retailers often use incompatible units even for products displayed side by side. For example, a consumer may have to compare a fridge of six cubic feet with a fridge of 200 litres. In property advertisements, some estate agents describe room sizes in feet, inches and square feet, while others use metres and square metres. Therefore, we need a minimum common standard that all manufacturers, traders, advertisers and estate agents must follow. Since the law already requires that goods and services must be priced per metric unit, with the option of an imperial equivalent, it is sensible that the minimum standard for product description and advertisement should also be in metric units.
Subsection (1) of my proposed new clause indicates the scope of the clause to achieve this aim, but allows for certain exemptions. It requires the same units as are already required for the pricing of goods and services—namely those listed in the United Kingdom’s Units of Measurement Regulations 1986. However, in order to help older people who are still uncomfortable with metric units, and to avoid cases of so-called “metric martyrs”, the new clause permits the use of supplementary indications using the exact wording from the Units of Measurement Regulations and the price marking order. Also included are a number of minor exemptions, such as car tyres, where it would not be practical to require them to be relabelled. There may need to be other exemptions, so the new clause gives discretion to the Secretary of State to amend the list.
Subsection (2) exempts the cases listed in the proposed new schedule. I will explain the reasons for the exemptions when I come to the new schedule. Subsections (3) and (4) permit the use of supplementary indications—that is, imperial equivalents—while making it clear that the metric unit is primary and must not be less prominent than the imperial unit. Proposed subsections (5)(a) and (b) define the terms “authorised unit” and “supplementary indication”, using the same wording as in the Units of Measurement Regulations. Subsection (5)(c) makes it clear that clothes and shoe sizes, et cetera, are not to be regarded as units of measurement. In subsection (5)(d), “year” is excluded because, unlike other units of time, it does not appear in the Units of Measurement Regulations; if it were not excluded, it might not be possible for traders to offer, for example, a two-year guarantee.
I now turn to the new schedule. Paragraph 1(1) explains that the reason why tyres need to be exempted is that the labelling conforms to an international standard which, for historical reasons, is expressed partly in imperial inches. Since the labelling is part of the moulding of the tyre, and since tyres are manufactured and traded internationally, it would not be practical to require them to be relabelled in metric units.
The reason for sub-paragraphs 1(2) and (3) is that the Units of Measurement Regulations specifically permit draught beer and cider, and milk in returnable containers, to be dispensed and labelled in imperial measures—that is, pints. It is therefore necessary to exempt the glassware from the requirements to display metric units; otherwise, all pub glasses would have to be dumped. As for paragraph 2, there may be other cases where an exemption is justified. This paragraph gives the Secretary of State the power to amend this schedule, subject to the consent of both Houses.
In summary, the amendments enable consumers to compare products on a like-for-like basis, using the same units as in the Units of Measurement Regulations and the price marking order. They would not prevent anybody from using imperial units in addition if they wished. I suggest that these amendments are eminently sensible: they are sensible improvements for the benefit of consumers, especially the younger ones who have only been taught the metric system at school. I also hope that this Committee will feel that moving a little closer to the requirement of Magna Carta for a common standard of measurement, and doing so after a mere 800 years have passed, is not displaying an excessive sense of urgency. I beg to move.
Lord Harris of Haringey (Lab)
My Lords, the noble Lord, Lord Taverne, raised some interesting issues. However, I am slightly disappointed that he did not attempt to sort out some other problems at the same time, as a number of issues such as product descriptions and advertisements of the size or quantity of goods, particularly food products, could usefully be addressed in this amendment. If he gets the traditional rebuff that Members of the Committee expect from the Minister, he might want to consider including those issues as additional items when he brings the amendment back on Report.
I have noticed a tendency for supermarkets to surreptitiously change the size of products, usually food products but also others, as a means of covertly increasing the price, so things which were previously sold at 140 grams weight are now sold at 120 grams weight. Conveniently, the label moves from the front of the packaging to somewhere at the back, often to a place where it is difficult to read. These are all issues that could usefully be addressed if we are trying to simplify and improve the quality of product descriptions and amendments. It is pertinent that we should look at it.
The noble Lord also highlights in his proposed new schedule the anomaly that exists in the markings on beer glasses. However, for those of us who drink rather more wine than beer, there is even more of an anomaly as places that sell wine by the glass may claim that the glass contains 150 millilitres, or whatever it is, but when you look at it, to the untutored eye, it does not look as though it is anything like that amount. I have on occasion challenged this in restaurants and been told, “Sorry, it’s a big mistake. We have given you the small measure rather than the large”, and a smidgen more appears. However, if one is trying to rationalise this—and the motivation of the noble Lord, Lord Taverne, is entirely helpful in addressing this issue—you might as well try to get a number of other things right. Between now and Report perhaps he and the ministerial team will see what else can be got right and included in the Bill.
Baroness King of Bow (Lab)
My Lords, the noble Lord, Lord Taverne, makes a persuasive argument, to which I listened with great interest. It is interesting to note that we use metres and kilometres for our athletics, miles per gallon for our cars, pints for our milk and beer, miles for our speed limits, feet for our height measurements, and our distances are often measured in yards. As the noble Lord pointed out, we have been hemming and hawing on this issue for 800 years, so I doubt that we will sort it out in the next eight minutes. Suffice it to say that Amendment 81 would safeguard a critical element of British heritage, not to mention a key aspect of British identity—the right to buy beer and milk in pints. For some reason, the self-esteem of the British people depends on it. I thank the noble Lord for bringing this issue before us. As my noble friend Lord Harris said, the motivation behind these amendments is entirely helpful. I hope that we will get a thoughtful response from the Minister and I look forward to returning to this on Report.
Baroness Jolly (LD)
My Lords, I start by reassuring noble Lords that a statutory framework for the use of units of measurement is already in place. The Weights and Measures Act 1985 requires the use of metric units for any regulated transaction, with the following exceptions—draught beer and cider, bottled milk and precious metals, where we still use the troy ounce. These are required to be sold in imperial units. In addition, the Units of Measurement Regulations 1986 list all the legal units available for any other purpose. The Weights and Measures Act applies to any unit or measurement in use for trade. This is intended to apply not just in the transaction itself but to any use in connection with, or with a view to, trade. That would already cover most advertisements or product descriptions for goods. I hope that noble Lords will be reassured by this. I am certainly very keen to avoid any possible confusion for consumers, businesses or enforcers. I am concerned that businesses might be confused by duplication of existing requirements, particularly if that were to result in reduced levels of compliance as businesses were uncertain about which set of rules they must comply with. Having a single set of requirements on units of measurement, as we currently do, all under the weights and measures framework, makes it easier for businesses to know where to look for the rules and how to comply with them.
Lord Taverne
My Lords, I welcome the suggestion by the noble Lord, Lord Harris, that one might look at broader issues than the ones I have raised. My proposals were very much modest ones. As far as the Minister’s reply is concerned, I will have to look very carefully at what she says. I understand that in the examples I gave, retailers and manufacturers are doing something that is perfectly legal and it is certainly very confusing. I will consider very carefully the suggestions we made. This is an issue to which we can return on Report to see either whether we can examine the issues more widely or whether in fact there is no reason to worry about the examples I gave. I beg leave to withdraw the amendment.
“( ) For the purposes of this Act, consumer notices are considered to be any information or requirements about the contract conveyed to the consumer before or during the commissioning of the contract by the trader which may reasonably be considered designed to influence the behaviour of the consumer.”
Baroness Hayter of Kentish Town (Lab)
My Lords, in moving Amendment 55A, which is in the name of my noble friend Lord Stevenson and myself, I shall also speak to Amendments 56FA and 56FB in this group.
Clause 62(2) states:
“An unfair consumer notice is not binding on the consumer”.
We concur with that, but we are concerned that the consumer notice should clearly include any promotions that are designed specifically to catch the shopper’s eye. We are also clear that in assessing whether something is unfair, the CMA should be able to include some elements of price where those have been hidden from plain sight—that is, if the consumers do not appreciate their significance at the point of purchase.
To some extent this amendment and those in the next group are part of our attempt to ensure that consumers should not fall victim to hidden traps in the traded standard terms and conditions, and that while some core terms and some charges are immune from any fairness assessment, that should not be the case where such terms or charges may influence behaviour or where they are not fully understood at the point of sale. The Unfair Terms in Consumer Contracts Regulations put the terms into two categories: those that a consumer will or can be expected to properly take into account when deciding to enter the contract; and those that he or she will not or cannot. It is the latter that can be assessed for fairness.
The Consumer Rights Bill narrows the scope of the price exemption following the somewhat unwelcome 2010 Supreme Court decision on bank charges, but still assumes that the consumer will behave like a rational economic person and take account of all prominent information. However, behavioural studies tell us that people are often far more influenced by presentation than by the information itself, or put more emphasis on salient rather than actually useful information. As such, even when a price or term is disclosed, consumers do not always factor that into their purchasing decision. They also tend to overvalue a benefit received now and underestimate the impact of deferred costs, which leads to an excessive willingness to pay at the point of purchase while underestimating the future use of the product, which may lead to future costs. Earlier in Committee we talked about a future fee, which a shopper may not consider relevant to them as they do not appreciate the likelihood of it affecting them.
Similarly, we know that consumers are influenced in their buying choices by a wide range of factors, which is what Amendment 55A seeks to cover. Indeed, it is interesting to note that one of the leading university departments specialising in behavioural economics—how consumers actually make decisions—the University of Warwick Business School, wrote to the Minister in the Commons on 7 October, saying that,
“simply providing consumers with information about a charge does not absolve the seller from the responsibility for ensuring the charge is fair and reasonable”.
The business school therefore asked that terms that are effectively “hidden in plain sight” should be assessable for fairness, but its wise words pertain also to other issues that might have been included in information put to shoppers with exactly the aim of tempting them into the purchase.
One example of this, which we know influences behaviour, is the choice of price times; in other words, when you find out about them. Research done in 2010 by the OFT shows that consumers make more mistakes and poorer purchasing decisions under what is known as “drip-pricing”, a form of partitioned pricing, where consumers see only part of the full price upfront and price increments then drip through the buying process. This can cause the most consumer detriment.
We all tell stories in this Committee. I was on the point of buying a walking jacket the other day because it was reduced to only £15. But as you get into it, you choose the colour, the size and whether or not you want a hood, and then you get insurance added on. The jacket was only £15 but the postage and packing was 1p short of £4. That is a very large amount to add on to the price but by that stage you have chosen the size, you have chosen the colour—it is a very clever way of selling. However, drip-pricing has a very negative effect on behaviour because we start our purchasing process before we see the whole price. Other offers, such as “take home today”, “easy to assemble”—I have fallen for that one—and “money-back guarantee”, are the ones that influence the buying process. We are not saying that they should be outlawed but they should be looked at for fairness.
Amendments 56FA and 56FB would amend the terms that cannot be assessed for fairness and replace them with,
“only where the price payable does not relate to future variable fees”.
Normally, price is absolutely not assessable for fairness, because it is assumed to be clear to the purchaser. It is up to them to decide whether to accept it and then it is part of the contract. However, future and unknown prices within a contract need to be assessable for fairness, as the consumer is not in a position to judge them and evaluate their worth at the point of purchase. I beg to move.
Baroness Drake (Lab)
My Lords, I support Amendments 56FA and 56FB. These amendments are not about extending consumer rights, so that more contract terms can be deemed unfair; they are about enabling more matters to be assessed for fairness. The problem arises because of the interplay of two provisions. The court may assess a contract term for unfairness unless it falls into a certain exempt category; and core terms in a contract are exempt from assessment for fairness by the courts if they are prominent and transparent.
Through this Bill the Government are clearly seeking to address the problem thrown up by the 2009 Supreme Court decision in the case of the OFT v Abbey National that held, as my noble friend has said, that charges for unauthorised overdrafts were exempt for assessment for fairness. This gave rise to uncertainty about whether ancillary charges could be assessed for unfairness. To use the Government’s own words, this created a situation whereby:
“Some protection in law is necessary because consumers often cannot, or do not wish to, investigate the detail of every contract term before they sign up to an agreement”.
This Bill provides for the “prominence” test for core terms in a contract to be exempt from assessment for fairness by the courts, but this raises other concerns. Prominence is very important and welcome, but its efficiency in providing a remedy both for unfairness and for a weak and ineffective market depends on how the consumer’s attention is drawn to a term and their understanding of its significance. As the OFT commented:
“Transparency alone cannot turn a substantially unfair term into a fair one”.
As the BIS Select Committee commented, bringing something to the consumer’s attention is not the same as a consumer appreciating its significance.
Prominence should not be operationalised in a way that gives too great a protection to traders in exempting contract terms for assessment for unfairness and too weak a defence to the behavioural bias that consumers demonstrate, so unfairly restricting their access to the courts for assessing the fairness of the term of a contract.
These amendments are clearly seeking to mitigate that risk by limiting the wide range of price terms that are immune from a fairness assessment. Consumer markets and products are becoming more complex, increasing the risk that consumers do not understand the significance of certain information. We have behavioural bias. We have asymmetries of knowledge and understanding between the trader and consumer that can actually create incentives for the trader to frame information in certain ways—a problem which the noble Lord, Lord Taverne, illustrated has not been remedied in 400 years.
The Bill may narrow the scope of the price exemption following the Supreme Court’s decision, but it does so on the assumption that consumers will take into account all information that is provided prominently. However, we know that that is so very often not the case. Consumer behavioural bias is very powerful. If the most important goal is buying a house or a holiday, people will focus less on the detail of the associated insurance policies. The closer that the consumer gets to signing something, the less likely they are to walk away or assimilate the detail. As my noble friend Lady Hayter has spelled out, the behavioural biases that consumers exhibit are very significant. At risk of repetition, I shall restate some of them. People are more influenced by presentation than the information. They overvalue a benefit that is received now. They underestimate the impact of any deferred cost. They underestimate future use. They are prone to optimism bias. Volume information means that they reach saturation point. Excessive or complex product information can freeze their decision-making. That is probably one-fifth of the list that one could enunciate if one was going through a study of the literature.
The one thing that behavioural science shows us is that if consumers are not factoring certain prices into their decision, those prices will not be subject to competitive forces, so the markets cannot work effectively. In effect, the Government will not secure the functioning markets they are quite rightly so keen to secure unless there is some limit on the wide range of price terms which are now immune or could be immune to fairness assessment.
By way of illustration, perhaps I may refer to the letter dated 27 October from the noble Baroness, Lady Neville-Rolfe, to my noble friend Lady Hayter on mortgage contracts. To me, the contents raise more concerns than they settle. On the issue of “mortgage prisoners”, the letter makes a reference to the FCA’s concerns that some firms do not seem to be applying its transitional arrangements in the spirit in which they were intended. That is very politely and gently stated, but it is quite clearly yet another example of the failure of rule compliance and is hardly an expression of confidence that Clause 64 of the Bill will work effectively. In her letter the noble Baroness also refers to a number of things that the FCA is doing to address the concerns raised by my noble friend, but of course these apply to regulated products. They cannot deal with unregulated products, which include the Bank of Ireland example cited by my noble friend. For these unregulated products we must rely on the unfair contract terms, the problems with which my noble friend and I have, I hope, gone through in some detail.
Other non-financial sectors will exhibit similar problems with unregulated products, especially where switching is difficult because of the length of the contract wrapped around the product. Examples of these would be products bought in the ICT and telecoms sectors or longer term courses in higher education. When one takes into account the extent of the behavioural bias which consumers bring to the market and how that creates incentives for traders to frame information, the fact is that if consumers are not factoring these prices into their decisions, it means that competition and functioning markets cannot be operating. There really is a compelling case for amendments that would constrain terms that are not assessable for unfairness.
Baroness Jolly
My Lords, this is the first amendment to Part 2 of the Bill covering unfair terms, so allow me to set the scene. Part 2 responds to the Law Commission’s recommendations to the Government on how to improve the rules around contracts between a business and a consumer. The aim of this part is to provide clarity for business and consumers, resolve uncertainties and avoid lengthy court disputes in the future. The basic framework remains the same: terms in a consumer contract must be fair and they must be plain and intelligible. A court can decide whether a term is fair or not, but the “core bargain”, what you pay for and how much it costs, is exempt from that assessment in certain circumstances. The legislation also lists certain terms as examples which the court may look at, known as the “grey list”.
What are we changing in this Bill? I would draw the attention of noble Lords to two particular changes. First, we are making the “small print bigger”: price and subject-matter terms must be transparent and prominent to avoid a court being able to consider whether they are fair. That requirement for prominence to avoid assessment is new. Secondly, we are adding three new types of term to the grey list. These are the types of term which are always assessable for fairness. We are adding terms which permit the trader to claim disproportionately high sums in compensation or for services which have not been supplied where the consumer has attempted to cancel the contract. These are also known as early-termination clauses. We are adding terms which give the trader discretion to decide the subject matter or price after the consumer has become bound by the contract. These additions were recommended by the Law Commission and based on evidence of consumer detriment and case law.
I turn to the amendments specifically and, first, Amendment 55A. As I am sure the Committee is aware, one of the other ways in which this part of the Bill increases consumer protection is by bringing consumer notices into the scope of the fairness test and transparency requirement which currently apply only to consumer contracts. We based our explanation of what constitutes a “notice” on the current regime, specifically the Unfair Contract Terms Act 1977. We make clear in Clause 61(8) that a consumer notice,
“includes an announcement, whether or not in writing, and any other communication or purported communication”.
I can therefore reassure the Committee that “notice” has this broad definition, meaning more protection for consumers.
We have been asked whether the provisions in Part 2 include general statements such as adverts which are not made to a particular consumer but to all consumers. Such notices are covered by the unfair terms part of this Bill where they relate,
“to rights or obligations as between a trader and a consumer, or … purports to exclude or restrict a trader’s liability to a consumer”—
as stated in Clause 61(4).
I also remind the Committee that Part 2 complements other protections. First, this Bill makes clear that certain information the trader gives the consumer forms part of a contract for the supply of goods, service or digital content. For example, in relation to a contract for a service, Clause 50 provides that where a trader gives a consumer information about a service they are offering, and the consumer relies on that information in deciding to enter the contract, the trader must comply with that information. Secondly, the Consumer Protection from Unfair Trading Regulations 2008 are already in place to protect consumers from being misled by a trader. I can therefore reassure noble Lords that the definition of “notice” has a very broad scope and that a wide range of notices are covered by Part 2 of the Bill. Both Part 2 and the other provisions and regulations will protect consumers from being misled.
On Amendment 56FA, concerns have been raised today that our drafting of the exemption will allow traders to surprise a consumer with additional charges after a contract has been agreed, without those charges being assessable for fairness. I do not like these surprises any more than noble Lords do. I would rather know about them upfront so I can shop around to avoid them. That is what the new requirement for “prominence” will allow. Traders should make such charges prominent when they enter into a contract. There should be no surprises. If there are, the consumer or a regulator can challenge them in court. Through that new requirement, consumers will for the first time have significant protection from unfair terms in the small print.
The noble Baroness, Lady Hayter, mentioned drip-pricing. The Bill will help protect consumers from drip-pricing, alongside the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 which say that these extra charges must be clear and comprehensible before the consumer buys. In contrast, were we to allow only the main price to be exempt from assessment for fairness, traders might just bundle all their charges under the headline price. That is not beneficial for consumers or creating a competitive marketplace. The Law Commission recommended to us in 2013 what you see in the Bill now. It considered this a careful balance between protecting consumers and allowing the market to operate. The Government agree with that view; we need an unfair terms regime that works in practice.
On Amendment 56FB, which would change the requirement for prominence under Clause 64, concerns have been raised that our current definition allows terms to be “hidden in plain sight”, where a consumer could see and read a term because of its prominence but still not appreciate its significance. We recognise that consumers rarely read terms and conditions and that those who do may not fully appreciate how they will impact them. After thorough consultation we agreed with the Law Commission’s recommendations that the way to tackle this was through transparency, prominence and the maintenance of the grey list—that is, the list of terms which are always assessable for fairness. In answer to the concern of the noble Baroness, Lady Hayter, about customers being irrational, I understand that the Minister has responded by letter to the University of Warwick academics on this particular point. I am not sure whether the noble Baroness has seen a copy of that letter.
The grey list is key to protecting consumers from terms which they may not fully appreciate when agreeing to a contract because it covers such a very wide range of such terms. We are therefore making clear in the Bill that terms on this list are always assessable for fairness. We are also adding three terms to the list, again on the recommendation of the Law Commission, thereby protecting consumers from three additional types of term that they may not fully appreciate when they agree to a contract. Finally, we are taking a power in the Bill to allow us, after parliamentary scrutiny, to update the grey list. That means that were consumer or trader behaviour to change, we could add terms to the grey list to accommodate that.
I agree with noble Lords that consumers might not appreciate all the terms when agreeing a contract, but I think that we have already addressed this in the Bill as drafted. I hope that I have explained our reasoning for accepting the Law Commission’s recommendations for the construction of Clause 64 and I therefore ask that this amendment be withdrawn.
Baroness Hayter of Kentish Town
My Lords, I thank the Minister for that response. As she says, this is the first time that we have discussed this provision. I also thank my noble friend Lady Drake for her professional and expert intervention; this is her area. Among the details which she so rightly raised, she used the phrase “transparency alone is not enough”. I think that that is the problem that we still have—that transparency and prominence are highly welcome but, by themselves, are not enough.
I very much welcome the expansion of the grey list. I think that there was a half-offer there that we could see the letter that was sent in reply to the Warwick University Business School, so I thank the Minister. I particularly welcome something that I am not sure I had noticed—it is confession time—which is the ability to update the grey list. We might return to this on Report after we have read those words carefully to see whether we would still like to tweak it at that stage, although it may be that we will want to do it later. I think that some points are still not sufficiently well covered. For the moment, I beg leave to withdraw the amendment.
“ A term (including those within the scope of paragraph 22 of this Schedule) which has the object or effect of permitting a trader to increase the price of, or alter unilaterally any characteristics of, goods, digital content or services during any minimum contract period or before the end of a contract of a specified duration without a valid reason or where it is reasonably foreseeable that the consumer would not be free to dissolve the contract without being disadvantaged.”
Baroness Hayter of Kentish Town
My Lords, Amendment 56ZA, which stands in my name and that of my noble friend Lord Stevenson, deals with a similar area. It would add a type of contractual term to the list of what may be regarded as unfair. The purpose is to ensure that consumers do not have terms imposed on them which could leave them disadvantaged, specifically in a minimum or fixed-term contract where a price was increased and where they would then be disadvantaged if they were to switch products or providers. I refer to the discussion that we had on “mortgage prisoners” earlier in Committee.
Which? has pointed out that the Unfair Terms in Consumer Contracts Regulations 1999 recognise that such variation in contracts can lead to consumer detriment. However, the grey list, as currently drafted, would appear to absolve the person varying the terms of the contract from responsibility should the consumer be unable to end the contract. We discussed examples of where consumers could not leave contracts, for whatever reason. There are clear examples of where ending the contract would lead to significant consumer detriment—for example, if another mortgage is not available or one’s circumstances no longer qualify one for a mortgage. Merely being able in theory to terminate a contract does not alleviate the difficulty of a change being made to the contract for no good reason because the person concerned still needs to find another mortgage but cannot do so at that stage.
A mortgage is not the only kind of contract where growing older during its term could make it disadvantageous suddenly to have to find a new one. Life insurance is another such example, or home insurance where a neighbour might have experienced flooding or subsidence since the consumer first bought their own coverage. In the case of a university degree, where suddenly a subject is withdrawn, merely being able to move to another university does not mean that the student is not disadvantaged, especially if they have worked hard for two years at the first university.
This amendment is limited to fixed-term contracts and minimum-term contracts, where the expectation of the deal advertised is at its clearest. The fairness test allows consumers to challenge a term of a contract to make it non-enforceable. Any compensation would have to be decided separately, whether by the financial ombudsman or elsewhere. The Minister will be aware that the approach we are taking here was supported by the BIS Select Committee and the CMA, so I hope that the Government will find themselves in a position to support it, too.
Amendment 56D returns us to the issue of “mortgage prisoners”, although it takes a slightly different approach. It would add to the grey list a term in a contract which would give a mortgage provider the ability to increase the price of a mortgage in cases where the consumer cannot get a new contract for the reasons we have been through. It would have the effect of giving a consumer recourse to argue that the change in the terms of the contract is not legal and should not take place. This consumer detriment, where people cannot get another contract, will be familiar to the Committee.
The Minister’s letter, received on 27 October, to which my noble friend referred, relates to Amendment 56ZA and contracts that vary in their supposedly fixed lifetime, such as a mortgage. However, it applies only to what the FCA is doing on mortgages. But the bottom line is that there is little concrete provision in the rules to stop a lender changing the terms of a mortgage deal that they have come to regret offering in the first place—perhaps when hidden terms and conditions allow them to do so—leaving consumers high and dry where there is no alternative product. Does the Minister agree that if the banks cannot honour the terms and spirit of a fixed mortgage deal, they should never have offered it in the first place? After all, consumers cannot exit the contract without penalty if this happens the other way round, when there may well be exit fees. Therefore, it is hard to see why the provider should be able to do so.
Furthermore, while the Bank of England example allowed BIS to deflect the issue back to the FCA, this issue can occur in other markets that are regulated by different regulators, such as Ofcom with telecoms fixed contracts and Ofgem with fixed energy contracts. Even more importantly, what happens where there is no regulator at all? Who would take action then? Would it be trading standards or the CMA? Again, it is worth noting that the CMA supports our approach to this.
I turn now to the other issue in the example of the Bank of Ireland. The Government said that it would be for the court to decide if the Bank of Ireland case was unfair, although the FCA has already said that it does not think it was. Furthermore, while the Minister says that consumers can go to the Financial Ombudsman Service, in fact that service adjudicated against the complainant because the unfair contract term regulations are not adequate in this case. The financial ombudsman actually cannot help unless the grey list is complete; that is, if it allows these terms to be open to assessment for fairness. Our amendment would add terms that vary by unknown amounts within a fixed lifetime to the grey list and would thus be able to be assessed for fairness. That is what we are trying to achieve.
I would add once again that although the Government have tried to use the particular case of mortgages to show what the FCA considers to be acceptable, we are worried about wider markets where it does not operate. The amendment would provide a clear route for someone to take their complaint in such a situation, and I hope that the Minister will either be able to accept it or will lay out plans to provide an equivalent level of protection within this legislation. I beg to move.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
My Lords, these amendments also relate to Schedule 2 covering the grey list, containing terms which are always assessable for fairness under Clause 62. These are terms that are likely to trip up even an astute consumer or that someone would not fully appreciate when agreeing a contract. As the noble Baroness, Lady Drake, set out, consumers do not always appreciate the terms they have agreed, and I agree with the sense of the debate that this is not the easiest area in the Bill in terms of understanding exactly what is happening. I note the points she made not only about regulated areas but other areas as well, and I am grateful to her for making them.
I shall try to address the generalities and then perhaps I may move on to financial services, which are the subject of Amendment 56D. Let me reassure the Committee that there are protections in place to protect consumers from unfair variation clauses. Where traders include a term to allow them unilaterally to change the characteristics of the goods, service, or digital content being provided without a valid reason, that is included on the grey list as set out in paragraph 13 of Schedule 2. Those terms can be challenged in court even if they allow the consumer to exit the contract. For example, if a painter decorating your bathroom includes a term stating, “All materials may vary in style, colour and finish”, that term can rightly be challenged for fairness.
Where traders include a term to allow them unilaterally to change the price of the goods, service, or digital content being provided, that is also included on the grey list as set out in paragraph 15 of Schedule 2. In that case, a term can be challenged for fairness if the increase is too high and it does not allow the consumer to exit a contract. I should remind the Committee that just because an item is not on the grey list, it does not mean that it is fair or exempt from the fairness test. In order for a price term to be exempt, it must be prominent and transparent, and I believe that the requirement for prominence that we are introducing in this Bill marks a significant increase in consumer protection. I hope that the noble Baroness, Lady Hayter, will bear that in mind in her further consideration of this issue.
The noble Baroness, Lady Drake, mentioned that I had written round—thank you for that. It may be worth reiterating a couple of the points that I made in that letter. The Government are determined that lenders should treat mortgage borrowers fairly. That is why, during the course of this Parliament, we have strengthened protections in a number of ways. Most significantly, in April of this year, the new independent consumer regulator, the Financial Conduct Authority, introduced a revised set of rules as part of its mortgage market review. These provide stronger protections than ever before for borrowers taking out a mortgage to buy a home and, indeed, have changed the marketplace a bit. Among the key changes were improvements to sales standards and to affordability assessments. The FCA’s rules are designed to protect consumers who find it difficult to switch once market or regulatory conditions change. Therefore there is a general requirement on firms to treat customers fairly, but there is a specific provision within the FCA rules that forbids lenders from taking advantage of a borrower who is stuck with their current mortgage—a circumstance that the noble Baroness, Lady Hayter, referred to. FCA rules say that lenders should not treat these customers less favourably than other, similar customers. In addition to that specific provision, the FCA has provided for transitional arrangements that allow lenders to waive the new affordability requirements for existing borrowers seeking to remortgage as long as they are not increasing the size of the loan. Finally, and most importantly, the FCA is also undertaking a review of its new mortgage rules which will consider how the rules are working in practice and whether any adjustment or clarifications are required. If need be there is scope for action and the FCA has the powers.
We believe that this amendment would significantly reduce valuable flexibility that lenders currently have in making commercial pricing decisions across the market. If we make it much more difficult for lenders to increase rates in response to changing market conditions, then lenders’ ability and readiness to offer the most competitive deals will be constrained. Ultimately, it will be mortgage borrowers who lose out.
In conclusion, we believe that introducing new legislative requirements would undermine the robust but flexible system of regulation that has been put in place in recent years. It would constitute a backward step in terms of delivering the Government’s aim to deliver a regulatory environment that offers consumers protection as well as choice and good value. I therefore ask that this amendment be withdrawn.
Baroness Hayter of Kentish Town
I am not certain about the flexibility point, because both amendments use the words “without a valid reason”. That is the point—there are valid reasons for things having to change. We are very focused on changes that are made without a valid reason and which therefore of course cannot be within the expectation of the purchaser. Valid changes in interest rates they know; we are worried about changes made without a valid reason. I want to look carefully at the words used in this amendment and the one before, which to some extent try to address the same problem, to see how we might come back to this. I beg leave to withdraw the amendment.
Baroness Thornton
“20A (1) A term which has the object or effect of permitting a trader engaged in the provision of fixed broadband internet access or mobile internet services to block, restrict or otherwise hinder the access of a consumer to any lawful electronic communications network or electronic communications service on the basis of an unreasonable or unusual definition of “internet access”, “data”, “webaccess” or similar word or phrase.
(2) Nothing in this prohibition shall affect filters for the purpose of child protection.
(3) “Electronic communications network” or “electronic communications service” shall have the same meaning as in the Communications Act 2003.”
Baroness Thornton (Lab)
My Lords, this is an amendment to Part 1 of Schedule 2 which seeks to add three sub-paragraphs. They concern net neutrality and seek to clarify the issue. As the Minister will know, they are made necessary, in some ways, because of the flurry of confusion that was caused by unfortunate wording in a measure debated recently in the European Parliament. It would be absurd, would it not, if in the name of net neutrality—or anything else, for that matter—ISPs or we found that we were unable to take reasonable steps to protect children from age-inappropriate materials on the internet.
No right-thinking person can ever have intended that, so I hope that the Government will take this opportunity to put the matter beyond any doubt. Noble Lords will know that net neutrality is the principle that internet service providers and Governments should treat all data on the internet equally. They should not discriminate or charge by user, content, site, platform or application. In layman’s terms that means that whether we are looking at iPlayer, Sky Go or Netflix, there will be equal access to services and there should be no speed differentiation in accessing them. The amendment seeks to address that issue.
I know that noble Lords have comments to make so I will limit myself to putting some questions to the Minister. What consideration has she made of any possible changes to the principle of net neutrality? Will she rule out any changes to data priority for UK consumers of online content? Has she had meetings with ministerial colleagues to discuss what response the Government might make if the authorities in America, for example, make changes to their rules on net neutrality? Does she feel that existing protocols are strong enough to protect the interests of consumers and avoid competition issues among content providers? What assessment has she made of any competition implications of the possible creation of a two-tier internet? I do not expect the Minister to answer those questions in detail right now but it might be necessary for the discussion to take place between now and the next stage of the Bill. I beg to move.
Lord Deben (Con)
My Lords, I hope that the Minister will listen to this very carefully. I will repeat for her interest an experience I had as a Minister when I sought to insist that the providers of telephonic communications should be able to withdraw the service to telephone numbers used by people advertising illegally in telephone boxes. This had become an increasing problem and it seemed not unreasonable that we should say that if you advertise a telephone number illegally in those circumstances, the telephone company might withdraw it.
One of the telephone companies took me to Ofcom, or the equivalent then, to say that this was contrary to competition and would create a cartel. With very great regret, the regulator said that it thought that the law did mean that. So this very simple way of removing very objectionable content in telephone boxes in the centre of London, which were very often used by young people, was stymied. I use the example so that my noble friend will recognise that this is an area in which very great care must be taken not to allow the very necessary protection for competition to interfere with the very necessary protection for other reasons.
The noble Baroness who introduced the amendment did so in a very broad-minded and sensible way, saying, “We just want to do this in order that the Minister will take it very seriously”. I just want the Minister to understand that this is much trickier than sometimes Ministers are advised. Having been through this, it is a very dangerous area to be in and the Committee will probably agree that we want both—protection of competition and protection of people so that they can make the choices that they want to make. There are many unscrupulous people around who will use the one to play against the other.
Therefore, will the Minister take it from me that it is much more difficult than is sometimes suggested, and that she needs to be on her guard in a particular way? I hope she will be able to answer the very pertinent questions that were raised by the noble Baroness.
Lord Best (CB)
My Lords, I have added my name to Amendment 56B. I was approached by the Internet Telephony Services Providers’ Association—ITSPA—because I chair your Lordships’ Select Committee on Communications. However, my committee has not had a chance to consider this particular issue so, having discussed it at length with ITSPA, which represents some 80 providers of telephony services via the internet, I speak in a personal capacity.
The amendment addresses a consumer rights issue relating to the penalties facing unwary customers of some of the companies that supply our mobile phone and internet connections. Unbeknown to those who sign up to get the internet from their iPhones and other mobile phones—unless they have studied all the small print and those terms and conditions that we all accept but have never read—some of the big players have built-in penalties for using the internet to make telephone calls—for example, through Skype. While providers such as BT, O2 and Sky, for example, have not adopted such practices and do not penalise their customers in this way, Vodaphone and EE have done so in recent years.
Presumably, the restrictive practices of these companies are a consequence of them providing mobile telephone services, which could be less popular and profitable if people use the internet to make telephone calls at a much lower cost. However, this practice is bad not just for the innocent consumer who can have their calls blocked or degraded, and/or could find some hefty charges on their mobile phone bills, it is also bad for this industry that finds it harder to attract investment to extend a really useful communication tool which, increasingly, could benefit more and more of us but has this cloud hanging over it. The practice is detrimental to consumer interests as well as anti-competitive and will gradually affect other services as we increasingly access the internet via mobile connections.
I note that amendments to this effect were tabled in the other place by both Conservative and Labour Members. We learnt there that the Government and Ofcom are keen to see an end to the current bad practice. We hear that in recent days Vodafone and EE have bowed to pressure from all sides and agreed to sign up to the industry’s code of practice which outlaws the technical blocking or restricting of telephone services through the internet. This is a step in the right direction. Nevertheless, as ITSPA points out, there are ways of interpreting this code of practice that could circumvent its intentions, for example simply by avoiding the term “internet access” and using a synonym such as “mobile data” or “mobile broadband”. There are also no sanctions for breaking the code, and those who voluntarily sign it one day can withdraw from it another. Only through legislation is the matter fully resolved.
As I know from the work of the Communications Committee, ensuring the law keeps pace with technological change—particularly in respect of the internet—is an important challenge for today’s legislators. This Bill takes steps in that direction and this amendment is very much a case in point. It seems that in the somewhat arcane world of telephony services, the consumer needs the protection of the law, not just of a voluntary code, to ensure fair play.
Finally, I gather that there is a school of thought that suggests we should await an EU directive on so-called internet neutrality—to which the noble Baroness, Lady Thornton, referred. That would cover this point, among other measures. However, I fear that we could wait a very long time for agreement on the content of this Europe-wide measure. Surely it is much better for UK citizens if the Government act now with a small, well-focused amendment to the Bill already before us. I am delighted to support this amendment.
Lord Stoneham of Droxford (LD)
Briefly, I lend my support to this amendment. Most of the points have already been made but wherever uncompetitive activity is trying to distort a market and deprive market entry to competitors it should be exposed and eliminated. Internet access should be open and consumers buying that service expect it to be so. Can the Government really achieve their objective of an open market without considering this amendment? Selective blocking is abhorrent to innovation and generally has uncompetitive motives. Consumers are not fully aware of the practices when ISPs and mobile providers undertake inhibiting their services. Ofcom has already indicated that it would welcome more clout against the blocking of or economic deterrents for internet services. It recognises that these practices should be unacceptable. The voluntary code of practice should be given statutory support.
Baroness Jolly
The noble Lord, Lord Deben, says that this is a tricky issue and he is clearly right. One of the tricky bits of this amendment is that many aspects of internet behaviour can be fitted under these amendments. The ones in my comments relate to those of the noble Lord, Lord Best, in which people using voice over internet protocol have been wrongly charged for it. Nobody wants to see that situation but I question whether there is a need to change the law to tackle such behaviour as we have good and robust protections in place for consumers.
I also understand that companies which block services such as Skype no longer offer packages that do so, except on legacy tariffs, so these terms and conditions should not apply. I also understand that the regulator Ofcom has been in dialogue with the providers, and that there is a commitment to review the wording in their terms and conditions to ensure that these are not misinterpreted in this way.
The noble Baroness, Lady Thornton, asked about the assessment of the two-tier internet. The Government’s intention is to ensure an open, secure and safe internet. Where some services are blocked, we want to see transparency. However, our experience is that competition is working. The proposals in the US are informed by the US market. The UK’s market is very different, so we watch with interest to see what the FCC will do.
More broadly, the Government and industry through the Broadband Stakeholder Group have done a great deal of work together to ensure that there is greater transparency. For example, two industry codes of practice have now been developed. This, coupled with the UK’s highly competitive telecoms market, has been very successful in ensuring that there is no consumer detriment caused by traffic management problems.
I hope that this gives some reassurance to noble Lords proposing the amendments. However, given their wide applicability, it makes an awful lot of sense to convene a meeting on this issue with interested parties before Report. Therefore, I ask the noble Baroness to withdraw the amendment.
Baroness Thornton
I thank the Minister and the noble Lords, Lord Deben and Lord Best, for their remarks.
I was getting quite cross until I heard the Minister read out her last paragraph, as I thought that her remarks showed a level of complacency which I do not think is justified. As the noble Lord, Lord Deben, said, this is a complex area. I would certainly like to take the Minister up on her offer of discussions before the next stage of the Bill. I beg leave to withdraw the amendment.
“ A term which either—
(a) requires or encourages a consumer to contract third party services without informing them of their right to seek independent advice; or(b) seeks to limit a consumer’s access to independent advice regarding third party contracts where there is a potential conflict of interest for the third party involved.”
Baroness Hayter of Kentish Town
My Lords, in moving Amendment 56C, I shall speak also to Amendment 56FD, both of which also stand in the name of my noble friend Lord Stevenson.
These amendments are about protecting consumers who take out legal protection through their insurance policies against being allocated a lawyer who has some tie with the insurance company. Instead, they should clearly be offered independent advice and have greater certainty that any lawyer arranged through such a deal will act independently of the interests of the insurance company. This is about ensuring that, following an accident, the lawyer, who has after all been paid for by their premiums, is working for the driver and not in any way for the insurance company. Unfortunately, experience shows that it is necessary to look at this. At the moment, if you look at your car or house insurance, you may well find a paragraph about legal protection.
The problem is that, should you need to call on this, you would probably have to use the law firm that the insurers appoint, not a lawyer of your own choice. And one has to ask, in order to stay on the panel recommended by the insurance company, what incentive would there be for a law firm to do extensive and therefore expensive work, which would be paid for by the insurance company, rather than a quick job which perhaps looks very satisfactory to the driver, if it results in a very fast settlement? Would such a law firm on the panel which relies for its work on referrals from the insurance company, really fight the driver’s corner with any vigour in a personal injury claim, or would there be a temptation to settle for the first offer from the other side? These legal expenses clauses are often difficult to remove from an insurance policy, which does not sound like a healthy market for consumer choice.
Baroness Jolly
Perhaps I may reassure noble Lords that where conflict of interest is an issue in particular sectors, the Government have taken action. As I am sure noble Lords are aware, in November 2008 the then Master of the Rolls, Sir Anthony Clarke, appointed Lord Justice Jackson to lead a fundamental review of the rules and principles governing the costs of civil litigation and to make recommendations in order to promote access to justice at proportionate cost. Lord Justice Jackson published his final report in January 2010 and the recommendations are being taken forward in a variety of ways. A number of measures required primary legislation, and some of the major reforms are in the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Other reforms will be implemented through rule or policy changes.
Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act implements recommendations made in Lord Justice Jackson’s review. No-win no-fee conditional fee arrangements have been reformed, but remain available. They provide a means of funding legal cases for those who could not otherwise afford them. That part also provides that for personal injury cases, referral fees are prohibited. This ban covers both the payment and receipt of such fees, which means that a firm cannot benefit through referring a customer to a particular third party. In effect, this removes the incentive on the trader to refer a consumer to a particular third party, just as this amendment would do. The ban captures all of the main businesses involved: solicitors, claims management companies and insurers. Any breaches of the ban will be subject to appropriate regulatory action by the relevant regulators, which are the Solicitors Regulation Authority, the FCA and the Claims Management Regulator. This regime has been in force since April last year.
Provision is also made in the Act for a power to extend the prohibition to other types of claim and legal services beyond personal injury claims. However, the Government do not intend to use this. There is no evidence that such a ban is needed in other sectors. I hope that that reassures the noble Baroness and I would ask her to withdraw the amendment.
Baroness Hayter of Kentish Town
I thank the Minister for her reply. I have worked on referral fees a lot and of course this is not quite the same. It is not about the payment of referral fees, but about a law firm which is dependent for the volume of its work on being referred by an insurance company. I made no allegation whatever that a referral fee was being paid. The problem is that if the insurer is putting all its cases to one or more lawyers on its panel, that sets up a potential conflict of interest for the law firm which wants to remain on the panel.
I know that the Minister will not be able to answer my next point now, but she has talked about claims management companies. She will not be aware, because she was not the Minister at the time, that another amendment I did get through was that complaints against claims management firms should be able to be made to the Legal Services Ombudsman. I think that that happened around 18 months ago, but the SI has still not come before your Lordships’ House. Despite this House having taken the decision—a very wise decision, I have to say—that complaints against claims management firms can be made to the Legal Ombudsman, the MoJ has been so tardy that we still do not have the SI. I am sorry to get that in as a dig, but we are still waiting for it. It is really important in these sorts of issues.
As I say, it is not referral fees that we were touching on in this. It is about being absolutely certain that when you pay for insurance to cover legal representation if anything happens, that legal representation should be absolutely non-conflicted and should act for the driver concerned. For the moment, I beg leave to withdraw the amendment, but if the Minister could talk to her colleagues in other departments, and if they could move on the complaints against claims management firms going to the Legal Services Ombudsman, many people would be very grateful.
Baroness King of Bow
Baroness King of Bow
My Lords, Amendments 56FC and 56G are in my name and those of my noble friends Lady Hayter and Lord Stevenson.
Amendment 56FC aligns the definition of “average consumer” with case law from the European Court of Justice. This basically means using a phrase already well established in EU law to identify an average consumer. The phrase in question is,
“taking into account social, cultural and linguistic factors”,
when identifying what is average. The essential point of Amendment 56FC is to give courts flexibility when determining what constitutes average. The amendment supports the view of the Financial Services Consumer Panel, which has judged the Bill to be inadequately flexible.
I realise that the Minister is likely to respond to Amendment 56FC by saying that it is too subjective. It would seem, for example, to protect consumers who might currently be unprotected—those who are not average. An example might be consumers with learning difficulties, mental health problems or medical conditions. The European Court of Justice has not found this approach too difficult and has used the phrase in a succession of cases. Although the ECJ expects traders to consider an average consumer as reasonably well informed and reasonably observant, at the same time it expects traders to take social, cultural and linguistic factors into account. This does not seem to have caused it undue problems.
Amendment 56G requires the Competition and Markets Authority to,
“publish an annual assessment of the extent of consumer detriment caused by the use of unfair terms”.
Throughout this debate, we have heard that consumer protection is meaningful only if consumers understand what their rights actually are and those rights are enforced. Amendment 56G would provide insight into those two critical factors. Many stakeholders involved with this legislation are concerned about the enforcement landscape, which is looking very patchy, to say the least. One of the obvious reasons for that is that funding for trading standards has in some places been cut off at the knees. The majority of trading standards enforcement comes via local authorities and we all know what has happened to local authority funding. The amendment requires the CMA to publish an annual assessment of the extent of consumer detriment in relation to what we have just been discussing around unfair terms.
It is helpful to have an idea of what we are talking about in terms of scale. The most recent comprehensive research on this that I am aware of was conducted by the National Audit Office in June 2011, although I would welcome any more recent figures that the Minister no doubt has to hand and can bring to the debate. In June 2011 the NAO estimated that the total cost of detriment to the consumer was £6.6 billion. Of that sum, £4.8 billion could not be tackled locally. Therefore, £4.8 billion of consumer detriment requires a national response and a national enforcement strategy. That national response is funded to the tune of £34 million—or at least that was what was forecast for this year.
Those figures set out a national problem that costs the consumer almost £5 billion, depending which of those figures you are using, and yet our response at a national level amounts to £34 million. That is an example of asymmetry that is clearly detrimental to consumer interests. Of course, you are never going to spend as much on trying to tackle the problem as the scale of the problem itself because clearly that would not make sense but I am sure we can all understand that there is a very big gap there when you look at the scale of the problem.
I am sure that, none the less, the Minister will resist the amendment by saying that the NAO is reviewing the landscape. She may well also point to research commissioned by the University of Birmingham which the Government are supporting and which will look at the structure of trading standards and the extent to which funding cuts may have impacted the service, among other issues. However, the key point here is that the CMA has overall responsibility for unfair terms legislation and therefore the CMA should determine detriment in this area. After all, it holds the knowledge about what is happening in the market. Yes, the NAO has looked at the landscape and said that it is a dog’s breakfast because it is just so complicated. The feeling out there is that the Government have replaced one complicated landscape with another one.
We know that the scale of the problem is huge and that the resources allocated to tackle it are few and far between. It is for precisely that reason that we need all the insight and information we can get from the right source. The debate that we recently had on unfair terms sets out why we need to assess and then tackle the vast scale of consumer detriment caused by unfair terms. I beg to move.
Baroness Jolly
My Lords, let me take each of these amendments in turn. First, on Amendment 56FC, the Government of course agree wholeheartedly that vulnerable consumers should be protected. The existing consumer protection regulations protect vulnerable consumers from misleading and aggressive practices. They take into account whether a practice is directed at a particular group and whether that group is particularly vulnerable when considering whether a practice is misleading. On 1 October this year the Government amended those regulations to make it much easier for consumers who have been the victim of such practices to get redress. The Government have also ensured that there is support available for those who need help understanding their finances or their financial options, for example through the Money Advice Service and citizens advice bureaux.
However, one of our aims in Part 2 of the Bill is to create a regime that protects consumers but which traders can work in practice. I am not sure whether the noble Lady would agree, but I do not think that a trader can be expected to know the social, cultural and linguistic characteristics of their customer; and, in many cases, the customer would not want to share the detail. Many contracts are now agreed remotely online or over the telephone, a practice that greatly benefits the consumer through speed, ease and efficiency. However, in such cases the trader cannot know the specific details of who it is contracting with, and I am not sure that we should be encouraging it to ask that information of the consumer either. Even in a face-to-face transaction, a business might need to spend considerable time assessing the social, cultural and linguistic status of a consumer, and even after that there will be uncertainties about how accurate that assessment was. This is a process that consumers themselves may not appreciate, as the Association of British Insurers pointed out in its evidence to the Bill Committee in the other place. Some consumers already begrudge the time spent purchasing insurance and the length of the documentation they receive.
I am aware that the language proposed is used in other legislation, such as the Consumer Protection from Unfair Trading Regulations. However, it would not be practical to use the same definition of “average customer” here. That is because those regulations are for unfair trading practices. A trader who, for example, uses advertisements to mislead consumers will know at whom it is targeting those advertisements. Indeed, it can choose who to target and what type of consumer to engage with. The Law Commission examined that issue in its 2013 report and recommended the definition we see in the Bill. Like noble Lords, it strongly supported a definition that works in practice.
I am pleased that Amendment 56G gives me an opportunity to talk about Schedule 3 to the Bill. This schedule is vital to ensure that the consumer protection regime is enforced effectively. As the noble Baroness said, rights need to be not only understood but enforced. It provides for a tailored, specific enforcement regime for the law on unfair terms. We have taken the current enforcement regime under the Unfair Terms in Consumer Contract Regulations 1999 and worked with the Law Commission and our stakeholders to improve and update it. For example, we are making it clear for the first time that enforcement action can be taken against consumer notices, such as those seen in retailers’ car parks, that seek to deny all responsibility for theft from or damage to cars parked in them. We have also taken a national approach to unfair terms enforcement in Schedule 3. This Bill will reduce consumer detriment by £2 billion a year.
Schedule 3 includes a key role for the Competition and Markets Authority, as the noble Baroness mentioned. It sits at the heart of enforcement work on unfair terms across the regulatory landscape and has the power to issue guidance on what traders need to do to comply with the law in this part of the Bill.
I can reassure noble Lords that the CMA will publish on its website details of specific enforcement action taken. It is also required by the Enterprise and Regulatory Reform Act 2013 to publish and lay before Parliament an annual report that covers among other things its enforcement activity in the previous financial year. Traders, consumers and other enforcers can also ask the CMA for this information during the year. Of course, for noble Lords, and for Members in the other place, the benefit of having the annual report laid in front of Parliament means that noble Lords can challenge the CMA on its work.
The department also regularly monitors consumer detriment in order to inform policy. I am pleased to say that a report on consumer detriment, drawing on survey responses from real consumers across a whole range of sectors, was published earlier this year and is available on the GOV.UK website. I have given noble Lords several examples of the CMA’s work that we think would not call for either of the two amendments that the noble Lords are suggesting, and I therefore ask that the amendment be withdrawn.
Baroness King of Bow
The Minister points out as a concern with Amendment 56FC that it might cause the trader problems in relation to knowing the background of the consumer. I trust that she understands that the point behind the amendment is, as I set out, not to increase any undue burden on the trader; rather, it is to increase flexibility in the courts when determining what constitutes the average. As I hope I have pointed out, this seems to have been done in a way which will not lead to the problems that the Minister raised.
On Amendment 56G, I am delighted that the Government estimate that the Bill will reduce consumer detriment by £2 billion. However, the point remains that the agency that would appear to be best suited to being able to measure this is not the one tasked with that, as far as I am aware. The concerns still remain, but naturally at this point I will withdraw the amendment.
Baroness Neville-Rolfe
“(7) No order may be made under sub-paragraph (2) unless a draft of the statutory instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.”
Baroness Neville-Rolfe
My Lords, this amendment was recommended by the Delegated Powers and Regulatory Reform Committee in its report on the Bill. On the committee’s recommendation, we propose to change the parliamentary procedure used to update and amend the list of enforcers of the unfair terms regime by moving from the negative to the affirmative procedure. We agree with the committee that now that the list of enforcers is in primary rather than secondary legislation, this is a significant power because it can be used to add to or amend the list of enforcers who can take action against unfair terms, as set out in Part 2. As such, the higher level of parliamentary scrutiny and the opportunity for debate that the affirmative procedure provides is more appropriate. I beg to move.
Lord Stoneham of Droxford
“Copyright
In cases where there is a consumer contract under Part 1 or 2 of this Act, paragraph 1(c) of Schedule 1 to the Unfair Contract Terms Act 1977 (scope of sections 2 to 4 and 7) applies with the omissions of “copyright,”.”
Lord Stoneham of Droxford
My Lords, I speak on behalf of my noble friend Lord Clement-Jones, who has commitments in China this week. I reassure the Committee that this is not an option that has been proposed in order to make speedier progress on the Bill.
The purpose of Amendment 57A is to amend the Unfair Contract Terms Act 1977 so that it would apply to intellectual property rights contracts. Although this has been sought by the Society of Authors, we would argue that there is a wider significance that needs to be examined in the context of the Bill. There is no justifiable reason why creators should be denied the legal protections afforded to other businesses, and we would therefore press for the amendment to be accepted.
The Consumer Rights Bill should be extended to protect creators and others in an unfair negotiating environment where they often have little choice but to sign the contracts that are put in front of them. For example, writers always have to sign clauses indemnifying publishers against any claims brought by other parties even when they arise through no fault of the author, and even though the publisher is covered by insurance. Nor can writers easily enforce performance which turns out to be substantially different from what they could have reasonably expected under the contract.
The proposed new clause would impose a basic obligation of fairness. It is unclear why contracts involving intellectual property are currently excluded from the Unfair Contract Terms Act, but it is probably because they were not so significant in 1977. It will protect consumers and businesses from being bound by contractual terms that they may not have read as they would have simply clicked their agreement to them, as we all do, on the assumption that they contain nothing astonishing or that the law will offer protection. For intellectual property rights, which could include something as basic as buying an e-book, there is currently no legal protection against unfair terms. This is remarkable, given the growth of contracts involving intellectual property rights.
The Government may argue that this new clause would represent a major change that requires consultation, but we do not agree. It is not being suggested because creators have little bargaining power—although that is true—but because if as a society we agree that people should be protected from hidden and patently unfair terms in contracts, the protection should be apply to everyone. It is completely illogical to exclude contracts that relate to intellectual property. Without a government response, this unfairness will grow with the increase in contracts involving intellectual property, and it will deter innovation. I urge the Minister to accept the amendment, or at the very least tell the Committee how the Government intend to deal with this growing inequity.
I now turn to Amendment 63A, which is somewhat unrelated. I have spent my life in the publishing business, where passing off brands was a problem. Although we invested heavily in brands over a long period, it required us to be ever vigilant to protect them. Parasitic copying—the practice of packaging consumer products to mimic familiar brands—misleads consumers and distorts competition. Indeed, this has been recognised by the Government, who launched a consultation in February on enforcing consumer protection regulations in relation to misleading, similar packaging. It is therefore a legitimate subject to be covered by the Bill. Copying the packaging of branded goods hijacks the reputation of a brand built up over many years of consumer experience. The current legislation appears inadequate to deal with the problem.
Lord Stevenson of Balmacara (Lab)
My Lords, I was aware that the noble Lord, Lord Clement-Jones, was abroad because I have been in correspondence with him on other issues in relation to this Bill, but I had not realised that he had set up such a brilliant “counterfeit parasitic package” in his place. The noble Lord, Lord Stoneham, has done a wonderful job of presenting the case and I congratulate him sincerely on that.
I do that because I have been exposed to the original version on a number of occasions. Those of us who have sat through the various pieces of legislation emerging from BIS this year have been astonished by the persistence that the noble Lord has displayed in finding ways to introduce both these items out of a hat. Even in respect of the most unlikely of clauses, he has been able to persuade those who should know better that they were not only in their scope but were central to the whole understanding of consumer law in this area. There are a lot of prizes around Parliament, such as those for the best newcomer or the best law. We ought to have one for persistence, and the noble Lord, Lord Clement-Jones, would win that hands-down.
Having listened to the noble Lord, Lord Clement-Jones, over the years, I am aware of the arguments he uses in these matters; indeed, my speech was prepared in response to what I thought he would say. It is rather irritating, but also very gratifying, that the noble Lord, Lord Stoneham, was able to find new words for these issues. It shows that this is not just a one-man band, which is an unhelpful way of describing it, but there is a broader sense of engagement with this issue, something that the Minister should reflect on when she comes to respond.
The case on the question of copyright is a strong one. It is perplexing that until recently the Government have maintained the view that it was okay for copyrights to be excluded from any negotiations, particularly where negotiations were between a relatively unresourced creative person and a large corporation. Individual creators can be at a disadvantage when negotiating such contracts, and it is time to look seriously at the Unfair Contract Terms Act and amend it if necessary in order to ensure that the terms of engagement are more equal. I know there have been discussions on this issue, and the last time this came up the then Minister confirmed that he would meet with representatives from the various creative industries. I would be grateful if the Minister would confirm whether that meeting has taken place and, if so, tell us what the outcome was and whether there were any proposals discussed that might have ameliorated the issue. It is an interesting one, which has been bubbling away quietly, but it has now reached a point where we need to make some movement on it—doing whatever is possible through this or other measures.
On the relationship to parasitic packaging—which is a new name since we went though this last time—the case was certainly well made by both the noble Lord, Lord Clement-Jones, and the noble Lord, Lord Jenkin, who is not in his place today but has followed this subject with interest. I think it is correct to say that lookalikes are already unlawful in the United Kingdom because they are contrary to a variety of measures introduced by previous Governments, particularly the Consumer Protection from Unfair Trading Regulations 2008. The point made by the noble Lord, Lord Stoneham, was right: these regulations would have little effect if the responsible authorities—in this case it must be the trading standards people—do not have the resources to take action against those who might breach the regulations. His point, which I support, is that we need more detail from the Minister on whether trading standards are sufficiently resourced to be able to deliver on this point. For instance, will the Minister identify precisely what resources are currently being deployed in this area? Where is the responsibility for these issues physically located? There is an understanding among the trading standards authorities to locate particular responsibilities in particular areas; I would be grateful if we knew a bit more about how that will have been done in this case.
The most interesting issue is one that was touched on—but perhaps not explored as much—in the speech today: the line between confusing packaging on the one hand and the use of generic cues to signal to customers on the other. The point is that if similar packaging prompts mistaken purchases and creates false assumptions in the minds of consumers, there must be an effect on sales. If there is an effect on sales, then it is surely right for the Government either to strengthen existing powers so that they are effective or to introduce new legislation. I would be grateful if the Minister could respond to that point.
Baroness Jolly
I am grateful to my noble friend Lord Clement-Jones for tabling these amendments and to my other noble friend for speaking to them on his behalf.
I realise that these amendments are closely related but I will take each in turn, starting with Amendment 57A. Noble Lords asked why we are not changing the scope of the Unfair Contract Terms Act in the Bill to apply to business-to-business intellectual property contracts. This is because this Bill is about consumers. We want to have a one-stop shop where consumers can go to find their rights. Adding business-to-business contracts would dilute this for consumers, making the law more complex and reducing its accessibility. Having rights for businesses in the Unfair Terms part of the Consumer Rights Bill may also be confusing for businesses.
We sympathise with the situation in which some small businesses find themselves. However, we have not yet seen evidence that amending the Unfair Contract Terms Act in this way would address the issue. We would need substantial, quantitative evidence of a problem to make this change. We would also need to be sure that amending the Unfair Contract Terms Act in this way would solve the problem my noble friend raises without unintended negative consequences.
My noble friend Lord Stoneham raised the issue of consultation, effectively saying that we do not need consultation, we need action. We need to be sure that we get this right, so we need to consider all interests. The creative industries are too important to rush this. They are really critical to the UK economy. The department is aware that this is a live issue, but the Bill is not the place to solve it.
Lord Stoneham of Droxford
Is my noble friend saying that in recognising the issue, the department is prepared to initiate some form of consultation to put this inequity right?
Baroness Jolly
Yes, there was a meeting and the outcome was agreement from the creative industries to provide evidence of the problem and to propose a solution. My noble friend has just said that she is seeing the British Brands Group tomorrow at an IP round table to discuss these issues.
Lord Stoneham of Droxford
I am sorry, that is a separate issue. That is on parasitic brands. I am sorry to confuse my noble friend. Perhaps she could write to me.
Baroness Jolly
I will drop my noble friend a line. I am sorry, that has thrown me. I was given this and told exactly where to slot it in.
Lord Stevenson of Balmacara
Just to pick that up and endorse it, in my researches for today I just happened to check back in Hansard and I felt it was important to reflect on this point. When this was discussed previously, the noble Viscount, Lord Younger of Leckie, said that the noble Lord, Lord Clement-Jones, had sent him a paper,
“on how the issue of unfair contracts could be addressed. I confirm at the beginning that I have received this paper and that we will consider his suggestions very carefully. It is a little early to talk about this as a formal review, but I reassure him that we will certainly discuss this and take it forward”.—[Official Report, 11/3/2013; col. 55.]
I am very heartened to hear from the noble Baroness that there has been a meeting. That is a good thing. If evidence was required from the creative industries, I am sure that it would have been supplied, so what is the hold-up?
Baroness Jolly
We can clarify this. The noble Viscount, Lord Younger, had a meeting to discuss this and we have asked for more detail. I hope to be able to come back with more detail on this for noble Lords, certainly before Report.
Moving to Amendment 63A, I would like to add my compliments to those of the noble Lord, Lord Stevenson, to my noble friend for speaking to this well-crafted amendment so clearly and for raising the important issue of copycat packaging. This was debated at the Committee stage of the Intellectual Property Bill in June last year and the noble Viscount, Lord Younger of Leckie, said that the Government would undertake a review into this issue.
Lord Stoneham of Droxford
I thank my noble friend for her comments. I apologise for interrupting, but I am grateful for the assurance that she will come back to us on Amendment 57A and its implications. Although I am disappointed that the review on parasitic products is not going to be published until early 2015 and I have certain doubts as to how this Government could deal with the European Act, we have had some assurances that the Government are on a path towards progress on this matter. I will have to leave it to my noble friend Lord Clement-Jones to decide how he pursues this matter. I beg leave to withdraw the amendment.
Baroness Jolly
“section (Enforcement of the duty)(1) of this Act.”
Baroness Jolly
My Lords, I want the requirement for letting agents to publicise their fees to come into effect in both England and Wales as soon as possible to ensure that tenants have some certainty over the payments they have to make. This is why I have laid an amendment putting the enforcement details into the Bill rather than subsequently using secondary legislation. This amendment simply uses the process described in the existing clause but makes it clear that the duty in England and Wales will be enforced by county councils, county borough councils, unitary authorities and London boroughs.
These authorities will be able to fine agents who fail to publicise their fees up to £5,000 for each office and website. Agents will be able to appeal to a tribunal. I recognise that enforcing the requirements for agents to publicise their fees will entail a new burden for English local authorities, so we will make additional funding available for this. Furthermore, authorities will be able to retain the fine, potentially enabling the proceeds from agents who are opaque on their fees to be used to tackle rogue agents where they exist, thus continually driving up standards in the industry. I beg to move.
Baroness Hayter of Kentish Town
I rise to say “well done”. I should warn the Minister that we will have other amendments on letting agents next week. However, we are very pleased that this will be in the legislation and that it will happen early, by the extra resources, and by the incentive for local authorities to take action, given that they will be able to retain any fines levied. I realise that that is the end of her political career, having had praise from me, but so be it.
Baroness Neville-Rolfe
Before the noble Lady sits down, perhaps I can say thank you to her.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I will speak to Amendments 60, 61, 62, 63 and 63ZA. As noble Lords know, my noble friend Lord Clement-Jones is elsewhere so I am standing in for him.
The first group of amendments deals with powers of entry for enforcement officers. While there is some logic to giving advance notice of inspections by trading standards officers, I do not believe that will work in favour of consumers and businesses in all cases. There are a number of situations in which the exemptions for giving notice cannot be sustained and are likely to cause confusion and uncertainty about whether an officer has to serve notice before an inspection of a business they believe is in breach of legislation.
The horsemeat scandal has caused the European Commission and the consumer to voice support for more unannounced inspections. Reviews of food safety powers have left powers of entry for trading standards officers untouched after concluding that the use of unannounced inspections is proportionate to the risks involved. The assumption is that consumer protection against unsafe products, including dangerous electrical goods, involves less risk. I question that assumption.
Evidence from members of the consumer association Which? suggests that many authorities are already following an intelligence-only approach. They use powers of entry only where there is good evidence to suggest that a breach has occurred. Many businesses suggested that they value unannounced inspections, both for their own businesses and their competitors. The need to give notice is questionable if it will do little to change existing practices and add little to the system. Although Which? welcomes the new provisions to give consumers redress, help them make better choices or prevent businesses from creating further harm, it has concern about how many authorities will actually take up such provisions, due to the complex nature of the processes, costs and risk to the enforcer.
In the criminal courts, enforcers can be liable for the defendant’s costs only in limited circumstances; for example, in the event of the enforcer acting improperly, negligently or unreasonably. We all know that in the civil courts the loser generally pays the winner’s costs. That could act as a disincentive to enforcers who are acting in the public interest. Perhaps now is the time to have the same protections for enforcers in the civil courts as in the criminal courts. If the legislation puts the onus on the enforcer to prove that the cost of redress does not exceed the cost of the harm, it will add to an area of possible challenge and could encourage enforcers to use the criminal route instead. A more balanced approach is needed whereby the business proposes a package of measures to the enforcer or the court and that is negotiated as necessary.
Amendment 63ZA is a probing amendment. I was contacted by environmental health officers who are concerned that the need to give advance notice would not help protect the consumer when grading food preparation and catering premises for food hygiene certificates. During the summer, I spent a day out with an environmental health officer. We visited a care home for the elderly which was anxious to increase its score from four to five, which is the highest rating. The visit was unannounced, but the home had requested a rescore. The reason for the score of four was mainly to do with the preparation of paperwork and flow charts, not the cleanliness of the kitchen or the temperature at which the food was stored. I am sure that noble Lords will agree that food hygiene in a care home for the frail elderly is extremely important. I was able to see the food being prepared, stored and served to the residents. All of them had a choice of food and the menus ran for a month before being repeated. It was very reassuring that despite having to be in an institution, the residents were consulted about what they would like to eat and their special diets were catered for. Our unannounced visit was successful and the home was told when we left that it would now get its treasured five rating.
We then went on to visit premises where the officer had provided advice and support to two new small businesses starting out in the food industry. One comprised a man in his 20s entering the specialist beer brewing market and the other was made up of two ladies starting a lunch and sandwich business close to a railway station and an industrial site where previously there had been no catering outlet. Once the businesses were up and running, they would get unannounced inspections in order to be given a food hygiene grade. Both were aware of this and both welcomed it.
We also visited a public house which the council, together with the police, had prosecuted, having previously served several improvement notices without success. The photographs of this establishment were truly horrific and proved that what the consumer sees in the bar or dining room of a restaurant is not what goes on behind the scenes in the kitchen. Mercifully, such instances are rare.
A catering establishment which has been awarded a grade four or five will have the certificate displayed on the door as you enter. Those which have received a three or below will not have it displayed anywhere since there is no requirement for them to do so. The officer who took me out also had on his patch Yeo Valley yoghurts and a massive Dairy Crest processing plant on a farm. He said that of course he gave notice when he went to visit them because he wanted to meet the managers and those who could give him the answers he required. He accepted that they were very busy people and did not wish to waste either his or their time. However, if when he went on his planned visit he found something that he felt was unsatisfactory, he would then make an unannounced inspection at a later date. Noble Lords will be pleased to know that this did not happen in either of the two cases I have mentioned.
I am seeking an assurance from my noble friend the Minister that the businesses I have described are not included in the requirement to give advance notice of inspection. To do so would mean that the unscrupulous would have a clean-up prior to the inspection but a week later would revert to their normal practices. I do not believe that this would be in the best interests of or protect the consumer. I beg to move.
Baroness Crawley (Lab)
My Lords, I thank the noble Baroness for her interesting description of going out with local authority officers. I would recommend that experience, as I am sure she would, to all Members of the Committee. Environmental health officers do an extraordinary job, given the scale of the work they are involved in and the scarcity of the resources they have to work with.
The amendments in the names of the noble Lords, Lord Clement-Jones and Lord Stoneham, and the noble Baroness, Lady Bakewell of Hardington Mandeville, are to be welcomed—I think. I am sure they are a sincere attempt to bridge the gap between the Government’s stance on enforcement and the rather more clear-cut and preferable amendment of the noble Lord, Lord Best, which we will discuss in a few moments. However, I am not yet persuaded that these amendments best the amendment of the noble Lord, Lord Best, on the same subject of trading standards officers conducting inspections on business premises. I am sure it was not at all the intention but these amendments might unfortunately bring about increased barriers to enforcement for officers conducting inspections. For me, the jury is still out on these amendments.
Baroness Hayter of Kentish Town
I am slightly confused by this. If I am completely honest, among friends and just within these four walls, I think our Lib Dem colleagues would very much like to support the amendment of the noble Lord, Lord Best, but are not allowed to. They do not want to confront the Government, so they are trying to find a weasel way of not quite confronting them while almost writing down exactly the same words but making it very complicated. They are not going the whole way but saying, “Well, in certain circumstances other than those already allowed for in the Bill, the 48 hours would not have to be given; that is, when a trading standards officer shows his or her credentials and they are going to see whether an offence has taken place”.
I am sure that the noble Baroness, Lady Bakewell, knows that trading standards do not go around in policemen’s big boots unless they think some offence is being committed. They do not have the time or inclination—why on earth would they? They always show their bona fides anyway. This basically seems to be saying, “We don’t like what the Government are suggesting but can we find a way of saying that round the back?”. I could be quite wrong—and look forward to being corrected—but I have my suspicions.
Of course, the problem with these amendments is that they have all the disadvantages of the Government’s own clause; that is, the uncertainty. The same people do food as do electricity safety, counterfeit booze or whatever else one is looking for. The amendments would still introduce two systems for when somebody could go in to do an inspection. It leaves all that complication and uncertainty of having to checklist things first but with no added advantage. That seems a convoluted way of saying that they do not like the present clause.
There seem to be two things going on here. First, in moving the amendment, the noble Baroness, Lady Bakewell, said very strongly that she supports unannounced inspections—which is exactly what is said in the amendment of the noble Lord, Lord Best. Secondly, she raised the interesting point about costs in civil courts, which we will come on to. I look forward to her support for that amendment when we get there. My concern about these amendments is not that they would not move a little way towards making life easier but that they are actually a rather weak way of telling the Government, “We don’t like your clause”.
Baroness Neville-Rolfe
My Lords, I thank my noble friend Lady Bakewell for her very interesting comments and good examples. They help us to understand so much more clearly the issues that we are debating.
In this part of the Bill we are consolidating and updating our investigatory powers in order to make enforcement more efficient and effective. A further objective is to reduce burdens on business without compromising consumer protection. We are doing this, for example, by making it easier for enforcers and businesses to know what enforcers’ powers are by consolidating them across 60 pieces of legislation and setting them out in one place. I think that the Committee will welcome this. We are also modernising them—clarifying that where there is a good reason enforcers can access information held or stored on computers. This brings us into the 21st century. We will return to the notice requirement again under the amendment of the noble Lord, Lord Best, and I expect that we will have a fuller debate.
I want to say a few words about why we have introduced the requirement for enforcers to give two days’ written notice, subject to some important exemptions. The Government are committed under the Protection of Freedoms Act 2012 to protect civil liberties and to reduce burdensome and intrusive powers of entry. Our aim is to strike a balance between the powers and safeguards that are needed for protecting businesses while ensuring that enforcers can tackle illegal activities. I am sure that we will come back to the detail.
I will answer a couple of points that my noble friend raised. She asked about notices and litigation, and court cases being lost on a technicality. As is currently the case, enforcers will need to ensure that they follow correct investigatory practices and procedures to ensure the integrity of their investigations and supporting evidence. We will not be amending the well developed principles on what amounts to reasonable grounds for suspicion. Many large businesses have a primary authority relationship with a local authority. This includes an inspection plan. Where an inspection plan is in place covering consumer law, this must be considered when deciding whether to carry out an inspection. We are committed to providing good guidance on what the law means; as noble Lords would expect, that is being developed by business and other organisations.
My noble friend also touched on the fact that enforcers risk costs in the civil courts. I reiterate that it is a fundamental principle of civil litigation that one side is at risk of having to pay the other side’s costs if it loses. That would be a difficult principle to change. Of course, the object of that is to deter unmeritorious cases and ensure that the winning party is not too adversely affected.
Amendment 63ZA, on the issue of whether food hygiene visits are covered by the Bill, is a probing amendment. There may be confusion in general as to whether food is covered by the Bill so it is good to have an opportunity to clarify the position. For example, the Bill does not apply to food hygiene inspections carried out under the Food Safety Act. That sort of inspection is normally done by environmental health officers. I should add that, curiously, I was the official Civil Service lead on that very Bill; I remember it with great affection. It was an important Bill at the time. In view of those alternative provisions, we do not see the need for this probing amendment.
On the lessons that horsemeat might give us for this Bill, the issue arose mainly through fraudulent activities of traders. That highlights the importance of greater sharing and use of intelligence sources, and how important that is in safety. The Bill supports the sharing of information and intelligence by local authorities, business and other partners such as the police. That can be used by enforcers to determine whether it is necessary to exercise a power of entry to premises and whether one of the exemptions to giving notice applies.
On Amendments 60, 61, 62 and 63, tabled by the noble Baroness, Lady Bakewell, it is worth noting that currently enforcers such as the Competition and Markets Authority, which has been referenced often today, have to give notice only for civil enforcement purposes. The amendments take us back to that position. However, when an enforcer decides to carry out a visit, they will not necessarily be focusing on whether civil or criminal enforcement action may result. We therefore think it makes more sense to provide a general requirement for notice to be given regardless and then provide a number of clear exemptions to giving notice, such as where giving notice would defeat the purpose of the visit because, for example, counterfeit or illegal software might be destroyed.
I am also keen to emphasise—we will come back to this—that this means notice need be given only for routine inspections. If there is a risk of a breach of a law, enforcers can still carry out unannounced inspections where they need to investigate illegal activities. The exemptions ensure that we have the safeguards we need. Small businesses in particular, which have been consulted about the changes in the Bill, welcome this approach. They welcome clarity, and the noble Baroness, Lady King of Bow, emphasised the importance of that earlier.
I believe that the Bill provides a better and simpler enforcement regime for both businesses and enforcers, whether civil or criminal enforcement action is involved. Hygiene and food inspections are dealt with elsewhere in the statute book. Therefore, I ask my noble friend to withdraw the amendment.
Baroness Bakewell of Hardington Mandeville
I thank my noble friend for her comments and I am slightly reassured. I am grateful for the reassurance that food hygiene certificates are not covered by this legislation but are covered elsewhere. I know that environmental health officers will be reassured because they were extremely concerned about how they were going to operate if they had to give notice.
With regard to competition versus the consumer’s rights and businesses generally, I thank my noble friend for her comments. I have to say that I am not totally convinced but I beg leave to withdraw the amendment.
Lord Best
My Lords, I declare my interest as a vice-president of the Trading Standards Institute, a post I occupy because I chair the council of the Property Ombudsman, which works with trading standards in relation to the world of estate agents and letting agents. I greatly welcome the Minister’s earlier announcement on fees. I also declare my interest as president of the Local Government Association.
The TSI welcomes the Bill and applauds the Government’s efforts to simplify and clarify consumer law. The real problem for the trading standards service is the startling decline in its manpower and budgets. Over the lifetime of this Parliament, the workforce will fall by almost half and budgets will be cut by an average of 40%. These reductions mean that we all face greater risk at the hands of rogue traders. New legislation needs to strengthen the hand of the remaining trading standards officers rather than in any way undermine their good work.
There are two areas of concern to the TSI in this regard. This is the first of two amendments in my name seeking to rectify these. I am grateful to the noble Baroness, Lady Hayter, for adding her name to this amendment and already speaking in support of it. I am grateful also to the noble Baroness, Lady Crawley, for doing likewise.
Baroness Crawley
My Lords, I rise to support the amendment in the names of my noble friend Lady Hayter and the noble Lord, Lord Best. This amendment proposes that the requirement in the Bill for trading standards to give 48 hours’ notice to businesses before entering their premises be removed. In supporting this amendment, I remind noble Lords that it is my privilege to be the current president of the Trading Standards Institute. I refer noble Lords to my entry in the register of interests.
Let us be clear: the power to enter business premises remains but the Bill introduces a new safeguard requiring written notice to be served before entering. Because of the strong response to this highly controversial proposal from the enforcement profession, there is now a list of exemptions to this new proposal from the Government. However, I believe, as do several other noble Lords, that these exemptions will only lead to confusion and the possible introduction of overcautious behaviour on the part of the trading standards profession, which is already seriously stretched. It will also lead to increased financial and judicial burdens, as outlined by the noble Lord, Lord Best.
I remind noble Lords that the budgets of trading standards departments at local government level have in some cases seen cuts of up to 86% since 2009. While the Government have listened and made some changes to the Bill, the Trading Standards Institute does not believe that those changes yet strike the right balance, which the noble Lord, Lord Best, talked about. It is essential that we achieve that balance between the right to carry on a business unimpeded by officials and the right to protect consumers.
It is not the case that all businesses are clamouring for the removal of unannounced visits. In a recent edition of The Grocer, the chairman of a large cash-and-carry business in the north-west stated:
“It is independent retailers saying that local authority test purchasing is less effective if there has to be 48 hours notice of a visit.”
Many retailers welcome spot checks because they want to see a level playing field in the high street and with larger retailers.
Last week I spoke to a trading standards officer about food fraud in the light of the very important Elliot report into the horsemeat scandal, which the Minister has referred to. She told me that while checking one of those large storage units that are so prevalent nowadays—we seem to have a lot of things to store in our lives, do we not?—she came across a unit that was being used to cut up some kind of raw meat. This was a unit that was usually used to store furniture; it had no running water or utilities necessary for processing meat. The trading standards officer had the unit closed down immediately. She was able to close it down under the Food Safety Act—which the Minister has also referred to—because, unlike this proposed legislation being brought forward under BIS, food fault is an area where spot checks are still allowed: 48 hours’ notice is not required. Had that unit been processing highly dangerous electrical goods—such as in the tragic case of the phone chargers to which the noble Lord, Lord Best, referred, or the hair straighteners that I have seen in trading standards offices and which can be very detrimental to health when they are criminally produced—she would most likely have had to give 48 hours’ notice. No doubt she would never have seen the rogue trader again.
Life is hard enough for the seriously overstretched trading standards service—which still does a magnificent job on behalf of the public—without putting another bureaucratic obstacle in its way. Such an obstacle could only allow rogue traders to prosper, damaging legitimate businesses—which are, of course, the vast majority of businesses in this country—and diminishing consumer protection.
Before I sit down I would like to ask the Minister where the evidence is that these inspections interfere with or hamper the operation of a business. The recent Elliott report on food fraud highlights the value of unannounced inspections, so why are the Government moving away from them in this Bill? The amendment of the noble Lord, Lord Best—which is also signed by my noble friend—denotes the line between the honest business and the hard-pressed consumer on the one side, and the rogue trader on the other. I call on noble Lords to support this amendment.
Lord Harris of Haringey
My Lords, I repeat my declaration of interest as chair of National Trading Standards. Will the Minister tell us what exactly is the problem that the clauses we are debating now are there to solve? What is the evidence that this has been a power that has been abused or misused by trading standards departments? If she can give us chapter and verse today, I would like her to do so but, if not, I ask her to lay in the Library all the complaints that the Department for Business has received on this specific point. It is not clear to me that this has ever been a significant problem or burden on anybody.
We have to recognise that, certainly as initially put forward, this proposal was a complete nonsense. It was essentially saying that: if you were a rogue trader who had something to hide, you would have 48 hours to make sure that it really was hidden before the trading standards department came around to do an inspection. Since then, we have made some changes which are the exclusions in paragraph 23(5) of Schedule 5. However, as the noble Lord, Lord Best, suggested, they pose a whole series of new potential problems. For example, the power of entry is to be exercised by an officer when,
“the officer reasonably suspects a breach of the enforcer’s legislation”.
What does “reasonably” amount to in this case? I have seen how litigious some of the people against whom enforcement action has been taken can be. They will string things out and argue abuse of process. The more serious the case, the more they argue. The litigious will say that there were no “reasonable” grounds. What is going to be the basis of the reasonable suspicion? All of this will have to be defined and the danger is that that will lead to litigation which takes up more time and generates more problems as a result.
If the officer reasonably—that word comes in again—suspects that there is an imminent risk to public health or safety, that is fine, but that is about public health and public safety. Other issues may arise where the evidence will disappear. What is it that is being gained by these changes? The whole point of having the power of random inspection is not just to find something on the occasions when a random inspection is made; it is also the deterrent implication for all those whom the inspector may or may not visit. There is a chance that they will be inspected, something will be found and the consequences will flow. If that is taken away, frankly, one of the most effective deterrent mechanisms as far as these issues are concerned will be lost.
Baroness Hayter of Kentish Town
My Lords, at Second Reading and at the start of this Committee I said that this was not a bad Bill, it is just a weak one. I also said that there was one exception, and this is it. I hope that when the noble Baroness replies, she will allow herself—using what is probably not a very Hansardian term—some “wriggle room”. The debate we have already had will be loud and clear at Report. The Minister will know better than me how well this could come across in the House. It would perhaps be much easier to withdraw gracefully rather than to try to fight to the bitter end. As I have offered to Ministers before, we will give them all the credit and say what wisdom they brought to it, although we will allow the noble Lord, Lord Best, some credit.
It is a nonsense—I do not know who used that word before—to require trading standards officers, who work to protect consumers, to warn traders of an inspection visit. My noble friend Lady Crawley asked what evidence there is of misuse and my noble friend Lord Harris asked what the problem is that this has been set up to solve. I will add three more questions. First, what is the benefit of this measure to consumers? Secondly, who asked for it? Thirdly, what consultation took place? Before anyone jumps to the 2013 consultation, which I have read very carefully, I would remind the Ministers that businesses were mixed in their responses and were not unanimous. Only some of them supported this notice. Some of them said it would lead to better co-operation between enforcers and businesses, but I thought that enforcers were meant to act on behalf of consumers rather than work too closely with businesses.
The consumer reps who responded to the consultation were worried that giving notice would hamper enforcers’ ability to tackle rogue traders. There were three categories. The third category, comprised of local authorities and regulators, was similarly concerned about the requirement to give notice before exercising a power of entry as it could encourage the obstruction of officers or hinder an intelligence-led approach. Local authorities and regulators also commented that on-the-spot checks would be necessary where there was intelligence about non-compliance, but of course, some of that intelligence could never be used in a court of law. If challenged in the way we have heard either over costs or whether it was reasonable, there would be times when a trading standards officer would not be able to cite the intelligence that led him to that particular retailer. It is true that the respondents supported the restriction on powers, but that was in relation to private dwellings, and that is not what this whole issue is about.
While the Minister tries to find some more persuasive answers to the questions posed today, I will make a couple of extra points. Even with the let-outs mentioned by my noble friend Lord Harris, it still makes no sense to give notice to those who are potentially breaking the law about when enforcers are going to check on them. As we have heard, food safety officers do not have to do this, although very often they are the same people. It is hard to know why they should have to do so here. As we have just heard, it is difficult for the very same person to need to have different criteria in their head and different lots of powers depending on which breach they are trying to check up on.
The Government have said—certainly to us, but I am not sure if in public—that a trading standards officer can always enter the premises as a member of the public. That way, they can see what any ordinary shopper could, assuming it was a retail rather than wholesale area. However, I have to tell noble Lords that retailers do not keep the counterfeit drink on top; they keep it underneath for those who come in with a nod and a wink. They do not put counterfeit cigarettes out on top either. They are put where a member of the public could not see them but where, on our behalf, we want trading standards officers to be able to see them.
The Government have also argued that this amendment would help small businesses so that they are not troubled by too many visits from the TSO. However, trading standards officers these days work very much on a risk-based programme. Having looked at some of the detail behind that, small businesses are actually very low risk. One TSO said, “We never go to small businesses”. Please do not tell small businesses this, but actually TSOs go to the big ones much more because they work on a basis of risk. The idea that one should constrain the powers across the piece because apparently some small businesses do not like it is worrying.
Another issue, of course, is that wanting 48 hours’ notice in writing still does not allow the trading standards officer to politely phone or text to say, “Can I come on Tuesday?”, which may well be what is best for the small trader that the Government seem to be worried about. It would anyway be perfectly possible for a trading officer to give notice; it is only the absolute requirement that we are worried about. Good practice would be, for many routine visits, that notice would be given for exactly the reason that has been given: so that the right person is there. None of this would prevent that.
Baroness Neville-Rolfe
My Lords, I thank the noble Lord, Lord Best, for provoking a wide-ranging and thoughtful debate. As I mentioned in respect of the previous amendment, we are consolidating and updating consumer law investigatory powers in order to make enforcement more efficient and more effective. I will try not to be too repetitious of that debate, but I will repeat something I said in earlier sessions of this Committee: I feel strongly that trading standards officers around the country do a very good job. I have dealt with them a lot over many years and I am very grateful for the work they do.
The Government are keen to support the honest trader and to tackle the rogue, so there is a joint and agreed objective in these areas. I am going to speak at some length, for which I apologise in advance. I hope that noble Lords will realise that our heart is in the right place and we are trying to do the right thing in this area. As I have said, we are consolidating and simplifying consumer law investigatory powers across 60 pieces of legislation, setting them all in one place. This variety of instruments can be a cause of confusion and a burden for enforcers as well as businesses. We are also clarifying the law to make it easier for trading standards to work across their local authority boundaries in order to tackle the rogue traders who cause real harm to consumers and damage consumer confidence and reputable businesses.
The noble Baroness, Lady Hayter, asked about what had happened with the consultation and about the benefit to consumers. I can confirm that we did have mixed responses, but the British Retail Consortium and the Federation of Small Businesses, which together represent a large number of small businesses, support the notice provision. Businesses in general welcome it for reasons that I will come on to explain. It reduces the burdens and unnecessary costs that they are facing, and those costs are in turn passed on to consumers in a competitive market. The Government consider it vital that trading standards and other consumer law enforcers can protect us from businesses that are deliberately or inadvertently breaking the law.
Lord Harris of Haringey
I am sorry to interrupt her, but can the Minister tell us why it is more costly for a business to be inspected without notice than it is to be inspected with notice?
Baroness Neville-Rolfe
If the noble Lord would bear with me, I have an example which we can debate.
While we share some common objectives, there are clearly real differences of opinion about how trading standards officers and other law enforcers should carry out their duties. The Government start from the principle behind the Protection of Freedoms Act 2012, which aims to protect civil liberties and reduce burdensome and intrusive powers of entry. It starts from the simple premise that an investigating officer should have good reason for entering premises. This is really important because both as private individuals and as businesses we should rightly expect to be treated as law-abiding unless there is a justification. The requirement in the Bill for enforcers to give two days’ written notice for routine inspections—I emphasise routine—flows from this principle. However, we take very seriously the importance of ensuring that enforcers such as trading standards can continue to tackle rogue traders. I am sorry to keep repeating this but I think it is common ground, and I can assure noble Lords that we are doing nothing to prevent enforcers investigating illegal activities—quite the opposite.
Let me explain in more detail why we have decided to require notice for routine inspections. Enforcers currently have some very intrusive powers such as the power to enter commercial premises without a warrant to carry out their inspections. They can demand that documents are produced and break open containers, and any person on the premises has to provide assistance and the information requested. Small businesses have told us that unannounced inspections are burdensome and inefficient. In particular, the Federation of Small Businesses is concerned about unannounced visits and has said that booking inspections in advance will allow the businesses to ensure the appropriate staff and paperwork are available. This ensures that neither the trader’s nor the enforcer’s time is wasted in these routine inspections. The owner or manager might be visiting a supplier away from the premises, leaving a junior member of staff not equipped to deal with an investigator’s questions or to find the documents needed. Staff may be in the middle of receiving deliveries or busy dealing with customers or an important new client when the enforcer arrives. This can be disruptive and embarrassing for the business. While large retailers may be able to cope more easily—the noble Lord mentioned them—it is really difficult for compliant businesses to see why they should be so disrupted when they are giving no cause for suspicion.
Business disruption hits the bottom line. We estimate that this measure would generate net savings to the economy of almost £50 million over 10 years. This net figure includes the savings to business as well as the costs and benefits to enforcers arising from a greater degree of efficiency in inspection.
Of course, I agree entirely that businesses cannot expect to have notice of an inspection when there is risk of a breach of the law. We have listened very carefully to enforcers’ concerns on that: to local authorities, regulators and trading standards officers, as I think was hinted at earlier in the discussion. Therefore, the Bill provides a number of very clear exemptions that still allow enforcers to carry out unannounced inspections, as they do at present, where they need to investigate illegal activities and matters of urgency. I will go through those and try to pick up the examples that have been quoted in debates and which have obviously been concerning people.
The first exemption would apply where an enforcer reasonably suspects a breach, for example where the sale of counterfeit alcohol is suspected or where a test purchase has been made and failed, e.g. on an age-restricted purchase. The noble Baroness, Lady Crawley, asked about access to warehouses and whether, if the officer suspects a breach, the exemption applies. Of course, that is particularly important in relation to rogue traders and the same would be true of the example of the sale of counterfeit goods.
Lord Harris of Haringey
Is it then reasonable for a local authority to invoke that grounds of reasonable suspicion if, for example, it is clear to the trading standards department in a small town that a certain form of counterfeit or dangerous goods is circulating and there are eight potential retailers who might be selling it? Is it then reasonable for the trading standards department to inspect all eight? If it is reasonable to inspect all eight in that town, is it reasonable to inspect 200 in a city?
Baroness Neville-Rolfe
In my opinion, that is reasonable if there is a suspicion—for example, if trading standards officers have had some intelligence. There is an example I am coming to about cigarette butts, unless we cut that out. In relation to each of these exemptions, I am trying to explain why they are generously drafted so that we can do what we think is needed.
The second exemption would apply where giving notice would defeat the purpose of entry, for example, where an enforcer suspects that counterfeit DVDs are being sold and the enforcer considers that the traders in question are likely to conceal the illegal products if notice is given. The third exemption would apply where it is not reasonably practicable in all the circumstances to give notice, for instance because an officer reasonably suspects that there is an imminent risk to public health or safety. For example, enforcers may find evidence of illicit tobacco, such as stubs and papers, in the street near a couple of suspected outlets. The enforcers need to act swiftly to remove it from sale. I know that illicit tobacco is a concern.
A fourth exemption would apply where the enforcer is carrying out market surveillance, for example to check the safety of toys. Finally, notice need not be given where the trader has waived the requirement to give notice so that agreement to an immediate visit is always possible. We also carefully listened and have already responded to the BIS Select Committee’s very sensible recommendation on this issue by simplifying the exemption for giving notice where that would defeat the purpose of the visit. That is the second safeguard I referred to and I think that noble Lords commented favourably on that earlier in the debate.
I have set out these examples to show that we really are only talking about giving notice for routine inspections. In my view, it is perfectly reasonable to do that and highly desirable. Routine inspections are where a business, such as a DIY store, may be operating properly without any significant breaches of legislation. Trading standards may consider them to present a risk simply due to the nature of the sector in which they operate or because of the time that has lapsed since an inspection. Trading standards officers have raised with us a number of examples where they felt they would need to inspect without notice and, without exception, we were able to show how the powers of these wide-ranging exemptions could be used.
For example, another area which has been referred to in the debate is where an officer wishes to check whether petrol is being sold in short measures. The officer can use the power to carry out a test purchase and if that discloses a potential breach by the trader, he can immediately exercise a power of entry in order to investigate. Another concern that was raised is when an enforcer comes across a new shop during visits to other premises. I am happy to confirm that an enforcer can enter those premises immediately, using the power to observe the business, or indeed he can undertake a test purchase. If while on the premises he discovers that fireworks, for example, are being sold in breach of regulations—or mattresses, as one noble Lord mentioned—the enforcer can make a test purchase. If that discloses a potential breach by the trader, the officer can exercise a power of entry immediately.
Baroness Crawley
The noble Baroness mentioned that when it comes to a new business, there would be a power for trading standards officers to observe. What is meant by “observe”? Does it mean going behind the counter, as my noble friend Lady Hayter asked, or does it mean “observe” as if the officer was a member of the public? In that case, it would hardly be worth walking in.
Baroness Neville-Rolfe
It means observing as though the officer was a member of the public, but obviously a test purchase can be undertaken. The officer can speak to the trader and agree that there should be an exemption, in which case the exemption would apply. Moreover, if the officer suspects a breach, that also implies.
Lord Harris of Haringey
Perhaps I may press this point a little because it is important and getting to the root of the issue now might save the Minister time later. What is sufficient for a suspicion of an individual trader? The officer has made a test purchase and now he has prima facie information to suggest that the trader is up to something. That is straightforward and no one would see any issues around that. However, I will come back to my example. It is known that something is circulating in a town and it is likely that it has only been purchased from retailers in that town. Is that sufficient to cover all the retailers? Does that change if we are talking about eight retailers or 200 retailers? That is also possible. If it covers 200 retailers, that would certainly reduce any concerns I might have, but if it covers eight retailers, I would like to know what the cut-off number is.
Baroness Neville-Rolfe
As my noble friend the Chief Whip has just mentioned, you must have some sense of proportionality. I think that I gave a clear answer to the question of eight retailers earlier and I stand by that. Once we get to 200 retailers, we could be in slightly different territory. However, if there is a reasonable suspicion of a breach—although 200 premises seems to be rather an unlikely example—
Lord Harris of Haringey
I am sorry to interrupt the noble Baroness, but perhaps I may give a specific example. There is a suspicion about a dangerous electrical fitting such as a plug adaptor which the trading standards department has come across and knows is circulating in the area, and those plug adaptors might be on sale in several hundred small retail outlets, local shops and newsagents which sell a range of other things. Without being unreasonable about it, there might well be several hundred outlets in an area. It may be thought that the device was such that it could kill someone, which means that the test would be proportionately higher. That is what I am trying to get at.
Baroness Neville-Rolfe
I can reassure the noble Lord on that point. There is of course another exemption on the grounds of health and safety and I am absolutely clear that it would apply in that case.
Baroness Neville-Rolfe
The officers would be looking for a faulty electrical product that might be in circulation in an area; there would be a suspicion. That is exactly the kind of thing I am talking about. I am sorry, but I wanted to take the noble Lord through the examples in order to explain how the power will be used.
Perhaps noble Lords will bear with me while I make another point about powers of entry. The powers that other law enforcers have when they investigate offences are of interest, and the noble Lord has raised one or two of those. The police have no general powers of entry to commercial premises. They can enter a premises only with reasonable suspicion or a warrant. So there is, if you like, a form of notice. Even with a notice requirement, enforcers such as trading standards will have very substantial powers—more powers than the police, who deal with serious offences and serious crimes.
A noble Lord mentioned Ofsted—a question I have asked, actually. For practical purposes, Ofsted does give notice. It normally gives up to two working days’ notice before a planned inspection to a further education college—that is, a routine visit—but for schools, notice is given by midday on the working day before the start of the inspection. But it also has the right, quite rightly, to undertake unannounced inspections in cases of serious concern.
The noble Lord, Lord Best, asked about interpretation. I assure the Committee that we will be providing guidance. We are not creating principles such as reasonable suspicion. They are already well understood but obviously we will need to explain them for day-to-day work.
The noble Lord, Lord Harris, asked about evidence of the abuse of powers. This is not about abuse of powers; it is about reducing the burden on business from intrusive powers of entry and protecting civil liberties. It is about routine inspections, which, in my opinion, should be the subject of a warning. Where there are reasonable grounds of suspicion, obviously you can proceed immediately. I am a businessperson and I think business planning can have value in these circumstances.
I was also asked how notice can be given. Notice can be given by post or e-mail to the occupier or by leaving it at the premises. Actually, we have engaged extensively with the trading standards community while formulating the exemptions. That brings me on to the point that a number of noble Lords have made about the funding of the trading standards service. Obviously, spending and resourcing decisions are made by individual local authorities, which are better placed to make decisions about the enforcement needs of their communities than central government. Like all parts of central and local government, the services have faced budget reductions in recent years. There is no point denying it; that is agreed.
As noble Lords know, the Government are committed to tackling the inherited budget deficit by making savings and trying to improve value for money for the taxpayer, and this is part of that effort. We greatly value the work of trading standards to protect consumers from rogue traders and scammers, and we want to develop a better understanding of the impact it has across the economy. That is why, in partnership with the Trading Standards Institute, we have commissioned a group of academics at the Institute of Local Government Studies in Birmingham to undertake research to build an evidence base on the impact, effectiveness and efficiency of services, how improvements can be made, what works well and how we can do partnerships. This sort of evaluation is really important in public policy.
I think I have pretty well finished. I was asked about the deterrence effect of inspections. We would be concerned about the resource implications for trading standards services where uncovering breaches by chance is seen as an effective strategy for the future, even on the basis that it has been useful in the past. Targeting finite enforcement resources using an intelligence-led approach is a more efficient and effective strategy. I speak as a former businesswoman, with experience of a pretty small business trying to do a good job, and I think that better planning and targeting can save money both for business and for enforcers.
In conclusion, it has been an important and good debate. I have listened. I have tried to explain where we are coming from in the way in which we have drafted the Bill. I am trying to ensure that the investigatory powers in the Bill, modernised and brought together, strike the right balance between protecting civil liberties, reducing the burden on compliant businesses and ensuring that enforcers can tackle rogue traders.
Baroness Hayter of Kentish Town
The noble Baroness said that the balance is between civil liberties and business. Unfortunately, she did not use the word “consumers”. Perhaps I might leave her with three questions. I know she will not be able to answer them now but they are extremely serious ones. First, she alleges that £50 million will be saved. I would like to know how many visits are included in that £50 million. Secondly, as I understand it, test purchases can be made only in a retail outlet and someone would not be permitted to go into a warehouse or a wholesaler’s premises to make such purchases. Thirdly, the biggest worry about this issue is suspicion, as I mentioned. How could suspicion be proved in a court of law if it was the result of an anonymous tip-off? I am very content for her to write to the Committee on those questions as I do not think that she has answered them this evening.
Baroness Neville-Rolfe
I thank the noble Baroness. Perhaps she will also read Hansard on these points. We carried out an impact assessment and I think that the £50 million figure comes from that assessment, which I can certainly make available. I wanted to say that I was going to mention consumers at the end because this is the Consumer Rights Bill. It is important that we have a deal that is good for all sides. There are various different pressures relating to investigatory powers. I have tried to explain the wider picture and the parallels elsewhere. I am very keen that this should be an effective part of the Bill, which is obviously designed to modernise and improve both consumer rights and consumer enforcement. I therefore ask the noble Lord, Lord Best, if he will consider withdrawing the amendment.
Lord Best
My Lords, that was a powerful exchange all round. Clearly, this is an issue of great interest and concern to your Lordships. I am grateful to the noble Baroness, Lady Crawley, who, among other things, welcomed the fact that the Government have already made a number of concessions along the way—that needs to be on the record. However, she pointed out that there are considerable costs involved for the trading standards service because there is a lot of bureaucracy involved in sending out 7,000 notices of intention to inspect each year, and the correspondence that has to go back and forth on all that. This is not a cost-free new regulation.
I am grateful to the noble Lord, Lord Harris, for calling into question whether there was a problem here that needed to be solved at all. He pointed out that this measure is bound to lead to endless litigation if we are not careful and made the important point that the ability of trading standards officers to make unannounced visits is, in itself, a deterrent, and it is uncertain what the world would look like if that deterrent effect was removed.
I am grateful to the noble Baroness, Lady Hayter, for raising key questions. She asked what would be the benefit of this measure to consumers and whether they would really benefit from it. She made the important point that an awful lot of unannounced visits follow anonymous tip-offs. Other traders know what is going on down the road. They do not want to get into a fight over it but want trading standards to know about it. However, there is a difficulty with that information being used later in a court of law since it is important but confidential information. I can see that that may cause a problem in future.
The Minister provided reassurance under a whole series of headings, which was extremely helpful. We have made some progress on these issues tonight. She paid tribute to trading standards officers, which I welcome, and emphasised continuously that this is about routine inspections only and that the legislation is generously drafted. We are reassured that suspicion is good enough in these cases. If a suspicion of a breach in the law is enough to trigger a perfectly legitimate unannounced visit, that covers an awful lot of cases. However, it leaves unanswered whether it is really worth putting on statute this new regulation and the binding condition on trading standards officers if they are to be able to bypass it in an awful lot of circumstances.
To conclude, we have a lot of new and extra reassurance on the record from tonight which is more than helpful. Putting this in the Bill also seems rather heavy-handed when we know there will be guidance in any case following the legislation. Guidance not statute sounds rather less of a sledgehammer to crack the remaining nut after we have heard about the many exemptions and exceptions. With those words, and the thought that we might need to bring this back again, I beg leave to withdraw the amendment.
Baroness King of Bow
“( ) For the purposes of the enhanced consumer measures set out in Schedule 7, the Secretary of State shall publish a review of the powers of Trading Standards Officers to consider—
(a) the number of enforcement actions by Trading Standards taken under the enhanced consumer protections set out in this Act,(b) any additional operational costs to Trading Standards Services associated with the new powers and procedures under sections 77 and 79 of this Act, and(c) the establishment of a statutory minimum standard for all officers carrying out Trading Standards functions in any local authority and the role of a competent body to set, test against, apply and monitor those standards.”
Baroness King of Bow
My Lords, I finally rise to speak to Amendment 63ZAA, in the names of my noble friends Lady Hayter and Lord Stevenson. This returns us to the issue of the enforcement landscape. The amendment would review whether the powers of enforcement given in the Bill are adequate. Surely this is absolutely critical.
I know we go in for a lot of hot air in politics—or that is what we are accused of—but this Bill is a quite good example of the detailed work politicians do to improve things for people going around their daily business. Yes, on this side we think the Bill could go much further but still it is a good Bill. What an irony it would be if we lose hours and weeks of our lives putting this consumer law into place—although for part of the debate on that last group I was worried less about losing hours of my life as the will to live—but the end result after all these words is that nothing changes because trading standards officers do not have the powers to enforce this law. Enhanced consumer powers and more flexibility are all well and good but unless we back them up with serious intervention traders might simply feel that they do not have to comply.
Will all enforcers always be able to back up with legal action any threat of intervention and the use of enhanced consumer measures, which are after all designed to avoid legal action? Which? expressed the following concern:
“The threat of court action is not always sufficient to encourage traders to engage meaningfully in negotiations with enforcers over remedies ... This risk is likely to be especially acute as enforcement budgets are streamlined”.
That is a quite nice way of putting it. Which? is therefore keen to see,
“enforcement mechanisms ... extended. This could include either the ability for enforcers to impose monetary penalties or a simplified and streamlined court process”.
This amendment takes the first step in remedying the imbalance between consumer protections on the one hand and enforcement powers on the other. As we know, trading standards departments have undergone significant cuts yet they are supposed to enforce a vast array of legislation, apparently amounting to 200 pieces of law. For example, earlier on we discussed letting agents. Trading standards have to enforce whether estate agents are members of a redress scheme. Then again, we also heard today about their responsibilities in other critical areas such as care homes. It will be very hard for them to balance those competing demands but we know that they will have to go for those that grab the headlines and also that carry more serious risk.
Given their reduced resources, is it realistic for us to increase their responsibilities on the one hand while having no overall idea of whether their powers are commensurate with their duties? Apart from anything else, it leaves the Government a bit exposed on the critical issue of ensuring enforcement. How can we guarantee that trading standards have the financial capacity, never mind the legal capacity and expertise, to use this legislation? The amendment is a sensible measure which would help ensure consumer protection is actually enforced. I beg to move.
Baroness Crawley
My Lords, I support my noble friend’s amendment and her very important call for a government review of the powers of trading standards officers, given the responsibilities inherent in the Bill.
In the trading standards workforce survey of March 2014—despite the health warning on it from my noble friend Lord Harris—a picture emerges of a service that is still excellent but is teetering on the edge of sustainability. Trading standards staff numbers have fallen by almost half in the past five years. Numbers of trading standards officers per service range from half an officer in one local authority to 48 officers in another, with apparently little reference to the population size of the areas they serve or the number of businesses in those areas.
The Minister has just spoken, in relation to the previous amendment in the name of the noble Lord, Lord Best, about needing to be an intelligence-led service, particularly in the future. I applaud that but what if there is no one left to gather the intelligence? We are seeing that in some places now. We all want a service that is effective and capable of meeting current and future expectations in the Bill, in order to fulfil its public safety remit and its consumer protection remit.
Trading standards officers take great pride in their work and they welcome the support that they receive from government. They want to make a full contribution to economic growth, public health, environmental protection and safer communities but their depleted numbers make that more and more difficult. In the workforce survey, more than 30% of trading standards authorities that responded mentioned stopping or limiting several second-tier advice services to consumers. Nearly all respondents stated that service provision would be reduced, with most proactive work ceasing and some services providing only the statutory minimum.
The functions under threat in local authorities include underage sales work, intellectual property, food sampling and animal feed. Non-statutory community projects such as the no cold-calling zones, which have been very successful, and trusted trader schemes, as well as the provision of free business advice, are also at risk. Several authorities will be introducing a system of responding only to complaints from vulnerable consumers or those with very immediate risk to their safety.
The trading standards service is centuries old. We have recently been commemorating the trading standards officers who gave their lives in the First World War. Many trading standards officers have in the past travelled to countries around the world to share our best practice. Ours is considered to be one of the finest services globally. We should be proud of that. Therefore, I ask the Minister, who I know is a good supporter of trading standards, to look favourably on my noble friend’s amendment and not simply say that this is the domain of local government and that therefore she is unable to intervene.
Lord Harris of Haringey
My Lords, this is probably a helpful amendment from my noble friend. The reason I say “probably” is that I am not sure that it is asking all the right questions: it is asking two of the right questions, but I suspect that there is a third one as well. One of the good provisions—which I actually think should be incorporated in all of the legislation that goes through Parliament—is the one introducing some mechanism for reviewing, once the legislation has passed, how much the powers that have been granted to whoever have been exercised, whether they have worked, and so on, and what the cost has been. Paragraphs (a) and (b) here are very much a part of that. I would like to see those incorporated in every piece of legislation that we pass because it would be helpful. I sometimes think that government departments put forward these things and then nobody ever looks at them again until perhaps 20 years later, when there is a Law Commission review as to whether anything has actually happened. This would provide the raw material to see what happened. It is particularly critical in this area because we know the extent to which trading standards departments are overstretched and in real difficulties. Therefore, it would be extremely valuable to understand whether this has been yet another set of powers, duties and obligations placed on them that they simply cannot cope with.
The second important thing done by the amendment is to try to set a standard for individual trading standards officers; to say essentially that there should be a properly recognised qualification and describe how all that would work. That is also extremely helpful. The amount of law that trading standards officers are expected to enforce—I think there are 250 pieces of legislation and the number rises constantly—covers an enormous range of areas of activity and requires a degree of specialist skills. Some of them require investigatory skills and financial skills in addition to all that, so having some minimum standard as to what officers should do is helpful and useful.
What the amendment omits is the minimum standard that our citizens—from whichever local authority—have the legitimate right to expect from local trading standards. What is the minimum level of protection that we can expect from local trading standards? That is the area where this amendment could be strengthened. Obviously, if the Government accept this amendment today, there would be progress and no doubt my noble friends would then introduce an amendment on Report which focused just on this issue. Otherwise, if they bring it back, perhaps they could look at this wider issue as well. This is important because there is enormous variation between local authorities in terms of trading standards provision.
As a former local government leader, I absolutely espouse the importance of local accountability, localism and so on. That is an absolute principle, but there were plenty of areas when I was a council leader where, yes, we had local discretion and espoused the principle of localism, but we were expected to achieve certain minimum standards. That is not the case as far as trading standards and consumer protection are concerned. It would be helpful to try to find some way to enable the Department for Business to look at whether there was an acceptable minimum standard or level of trading standards provision in every local authority. I am conscious that the level of provision made by local authorities necessarily depends on their block grant. That is determined not by the noble Baroness and her colleagues in the Department for Business, but by the Department for Communities and Local Government. Consumer protection is one very miniscule part of that block grant. It would be in everyone’s interest—particularly in the interest of all of us as citizens or consumers—if there were some clear minimum standards laid down. Perhaps some work done on the back of a small amendment to this Bill over the next year or so would be extremely helpful in setting out what that minimum should be.
Baroness Jolly
My Lords, on behalf of the team I thank the noble Baroness, Lady King of Bow, for her kind words at the outset.
The enhanced consumer measures will give enforcers of consumer law greater flexibility to get better outcomes for consumers. When there is a breach or potential breach of consumer law, the measures available to enforcers can be limited. Prosecutions in the criminal courts can lead to a fine or even imprisonment, while actions in the civil courts can stop the infringing conduct. However, neither option tends to lead to consumers getting their money back, nor does the person who has broken the law have to take positive steps to put right the damage they have caused.
The enhanced consumer measures will allow public enforcers to seek a range of innovative and positive measures in the civil courts, aimed at achieving one or more of three outcomes: redress for consumers who have suffered loss, increased business compliance with the law or more choice for consumers. Measures must be just, reasonable and proportionate. Once they have settled in, we expect the measures to lead to consumers getting around £12 million in redress annually. Although a business might be required to spend money in order to pay redress to consumers, to increase compliance or to provide information to consumers, a simple penalty payable to the enforcer or to the Treasury would not be appropriate.
Turning to the amendment, and to answer the points made by the noble Lord, Lord Harris, we have already committed to a post-implementation review of both the enhanced consumer measures and the changes we are making to trading standards powers in the Bill. Our impact assessments for both state that the policies will be reviewed three to five years after they come into force. In addition, when we introduce the power to extend the enhanced consumer measures to private enforcers, we want to see how the measures bed in, and the experience of public enforcers using them, before deciding whether the use of them should be extended. Clearly, when deciding whether or not to extend the use of the measures, a key consideration will be how often they have been used and the cost to trading standards of using them.
The enhanced consumer measures represent a real change in how public enforcers such as trading standards will approach enforcement. The measures will be innovative and far-reaching. We have already circulated draft guidance on using them to our implementation group for comment.
On the proposal to establish statutory minimum standards for trading standards officers, if not the service itself, local authority trading standards are required to have regard to the Regulators’ Code, which is a statutory code of good regulatory practice. This code makes it clear that regulators should ensure their officers have the necessary knowledge and skills to support those they regulate, and that regulatory activity should be proportionate and consistent. A post-implementation review of the code was undertaken in 2012, and, following a consultation in 2013, an updated and simplified code came into force in April 2014.
The Government have committed to monitor regulators’ published policies and standards to ensure that they are consistent with the principles in the code. There will be a post-implementation review of the revised code to check that it is operating as intended. In the mean time, the Better Regulation Delivery Office offers assistance to all relevant bodies to implement the provisions of the code. At a local level, we think that local authorities are best placed to determine their officers’ competence. They will have a better understanding of local priorities, taking into account new models of delivery or collaborative approaches with businesses and other neighbouring councils.
As I have already said, the Government greatly value the work of trading standards and that is why we have commissioned research on the impact and effect of trading standards on the economy, to build on the evidence base. The research will conclude in the autumn, and the outputs will inform future policy. I therefore ask the noble Baroness to withdraw the amendment.
Baroness King of Bow
My Lords, I thank the Minister for her reply and other noble Lords who have taken part in this short debate. My noble friend Baroness Crawley spoke powerfully about trading standards services as they teeter on the edge of sustainability. Anyone who has worked with them and followed their trajectory over recent spending reviews and spending rounds cannot help but feel that there is a bit of a chasm between what we are talking about in theory here—the laws that we want those trading standards officers to promote—and the powers and resources available to them to do so, not least because, as my noble friend pointed out, their numbers have been halved.
If we are on the brink of ending current services and giving up on proactive work, it does not seem realistic that they may be able to make use of any powers, which is another reason why we feel a review of this sort would be very helpful and important. My noble friend Lord Harris of Haringey gave me qualified support—thank you.
Baroness King of Bow
I was very lucky. He said I got two of the questions right; perhaps a 66% ranking is not too bad. He said that the areas that this amendment promotes that are important relate, first, to providing the mechanism for reviewing whether powers have worked and what the costs are, and, secondly, setting a standard for individual training standards officers. That is extremely important; it is why we are asking for support for this amendment. My noble friend Lord Harris pointed out that this whole area of minimum standards has resulted in a postcode lottery nationally. If we are to tackle that postcode lottery and also ensure that the Bill’s objective of enhanced consumer protection is fulfilled, we need the powers set out in the Bill to be used proactively in the pre-emptive way in which they were intended. This amendment would give us the information we need to make sure that happens in future.
My noble friend Lord Harris said that the Government might accept the amendment. Obviously, we need not worry about that, so I will leave it to one side and end on the point that the Minister referred to, that effectively it will be local authorities who have to make sure that this works. That brings us back to the point where we started. We do not see how we can avoid a dissonance between the powers that local authorities have and their inability to use those powers and meet their obligations because of a lack of resources. We do not think that those two issues can be split up, but the review would illuminate where the problems really lie. None the less, I beg leave to withdraw the amendment.
Baroness King of Bow
“Report on work of Implementation Group for this Act
On commencement, the Secretary of State shall report to Parliament on the work of the Implementation Group to ensure consumers and businesses are adequately informed of the changes in the law made by this Act, especially with regard to the key rights at the point of sale.”
Baroness King of Bow
In moving Amendment 63AA, I shall speak also to Amendment 105J in the names of my noble friends Lady Hayter and Lord Stevenson. Amendment 63AA deals with the implementation group and is interesting, not least because during the Bill’s passage in the other place the shadow consumer rights Minister, Stella Creasy, spoke about the mythical implementation group because often in the other place the answer to every question raised was, “The implementation group will sort it out”.
What will the implementation group look at? It will look at the point of sale information and identify the best way to communicate and teach people about their rights. It will look at a range of ways to ensure that businesses and consumers know what the law is regarding the point of sale questions being asked. It will look at statutory rights, what they mean and how people will be told about them. It will also identify clear, understandable wording, not just how to tell people about their rights but the words used to describe those rights. It will also look at the point of redress. It will answer questions about the information given when someone complains about the goods, service or digital content. We also heard that the implementation group will look at the guidance given to trading standards; it will look at how this will be drafted for a wide range of organisations.
With that said it is clear that the implementation group is not simply an add-on to this legislation. It is integral to the way in which it will work. The Bill is a framework. As we know, most of the law is then implemented via statutory instruments and guidance. Unfortunately, Parliament too often thinks that its job is done at that point, but implementation is really the most important part. The implementation group will be working behind the scenes—for example, preparing businesses. Consumers can be empowered only to know what their rights are, and therefore we need the implementation group to succeed and its recommendations to have bite. The key work of the group relates to Part 1 of the Bill, improving business and consumer education on their new rights and obligations, as well as spending some time informing trading standards officers.
After all that, what do we know about this mythical, important, integral implementation group? It is an all-statutory group. So first, we do not actually know what it is doing. Secondly, without Amendment 105J its recommendations will have no teeth. We hope that the advice of the group would be taken by the Minister to turn into a code of conduct. There definitely should be a statutory code of conduct. We want the implementation group to succeed. I beg to move.
Baroness Jolly
My Lords, I thank the noble Baroness for highlighting both the work that we are doing on the implementation of the Bill and that this implementation is vital if the measures are to make the differences that we intend.
We have published our plans for implementation online, at GOV.UK, and we have written to all noble Lords about them. These plans have been drawn up in close co-operation with the experts on our implementation group. These are the people who know how this really works on the ground for business, consumers and enforcers. We intend the Consumer Rights Bill to come into force in October 2015. Work to inform businesses of the pending changes in the law will begin in earnest in April 2015. This will include the publication of guidance that is easy to understand and will be supported by the sterling work of trade associations and enforcers to educate and assist businesses.
Businesses will have six months to make any changes to processes and information to meet the requirements under the Bill. They will be able to see at a glance the key changes in the law. They will also easily be able to find more detailed guidance as and when they need it. The noble Baroness rightly emphasised the need for consumers to be aware of their rights, while other noble Lords expressed similar thoughts. As we have said many times, the Government believe that we must ensure that consumers understand their new rights and obligations. That is essential and I know that is something on which we can agree.
That is why we are working closely with relevant organisations, particularly consumer groups, to ensure that consumers have a basic awareness of their updated rights and that they know where to get advice on a specific problem with faulty goods, services and digital content. The primary source of this advice will be the excellent Citizens Advice website and helpline, but of course the work of other consumer groups will be vital and we will work with key organisations to get the message across.
Baroness King of Bow
My Lords, if this implementation group is to take on so many of the issues that we have raised in Committee, we need to know in good time when this information will be made available to consumers and businesses. That is why it is very helpful that the Minister has outlined the timeframe for some of the critical tasks that the implementation group is responsible for. I heard what the Minister said about the timing of publicising consumer rights. I was going to ask if she could write to us with an integrated summary of when both business and consumers will be informed, but the Minister has said that she will place something in the Library of the House. If it is possible to write to us in advance of that, that would be welcome.
The key point, though, is not when these organisations, stakeholders or citizens are informed; the key point is how they are informed, and whether it is in a common-sense, plain manner that they can understand. That will be down to the implementation group and, given that group’s importance, it would be helpful for us to know more about how it will operate. In the mean time, I beg leave to withdraw the amendment.
House of Lords
Introduction: Lord Goddard of Stockport
Police and Crime Commissioners
(10 years ago)
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Lord Hoyle
To ask Her Majesty’s Government what standards and guidelines are given to Police and Crime Commissioners upon taking office.
The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)
My Lords, the Police Reform and Social Responsibility Act 2011 provides the broad structure within which police and crime commissioners must operate. The legislation is necessarily permissive to allow PCCs to innovate and deliver policing more effectively than the unelected police authorities that they replaced.
Lord Hoyle (Lab)
I thank the Minister for that considered but short reply. Already between 2012 and 2014, these police and crime commissioners have cost us £9,636,264. That is just in salary and expenses and does not take into account the people who are directly employed by them. The public do not understand why police and crime commissioners were appointed, what they are supposed to do and what they have achieved, but they do know that they cannot be sacked. Does the Minister agree with the Deputy Prime Minister that this is a failed experiment and that they should be scrapped?
Lord Bates
I hear what the noble Lord says, but of course 5.49 million people voted to put those people in place. I would argue that they are much more accountable than the police authorities and the local government systems that existed before. As for the comments of the Deputy Prime Minister, of course this was a coalition agreement that was supported through this House, but the Liberal Democrats are entirely entitled to change their mind whenever they choose.
Lord Blair of Boughton (CB)
My Lords, it is said that Churchill described democracy as the worst system of government except for everything else that had been tried. Does the Minister agree that the coalition has achieved the converse by the introduction of police and crime commissioners, which is the best system of police governance in England and Wales that could have been invented, except for anything else that you could have thought of?
Lord Bates
I respect the noble Lord’s great experience in this area, but we need to remember what the system was before. The previous Government commissioned an HMIC report—entitled, appropriately for the time, Police Governance in Austerity—which found that only four of the 22 police authorities inspected were judged to have performed well in two of their primary functions: setting a strategic direction and ensuring value for money. There has been a change there, and that is to be welcomed.
Lord Paddick (LD)
My Lords, one of the two objectives that the Government set for police and crime commissioners was to save money. In addition to the vast expense of many of these police and crime commissioners appointing deputies, we have also had to have two by-elections—once, tragically, because of a death and once because of resignation—which have cost between £1 million and £3 million. How much money has the change actually saved?
Lord Bates
Police budgets overall are reducing, which is not something that we chose to do but was the situation that we were faced with when this Government came into office. It should be said that the police are also overseeing one of the largest falls in crime that we have ever had in recent years. That is to be welcomed. The average salary of a police and crime commissioner is about half that of a chief constable. In many areas, people will regard them as delivering value for money. If people feel that they are failing in their responsibilities, they can vote them out, which they could not do before.
Baroness McIntosh of Hudnall (Lab)
My Lords, the noble Lord mentioned the number of people who voted for police and crime commissioners when the elections were originally held. Will he remind the House what percentage that represents of the people who could have voted?
Lord Bates
Yes, it was 15% of those who could have voted. This was a new role introduced to increase accountability, and 15% is a sight more than were present in the smoke-filled rooms to elect the chairmen of the police authorities which existed before.
The Earl of Listowel (CB)
My Lords, what advice is given to PCCs on the value of high-quality youth services and well supported mentoring and peer mentoring services? What evidence can the Minister cite of consistent investment by PCCs in that vital area to prevent children and young people entering crime?
Lord Bates
The noble Earl is right to raise the concern. PCCs can be responsive in local areas in a way that did not exist before. For example, in Northamptonshire, Adam Simmonds has introduced a new victim witness service. In Cumbria, Richard Rhodes has introduced an office of victim services. Those are exactly the type of changes which are responsive to local needs that the commissioners are now delivering.
Earl Attlee (Con)
My Lords, is the Minister aware that I was unable to name any member of a police authority who was not a Member of your Lordships’ House?
Lord Bates
My noble friend makes a fine point. Police and crime commissioners, through the press, through discussion and through the elections, are much more widely known and recognised. Therefore, people will increasingly come to them with their issues, to which they can respond.
Lord Harris of Haringey (Lab)
My Lords, is it not the case that a fifth—it may be more, but it is seven or eight at least; no doubt the Minister can tell us—of the elected police and crime commissioners are under current or recent investigation by the IPCC for fraud or other misdemeanours? Are the Government, or at least the Conservative part of the coalition, still intent on giving PCCs more powers and more responsibilities and doing nothing about the accountability mechanisms?
Lord Bates
I thought that when the noble Lord began by speaking about seven or so police and crime commissioners, he was referring to the number of former Labour MPs and Ministers who are now holding those important positions in this country. The reality is that of course they are accountable to the police and crime panels, but ultimately they are accountable to the people who elected them.
Lord Bew (CB)
My Lords, is the Minister aware that the Committee on Standards in Public Life recently announced an inquiry on local policing accountability, leadership and ethics, which is reviewing how ethical standards are being addressed within the current structures for police accountability, including police and crime commissioners? I declare an interest as chairman of the Committee on Standards in Public Life.
Lord Bates
I was aware that that process is under way and I pay tribute to the noble Lord, Lord Bew, as chairman of that committee. In the context of this, I encourage all Members of your Lordships’ House, particularly those with policing experience, to feed in their views to the Committee on Standards in Public Life so that it can look thoroughly at this issue.
Lord Patel of Bradford (Lab)
Can the Minister give us an ethnic breakdown of the police and crime commissioners?
Lord Bates
I cannot give that at the moment, but I will write to the noble Lord.
Child Abuse: Police Investigations
Baroness Smith of Basildon
To ask Her Majesty’s Government what assessment they have made of recent research by the NSPCC into police investigations of child abuse.
Baroness Williams of Trafford (Con)
My Lords, we will always ensure that police and other crime-fighting agencies have access to the powers and resources that they need to tackle child abuse in all its forms. The National Crime Agency is currently leading an unprecedented operation against online child abusers in the UK. In the past 12 months it has safeguarded or protected more than 1,000 children, and 706 arrests have been made by forces.
Baroness Smith of Basildon (Lab)
My Lords, in July 2012, the Canadian police passed to CEOP—now part of the National Crime Agency—hundreds of names of people involved in downloading abusive images of children here in the UK. It was not until September 2014, over two years later, that Essex police interviewed deputy head teacher Martin Goldberg. He was found dead the following day, with thousands of images of children on his computer, some taken with a secret camera.
Reliable evidence shows that more than 50,000 people may pose a risk to children in the UK—and yet, by the noble Baroness’s own figures, only some 700 have been arrested. The Government say that those who pose the greatest risk are prioritised. How are they prioritised? How many of the 50,000 on the NCA list have been identified as posing the greatest risk, and how many have now been interviewed?
Baroness Williams of Trafford
It is fair to say that Project Spade—as it was called—was a very regrettable incident, to the extent that the NCA has actually referred itself to the IPCC. There was no excusing what went on there. In terms of who is prioritised, they are the people who proved the most harmful to children. That is how the priority is worked out.
Baroness Walmsley (LD)
Will the Minister work across government to ensure that the whole children’s workforce in all sectors are trained to recognise the early signs of child abuse so as to help the police by reducing the need for cases to come before them at all? That will protect children.
Baroness Williams of Trafford
My Lords, it is a general duty of those working with children to safeguard them. Certainly every single officer who works in the NCA has a legal duty to safeguard and protect children.
Lord Campbell-Savours (Lab)
My Lords, can we draw a distinction between “most harmful” and “harmful”?
Baroness Williams of Trafford
In terms of harm, I would say that “most harmful” applies to children in immediate danger of being harmed.
Baroness Butler-Sloss (CB)
My Lords, what training are the police being given in relation to child abuse, whether it is porn images or the appalling stories of Rotherham and others right across the country? It is perfectly obvious that the police are not being trained at the moment. What is being done about it?
Baroness Williams of Trafford
There are highly trained officers within the NCA. The CEOP officers, of which there are 141 at the moment, are highly trained in terms of safeguarding and in terms of image viewing on the internet. I can provide the noble and learned Baroness with more information on that subsequently.
Baroness Farrington of Ribbleton (Lab)
My Lords, would the Minister care to comment on my noble friend’s question: do the authorities take physical harm towards children outside the country as seriously as they do harm towards those within it? Is her definition of “most harm” inclusive of children who are abused anywhere else in the world?
Baroness Williams of Trafford
My Lords, British national children, whether they are in this country or outside it, are of the highest priority for the Government. That is why some of the work being done on the internet has global reach. In fact, we are global leaders in this area.
Lord Laming (CB)
My Lords, can the Minister assure the House that progress has been made in training front-line staff and others to listen to children and take their concerns seriously—not necessarily without a critical view—and make sure that the full range of services is brought into play at the right time?
Baroness Williams of Trafford
My Lords, the development of multiagency teams in this area has been very helpful over the years. Obviously, some organisations do it better than others but I am happy to write to the noble Lord in terms of where we have got to on this.
Lord Swinfen (Con)
My Lords, there appears to be far more abuse of children today than there was 30 or 40 years ago. Is it known why?
Baroness Williams of Trafford
My Lords, I think that there appears to be more abuse of children these days; I do not necessarily think that there is more abuse. We are just far more aware of it and willing to deal with it.
Lord Foulkes of Cumnock (Lab)
My Lords, there are reports that the Home Office is reviewing the position of Lord Mayor Fiona Woolf as chairman of the inquiry. Is this correct?
Baroness Williams of Trafford
My Lords, Fiona Woolf stated to the Home Affairs Select Committee that she had no close association with the Brittans. I think that noble Lords would agree that it is time that we got on with this inquiry.
Baroness Benjamin (LD)
My Lords, can my noble friend the Minister tell the House what support is given to children who have been abused?
Baroness Williams of Trafford
My Lords, there is a wide range of support available to children who have been abused, but in the time that I have here I will not go through it all. I will write to the noble Baroness to outline some of the detail.
The Earl of Listowel (CB)
My Lords, is the Minister aware of the important report produced by the Office of the Children’s Commissioner on children who are abused when taken from residential care in children’s homes and on how gangs sexually abuse children?
Baroness Williams of Trafford
Yes, those are some of the most vulnerable children in our society and it is right that we should deal with this and bring the perpetrators to book.
Baroness McIntosh of Hudnall (Lab)
My Lords, is the Minister aware that the General Medical Council did some work a couple of years ago, with which I was involved, on the involvement of general practitioners and other doctors in spotting child abuse? Is she also aware that one issue that was most clearly a problem was the multiagency relationships that she talked of in one of her earlier answers? Although there are good intentions in relation to multiagency work, is she confident that it is being carried out in a coherent way?
Baroness Williams of Trafford
The noble Baroness raises a very valid point. That is why I mentioned earlier the different pictures across various multiagency teams. This is an area for improvement.
Gaza: Reconstruction
(10 years ago)
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Baroness Tonge
To ask Her Majesty’s Government what contribution they are making to the reconstruction of infrastructure in Gaza.
Baroness Northover (LD)
My Lords, at the Gaza reconstruction conference in Cairo, the United Kingdom committed £20 million to assist those affected by the recent conflict in Gaza, including the hundreds of thousands left homeless or without access to water. This funding will include support for the disposal of unexploded ordnance, rubble clearance programmes and reconstructive surgery for those injured in the conflict.
Baroness Tonge (Ind LD)
I thank my noble friend for her Answer but how does she intend to reassure taxpayers in this country, who are increasingly worried about expenditure on international aid, that the money for reconstruction in Gaza will not be squandered when Israel launches another attack in a couple of years’ time? Can she also say why so many of the contracts for building materials and the reconstruction of Gaza are going to Israeli companies, thus ensuring that Israel profits from the destruction that it caused?
Baroness Northover
No one benefits from destruction in Gaza. In terms of the rebuilding, we are looking very carefully at the implications of any damage to internationally funded structures. Meanwhile, our partners assure us that relief items are largely sourced in Gaza, the West Bank or internationally.
Lord Turnberg (Lab)
My Lords, it is clear that we need to get much building material into Gaza to help rebuild all those destroyed homes, but is the noble Baroness aware of the statement made by the Hamas spokesman last week? He said that the avowed intention of Hamas is to start rebuilding the tunnels into Israel immediately. Is there any way of preventing this?
Baroness Northover
We urge restraint, as we always do, on both sides. Peace is in the interest of both sides—of the Palestinians and the Israelis.
Baroness Eaton (Con)
My Lords, last month Israel, the Palestinian Authority and the UN agreed to a tripartite mechanism to enable vital reconstruction materials to reach Gaza, while also ensuring they do not end up in the hands of the terror group Hamas. Does the Minister agree that this is welcome news and that we must encourage further such co-operation, which recognises the concerns of both parties?
Lord Anderson of Swansea (Lab)
My Lords, it is surely quite right that vast sums should be pledged by the international community for reconstruction. But what assurances were given by Hamas and its successor that the sums they receive are conditional on good conduct—in particular, on not provocatively raining ever more rockets on Israel?
Baroness Northover
It is worth bearing in mind that, as I said, we urge restraint on both sides. In that conflict, 71 Israelis lost their lives and 2,131 Palestinians were killed. It is extremely important that we move forward into a proper peace process.
Lord Hylton (CB)
My Lords, am I correct in understanding that Turkey has offered a ship with sufficient generating capacity to supply electricity to the whole of the Gaza Strip for six months? If that is correct, will the Government ensure that the offer is accepted and the thing is made use of?
Baroness Northover
I do not know the details of that but I will write to the noble Lord. I know that we are gravely concerned about Gaza’s fuel and energy situation.
Baroness Falkner of Margravine (LD)
My Lords, my noble friend will be aware that the Egyptian Government are starting to clear eastern Sinai to create a buffer zone to close the Rafah crossing, which will further limit supplies going into Gaza. Given that very limited construction materials are already agreed, how does she see Gaza being rebuilt in these very constrained circumstances?
Baroness Northover
We were very clear at the Gaza reconstruction conference in Cairo that movement, including access restrictions, needed to be improved to have the kind of meaningful reconstruction that my noble friend is talking about. We have welcomed the agreement on the UN mechanism for importing construction materials as an important first step. Egypt’s actions in this regard are less than helpful, but Israel has primary responsibility as the occupying power and we continue to urge it to ease restrictions and reach a durable ceasefire agreement.
Lord Collins of Highbury (Lab)
My Lords, at the Cairo conference, the DfID Minister declared on his return that a key ingredient for stability is a long-term strategy for Palestinian economic growth. What action is the department taking to ensure that that comes into place?
Baroness Northover
This leads back to the previous question. What is extremely important here is lifting many of the Israeli restrictions. Lifting restrictions in Area C alone, as he probably knows, could increase Palestinian GDP by $3.4 billion.
Lord Ashdown of Norton-sub-Hamdon (LD)
My Lords, earlier the Minister quoted the relative numbers of people killed on both sides. Taking these into account as well as the extent of the destruction, including two declared UN safe-haven facilities, do Her Majesty’s Government share the White House’s view that Israel’s actions in this matter were disproportionate and indiscriminate?
Baroness Northover
We certainly condemn the actions of Hamas in terms of the rocket fire but we have also urged that Israel, which has a right to defend itself, should do so in a way that is indeed proportionate.
Viscount Slim (CB)
My Lords, it is a known fact that the Palestinians inside Gaza are not in control of their own destiny. Hamas dictates in Gaza. Unless Her Majesty’s Government, and DfID in particular, are very careful, they will discover that most of this reconstruction money goes towards the rebuilding of Hamas’s destroyed houses and, as one noble Lord said, the tunnels and hides for its armaments and munitions. There is a great danger that if this money and equipment get into the wrong hands, our country will be liable for supporting one of the nastiest and most vicious terrorist organisations in the world at present—one that is primed and supported by Iran. This will mean that we are supporting a terrorist organisation.
Baroness Northover
I assure the noble Viscount that no UK aid money goes to Hamas, but of course Hamas needs to be part of the ceasefire negotiations and it is extremely important that the peace process moves on. The region is a tinderbox, and the sooner that it moves on, the better for all concerned.
European Arrest Warrant
(10 years ago)
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Lord Harris of Haringey
To ask Her Majesty’s Government what steps they are taking to ensure that the United Kingdom is able to opt back into the European Arrest Warrant.
The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)
My Lords, the Government are close to agreeing a package of 35 measures with the European Commission and other member states that the UK will seek to join in the national interest. That package includes the reformed arrest warrant, with increased domestic powers to block arrest warrants where the offence is disproportionately minor or where the relevant conduct that occurred in the UK is not a crime. The discussions continue in Brussels.
Lord Harris of Haringey (Lab)
Given that nearly 100 foreign criminals are removed from this country under the European arrest warrant every month, can the Minister give us a guarantee that we will have opted back in by 1 December? When will this be put to the House of Commons? When it is, because of the level of opposition to the European arrest warrant by the Taliban majority of the Eurosceptics in the Conservative Party, will the Government be relying on Labour votes for us to opt in, in the national interest?
Lord Bates
My Lords, the noble Lord is right to point to the importance of this; 5,000 foreign criminals have been deported since it came into effect in 2009. Of course the desire is to opt back in by 1 December, but this needs to be negotiated and there need to be agreements. Those negotiations are continuing. Her Majesty’s Government’s position is that we want to be there by 1 December. In terms of when the House will have the opportunity to discuss this, discussions are ongoing between the business managers to make time for that to happen before 20 November.
Lord Deben (Con)
My Lords, does my noble friend accept that the only people who gain from our non-membership of the European arrest warrant arrangements are fraudsters, child molesters and gangs? Should we not say that this is another example of the excellent reasons why we should be full and really committed members of the European Union?
Lord Bates
My noble friend is absolutely right in respect of these measures. To keep a balance, though, let us remember that being part of the European Union is not just about signing up to everything that comes down the track. With regard to justice and home affairs, there were 135 measures in the package, 100 of which we did not feel passed the test regarding our national interest. However, 35 did and those are what we want to rejoin.
Lord Elystan-Morgan (CB)
My Lords, does the Minister accept that committees of this House have heard overwhelming evidence from law enforcement agencies from England, Wales, Scotland and Northern Ireland, as well as the Republic of Ireland, of the wholly invaluable role that the European arrest warrant plays in the war against serious crime? Does he also accept that, although there are minor infractions that can so easily be put right, it would be a severe blow to the administration of justice if, for any reason—particularly in relation to any tactical or political consideration—the European arrest warrant were to be prejudiced in any way?
Lord Bates
The noble Lord is absolutely right. That is why the Government are bringing this forward and seeking urgent agreement on it.
Baroness Smith of Basildon (Lab)
My Lords, the Minister will be aware of the comments in the letter from the Irish Government expressing their concern that if there is any gap between the Government opting out of the international arrest warrant and opting back in again, that will have serious implications for arresting those involved in terrorism. What response have the Government made to this, and what discussions have they had with other countries which may be expressing similar concerns?
Lord Bates
The noble Baroness is absolutely right. That is why we want to ensure that there will be no gap in respect of this, and I am confident that there will not be. Only one country out of the 22 with which we are currently in bilateral negotiations has a concern about this. We believe that that concern can be overcome within a matter of days.
Lord Blackwell (Con)
My Lords, does my noble friend accept that there are serious concerns about the principle of British citizens being arrested on British soil and sent into the custody of foreign judicial systems, where there is no democratic control by other British citizens, without a chance for British courts and British justice systems to take a view on it? Will my noble friend assure us that this House will have a full opportunity to debate and vote on this proposal before it is taken forward?
Lord Bates
We will certainly have that debate and vote. That was one of the important safeguards we negotiated that have been introduced: to say that a crime must be a crime in this country as well as in the country to which the extradition has been sought for a warrant to be agreed to.
Lord Blair of Boughton (CB)
My Lords, is the Minister aware that European arrest warrants are a two-way process, and that should the Government fail to renegotiate an entry back into the European arrest warrant system for Britain, then the criminals of Europe would know that and what used to be called the “costa del crime” would arrive on the shores of Britain?
Lord Bates
My Lords, I am sure that the representatives of the Spanish Government, with whom we are negotiating bilaterally, will of course have noted the noble Lord’s comments carefully.
Baroness Suttie (LD)
My Lords, does my noble friend the Minister agree with Sir Hugh Orde, the president of ACPO, when he said that the European arrest warrant,
“gives us a stronger, more effective means of arresting dangerous criminals across borders and thus keeping our communities safe at home—it is not an instrument which we can afford to lose”?
Lord Bates
My noble friend is absolutely right. I agree with ACPO in respect of this and of course the European affairs committee, the security services and the law enforcement services, whose views the Government have listened to and acted upon.
Lord Low of Dalston (CB)
My Lords, will the Minister say if the Government are willing to reconsider their opt-out from the measure on xenophobia and racism? I think that to opt out of this measure portrays the United Kingdom in a very bad light and sends a very bad signal.
Lord Bates
I will write to the noble Lord on that. He is right to raise concerns about it and I will make sure that he gets an absolutely accurate and speedy reply.
Arrangement of Business
Lord Taylor of Holbeach (Con)
My Lords, my right honourable friend the Leader of the House of Commons recently announced a February Lenten Recess for that House. It may be for the convenience of the House that I now do the same. I hope that we will be able to rise for a short recess at the end of business on Thursday 12 February and return on Monday 23 February 2015. I must emphasise that these dates are provisional and subject to the progress of business. That is of course the usual caveat for all our recess dates, but I must underline it on this occasion, for this will be the final recess in this last Session of the Parliament.
I hope that the House will also find it useful if I take the opportunity to highlight that this morning’s edition of Forthcoming Business advertises three more sitting Fridays before we rise for Christmas: 21 November, 5 December and 12 December.
Scotland: Devolution
(10 years ago)
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Baroness Stowell of Beeston
That this House takes note of devolution following the Scotland referendum.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, I am delighted to open this debate on devolution following the clear decision of the Scottish people to remain part of this great United Kingdom.
As delighted as I am, I will allow a little time for noble Lords leaving the Chamber to do so before I continue to open this debate, because I would be very disappointed if noble Lords remaining for the debate did not get to hear just how delighted I am.
The clear decision of the Scottish people to remain part of this great United Kingdom was a once-in-a-generation decision that confirmed once again what we all know to be true: that we are a family of nations bound by a rich history and the strength of our democracy. The referendum campaign electrified politics in Scotland. Door by door, street by street, the Scottish people showed just how much people are truly interested in the big decisions that affect them. I know that many noble Lords from across the Chamber were involved in that campaign. I pay particular tribute to my noble and learned friend Lord Wallace of Tankerness, who will respond to today’s debate and who, let us not forget, is a former Deputy First Minister of Scotland.
Eighty-five per cent of people in Scotland voted in the referendum: a truly remarkable figure. More than 2 million people voted for Scotland to remain part of the United Kingdom. They voted for a stronger Scottish Parliament backed by the strength and security that comes from being part of the United Kingdom. With their support, we can now firmly say that the debate has been settled for a generation—or, as Alex Salmond himself said, perhaps for a lifetime.
Before the referendum, the three pro-union parties made clear commitments with a clear timetable to devolve further powers to Scotland. We have since published our Command Paper on Scotland ahead of schedule, setting out the proposals from each party. This is not just talk. The noble Lord, Lord Smith, and his commission have already begun work to take those commitments forward, working with one aim: to produce a unifying set of proposals by 30 November. For the first time, I am pleased to say that all major parties are involved in shaping that result. Based on that work, the Government will publish draft clauses by the end of January—by Burns Night, to be precise—so that the legislation is ready to be implemented after the next general election. Let me be clear: we have delivered, we are delivering and we will deliver on our devolution commitments, just as the United Kingdom Government have always done.
Let me turn now to Wales, where we have also been making good on our promise of further devolution. We have delivered a referendum on lawmaking powers, we have set up the Silk commission and we have introduced the Wales Bill, where I am particularly proud of the role that this House is playing. That Bill implements nearly all the Silk 1 recommendations, which alone devolve significant tax and borrowing powers to the Assembly and Welsh Ministers—but we went further. By removing the lock-step, we will provide the Welsh Assembly with the power to vary income tax rates. Not only will those new powers help the Welsh economy to become more dynamic, they will make the Welsh Government more accountable. Those are big steps forward, but we must make sure to keep Wales at the heart of the broader debate before us today.
As Noble Lords will know, the Silk commission recommended a move to a reserved powers model in part 2 of its report. It will fall to the next Parliament to make that change, but the Secretary of State for Wales has made it clear that in considering the best way forward he wants to hear views from across the political spectrum in Wales.
It is also vital that we consider the future of devolution in Northern Ireland. I need not remind the House that the settlement there is the result of the hard-fought and hard-won Belfast agreement. Providing additional powers would involve changes to that agreement, so any changes would need to command the support of all parties in the Assembly. It is right that the focus there is on making the existing settlement work well and in the best interests of the people of Northern Ireland.
This does not mean that the devolution settlement in Northern Ireland is fixed. The ability to vary long-haul air passenger duty has already been devolved, and the Northern Ireland Executive are committed to devolving corporation tax. The Prime Minister has made it clear that there will be a decision on this no later than the Autumn Statement.
As I have already set out, the Government respect and support the calls for greater autonomy and devolution in Scotland, Wales and Northern Ireland—but we cannot ignore England in this equation. England is the most decentralised nation in the United Kingdom. The Localism Act 2011 marked a historic shift in power to the local level. In doing so, we did not create new layers or structures or more politicians; we moved money to local areas in order to make things happen. Thirty-nine local enterprise partnerships bring together civic and private sector leaders to promote growth. We have devolved the money—£2 billion a year from next year—for them to do their work. We have delivered on city and local growth deals. Eight so-called core deals have been signed, creating around 175,000 jobs and 37,000 apprenticeships over 20 years. With the second wave now in place, there are 18 more on the way.
Those steps are part of the answer, though I am sure that more can and will be done. However, they do not answer the fundamental, so-called West Lothian question—how to deal fairly with legislation affecting England. For the people of England this is a matter of fairness. Who decides their laws? With further devolution to Scotland, Wales and Northern Ireland, we must ensure that the voice of England is heard as well. This means establishing a clear principle. When decisions affect only the people of England, they should be made by—or with the consent of—the MPs whom those people have elected to represent them.
There has been much talk that a constitutional convention must discuss all these issues before we can make progress on the matter of English votes for English laws. I reject that suggestion. A convention may well be desirable, but it should not delay progress on the West Lothian question. At a time when we are looking again at devolution to Scotland, Wales and Northern Ireland, it cannot be right that England should be left out once again. To those who argue that we are moving too quickly, I remind the House that we have been discussing the question for at least the last 17 years and that, in that time, we have had plenty of material to inform us. From within my own party, for example, my noble friend Lord Norton’s Commission to Strengthen Parliament made considered recommendations in 2000. More recently, noble Lords will recall the work of the McKay Commission in 2013. A commitment to address the problem has been in the last three Conservative manifestos.
In Scotland, Wales and Northern Ireland, all the major parties have come together across party boundaries to work towards new settlements. It is only at Westminster, on the issue of fairness in England, that the Opposition have not accepted our invitation to move the issue forward. It is a shame. As a member of the Devolution Committee, I was looking forward to working with Members on the Benches opposite.
Lord Forsyth of Drumlean (Con)
I am most grateful to my noble friend. None of these arguments is new. They were gone through in great detail in the 19th century at the time of Irish home rule. The conclusion then was that the way to deal with this fairness was to reduce the number of MPs coming from Ireland. Why can the same not be applied in the case of devolution to Scotland?
Baroness Stowell of Beeston
Certainly—and I speak for the leadership of my party—we are clear that the best way in which to deal with this is through English votes for English laws within the House of Commons. That is something that we can tackle and deal with quickly.
Lord Thomas of Gresford (LD)
So much of the legislation affects England and Wales. When the noble Baroness says England, does that include Wales?
Baroness Stowell of Beeston
Certainly in the context of legislation that affects England and Wales only, of course that includes Wales.
I assure the House that my right honourable friend the Leader of the House of Commons and chairman of the Devolution Committee, to which I have already referred, will do everything that he can to resolve the West Lothian question before the election, and I applaud his efforts and commend them to this House. It cannot be clearer that now is the time for a better and fairer settlement for the whole United Kingdom. We are absolutely committed to the timetable set out for further devolution to Scotland. We are committed to providing further powers to Wales and to meeting the special needs of Northern Ireland. We on the Conservative Benches are committed to bringing forward a solution to the West Lothian question before the end of this Parliament. There will be a time and a place for a constitutional convention but that should not be a device to prevent the other issues before us being addressed now. We are all responsible for ensuring that decisions are made fairly and in the interests of all people in the United Kingdom. Now, more than ever, we must uphold that responsibility. I beg to move.
Baroness Royall of Blaisdon (Lab)
My Lords, I am grateful to the Leader of the House for agreeing to table this significant and necessary debate in government time. I have long recognised the importance of constitutional change, and I am proud of what my Labour Government achieved. But in recent years, with the country facing so many challenges, many as a consequence of coalition policies, I felt that such changes should not be a priority for legislation. However, the experience of the Scotland referendum has made me think again, and I am now firmly of the view that we must urgently consider profound changes in our governance.
Thomas Paine said:
“Society in every state is a blessing, but government even in its best state is but a necessary evil; in its worst state an intolerable one”.
Government, Parliament and our politics have for too many of our citizens become intolerable. There is much that we can learn from Scotland’s referendum: the tremendous participation was a shot in the arm for democracy. People thought that the result really mattered. There was great passion in the yes campaign and the no message, and in many ways they both reached the same conclusion, that the status quo is simply not acceptable. What it clearly illustrated, despite the resounding outcome in favour of the union, is that people feel powerless that they have no influence over distant decisions taken for them rather than with them. As with their fellow citizens in England, Wales and Northern Ireland, people in Scotland want power closer to where they live, rather than what they see as a cosy circle in Westminster and Whitehall. They want this because they are fed up with inequality and being left behind while those at the top continue to thrive. They are disappointed by what they see as the “yah, boo” of party politics, which either bores them rigid or reinforces alienation, and they are angry about being let down by elite decision-makers—not just in politics, but in the banks, media, police and church. In a nutshell, people’s faith in some of the major institutions of our country has crumbled.
Granting votes at 16 was a real lesson for the UK as a whole. I have long supported this policy, which has now been adopted by both my party and the Liberal Democrats. My view was reinforced this morning by a meeting with a hundred National Citizen Service leaders, and I was delighted to hear my noble friend Lady Liddell of Coatdyke say recently in the Chamber:
“I was one of the people who thought that it was wrong for the franchise to reduce the voting age to 16. I was comprehensively proved wrong. I heard some of the best debates I have ever heard in a lifetime in politics from 16 and 17 year-olds”.—[Official Report, 16/10/14; col. 295.]
Like her, I urge the Government and the Hansard Society to consider the specific lessons to be learnt from empowering young people at the ballot box, then act on their findings.
I take this opportunity to pay tribute to those Conservatives who during the referendum campaign were committed to the union. The party’s leader in Scotland, Ruth Davidson, and the Prime Minister both pulled out all of the stops to secure a no vote.
However, soon after the counting ended and the results began to emerge, Mr Cameron, I am afraid to say, reverted to type. He parroted the response of his general election strategists and political advantage took centre stage, by making the link between the promises made to the people of Scotland and English votes for English laws. Once again, Mr Cameron was caught looking over his shoulder at the threats from within his own party, along with UKIP’s bluster, rather than responding to the needs of our country.
The Prime Minister, the Deputy Prime Minister and the leader of the Opposition made a commitment—indeed, a vow—to further strengthen and empower the Scottish Parliament. My party is participating in the process under the leadership of the noble Lord, Lord Smith of Kelvin, in a spirit of partnership and co-operation with others. I would be grateful for an assurance from the Leader that the commission will at all times be led by the outcome of the referendum. The result indicated that people wanted a strong Scotland inside a strong UK with the continuation of sharing both our resources and achievements.
The necessary further devolution to Scotland, together with the clear discontent of the British people, means that it is imperative that we consider and address the English constitutional anomaly. England has been tolerant for a long time and I understand some of the frustrations expressed. However, English votes for English laws is not the answer.
The Cabinet committee, referred to by the noble Baroness, chaired by William Hague, hastily convened and meeting behind closed doors, simply will not do. People will no longer tolerate a Westminster stitch-up, when what our country needs is an open, transparent discussion. A piecemeal approach to constitutional change for political advantage is unacceptable. Embittered nationalism is always wrong. The fact that some in the party opposite want to put what the Telegraph calls “English home rule” at the very heart of their election campaign is not a sound basis for action. In fact, it is morally wrong and further erodes trust in our politics. The future governance of our country is much bigger than one party’s demands or vision. As Vernon Bogdanor pointed out in an excellent article last month:
“the British constitution is not the private property of the Conservative party or”,
any other party. He continued:
“A constitutional settlement, if it is to be lasting, needs the support of all parties, and endorsement by the people as a whole after measured debate”.
English votes for English laws, of which, contrary to expectation there are few, is a purely separatist proposal and one that would produce a two-tier system that would enshrine existing inequalities; drive a wedge between the Scottish and English systems of government; and risk the future of the Union, when what is needed is a constitutional reform that strengthens its integrity.
Earlier this year, colleagues in the Lords Labour group published an excellent report entitled A Programme for Progress. Among its recommendations was the setting up of a constitutional convention. The group was, indeed, prescient. My party leader, Ed Miliband, has announced proposals for a constitutional convention rooted in the UK’s nations and regions. It would address the need for further devolution, not just in Scotland, Wales and Northern Ireland, but in England too, and reform of Westminster, including this very House. It is the best means of arriving at a consensus on the governance of our country and it would give our citizens a stronger voice in politics.
I recognise that this is also the policy of the Liberal Democrats, so I strongly urge the noble Baroness to commit the Conservatives to something that has broad support, including among civil society and our citizens. Now is not the time for partisanship. Consensus has to be the way forward and we should learn from the experiences of Ireland’s post-2008 constitutional convention and Scotland’s own pre-1997 convention.
The process must be time limited and involve not just the political class. A convention driven by the people, for the people, with views and voices from communities across the country would mean that change could be part of addressing feelings of powerlessness in the face of globalisation and its impacts. It would encourage participation in the decision-making process, both within our new constitutional arrangements and the democratic system that it delivers.
Greater devolution is at the heart of my party’s policies, with radical plans to disperse power and responsibility downwards. My right honourable friend, Hilary Benn, has announced a new English deal, in which the equivalent of £30 billion pounds of spending would transfer away from Whitehall. This is crucial because, notwithstanding what the noble Baroness says, right now our country is too centralised. Only a quarter of public spending is at a local or regional level compared with an OECD average of a third, and our subnational taxation is 1.7% of GDP compared with 16% in Sweden.
A report released last week by the City Growth Commission, chaired by Jim O’Neill, focuses on how to push power down to our top 15 metropolitan areas. Starting from the position that “This is the age of the city”, it makes an eye-catching observation that these 15 areas, performing to their potential up to 2030, could net an additional £79 billion for our economy. However, it is not just about cities; our more rural and coastal areas are just as important, as recognised by the excellent review of my noble friend Lord Adonis entitled Mending the Fractured Economy. They, too—the counties within county regions—need greater powers to chart their own course on infrastructure, skills and employment.
City regions and county regions are of course already taking shape across England. Councils of all political persuasions understand that working together, whether to deliver better local services, be more efficient in the use of public money or market their economic and cultural potential on a wider international stage, makes sense. As a consequence, they are building up local university, IT and service sectors with the jobs and prosperity that all that promises. The cohort of authorities around big cities such as Manchester, Liverpool and Birmingham has been doing this for years, as, too, are less urban areas such as Derbyshire and Staffordshire.
Therefore, it is no wonder that some are now saying that if it is good enough for one part of the UK, why not the rest? Many who voted yes in Scotland’s referendum did so not out of a new-found belief in Scottish nationalism or support for gesture politics; they voted yes because they believed that nobody else was listening to their concerns that politics was not working for them and their families. Nobody was offering them hope of better times, if not economically then at least an opportunity to flourish and grow. The conversations that our great parties wanted to have with them often started from a different premise and, as such, failed to reflect what people were actually worried about.
It would seem to make perfect sense, therefore, that Scotland should be looking to devolve internally in the same way as England—not just to city regions around Glasgow, Dundee and Aberdeen but perhaps to county regions, too, with more powers closer to home for local authorities to work together, influence change and offer the promise of a better future not just to those youngsters who voted yes but to their younger siblings who were not yet old enough to vote but might hold similar views. Such an approach could also help to deal with the false promises of the SNP and its political bedfellows, for whom a centralised—a more centralised—Scotland is everything.
It is only two short years since that wonderful summer of 2012, when we all came together to celebrate the Olympic and Paralympic Games. The Games may have lasted just one month but they were the culmination of a decade’s hard work from the initial bid to the event itself. This was not the achievement of any one party: we all played our part in making it a success, and that work goes on through the benefits of the Olympic legacy.
In many ways, the glorious summer of 2012 already seems a long time ago: our huge feeling of optimism and togetherness—dare I say “one nation”?—as people in communities across Britain took an interest in sports to which we usually pay little or no attention just to see how well the Team GB competitor had done; our excitement in looking at the medals table evening after evening to see how far we could climb, competing with the likes of China and the US; our pride in the modern, diverse, outward-looking, optimistic Britain that was on display during that extraordinary opening ceremony; those wonderful volunteers, the Games makers; and of course that “Super Saturday”, when Jessica Ennis, Greg Rutherford and Mo Farah all won gold in what must have been the greatest 46 minutes of British sporting history. We felt like a nation at ease with itself and we felt like a country that could achieve anything we set our sights on if only we put our differences aside and worked together.
Two years on, that feeling has gone. We have seen a sometimes bitter referendum campaign in Scotland, the debate about Europe and immigration gets more intolerant and feeds people’s fears, and distrust in politicians and government goes from bad to worse. We are not, however, going to find solutions with partisan politics and playing people in different parts of the UK off against each another. A constitutional convention will not resolve all of our problems but it would certainly make a start.
Lord Tyler (LD)
My Lords, today I am celebrating: the concept of a federal approach to our previously grossly overcentralised system of government seems to have come of age. After a political lifetime promoting this concept, I am delighted that this f-word is no longer considered unutterable. Perhaps we should also allow two c-words to be used in polite political society: the Commonwealth of Australia has something to teach us, as does the Confederation of Canada. We are so insular in this country that we have failed to examine the good examples in other mature democracies, even when we Brits had a hand in devising their constitutions. I will make three broad points.
First, I hope and trust—and this has been evident from the contributions so far—that there is complete unanimity across the House and the three main parties that the delivery of the vow to the people of Scotland will not be delayed by any proper considerations of the implications for other parts of the United Kingdom. That is important for all sorts of reasons. Nothing could stoke up further resentment, increase disenchantment with our whole representative democracy and, indeed, play into the hands of separatists, more dangerously than delay and dithering over this.
Secondly, there is also a widespread recognition that there are consequences of greater devolution for the way in which we legislate and apportion tax responsibilities and expenditure here in Westminster and Whitehall. Thirdly, there must be recognition that the most oversimplified, knee-jerk, hasty reaction of calling for English votes for English laws is simply inadequate: EVEL is not enough. It is far from simple; decisions taken on English matters in the United Kingdom Parliament have financial implications for the whole union. It is hard enough to define what an English Bill is. As my noble friend Lord Thomas has already said, very often it is an English and Welsh Bill and falls outside that definition during its progress through both Houses.
Of course, the United Kingdom Parliament is not unicameral. There are two Houses and we here do not represent any one territory: we are United Kingdom Peers. Only an elected House—so far elusive—could resolve that anomaly. However, in the mean time, the McKay commission completely ignored our evidence on this point. What would this House do if its recommendations were accepted by the other House?
Although we must be conscious that obsessing about England per se does no service at all to the already increasing pressures for true subsidiarity and a bottom-up approach to devolution, we must recognise that within England there are pressures for devolution. Simply creating an English institution does not deal with the underlying problem of overcentralisation. People are already rightly asking, if Scotland and Wales, with five and three million people respectively, can take significant legislative and fiscal power, why not London or Yorkshire? Indeed, might it not again be time to ask the people of the north-east—or parts of it—whether they want the top-down, minimal devolution-lite they were offered in 2004, or whether they would prefer something serious, along the lines already experienced in Wales and which we hope will be increased there. In Cornwall, of course, there is substantial demand for an assembly to take on similar responsibilities.
Dealing with this demand for real legislative devolution—not just administrative decentralisation—is a construct that people in England already recognise, and we must require a bottom-up process, not a top-down imposition, as a vital first step in sorting out the English question. I say to my noble friend on the Front Bench that the Localism Act did not instil in the British people a recognition that we have adequate local accountability in England. It simply is not there. That is not enough. It was never thought to be enough.
Clearly this would leave much less for the Westminster Parliament to do. There would be far fewer English issues. There would be less for Whitehall to do, offering an opportunity for substantial bureaucratic slimming. However, I and my colleagues acknowledge that there would still be some distinctly English issues. For those, it may be that an English Grand Committee might be an appropriate mechanism—but that is a consequential change. That is not the initial change that is so critical. In setting that up, we would have to be clear what the options for such a committee would be.
First, it could be an impotent talking shop—there is plenty of precedent for this. If, as with the McKay proposals, the full House of Commons, the United Kingdom House of Commons, and your Lordships’ House were simply to overrule everything that was said in the English Grand Committee, how would that play with our fellow citizens? That would just make the problem worse, not better.
A second option would clearly be a full legislative decision-making parliamentary vehicle. If so, we must face up to the fact that there would be a need for an Executive to deliver those legislative decisions. Do we want an English Executive with an English First Minister? I do not think that the public are ready and willing to go in that direction.
Thirdly, the committee could have the power of veto to prevent MPs from Scotland or Wales, or wherever that legislation was likely not to have any effect, pushing it through at the risk of constant cost and tax implications exclusively for England—or England and Wales. That veto option seems the most likely to prevail. It underlines why so much legislative power needs to be transferred out of Westminster before it happens, because it is only half the answer—or no answer at all—to the English question.
We must also consider that each devolution settlement so far has built in a firm commitment to fair representation. That is why my right honourable friend David Laws, on behalf of our Party, has set out this essential element for a new parliamentary vehicle, if there is to be one, to be truly and fairly representative of English voices, in a submission to the Cabinet committee.
In his Guardian article on 2 October, David Laws set out an unanswerable case when he stated:
“Every time Westminster has devolved powers in the past—to Scotland, Wales, Northern Ireland and even London—it has insisted that the devolved authority that wields those powers be put together on the basis of proportional representation … What was right for Scotland, Wales, Northern Ireland and London is also right for England”.
That approach was endorsed by the Economist on 21 September this year.
From these Benches, we will continue to argue that further devolution to Scotland must proceed immediately. We should go even further than the present Wales Bill does for Wales. We should introduce a devolution-enabling Bill to bring about transfers of more power from this Parliament to other institutions in England, and those institutions should be elected on the basis of fair representation. Residual English powers operated in Westminster by a Grand Committee should be similarly subject to fair proportionality so that English votes and English voices represent the will of English voters.
Next year, 2015, is the 800th anniversary—
Lord Tyler
I am coming to a conclusion. Next year is the 800th anniversary of this Parliament, as set out in the Magna Carta. Barons led the route to greater democracy 800 years ago. I hope that Barons and Baronesses will make a very positive contribution to the next move forward on devolution.
Lord Empey (UUP)
My Lords, this debate is on devolution following the Scottish referendum. Unlike many colleagues in this Chamber who, after the Scottish referendum, expressed the view that it was a great victory, I do not think that is the case. It was a damned close-run thing. Not only that, having succeeded in winning, the ink was barely dry on the ballot papers when we were busy snatching defeat from the jaws of victory. I am no constitutional expert but there are two things that I know. First, you cannot sensibly reform a constitution such as ours on the hoof.
The second thing I know is that we are perfectly capable of destroying a similar constitution on the hoof. These things need to be thought through, and we have had years to think them through, but little or nothing has emerged. All of a sudden we get a shock. I have to say to noble Lords that it does not matter what we do with the vow that was made by our leaders. Of course it must be implemented, but whatever is put forward will not be enough because the people who will reject it have no gain to make by accepting it.
That is my biggest concern. I have always been in favour of devolution, and I accept that there will inevitably be an asymmetric situation in the United Kingdom. I also accept the frustration of the people in England. Let us face it: we have a Cabinet Minister outside this building telling the people of Scunthorpe how many times a month their bins are going to be emptied. That does not strike me as being somewhere where power should be, so we have a long way to go and we know it.
As the noble Lord, Lord Tyler, asked a moment ago, what will become of your Lordships’ House? Are we to go around with badges on us, or with flags on our foreheads, to say when we can go into a Lobby and when we cannot? What are we going to do? These things are fundamental and can be dealt with in a coherent manner only when everybody sees the working out of the constitutional changes that are inevitable now. We have set our shoulder to the wheel. Did we intend the machine to run down the hill out of control? Probably not, but that is where we are.
The nationalists in Scotland will never accept anything that we do here unless they get their own way. People like me know how nationalists think. It does not matter what we do in Stormont either—the same thing will apply.
The noble Lord, Lord Sewel, is in his place, and I want to say something about the convention in his name, which has been mentioned. That roughly said that this Parliament would not interfere in the day-to-day affairs of the devolved Assemblies. I understand that. However, as a result of that, we have turned the devolved Assemblies into giant ATMs. The politicians in them spread out the largesse—and I was one of them. We were spending billions of pounds, and if we did not have enough to spend, this place was to blame. It was a shot to nothing, as snooker players would say. We cannot possibly win in Westminster. There has to be some link so that the people understand where the money comes from and what the consequences are of overspending.
At Stormont today they are in crisis because they cannot control their own budget, something that has never happened before, despite being in charge of this for years. It is a mess. My fear is that, unless there is a clear link between what is spent and clear accountability by the devolved regions for what they spend, there is no way that we will have any United Kingdom identity or brand. It will simply be Holyrood or Cardiff or London or Belfast or wherever.
We have a lot of work ahead of us if we are to have a coherent constitution that meets the needs of our citizens. I feel very strongly that in Northern Ireland after 1920, Whitehall and Westminster thought the problem was solved. Northern Ireland was dealt with by a junior officer at the back of an office in the Home Office. I believe that, if this Parliament had had a meaningful role, oversight of and a say in what was happening in Stormont, we would never have got into the mess we got ourselves into in the 1960s and 1970s. We are going to repeat the same mistake, because it was clear when the Northern Ireland (Miscellaneous Provisions) Bill was brought forward earlier this year that the same thinking and mentality are still there.
I can say only that I am a great believer in our union—a great believer in the United Kingdom. The chairman of our Constitution Committee, the noble Lord, Lord Lang of Monkton, who will speak shortly, spelt out a vision for the union for the years ahead. We need that vision first, and then we have to decide what the function is, and the form will follow. I think we are doing it back to front.
The Lord Bishop of Chester
My Lords, bishops need to tread warily when discussing matters Scottish. Although I am thoroughly English by birth and background, I can, I think, claim rather closer connections with Scotland than some whom I observe wearing the kilt at the Chester Caledonian Association dinners which I regularly attend.
Let me explain. I have a Scottish wife—my one and only wife, I hasten to add—and two Scottish degrees, all three from Edinburgh. I trained for ordination in Scotland as somebody sponsored by the Scottish Episcopal Church, and I have owned a house in Scotland for 25 years and will happily retire there in a few years’ time. I am Anglican co-chair of the current Church of England-Church of Scotland ecumenical conversations. So tread I shall, if nevertheless warily. If I have learnt one thing in my discussions with the Church of Scotland, it is that were the Kirk ever to contemplate having bishops, which remains, I think, doubtful, they would need to be very different from English bishops to be acceptable.
My learning curve about Scotland began soon after I had enrolled at Edinburgh University in 1974. I was in the student common room watching a football match between England and Russia. Russia scored first, and the whole room exploded with joy and everyone cheered. Had it been in an equivalent English university and Scotland had been playing Russia, the English students, I think, would have been enthusiastically supporting Scotland. But in Scotland things were clearly different. I suddenly awoke to the fact that I was in a foreign land.
What I was beginning to learn 40 years ago was that Scotland is self-consciously a different nation from England. In all my subsequent contact with Scotland, not least during the recent referendum campaign, which I observed closely, I have been on a progressive learning curve about the separate dignity of Scotland as a nation. I think that the English often find that hard really to take in. Even some aspects of the recent campaign rather undergirded that to me.
Let us never forget that, for most of human history, Scotland has been a fully independent country, with its own culture, and Hadrian’s Wall stands as testament to that. The question on the ballot paper, “Should Scotland be an independent country?”, ought to have been, “Should Scotland revert to being an independent country?”, which is how it has been for most of the time. I say all this as a supporter of the union.
Baroness Quin (Lab)
I am grateful to the right reverend Prelate for giving way. May I point out that Hadrian’s Wall never has been the border between England and Scotland? It is not near the border today and, in fact, runs through the middle of the city of Newcastle upon Tyne.
The Lord Bishop of Chester
I do know where Hadrian’s Wall runs, but the fact that the Romans did not get to the rest of this island is significant, even though I fully accept that the border, which has moved over time, is not coterminous. But the very fact that the Romans did not conquer Scotland reinforces the underlying point I am seeking to make.
I chose not vote in the recent referendum, although I was entitled to do so, because I felt it was a question which the Scots should decide. If I had voted, I would have voted no. However, I found the recent no campaign disturbing to the point of embarrassment. It was conducted largely on negative, almost threatening terms—“worse apart” rather than “better together”. When this did not seem to be working, after the second televised debate in particular, the strategy changed towards promises and inducements, with the Prime Minister suddenly to the fore. How much better it would have been had he headed up the principled case for the union from the start and made that case on a positive basis, as indeed did former Prime Minister Gordon Brown.
I would draw two conclusions from what I have said so far in relation to today’s debate. First, the English in particular need to be very careful not to be seen to take the union with Scotland for granted—a lot of this is about perceptions—or to take the union as a foregone historical conclusion, which it clearly is not. The English and the Scots may share a great deal but fundamentally they are different cultures and nations which, for the past 300 or so years, have formed a richly creative political union. That union now needs to be nurtured on a new basis, especially given the dismantling of the British Empire. The English tendency to view Scotland in a slightly paternalist, patronising way needs to be consigned firmly to the past as the new devolution arrangements are negotiated. I hope that is the key in which all that is now going to be discussed is conducted.
Finally, I would be cautious before drawing any lessons from the recent referendum for wider questions of devolution in the UK. What will now happen in Scotland reflects the particular historical dynamic of English-Scottish relations. Perhaps elements will be replicated in relation to Wales and Northern Ireland, and even some regions of England, but not necessarily so. The resounding outcome of the referendum in the north-east on a regional assembly a few years ago illustrates the specific nature of the Scottish question. To regard the English-Scottish relationship as simply the primary and maximal example of broader devolved relationships in the UK would be to invite a repetition of recent errors of judgment.
Lord Lang of Monkton (Con)
My Lords, it is a great pleasure to follow the right reverend Prelate and to reassure him that the Romans did indeed get well into Scotland—but it did them no good. I am sure the whole House looks forward to the maiden speech in today’s debate of the noble Lord, Lord Lennie.
I welcome this further debate on devolution, although it takes place in greatly changed circumstances. What should be happening now? I think the ideal answer is calm reflection, consultation and consideration of a way forward, not just for Scotland but for the whole United Kingdom. Unionism won the referendum but for a secure future it is clear that the union now has to change. I believe now that a wide consultation process should take place and that it should involve the interests of all the component parts of the United Kingdom.
Few can now dispute the causal link between the establishment of a Scot-centric, lopsided, asymmetrical, tax-free, unstable form of devolution in the Scotland Act 1998 and the slow but accelerating landslide towards separation that has ensued. That approach has not brought stability or fairness. Successive changes have fed the flames and come close to destroying the United Kingdom. Under that approach, devolution has become a separatist policy. It has been the gift that keeps on taking. The slogan that Labour coined in the 1990s, “We didn’t get the Government we voted for”—that self-deluding piece of constitutional chicanery—is the same slogan that the separatists have picked up and run with ever since. That is why we have to pause, step back and bring the whole nation into the debate. That is why I am uneasy about the rush to action to which we all find ourselves firmly committed, although of course we do have to honour the commitments that have been given.
I would like to try to be constructive, in particular to seek information from the Government to head off any threats that the latest devolutionary proposals create, because I think I see a potential impending problem. The core of what is contemplated now is the raising of a higher proportion of what the Scottish Parliament spends from direct taxation by it, instead of from a grant from the Treasury. There will of course be a read-across in due course to Wales and Northern Ireland. Of the variations on offer, I support the Strathclyde commission’s proposal to transfer the whole of income tax as it forces the issue directly towards the pockets of those who will have to pay. It will be a democratic stimulus. But my concern is this: I do not understand how it can possibly work. The funding system for public expenditure in Scotland is much misunderstood, in particular the Barnett formula. A formal submission from the Scottish Labour Party to the Smith commission referred to the “Barnett grant”. But there is no such thing as a Barnett grant. It does not exist. Barnett is a mathematical formula—no more, no less. It has no funds to grant. The funds come from the Treasury’s Scottish block grant, annually disbursed. The block grant is the key to the whole thing. The baseline of that block grant is not recalculated every year except to take account of relative population changes. Rather, it is the accumulated mass of past settlements and favours won for Scotland by past administrations, to which is added a new sum each year. It takes no account of relative need. The disbursement of that annual sum is where the Barnett formula comes into play.
I will spare your Lordships the details of how the mathematics of the formula works. It is intended to, and it does, erode gradually—very gradually—the excesses contained in that grant. In due course, it will become increasingly irrelevant as the block grant itself is cut into. It is the block grant that enables Scotland still to spend much more per head than England on many public services, and England and Wales are right to feel short-changed. It is the block grant that is now about to be hacked into by the 10% income tax provision in the Scotland Act 2012, not yet implemented, and by whatever further devolution of taxation the Smith commission decides on.
I wonder how the product of that 10% income tax and future tax transfers will be calculated and the block grant therefore cut. The impact of that and the further tax transfers proposed could be substantial, reducing the block grant by a large amount. Out of date though it is, and largely irrelevant as a true measure of relative need, the block grant is a pot of gold compared to the uncertainties that lie ahead with its replacement by Scottish income tax. The tax base in Scotland is weaker than in England. There is a larger public sector and correspondingly smaller private sector. With the machinations of the nationalists stirring up uncertainty and loss of confidence, that is likely to get worse. Investment decisions and productivity look endangered just when they will need to be enhanced. But the cushion embodied in the block of some £4 billion, which Barnett does not touch, could now evaporate along with much of the block. The consequences for current spending levels and future taxation could be extremely serious.
I have long argued that the surplus that has built up in the Scottish block grant should be addressed to bring fairness to the rest of the United Kingdom, but in the context of tax changes now facing us, we urgently need clarity on that potentially very difficult issue. What plans has the Treasury to erode or retrieve part of that £4 billion? Does it plan in some way to identify and hypothecate spending within the reducing block, thus second-guessing how the Scottish Parliament might spend it? Then the block grant would no longer be a block grant.
I ask my noble and learned friend to tell the House how that transition will be managed. What will happen to that £4 billion cushion that I referred to? It is an excessive figure, but some of it is deserved and, at the least, a transitional period is needed if it is to disappear. Will there be what is urgently needed across the whole United Kingdom: a new, needs-based study of relative need and new arrangements introduced to meet what will be fair and just forms of support, once the facts have been accurately established? The matter is now becoming a burning issue.
That brings me back to my central theme. It is only by establishing fair and balanced systems and powers of government across the whole United Kingdom, varying in detail but harmonised in their underlying principles, that we can hope to achieve the stability that will secure the long-term future of the United Kingdom.
Baroness Liddell of Coatdyke (Lab)
My Lords, more than 2 million people in Scotland voted no; almost two to one. That is where the mandate lies. The people of Scotland wish the United Kingdom to remain united. We must be very cautious in our deliberations that we do not jeopardise that. Some of the issues raised since the devolution referendum put that in peril.
Let us start with English votes for English laws, following what the noble Lord, Lord Lang, said. It is very difficult to have English votes for English laws because of something called the Barnett consequentials. I will not go into the detail of the Barnett formula—I have only six minutes and it has taken me about six years to understand it—but the key issue is that we must not have two levels of Members of Parliament. That is absolutely essential. We begin to destroy the United Kingdom if we go down that route.
The other issue, again taking up a point from the noble Lord, Lord Lang, is about proposals for the devolution of taxation. One of the key issues in the referendum was the pound; it was central to the campaign. I should be very grateful if the noble and learned Lord, when he is summing up, could explain to me how a currency union, which is what sterling is, can operate without a fiscal union as well, leading to proper monetary union. We must be very careful that we do not scupper that.
If you read the Scottish press and look at the atmosphere in Scotland, you would think that no had lost. We have a responsibility to every one of those 2 million to recognise the mandate that they have given us. They were the silent majority. The noble Baroness the Leader of the House referred to how wonderful the devolution referendum had been with the high turnout. Frankly, it was the worst election I have ever seen. It was divisive, it was aggressive, it was thoroughly unpleasant and it did not represent the good people of Scotland, whom we saw weeks beforehand at the Commonwealth Games welcoming the world. And, yes, in some places there was an anti-English feeling, and Mr Salmond and Ms Sturgeon were the joint architects of that.
The division is having an impact even yet on Scottish businesses. Some of your Lordships will have seen the analysis of Standard Life the other day recounting their strengths, their opportunities and their weaknesses, and the risk still being independence. The noble Lord, Lord Empey, was absolutely right to say that we are going at this the wrong way round. This is piecemeal, reacting in the space of weeks to a situation that has taken generations to build up. The start of this long progress towards devolution may have been 300 years ago, but in my lifetime it was when two royal commissions were published—Kilbrandon and Wheatley. They were done separately; if they had been done together, the outcome would have been very different indeed.
As we move into this next phase of looking at the consequences of devolution, I would like us to concentrate on how we bring our society together. Some of that is bringing the business community together. Some of that is recognising that women very clearly voted for no. I had never gone to someone’s door and had someone say to me, “I’m voting yes”, and then shake her head and say, “I’m actually voting no, but I’m scared to say that I’m voting no”. There was a silent majority that was frightened to say how it was voting. I know of one lady who put yes stickers on her car because she was frightened of getting a stone through the windscreen, despite the fact that she was voting no. We must bring society together. We had the appalling situation of Louise Richardson, the principal of St Andrews University, being bullied by the First Minister’s office to support devolution. That is against everything that devolution is about.
I realise that these are difficult issues for all the United Kingdom. There is a democratic deficit in this country, and it applies to England. The way to resolve it is not with a sticking plaster; it is by looking in depth at the issues that we have to confront and by being confident enough about the strength of the union. We were all far too apologetic about the union. It was a great support to all of us who were involved in the campaign to receive messages from down south. I am in front of my noble friend Lady Quin, who was on the doorsteps more than I was, and my noble friend Lord Soley, who was very active in getting the English vote together. Let us not squander the benefits of the union. It has brought us together and served us well for many years. Do not let those who are doing a lap of victory in defeat undermine the union by the back door. We have a responsibility to stand up and defend it.
This House has a role to play. A constitutional convention sounds like a very good idea, but, frankly, what I would like to see is a royal commission on the constitution that looks in detail at the devolution settlement and at the role that your Lordships’ House can play in that as a House that represents and has the potential to represent—hopefully, directly elected—every part of the United Kingdom, with the background, experience and knowledge that this House brings together.
I keep hoping to escape Scottish politics—I went to the other end of the world to escape it—but thank goodness the people of Scotland made their voice known clearly and without question. We must not prevaricate. They have the mandate, which is for the union of this country. We must not squander it.
Lord Steel of Aikwood (LD)
My Lords, it is a particular pleasure to follow two former Secretaries of State for Scotland in this debate, given the important speeches that they made.
I begin by echoing something that was said by the Moderator in the sermon during the reconciliation service at St Giles’ Cathedral. He pointed out that despite the flaws, which the noble Baroness was quite right to mention, the fact is that the turnout produced an enthusiasm for political discussion and debate in Scotland that we have not seen before. It was 84%; we have not seen a turnout like that since my by-election in 1965. That gives me the chance to say how proud I was that the Scottish Borders was the area that produced the strongest positive no vote in the referendum—apart, of course, from the Orkney Islands, before my noble and learned friend intervenes. However, I discount Orkney because I think that if there had been a yes vote, they would have followed that by voting to go back to Denmark. On the mainland of Scotland, the borders had the highest turnout.
The immediate consequence of the referendum is the appointment of the Smith commission. I am perhaps a little more optimistic about it than many others are. I know that it has been given a tight timetable but my former constituent, the noble Lord, Lord Smith, is an extremely able and patient man. More importantly, I notice that each of the four political parties has appointed to that commission people of good common sense. I include in that the SNP because while it could have produced some wild cards, both John Swinney and Linda Fabiani, who I know from my time in the Scottish Parliament, are sensible people who will work with the others in that commission to try to produce a consensus agreement. It is perfectly obvious that no political party will emerge from that commission with everything that it wants. That cannot be done but if there is good will in that commission, which has certainly got off to a good start, there is no reason why it cannot come up, in a very few weeks’ time, with a package of further measures amounting to the maximum of home rule consistent with common sense.
Going beyond that, we have to look at what happened on the morning after the referendum. The Prime Minister made a great mistake by coming out into Downing Street at seven o’clock in the morning. Nobody, not even the Prime Minister, should be out at seven in the morning making pronouncements on anything, in my view. I am glad that my noble friend Lord Ashdown is not his place because I used to stop him phoning me at 6 am. In fact, I gave a general instruction that nobody was to phone me before 10 am, which is a much more sensible approach. However, it was a disastrous statement that the Prime Minister made at 7 am. Trying to link the immediate issue of further powers to Scotland with the English question was a serious error.
However, we have the report of the McKay commission, which was published some years ago and has been around a long time. It proposed simply that there should be an English, or an English and Welsh, Grand Committee. I see nothing wrong with that. My noble friend Lord Tyler was right to say that it might just be a talking shop but I was a member of the Scottish Grand Committee in my early days, which was a talking shop but quite a good one. We had debates on our own issues and dealt with the early stages of legislation, although at the end of the day the whole House of Commons had a vote. There is no reason why an English Grand Committee could not be composed on the same basis.
Admittedly, in the early days of the Scottish Grand Committee we had conscripted English members to make up the party balance. That was madness; they were usually appointed by the Whips on the basis of their being guilty of misconduct. They would say, “Two days on the Scottish Grand Committee for you if you don’t turn up for the three-line whip tonight”. Eventually, they were abolished. My noble friend Lord Hamilton, who is not in his place, claims not to remember an episode which brought the conscripted members to an end but I remember it. We were having a debate on tourism in Scotland and, to our horror, Mr Archie Hamilton MP got to his feet. This was unheard of, as the conscripted members were not supposed to speak. He began his speech by saying, “I recognise that by intervening in this debate, I run the risk of not being appointed to this committee again”. That was what led to the end of the conscripted members. In its latter years the Scottish Grand Committee, as my noble friend Lord Forsyth will well remember, operated without a government majority. That did not do it any harm. It was a perfectly workable instrument, as I believe an English Grand Committee could be, too, without upsetting the basic nature of our constitution.
In the end, we will have to take a long-term look at our systems of government. I am one of those who strongly support either a constitutional convention or, as the noble Baroness suggested, a royal commission. I do not know which would be the better instrument but it would need to take time. If you count the pre-period of the Campaign for a Scottish Assembly, then the Scottish Constitutional Convention, of which I had the honour to be the joint chairman, took nearly 10 years to come up with the devolution proposals. We cannot even pretend that we got those 100% right. It is not a quick-fix issue. I believe that we have to move in a more federal direction. That is where a replacement for this House—a senate elected by the component parts of the United Kingdom—makes good sense. It needs all parties, including my own, to rethink their policies on this so that we come up with a proposal for a proper United Kingdom Parliament, where the upper House really represents the component parts of the United Kingdom.
Out of the Scottish referendum can come good, and I am more optimistic than perhaps some others in this debate. I wish it well.
Lord Hope of Craighead (CB)
My Lords, it is a very real privilege to follow the noble Lord, Lord Steel of Aikwood, who has done so much to inform the debates in this House. I am sure that many noble Lords will be grateful for the note of optimism which he has sounded.
When I spoke near the end of the debate at the end of the summer, when we were still wondering what the result of the referendum would be, I spent a little time trying to inject a note of caution. It seemed to me that there was a real danger that, if the vote had gone the other way, things would have moved extremely fast, to the timetable that Mr Salmond was going to set for us, and we would not be in a position to resist whatever demands he was going to make. Of course, the vote has gone in the other way—to preserve the United Kingdom—but I still feel a sense of unease about the commitment that was made in the closing days of the campaign. In a way, that is playing into the same trap where we find ourselves with a commitment to achieve a great deal within a very limited period of time.
I am sure that the noble Baroness the Leader of the House was right to underline the commitment that was given, because it would be quite unthinkable, as the noble Lord, Lord Tyler, said, to withdraw from that now. We have some reasons for comfort, some of which were mentioned by the noble Lord, Lord Steel—in particular, the commission which the noble Lord, Lord Smith of Kelvin, is chairing. We can have absolute confidence in the ability of the noble Lord, Lord Smith, to chair that commission. He has made it clear that we should leave the commission to get on with it. He is assuring everybody that the essential is that each of the participants around the table should have the authority to agree what can be agreed.
There is a reason for unease about that, however. Not everything that everybody is asking for can be agreed, and there will certainly be things left lying around which the Scottish National Party will be asking for. I urge caution again that we do not move too fast in giving way to whatever it is suggesting. The whole point of the commission is to assume, as indeed the voters told us, that Scotland remains part of the United Kingdom. That is one of the essential principles. We can draw comfort from that. But there we are; we have to hold firm to whatever the noble Lord recommends at the end of his discussions.
There is another reason for comfort, and that is that we have in existence a framework within which the result of the commitment can be delivered—that is, the Scotland Act 1998. It is a well tried system, which at least has the advantage of a system within which things can be adapted, according to some adjustments of the Schedules that set out the reserve powers and so on.
That is under the overall supervision of the Supreme Court, and perhaps I might just say a word about that. An essential part of keeping the devolved systems within the United Kingdom was that, ultimately, should there be an issue about the compatibility of legislative measures, it would be decided by the United Kingdom Supreme Court. I notice that one of the points being made by the Scottish National Party is that it wants to abolish all appeals to the Supreme Court—all appeals, not only civil appeals but also appeals under the devolved system. There is a great danger in that. I hope the Minister will assure us that the position of the Supreme Court as the ultimate court for deciding these issues will remain, as it is part of the United Kingdom structure.
This morning the Deputy First Minister was quoted as saying that the United Kingdom is just,
“a family of nations, not a unitary state”.
There is something in what she said, but it is certainly not the whole truth. The whole truth is that the UK is to a very large degree a unitary state because of the structures that hold it together: Parliament—these Houses—the Supreme Court and the other institutions that exist. No doubt the Scottish National Party wishes to separate them, which is why the proposals about the Supreme Court are there, but we must hang on to the idea that the UK is united in various essentials; it is not just a family of nations, as we are being led to believe.
As for the future, I feel, as others have been saying, that we have to move forward with some kind of commission to decide how the structures throughout the entire United Kingdom have to be designed. Again, I see the Supreme Court as having a vital position at the end of whatever package may be designed, but we have a framework that could be borrowed and used for England as well as the other parts of the UK. The devolved systems give some kind of sign as to the kind of framework that might be used. Mention was made by, I think, the noble Lord, Lord Tyler, of other countries that have systems of this kind. The South African constitution is another where you see a schedule with various powers that are devolved to the provinces, of which I think there are nine. So these structures can be used. It is not my position as a non-politician to say whether or not that is the right way forward, but we have some advantages on which we can build.
We may find as a result of the 2016 elections in Scotland that the SNP once again moves back with an overwhelming majority, and that will almost certainly result in a demand for another referendum. I hope that we do not go down the line of the Edinburgh agreement and the Section 63 order that followed it. If there is to be any discussion of a further referendum, surely that must be done in both Houses by means of primary legislation so that it can be fully debated in the interests of everyone—above all, people in England, Wales and Northern Ireland, who have a very clear interest in what goes on in Scotland.
Lord MacGregor of Pulham Market (Con)
My Lords, I am hugely relieved by the clear decision of the Scottish voters against independence. The consequences if the vote had gone the other way would have been severe indeed for the Scottish economy, but also for the rest of the UK in terms of the economic implications, currency, the division of assets and liabilities, debt, defence, the EU and international bodies and the need to tackle all these issues when we have so many other issues to deal with, not least the continuation of the economic recovery. It would have been severely disruptive and difficult.
We must all confine ourselves to a small number of issues, and I wish to concentrate on two: English votes for English laws, and issues around tax and expenditure, including the Barnett formula. As the Prime Minister, the Government and my noble friend on the Front Bench today have made clear, this is fundamentally a question of fairness. It has nothing to do with “morally wrong”. What is morally wrong about fairness? Frankly, we all know that it is not about morals; it is purely about politics. I believe that that is a very important point.
I shall speak first about English votes for English laws. I have just looked up the Hansard of one of the earlier debates that we had in the House of Commons on devolution shortly after I entered Parliament in 1974, a Scot representing an English constituency. It was in January 1976 on the then Labour Government’s proposals for devolution in Scotland and Wales. A number of colleagues who are now in your Lordships’ House spoke then, and it is interesting to see how many of the points made then are still fresh today. I shall give just one quote from my own speech. I said then:
“Although I accept the list of subjects which”,
the Government,
“have put forward for devolution to the Scottish Assembly … it seems that there will be a growing demand, which is right in logic and fairness, for the same devolution to be given to England. That is a demand that must grow. We have already seen much evidence of that during this debate … There is the feeling that the Scottish people will have a power over the subjects that are devolved to them that is almost total and complete … whereas Scottish Members will be totally involved at Westminster in the discussion of issues that affect England”.
I went on to suggest two possible solutions, and concluded:
“Let us remember that the English also have their rights”.—[Official Report, Commons, 15/1/76; cols. 676-77.]
Tam Dalyell was listening intently throughout that debate and henceforward argued constantly about what became known as the West Lothian question. It must be solved now. We surely cannot continue with a situation in which a Scottish Parliament can have total control over health, education and so many other crucial issues in Scotland—transport, et cetera—while in England, Scottish MPs can continue to vote, sometimes conceivably having the crucial deciding votes, on these same issues in England. It is relevant in this context to note that the Scottish population is 5.2 million while the English population is 53.1 million. In a vote where the Scottish MPs voting on a purely English matter could be crucial, what is fair in that for the 53 million?
I believe that the solution to this lies in the proposal for the Speaker to be able to denote a bill in the UK Parliament as an English Bill and that only English MPs would be able finally to vote on that matter.
Lord Lea of Crondall (Lab)
The noble Lord is discussing a very interesting point. Would it be fair to characterise it as a UDI for England approach, although he might not like that phrase? Would that make UDI for Scotland less likely or more likely?
Lord MacGregor of Pulham Market
It is really quite simple. If the Scottish people have Scottish issues, as delineated now, voted upon entirely in the Scottish Parliament, then the same ought to apply to purely English issues in the English Parliament, and it should be English Members of Parliament who should vote on them.
I entirely agree with the Leader of the House in the other place when he said:
“We must establish the principle that when this House makes decisions affecting only the people of England, or only the people of England and Wales, those decisions should be made only by, or with the consent of, the MPs elected to represent them”.— [Official Report, Commons, 14/10/14; col. 176.]
It is high time that we did this.
I turn now to tax and spending, both complex and crucial issues. I have just a few quick points. I hope that we can soon have a full debate on all this. First, there are good arguments in favour of more devolution of various tax measures, provided that tax and spending are taken together. In principle, having the possibility to raise or lower taxes, while at the same time recognising that there are spending consequences, is attractive. Borrowing limitations must also be taken into account, as should the consequences for UK tax revenues.
Secondly, what cannot be accepted is the freedom to lower taxes and decrease revenue, with the expectation of consequential upward adjustments in the block grant from the UK Exchequer at the same time.
Thirdly, this raises the whole question of the block grant and the Barnett formula. I well remember the discussions on the Barnett formula in 1976, when the noble Lord, Lord Barnett, was under great pressure to reach conclusions on the expenditure settlement. He has said that, because of that pressure, he had to find a solution to one particular part of the expenditure arrangements and that it was a temporary expedient, never expected to last; he is strongly opposed to its continuation. There is a strong feeling in the country—I have long felt this in East Anglia—that the formula is unduly favourable to Scotland. Current figures show that public expenditure per head in East Anglia, where I come from, is £7,865, in England £8,529 and in Scotland £10,152. I believe that this issue must be addressed.
Fourthly, many have argued that the formula should be adjusted to a needs basis. I have long argued that myself. A committee of this House reporting in 2009 argued that,
“the Barnett Formula should no longer be used to determine annual increases in the block grant for the United Kingdom’s devolved administrations … A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs should be introduced”.
I actively believe that this should be introduced and that there should be a transitional arrangement.
In conclusion, I believe that this must all be tackled in the negotiations and that the Barnett formula should go at last. This will be a critical part of the negotiations; I hope that this House will have another opportunity to debate it before they are completed.
Lord Prescott (Lab)
My Lords, in the 45 years that I have been a Member of this Parliament, I have been involved in the argument for decentralisation and devolution and strongly believe in them. I have taken part in every referendum campaign in Scotland and Wales and, indeed, in the north-east, where I introduced and failed to get my Assembly. All of them, after a first refusal, were voted for a short time later in a referendum. The point to draw from that is that the public did not believe there were sufficient resources or powers in what was being offered to them in either the Scottish Parliament or the Assemblies. That is the first lesson.
We are always behind public opinion on devolution and decentralisation. The evidence from all Governments is clear. It is clear to me. When I argued in the Labour Cabinet for more resources and powers to be given to the North East Assembly, I could not get them. They were fixed in a central system, and very few of my colleagues were prepared to give the north-east the powers it was entitled to, and which they were quite prepared to give to Scotland and Wales. The people saw that I was offering a consultative body with quango powers—that was all it really was—and they rejected it. It was another form of local authority. The lesson to learn from that is clearly that we should understand the problems involved and find a proper solution.
Some of the discussions, and the questions posed by the noble Lord, Lord Lang, about tax are fundamental. The Barnett formula always comes into it. I remember arguments in the Cabinet about whether the Barnett formula is fair. In this referendum, the argument was that Scotland gets far more per head than England. That is an argument about having a fair system, as the noble Lord, Lord Lang, said. That means that we really have to look at that taxation proposal.
Looking at the regions, the population of the north alone is 9 million and 83% of our population falls under central government. You want to throw up your hands. In the north, we are not very happy about Tory Governments, just as the Scots were not. This business of English laws and English votes is just a political fix. It is nothing to do with redistributing power, which is what devolution and decentralisation are about. Indeed, the McKay commission suggested that it was told that it could not deal with finance. The White Paper before us does so in a fundamental and radical way, with changes in our tax. When people see how money is distributed between nations and regions, we will begin to get the problem of people seeing that more is being given in a very unfair way. That was part of the argument that came out of the Barnett formula. The commission left that alone. The McKay commission was concerned only with governance and how you identify an English or Welsh person voting in the Commons Chamber. God knows what we would do in this Chamber, but let us leave that aside.
The commission deliberately said that it was not going to deal with English regionalism because it was firmly rejected in the north-east. In all those referendums in Scotland and Wales there was consultation. That was mentioned by the noble Lord, Lord Steel, who said that that discussion lasted 10 years. We have not had two days on English votes, with the Prime Minister then coming out and making that point. He promised a vigorous discussion on decentralisation and alternatives for the English regions. What discussion took place on that? I know it was in the manifesto, but you need to consult the people. If there is a lesson that comes from Scotland, it is that the people took a very strong view and participated in a way that we have not seen anywhere else in this country, with the type of discussion that took place. The English regions are surely entitled to have the same discussion, to find the alternatives and how they fit in.
I hear another argument coming up. I know Tam Dalyell well. He was on one of the delegations and we worked together on the West Lothian question. Why do we not approach it the other way? Why not distribute the powers and resources mentioned in the White Paper and the Government’s proposals to the English regions? They can all be fitted in. Whether in health or education, adjustments can be made. It may be a challenge within our constitutional framework, but there would not then be a West Lothian problem.
Certain parts of the UK are being given far greater resources and powers. That will be resented in the English regions. I am from the northern region, where are 9 million people living in an area stretching from Liverpool to Hull, and on to Newcastle. That is a far greater number than in Scotland, Wales and Northern Ireland put together. What would be fair and have the greatest consensus would be a settlement with fairness built in. We talk about it, but we do not deliver it. Great damage is being done to decentralisation and devolution when the Prime Minister connects the English problem, as he would see it, to the Scottish promise, the Scottish vow. That will undermine the consensus. A system must be found to achieve that fairness.
A year or so ago, the Prime Minister promised a vigorous debate. Has the debate in the Cabinet committee now simply been what has been announced in Parliament or outside No. 10 Downing Street? Or are Members of Parliament and people in constituencies going to be given a say in deciding what is going to happen, as they had in Scotland and Wales? That is the least that can be done for the English regions. If not, there will be resentment; there will be a revolt—a call for the same treatment as there was for Scotland.
Concentrating on the northern region, 9 million is an awful lot of people. The Government announced that the Northern Way that I introduced in 2004 was becoming the Northern Powerhouse. They cancelled it when they came in and have now rebranded it. The north is not just about economics, it is also about accountability. These are essential issues but, above all, it is about consensus. This cannot be achieved two days after a Number 10 statement; it can only be done by consulting the people. We demand that right. We want a proposal in the White Paper that the Government will consider a reform of the English regions in some way. This must be on the agenda, as it was with the Scottish referendum. We support devolution for Scotland and in Wales, but we are not going to allow it to advance to our disadvantage and with the contempt of this Government.
Lord Maclennan of Rogart (LD)
My Lords, the referendum in Scotland was ultimately satisfactory in that it gave us time to consider how to reform our constitution in a fairer way. The anxiety that I felt was in part due to the possibility that Britain would be broken up and we would cease to have influence on international events affecting our future. It seems that less consideration has been given to the part we play in global government, and to the susceptibility of this country to decisions taken against us, than to looking at the navel. We need to contemplate that as well as the fairness of the arrangements between theusb different nations and regions of the United Kingdom. Consequently, I am concerned that the decision to appoint the Smith commission to consider taxation and care has been taken with such a tight schedule. It seems, however, that it is at least possible that the implementation of the Smith commission recommendations will have more time, since the publication of the Bill to implement these matters will not be the date on which conclusions are reached.
The Government have said that the Bill will not necessarily come into effect before the next general election, and that will give a certain amount of time for scrutiny—the proper scrutiny that we need to give. I take the point that the noble Baroness, Lady Royall, made from the Front Bench opposite: we need to rethink our constitution. The scrutiny should not be done by individual political parties; we need a constitutional convention, which should be a high priority. I do not see any reason why the three main British political parties cannot now set up such a convention. I do not think that it should go on for ever, but it should certainly have enough time not only to take into account the outcome of the next general election and to reflect on the Smith of Kelvin recommendations but to consider subsidiarity. What issues can be decided in national or regional Governments and Parliaments that do not adversely affect the other parts of the United Kingdom? If we grant huge tax-raising powers to Scotland, it may also give the power to England, which is considerably wealthier than Scotland, to distort the distribution between the member nations and regions of the country.
I recommend that the three main political parties get together now and agree on how to involve the general public in such a convention and how to ensure that it is not just a political sword fight, and that information is given by those who are expert in all the areas that this needs to involve. We have heard the suggestion from the noble and learned Lord, Lord Hope of Craighead, that we should look again at the judicial consequences. I totally agree with him in criticising what was said by Lord Salmond—by Mr Alex Salmond, I mean—about appeals to the Supreme Court. If we are to have a national constitution, it should certainly be subject to review by such a judicial process.
I cannot urge more strongly the need to make the decision about the constitutional convention now, well before the election, when people can jockey for position. It should be made now, and the people participating in this should be drawn from a wide cross-section of the community and nation at large.
Lord Turnbull (CB)
My Lords, in my 35 years in Whitehall, I spent more time on public spending than on anything else, so the Barnett formula was never far from my thoughts. It was therefore with some alarm that I heard that “The Vow” by the three party leaders referred to continuing the Barnett formula. If that means continuing it as it operates now, that is an outcome that I would strongly oppose.
However, the actual text of the vow may offer some reassurance and a hint of a way forward. The front page of the Daily Record of 16 September says:
“And because of the continuation of the Barnett allocation for resources, and the powers of the Scottish Parliament to raise revenue, we can state categorically that the final say on how much is spent on the NHS will be a matter for the Scottish Parliament”.
Thus, if Scotland has a significant control over its revenue, it will ultimately control what the level of spending is on any devolved service. That condition can be satisfied by a wide range of Barnett formulae. It does not commit us to precise figures or method of calculation.
Note also a reference earlier in the vow to,
“sharing our resources equitably across all four nations”.
There is no way that the Barnett formula, as currently operated, can be regarded as “sharing our resources equitably”. Its main flaws are, first, that it adjusts the population proportion with a long lag. If, as is the case in Scotland, the growth of population is slower than in the rest of the United Kingdom, Scotland is always over-rewarded. Secondly, this flaw is compounded by the fact that, when eventually there is an adjustment to the population ratio, it applies only to the increment of spending in England at the next spending review; no attempt is made to correct past overpayment.
The best analogy I can produce is from income tax. Someone sends in a tax return and the inspector finds that the coding has been too generous. But instead of recouping the error in the next year, the inspector applies a new, less favourable coding, but only to the change in income from this year to the next. In this way, all the previous errors, which in the case of Scotland are all in the same favourable direction, are allowed to accumulate. They have now reached grotesque proportions.
Scottish public spending is now £1,600 per head greater than in England and £500 per head greater than in Wales. These are huge sums in relation to income per head, of the order of £20,000 a year. This disparity funds policies in Scotland, such as care for the elderly, university fees and prescription charges, which are simply unaffordable elsewhere in the UK. To put it another way, a Scottish family of four receives the same social security benefits as an English family, but on top receives an extra £6,000 per year in what we used to call the social wage.
What is the explanation for this? The answer, in a word, is appeasement. Over 30 years, neither Conservative nor Labour Governments wanted to confront voters in Scotland. When the House last considered this in the committee chaired by the noble Lord, Lord Richard, in 2009, it was suggested that the way forward was to relate the transfers to needs. But, as Mr Salmond—not Lord Salmond—frequently boasted, Scotland is a prosperous nation. Scottish Government figures claim that Scotland has a GDP per head 11% higher than that of the United Kingdom as a whole. Wales, on the other hand, has a GDP per head of about 25% lower than the UK average.
Had I served on that committee in 2009, I might well have signed up to the recommendation to move to a needs basis. In my time at the Treasury in 1993, we investigated that, although it came to nothing. However, I draw noble Lords’ attention to the analogy of the rate support grant, which is a needs-based thing, which turned out to be a statistical nightmare. I no longer think that this needs basis is necessarily the right answer when the freedom for Scotland to raise taxes is being expanded. Instead, we could move to a much simpler system under which all nations get a block grant of the same per capita amount and the devolved Assemblies are given the freedom to top that up, or not, as they please. In the process, as the noble Lord, Lord Empey, mentioned, they would assume a proper accountability.
The other change is that the population ratios—
Lord Forsyth of Drumlean
I am grateful to the noble Lord, and I agree with everything that he has said. Is not the problem with his recommendation that there would be a huge gap in the Scottish budget, which would mean that Scotland would end up as the highest taxed part of the United Kingdom and worse off in terms of public services?
Lord Turnbull
Not necessarily. Scotland would have to bring its spending into line with England and it would be getting the same grant from the centre as England. My recommendation corrects a favourable anomaly; it is not impoverishing Scotland compared with England.
Lord Purvis of Tweed (LD)
I am grateful to the noble Lord, and I do not intend to take up too much of his time. When he refers to England, is he including a calculation for London, and is he also including what is currently statistically considered as non-identifiable expenditure for defence and how that is distributed across the different nations?
Lord Turnbull
I was referring to identifiable expenditure, not defence expenditure. The latter, of course, runs at a very high level in Scotland, with our major bases there. I have not addressed the issue that the noble Lord, Lord Prescott, raised, which is how you deal with separate regions within England. That is a further thing that we have to address.
The other change is that the population ratios must be kept much more up to date than they have been at present. My plea, therefore, is that we start a new relationship which gives proper weight to the principle in the vow of “sharing our resources equitably” across the whole of the United Kingdom.
Lord Selkirk of Douglas (Con)
My Lords, I enjoyed the noble Lord’s lucid speech and I have no doubt that it will be noted by the commission of the noble Lord, Lord Smith of Kelvin. First, I should mention that I had a past interest as a Member of the Scottish Parliament. I remember the night of that election very well because those counting the votes said that they had had enough at 3.30 in the morning. As a result, those of us in the Lothian region and Edinburgh had to await our fate being determined for a great many more hours. I was one of the last three in Scotland to be elected. The other two were my noble friend Lord Steel of Aikwood and Britain’s first Green parliamentarian, Mr Robin Harper.
I should also mention a second interest. I served as a member of the Government’s Calman commission, which recommended additional powers for the Scottish Parliament. The resulting Scotland Act 2012 included the power to set a Scottish rate of income tax from April 2016, as well as the powers to introduce taxes on land transactions and on waste disposal from landfill, replacing the existing UK-wide taxes of stamp duty, land tax and landfill tax from April 2015.
With that background in mind, I rise to highlight one particular issue—the supreme importance of the guaranteed timetable set out for transferring further powers to the Scottish Parliament. That was endorsed by the three party leaders as part of the vow, published on the front page of the Daily Record. The details of the timetable for action had already been put forward by Mr Gordon Brown in his extremely powerful intervention in the referendum campaign. However, no sooner had the people of Scotland expressed their desire to remain within the United Kingdom clearly and decisively than the leader of the SNP, Mr Alex Salmond, began to construct a narrative of betrayal. He accused the Prime Minister of backtracking on the pledges made, and he was at it again on television last week on “Newsnight”, claiming:
“Yes of course he is trying to renege on the promises he has given. He is a Tory Prime Minister. That is what they do”.
These unfounded allegations go beyond even wishful thinking. They are pure fantasy because not one of the three leaders has actually reneged on anything. I hold in my hands the Prime Minister’s speech on 19 September. These are his words:
“To those in Scotland sceptical of the constitutional promises made, let me say this. We have delivered on devolution under this government, and we will do so again in the next Parliament.
The 3 pro-union parties have made commitments, clear commitments, on further powers for the Scottish Parliament. We will ensure that they are honoured in full”.
A Command Paper has been published on time and, although the timetable is tight, I fully expect that the heads of agreement to be drawn up by the government commission of the noble Lord, Lord Smith of Kelvin, will be made public by St Andrew’s Day, as promised. It has suited the First Minister of the Scottish Government to claim that the Scottish process could be knocked off course as a result of the Government’s plan to come up with proposals for constitutional change in other parts of the United Kingdom.
However, this attempt at obfuscation flies in the face of the facts. Mr William Hague, the leader of the House of Commons, who is chairing the committee looking at possible constitutional change in the other House, has stressed on television that every commitment made with regard to Scotland,
“has so far been kept and will be”.
Even more importantly, he has said that the two matters are not tied in the sense that one is dependent on the other. In addition, all five party leaders who met last week around the table at the commission chaired by the noble Lord, Lord Smith of Kelvin, tried to agree on a way forward for Scotland. They made it clear that enhanced devolution for Holyrood should not be conditional on any other plans for the rest of the UK. In view of Mr Salmond’s determined attempt to cast doubts on the execution of the promises made by the three party leaders, I would be very grateful if the Minister would confirm once more, in the clearest possible terms, that the pledges made to the Scots people will be kept and that there will be adherence to the agreed timetable. It is my strong conviction that those serving on the Smith commission are persons of sincerity and ability. I noted that the noble Lord, Lord Steel of Aikwood, described them as persons of “good common sense”.
To misquote the late John Mackintosh, it should not be beyond the wit of humankind to produce a package on measures for further devolution in line with the referendum results. I would be very grateful if the Minister, who has also served on the Calman commission, will make it clear, beyond doubt, that promises made will be kept and delivered on time.
Lord Greaves (LD)
My Lords, I am sure the whole House regrets that the noble Lord, Lord Barnett, cannot be here today to reply to all the comments about his formula. We all hope he is keeping well. I remind the House of my current interests in English local government. I wish to associate myself fully with the remarks of my noble friend Lord Tyler. I found myself cheering on the noble Lord, Lord Prescott, for his advocacy for devolution in the north of England.
To the surprise of many, certainly in this part of the kingdom, the Scottish referendum showed the intense feelings that people had about the dominance—I will try to use not very emotional words—of London and south-east England in the economy of this country, in investment, the financial sector, political power, government, media and culture. Watching all this on television, it came across to me that the degree of dominance is even greater if you just take England, because Scotland already has a substantial amount of political and financial power based in Edinburgh. This dominance is clearly linked to the distribution of wealth, incomes and influence; it is what people used to call the class system. Nowadays we are supposed to talk about social inequalities and not use the word class. However, it is not just social inequalities; the linked and closely related geographical inequalities are part and parcel of it. People are beginning to understand this much better now.
In the later stages of the referendum, the Deputy Prime Minister led calls for devolution, decentralisation, even a degree of federalism, in England as well as in other parts of the kingdom. To our surprise and horror, at the same time, we suddenly had calls at 7 am. I agree entirely with my noble friend Lord Steel about the nonsense of making announcements at this time but it is all to do with 24-hour rolling news. Top politicians nowadays think they have to dominate the day’s news agenda and hope to get through to the next day when something else will have taken over as the latest media fad. However, we had the attempt to resolve the West Lothian question by the introduction of English votes for English laws or, to use its appropriate acronym, EVEL.
Therefore, we are presented with a choice: that is, devolution to England and EVEL, however it may be carried out, or devolution within England to the regions—the towns, cities and localities of England. To pick up a point made by my noble friend Lord Thomas of Gresford, when the Prime Minister and similar people talk about England, it is not entirely clear whether they are talking about England or England and Wales. In terms of legislation, it is nonsense just to talk about England. Perhaps, instead of EVEL, we should talk about “EWVEWL” or something like that.
You only have to look at a typical Bill, especially a longer one, that comes to your Lordships’ House to see that towards the end there is a clause entitled “Extent”. Most noble Lords probably do not notice it. It states which clauses will apply to the different areas when the Bill passes into legislation. It is always extraordinarily complicated. When we were in opposition and I was responsible for overseeing the Marine and Coastal Access Bill from the Liberal Democrat Benches, I had the help of my noble and learned friend Lord Wallace of Tankerness to deal with the Scottish clauses. That was all built into the Bill and extremely complex. A lot of a typical Bill applies to England and Wales. Sometimes it applies to the Welsh Office directly and sometimes it applies to permissive powers to the Welsh Assembly and Welsh Ministers. Some of it applies to England, Scotland and Wales; to England, Northern Ireland and Wales; or to the whole of the UK. It is always complicated. If there is a serious attempt to deal with English votes for English laws, the whole way in which legislation is dealt with will have to be reorganised substantially. I suspect that often we could end up with three or four Bills instead of one.
When we were writing the constitution for the new party on the merger of the Liberals and the Social Democrats, my noble friend Lord Steel once accused me of being a north of England nationalist. I am not a nationalist; I am a north of England home ruler. I want as much local decision-making in the north of England as we can get. The problem is that throughout England, including the north of England, there is absolutely no consensus about the direction in which we want to go. My noble friend Lord Steel reminded us that it took nearly 10 years for the Scottish convention to get to the point where the Scottish Parliament was set up. At the beginning, the parties taking part all had a general consensus of the general direction in which they wanted to go; namely, home rule of some sort for Scotland.
There is no consensus in the north of England. We talk about city regions, which are a blind alley in many places because huge areas of the north of England are not in city regions. Some people talk about local authorities having more powers, which is a good thing in the short term, and some talk about regional bodies for the north-west, the north-east or for Yorkshire. I would like to see one for the whole of the north of England. Bodies such as One North, which was set up by some of the big cities to look at the transport links, lead us in that direction. However, there is no consensus. Before we can start talking about what we want, we must have debate and discussion in the north of England and, I suspect, in other regions of England to get some consensus of where we are going and what we want before we can stand up and say, “Home rule for the north of England”, which is what I should like to campaign on.
Lord Lennie (Lab) (Maiden Speech)
My Lords, I speak for the first time in your Lordships’ House and do so with a degree of humility, nervousness and some trepidation. My particular fear is that this piece of prompt technology will fail part the way through what I have to say. If it does, I have no doubt that someone will rush from somewhere to my aid, which has been my experience thus far in this House at every turn, or every wrong turn, that I have taken. I pay tribute to all the staff, officers and Members of this House on all sides who have been generous and kind, and have welcomed me here. I also thank my two supporters, my noble friend Lady Armstrong and my noble and learned friend Lord Falconer, who is unable to be here today—I will come to that in a minute—for doing me the great honour of introducing me to the House on Monday. Both have been my friends and political allies for many years and I hope will be for many more years to come.
With regard to my noble and learned friend Lord Falconer, I have an important leak to reveal to the House. A confidential source has revealed to me that he has been approached by a leading publisher to write a book. The working title is “The Ten Apples and Ten Cokes a Day Diet”.
Lord Lennie
Noble Lords may have seen some pre-publicity about this in the Sunday Times this week. It was not just a puff piece—it was a strategically placed article. The plan is to publish this as a pre-Christmas stocking filler. The problem with the plan is, of course, that my noble and learned friend Lord Falconer, subject to his successful diet, can no longer fill a stocking, so the plans are somewhat in disarray as far as publication is concerned.
I start my comments about devolution. I am somewhat unusual in this House in that I have experience of an English region rejecting devolution of power. A decade ago, as my noble friend Lord Prescott has said, the north-east chose by a large margin not to accept my party’s kind offer of a regional assembly. At that time I was the Labour Party director in the north of England. It is often said that we are shaped by our experiences. Having to explain the north-east rejection to my noble friend Lord Prescott certainly helped shape me.
Despite that defeat, I believed then, and I believe now, that there is an appetite for devolution of government in order that we improve lives, or seek to improve lives, and increase opportunities across England. For devolution to succeed, however, we must understand the reasons for its past failure in terms of what happened in the north-east. There was a disconnect between politics and people. That fundamentally explained the rejection of the regional assembly. The opponents simply asked voters whether they wanted more politicians at more cost, meddling more in their lives. The answer was a resounding no, thank you very much.
I suspect that the climate for politics is less favourable today than it was then. I may be wrong, but that is my suspicion. For devolution to succeed, the distance and disconnect between politicians and voters has to be narrowed, not just here at Westminster but in councils too. After all, an out-of-touch political elite is equally offputting, whether clad in ermine or mayoral robes.
Devolution must not be something that politicians want to do to voters, but a change delivered with, by and for the people. Proposals bringing this devolution to English regions and cities must be judged not by how they solve the problems for political parties but by how they will make things better for citizens in every region of the country. There needs to be a convincing argument that devolution means government done at lower cost, with clear, tangible benefits to the electorate at large. That is a huge challenge.
How do we go about this? First, devolution in England needs to be considered purely on its own merits. Otherwise, voters will see English devolution proposals as the unforeseen or unintended consequence of the Scottish referendum. They will see politicians trying to apply a fix to a problem they themselves created.
Further, we need to be clear that English devolution and English votes for English laws—EVEL—are not the same issue. Today we have a hugely centralised English government; changing who votes on which legislation may be a good thing or a bad thing in reflecting an English will, but it devolves little power. It cuts no costs. It makes the delivery of government policy no more streamlined than before. If we want devolution, we surely have to look beyond the question of who votes in Westminster. That means that we must devolve the process of devolution. It is easy to say that you are in favour of devolution, but if your deeds undermine your words, you will fail to impress voters who you want to support your proposals.
We must reach beyond politics and ensure that whatever we put before the English voters commands public support from a broad consensus of civic society, who can then seek to reassure those who are suspicious of politics—and I believe that they are currently the many, not the few.
Finally, I would like to say that I chose the title of Longsands Tynemouth. It was featured in a photograph in the Times last Friday; your Lordships may have seen it. It is where I live; it is worth a visit; and if you go there, go to the wonderful beach bar, Crusoe’s. It is where I spend much of my family time.
My home region, the north-east, is engaged and energetic and sceptical of easy promises. Those are qualities that I shall endeavour to replicate to the best of my ability. It is an honour beyond measure to be one of those of all parties and none who will speak up for my region in your Lordships’ House.
Lord Hennessy of Nympsfield (CB)
My Lords, it is an honour to be the first to congratulate the noble Lord, Lord Lennie, on his fine and witty maiden speech. There will be many more occasions when your Lordships’ House will relish his wit and wisdom, his intimate knowledge of the north-east, and his great experience both of what makes a political party tick and of the trade union movement. I already sense a special sense of solidarity with him: he is a devoted supporter of Newcastle United, with the emotional rollercoaster that that brings—I see the noble Lord, Lord Beecham, nodding madly. I am a West Ham boy; I know how he feels.
I declare my membership of the All-Party Group on Reform, Decentralisation and Devolution.
Relief that we are intact as a United Kingdom is still surging through every one of my capillaries, nearly six weeks after we knew the result of the referendum on Scottish independence. However, it is a relief suffused with anxiety, for the referendum campaign showed just how brittle the union had become and how brittle it remains. Now, not only do we have great repair work to do in terms of the emotional geography of the United Kingdom but we find ourselves on a vast construction site for the remaking of multiple aspects of our constitution beyond the sculpting of a new constitutional settlement for Scotland. It is largely without plan, substantial forethought or consensus.
There is a critical, pivotal sentence in chapter 3 of the Government’s Command Paper of earlier this month, The Parties’ Published Proposals on Further Devolution for Scotland. It is this:
“Proposals to strengthen the Scottish Parliament provide an opportunity to reach a strong and lasting constitutional settlement across the UK”.
Perhaps I may offer just a few thoughts on what it takes to frame “a strong and lasting constitutional settlement”.
The coming extra surge of powers for the Scottish Parliament will require constitutional legislation of a fundamental and first-order kind, as will any serious moves towards greater devolution and decentralisation within the wider United Kingdom. Can we reach for the Gladstonian solution of “home rule all round”, with the predominance that that would give to an English Parliament serving more than 80% of our people? Can we somehow carve a surrogate English Parliament out of the existing House of Commons along the lines suggested in the McKay commission report of 2013? Should we follow the developing economic geography of several parts of the kingdom and foster the growth of city statelets? The possibilities are multiple and every one of them stretching.
First-order constitutional legislation, in my view, needs to meet certain tests. It requires durability and predictability in its operation once it has received Royal Assent. For that to be achieved, it needs to live and breathe in a stable yet sensitive relationship with the other adjacent moving parts of the constitution. There is a prior requirement if these tests are to be met: a high level of parliamentary and, by extension, public consensus. To achieve this takes thought, consultation, care and time.
I appreciate the need to move with some deliberate speed towards fulfilling the promises made to the people of Scotland by the three party leaders on the front page of the Daily Record two days before the referendum poll. Great responsibilities rest on the shoulders of the noble Lord, Lord Smith of Kelvin, and the five political parties engaged on the task of converting those proposals into workable practice. However, I fear the consequences of excessive rush, not just for Scotland but for those other parts of the kingdom that will feel the percussive effects of the vote to stay together. Every fibre of me sympathises with the party leaders’ desire to save the kingdom in the last days of the campaign, but placing a series of staccato pledges on the front page of a newspaper is not the most desirable way of refashioning a constitutional settlement that had been 300 years in the making.
We are in the rain shadow of a general election. The metabolic rate of the party competition is rising and will continue to rise. I regret that very soon after the referendum votes were counted, as the English question shifted from a rumble to a roar, political partisanship inserted itself over the matter of English votes for English laws, with the Conservative leadership making it plain they would make EVEL an election issue if Labour did not go along with the idea. That Friday was when the party leaderships should have risen to the level of events and met as fellow Privy Counsellors to agree that, alongside the Scottish timetable, a broadly based constitutional convention or royal commission should be created to range wide and deep over the constitutional questions facing our country.
In the debate on Scotland that we had in your Lordships’ House last January, the noble Lord, Lord Lang of Monkton, whom I am delighted to see in his place, said that we needed to learn once more how to do things together as a union. Here was a shining opportunity to do just that. We need a set of constitutional arrangements that will allow the constituent nations and regions of our United Kingdom to live in a condition of “mutual flourishing”—to borrow a phrase used by the most reverend Primate the Archbishop of Canterbury in a different context. For this we need a broader-gauge approach: to think high, to go wide, to fashion a settlement that will endure.
Has the moment passed for this? I think not. I do not know whether the will can be generated within our political leaderships to stand back, rise to the level of events, meet as Privy Counsellors and make a joint proposal for a constitutional convention or a royal commission, but there really is a glittering prize of a better governed United Kingdom to be grasped up there on the higher ground.
Lord Lyell (Con)
My Lords, I thank my noble friend the Leader for being here for this debate. I have attended many debates on Scotland and we have not had all the assistance and help that we shall get from my noble and learned friend Lord Wallace and have already had from my noble friend the Leader. This is one of the most important debates that I have attended in 50 years—I shall say that again: 50 years—in your Lordships’ House. Fifty years ago I was an apprentice accountant in that great city of Glasgow and I never imagined that I would have the chance to discuss what we are discussing today—the onward march of devolution and political developments in Scotland—but we have it and here I am.
I declare an interest as I live in the boondocks of Scotland. To the real happiness of the government Whips who have tried to find me, I live about one station before Vladivostok, but I manage to get here in 12 hours on the train each week. I spent the whole of our Summer Recess in rural Scotland. Day after day, the electronic media, both visual and aural, told us that this was a major decision. It was, but feelings ran very high and I certainly listened with great care and appreciation to the remarks made by the noble Baroness, Lady Liddell. In my little town of Kirrie—known to the rest of the world as Kirriemuir—never in my 74 years have I seen not one or two but four policemen at the town hall where the vote was taking place. It may have been an 80% turnout but, as the noble Baroness pointed out, passion and feelings of varying degrees were whipped up to, I might say, “Bash the English”. That was behind it all. Certainly, I felt that in my neck of the woods in Scotland and it really rather worried me.
Happily, things turned out very well on 19 September and since. What happened and what have we had since then? I am pleased that the noble Lords, Lord Foulkes and Lord McAvoy, are here, because the three of us frequently hear, when the men in dark blue have not done terribly well, “We were not defeated; it was the referee”. That has been the great cry of the yes voters, and we are still hearing it today. It has been gradually calming down, but it will be an ongoing battle, probably for the rest of my career in your Lordships’ House or elsewhere.
I was in the boondocks of Scotland. I was very lucky; fortunately, in Kirrie, they regard me as something of an intellectual—they are quite wrong—because I obtain and pay for a copy of the Financial Times. One of the most hard-hitting articles that I read was by the noble Lord, Lord Robertson. I warned him that I would mention him although I knew that he would not be not here today. He wrote the most devastating article for the centre pages of the Financial Times. He was speaking to a taxi driver in Glasgow who said, “I want to be part of the United Kingdom, but I am going to vote yes to give those so-and-sos south of the border something to think about. Anyhow, all the negotiations will be done by the likes of you”—that is, the noble Lord, Lord Robertson, Mr Darling and the rest. As the noble Lord, Lord Robertson, said, that is sheer brass neck.
I fear that that was what was appearing in the electronic media but, happily, not in the printed media. Two days later, I read another article, again in the Financial Times, which I have no hesitation in praising because it is read throughout the world. My friends in America and New Zealand know precisely what is going on, even without the BBC World Service. Martin Wolf wrote a searing article for the centre page, saying, “You had better take care in Scotland; I have a shock for the Scots if they were to vote yes”. He looked at the economic and political aspects throughout Europe if there were to be a yes vote.
Happily, it did not turn out that way. Professor John Kay, who I understand is a leading adviser to the Government of Scotland, wrote that, “nationalist sentiment” will not,
“be assuaged by the transfer of responsibility for housing benefit”.
There is an awful lot more to be done. He concludes:
“Effective political leadership and a strong economy are the only way to define the resentments expressed in current public opinion”.
I started, and will finish very quickly, to the happiness of the Whips, by saying that I commenced my apprenticeship in Glasgow. I am very lucky to be followed by the noble Lord, Lord McConnell. In that great city, we have enormous industry. There is the Weir Group, which my noble colleague, the noble Lord, Lord Smith of Kelvin, chaired and ran for many years. I think that he has one year more than me as a qualified accountant. You could not find anyone in Britain or in the United Kingdom who would do a better job than he will for Scotland, its industry and its economy.
Five minutes ago, we had a huge group of young Royal Navy ratings up in the Gallery. Barr and Stroud is a world leader in naval equipment; once again, it is in Glasgow. We also have British Aerospace, or BAE, and the shipyards. My noble friend Lord Stephen came with me to Babcock International in Renfrew—world leaders in energy, microwelding and nuclear security. Those four firms are world leaders and they are in Scotland. They will provide the foundations and the seed corn for any development or devolution that will be discussed in my lifetime or further on.
I am very grateful to your Lordships for giving me five minutes.
Lord McConnell of Glenscorrodale (Lab)
My Lords, the result of the Scottish referendum was clear enough to resolve the issue of Scotland’s place within the United Kingdom for at least a generation, but it was also close enough to make all of us in positions of responsibility, elected or otherwise, sit up and listen to the message that it sent. Probably the most used phrase in Scotland over recent months has, I suspect, also been used across many of the towns of the north of England and elsewhere in the UK: “They just don’t get it”. That is a telling reminder for us of the disconnect that exists today between the Government, Parliament and the people that they are there to serve. In recent years there have been bonuses paid that appear to have been completely unjustifiable, scandals covered up at the British Broadcasting Corporation, the ongoing scandal over many years of expenses for Members of Parliament, and the “jobs for the boys” culture that appears to exist in and around British institutions. The feeling that they—the metropolitan elite in one form or another—are in it for themselves ran deep in Scotland in August and September. Those voting yes were not all nationalists, but they did all want to kick the establishment and the established order.
Lord Foulkes of Cumnock
Does my noble friend not agree that there have been some problems in Holyrood just as much as in Westminster?
Lord McConnell of Glenscorrodale
Yes, but I do not think that the issue there in any way reflects the perception in the country, not just in Scotland, of what happens between people in positions of responsibility and in established institutions in London and the metropolitan centre.
It is a matter of real regret for me that the fantastic atmosphere, very similar to that described by my noble friend Lady Royall, that existed in Glasgow and the rest of Scotland in July during the Commonwealth Games dissipated so quickly and turned into such bitterness and bile. It is also a matter of regret for me that it took Dan Snow, Bob Geldof and others to positively express what was good about the United Kingdom and worth keeping, in a way that most of the politicians seemed unable to do. It is a matter of deep regret for me that so many of what I would describe as UK politicians seem unable to see and praise, even from time to time, the good that has happened in the devolved Assemblies and Parliaments since they were created. That resonates with the people because it adds to that perception of being out of touch and at a distance. It is also a matter of regret for me that, in an unnecessary panic, commitments were made about additional powers for the Scottish Parliament that will be a challenge to keep. However, we are where we are, and keep those commitments we must.
I believe very strongly that the Smith commission must drive its work based on the following principles: the principle of subsidiarity, by which decisions should be made at the most local level possible; the principle of mutual respect between the two Parliaments and between the two Governments; and the principle of fiscal responsibility, but also fiscal opportunity for the Scottish Parliament so that it can make decisions that might spark off entrepreneurial activity and other developments in Scotland, in addition to having responsibility for the expenditure that it has made so far and will make in the future. The Smith commission should absolutely commit itself to doing nothing that would damage the UK single market. It should also have firmly in its thoughts the need to redistribute across the UK from rich areas to those that have more needs.
I believe strongly that the unionist parties will need to move their current policy positions. A settlement based on any of the current submissions will not be sufficient to create stability and allow the debate in Scotland to move on to using powers rather than more powers. The final settlement will require somewhere between half and two-thirds of expenditure being the responsibility of the Scottish Parliament through tax-varying or tax-setting powers. I believe that those powers should be not just for income tax; they should be partly income-related, partly business-related and partly sales-related. There must be the power to vary rates of tax up and down but not to assign revenues. If these additional powers are to be devolved to Holyrood, Holyrood itself must reform to ensure that government and decisions there have more accountability, and more checks and balances, than they appear to have at the moment.
With regard to the situation in the UK, coming out of the referendum it is vital that the UK looks at votes for 16 and 17 year-olds. The issue of English consent—not necessarily English votes—for English laws will have to be addressed in due course. Reform of this House, based on more equal representation for the regions of this country, will be essential. Individual matters such as the recall of MPs and the future of the territorial Secretaries of State will need to be addressed. I would have preferred it if these issues had been addressed in a constitutional convention, and I hope that that option might still be on the table.
Finally, I really wish that the Prime Minister, instead of standing on the steps of No. 10 the day after the referendum, had come to Scotland and said thanks. It would have been the right thing to do: to come to Scotland and say to people, “We are grateful that you voted the right way and we will be back. We mean it. We meant it when we said that we would change and improve this relationship, and in future our Ministers, both government and opposition, will come to Scotland and other parts of the kingdom not just when there is a problem and a vote is taking place. We will come all year round and will engage with you, and we will govern for the whole United Kingdom”. If the Government would do that, the whole kingdom would be a happier place.
The Earl of Glasgow (LD)
My Lords, I very much agree with the last point made by the noble Lord, Lord McConnell, but I suspect that some of your Lordships may never fully appreciate how close we were to the break-up of the United Kingdom last month. Those of us Scots who believe passionately in the union were having sleepless nights in the weeks running up to the day of the referendum. I really believed that the nationalists were going to win. Alex Salmond had masterminded a brilliant campaign. He had persuaded a large number of Scots that it was unpatriotic to vote for anything other than independence. His followers had whipped up my normally canny countrymen into a frenzy of excitement, promising us a new, fairer, more caring and more prosperous Scotland—and never mind the collateral damage and mess left behind; that was just Westminster scaremongering. He even engineered the question to be put to the voters. Those of us who were desperate to keep the United Kingdom were obliged to vote no, and those who wanted to see it broken up were asked to vote yes.
On the day of the vote, I really believed that the nationalists were going to win. More importantly, Alex Salmond and Nicola Sturgeon did, too. When they lost, they did not believe it, nor did their supporters. Clearly, it could have been explained only by some sort of Westminster stitch-up. At the last moment, Mr Cameron had made an agreement with the owners of all the big businesses in Scotland that they would announce that their companies would leave Scotland if there were a yes vote, and this had frightened a large number of Scots into voting no. Furthermore, the three unionist parties in Westminster had got together in a state of panic and bribed the Scots into voting no with unspecified promises of further devolution. Thus the no vote had been secured only by a number of last-minute dirty tricks. These arguments are still being expressed by angry nationalists in newspapers all over Scotland.
If dirty tricks had been employed in the campaign, it was those of the nationalists that had been the most effective. Large numbers of small businesses in Scotland were scared to declare their voting intentions in advance for fear of reprisals if the nationalists won. In certain parts of Scotland, life had been made very uncomfortable for those Scots with English sympathies or connections. By comparison, the Better Together campaign seemed mild, unthreatening and relatively ineffective. It came alive only at the very last minute, when people like Gordon Brown and Jim Murphy started to put the case for the union with some passion. David Cameron may have helped, but I am not sure about that.
In any case, Alex Salmond and Nicola Sturgeon may now have accepted the verdict of the referendum, but they certainly do not believe that this is the end of the story. They now regard the referendum as no more than a further step towards total independence at a later date. After all, they got 45% of the Scottish vote and that is why the threat of Scotland breaking away from the union is far from over. You English must remember that the nationalists govern Scotland and that, unless the Labour Party can get its act together fairly quickly, they are likely to go on governing Scotland for the foreseeable future.
A lot now depends on the deliberations and conclusions of the Smith commission but, here again, the nationalists hold all the cards. If the commission recommends that significant new powers should be devolved to the Scottish Parliament, these will be accepted by nationalists as useful stepping stones to full independence. If they are denied the sort of new powers that they seek, they will cry out that Westminster has broken its promises to the Scottish people and that the referendum was lost only through Westminster lies and subterfuge. They will then feel justified in demanding a new referendum or something like it. It is heads they win, tails we lose. The nationalists are not going to give up, as my noble friend Lord Lyell has already pointed out.
The noble Lord, Lord Smith, and his commission therefore have a difficult and delicate task to perform. They are going to have to keep reminding the nationalists that they lost a referendum fought largely on nationalist terms and that Scotland will remain part of the United Kingdom for the foreseeable future, whether they like it or not. That issue is no longer negotiable.
Against the wishes of our Government I have one plea, directed mostly to those English politicians who understandably seek to deny Scots MPs the right to vote on purely English matters in Westminster, but who also believe as passionately in the preservation of the union as some of we Scots do. It is: please let the West Lothian question remain unanswered, however unfair you may think it is. This Westminster Parliament is a British Parliament representing England, Scotland, Wales and Northern Island. It is not an English Parliament, as the Scottish Nationalists wish their supporters to regard it. Nothing could provide them with better ammunition than putting Scottish MPs into the position of being second-class Members in a British Parliament. Such a move would greatly strengthen their case for independence. Can those of you seeking a purely English Parliament please shut up? Talk of English independence is food and drink to the ears of Scottish nationalists. It plays it straight into their hands.
Alex Salmond, Nicola Sturgeon and an army of Scottish nationalists are not going to go away. They remain a continual threat to the union and we must give them no opportunity to open up this whole independence issue again. Personally, I am dreading the forthcoming referendum on Europe.
Lord Blencathra (Con)
My Lords, I wish to concentrate on the English question—or the West Lothian question, as it was originally called when the great parliamentarian Tam Dalyell first asked it in 1977. I am afraid that the question will have to be answered sooner or later.
First, however, I support the proposals in the White Paper by the parties on further devolution but I believe that they need to go further. The Conservative Party has additional devolution proposals. I think those are the minimum that we can do and for this reason: if we do not go as far as we sensibly and safely can, there will be a demand in the next Parliament by the SNP for another referendum. The noble and learned Lord, Lord Hope of Craighead, was right as if the SNP takes more seats in the general election of 2015 and increases its numbers above 69 in the 2016 Scottish Parliament elections, another referendum is more than likely. It is probably inevitable, especially if the SNP can point out that there are some matters that were capable of devolution and we failed to devolve them. I am afraid that this matter will not have been settled for a generation, or a lifetime, as has been suggested and as we hope. It will come back again and again until the yes vote for independence finally wins.
The Barnett formula has completely outlived its usefulness and should be scrapped, as the noble Lord, Lord Barnett, has repeatedly suggested. Indeed, he has called it a “terrible mistake” and a “national embarrassment”. However, the Prime Minister made a promise to retain it and it would be fatal to renege on that promise now. I hope that the formula will decline in importance if Scotland raises more of its own expenditure. If Scotland is to get the additional powers, which it must get, and continues to get £1,600 per head of population more than England, then it is vital that England is treated fairly, which it is not at the moment. We must therefore have English votes for English laws.
Some will say, as we have just heard, that we would then create two classes of MP but we have had that for 14 years in the Commons. We have had 59 Members of Parliament from Scotland being able to vote on all matters, including issues that are English-only and nothing to do with Scotland. English MPs do not have that reciprocal right to vote on a host of Scottish matters. That has unbalanced Parliament. It is morally wrong and needs to be changed. The McKay commission stated quite firmly that:
“The constitutional principle that should be adopted for England (and England-and-Wales) is that decisions at the United Kingdom level with a separate and distinct effect for England (or for England-and-Wales) should normally be taken only with the consent of a majority of MPs … in England (or England-and-Wales)”,
as the case may be.
I consider it one of our fundamental democratic and parliamentary principles that if, as a Member of Parliament, we vote for higher taxation, student tuition fees or whatever, then we have to be accountable to our electorate in our constituencies. We have to go back there at the weekend, look them in the eye and face the consequences of our actions but that has not been the case for Scottish Members of Parliament voting on English matters for the last 14 years.
When he was Secretary of State for Health in England, the noble Lord, Lord Reid, pushed through the NHS foundation trusts with the help of Scottish MPs. Health is a devolved matter in Scotland; so is education. I think that the policy of the noble Lord, Lord Reid, on foundation trusts was jolly good but it was pushed through by a Scottish Member of Parliament with Scottish MPs’ support, when the Scottish Government and their MSPs were making it abundantly clear that they would never adopt that policy in a million years in Scotland. That cannot be right.
The list of matters devolved to the Scottish Parliament includes agriculture, forestry and fisheries, education and training, environment, health and social services, housing, law and order, local government, sport and the arts, tourism and so on. On all these matters, English MPs have no say whatever since only MSPs decide on them. When I was an MP, I did not want a say in them but it is wrong for Scottish MPs to vote on these matters when they apply to England, since they have the freedom to do as they like and are not accountable to an English electorate. What a wonderful life that must be: to have power without accountability, voting through policies applying to England knowing full well that you will not face angry constituents in your surgeries at the weekend. That is why, for the last 14 years, English Members of Parliament were second-class citizens in the House of Commons Chamber, where everyone should be an equal. We already have a two-tier House of Commons and that inequity cannot continue.
There is an answer to Tam Dalyell’s West Lothian question. It is to implement English votes for English laws. England does not want piecemeal regional devolution. The noble Lord, Lord Prescott, tried regional devolution in the north-east and it was rejected by 78% of the electorate. I say to him that it was rejected not because the powers were grossly inadequate but because the majority of people, while feeling detached from Westminster, trusted it a lot more than they did politicians in Newcastle—or, in our case in Cumbria, politicians in Manchester and Liverpool—to divvy up the money fairly. The McKay commission pointed out that giving extra powers to local government in England and its northern cities, which I support as it may be part of a future solution, does not answer the fundamental question of the governance of England itself.
Some have suggested that the number of Scottish MPs should be reduced, as in the Stormont solution, on the basis that half the Scottish MPs’ workload is now the responsibility of MSPs. However even if there were only 40, 30, 20 or 10 Members in the United Kingdom Parliament from Scotland, they would still be voting on English matters. That fundamental injustice would need to be resolved.
Finally, having English votes for English laws is not too complicated to implement. The clerks in the Commons, as in this place, are experts at detecting hybrid Bills or amendments. They can easily identify a Bill which is UK-wide or for England only. It is not rocket science, as the McKay commission pointed out. There is overwhelming demand in England for such a change. I found that my English constituents in that magnificent border area were very tolerant and patient people, despite 600 years of border reiving—or probably because of it. They were very happy for Scotland to get additional powers but their view now is that 4 million electors in Scotland have had their say and it is time for the 40 million people in England to get fair treatment. I think that I am one of only 10 noble Lords participating today who has served as an English Member of Parliament. I say to your Lordships that we ignore the views building up in England at our peril. We should legislate for English laws and do it urgently, in tandem with any further legislation on devolution for Scotland.
Lord McFall of Alcluith (Lab)
My Lords, in the referendum, no has won the battle, but it has not won the war of words. Those words were pretty ugly, divisive and depressing throughout the referendum campaign. What we saw was an intolerant streak, demonstrated in the social and political debates; so much anger, venom and sneering contempt directed by individuals and groups at one another. The social media mirrored this throughout the referendum.
To have a decent debate you have to have a good tone at the top. That is where the First Minister and his deputy were lacking. They were lacking in the area of business. I was engaged with businesses for many months on this issue and they were afraid to put their heads above the parapet. I was engaged with academia, and that was a mirror image. The only one who stood out against that was Dr Louise Richardson of St Andrews University. In a personal call with Alex Salmond, she told him, no, she was going her own way. We also saw that with the SNP-inspired demonstration against the BBC for Nick Robinson asking a hard question—the sort of hard question that he asks politicians in Westminster day in and day out. Alex Salmond took exception to that.
What has happened is that Westminster has become a toxic term as a result of this debate. Both Alex Salmond and, indeed, Nigel Farage in his own way, have enhanced that toxicity. What does that mean? That means that Westminster is to be very much involved in ensuring that we progress this devolution debate. We need to ensure that we correct our politics and ask the question: how do we contain and how do we eliminate the disturbances that we have seen? There is something unnerving in the air—witness the social and political fragmentation. Westminster needs to reassert its authority and produce a confident voice in this debate; one that respects the constituent parts.
EVEL has been mentioned. If we go down this line as a primary consideration, we will not achieve that. Let us reflect on the situation. The English voice is alive and well in the mother of Parliaments: 650 constituencies with 533 English ones. That voice is alive. England remains the dominant nation. There is no need, as Vernon Bogdanor, the Prime Minister’s Oxford tutor, says, to beat the drum or blow the bugle. If we beat the drum and blow the bugle too much, that will strain the devolution settlement to breaking point—as will the 100% tax devolution to the Scottish Parliament. This is a slow way to independence. Why? If there is 100% tax devolution, Scottish MPs will not vote on the Finance Bill or indeed debate it as we do here. There will be no Scottish Chancellor and, given that the Prime Minister is the First Lord of the Treasury, there will be no Prime Minister from Scotland.
There is another way of getting independence. Members of Parliament and parliamentarians here have to realise that. If Westminster is to maintain its voice, there has to be no dereliction of duty by the Prime Minister in the future. A dereliction of duty was undertaken with the Edinburgh agreement. There was a casual treatment of the Edinburgh agreement by the Prime Minister. It was way in the future, so the timing, giving a two-year timescale, was given away—just like that. Also, the wording of the question was given away. The wording, style and tone of a question are crucial in determining the value and quality of the answer received. As one who campaigned, I can tell the House that it is very hard to enthuse people if one is proposing a negative. That should have been looked at at the very beginning. The constitutional debate since 1999 has been all about process; what further powers can be devolved to the Scottish Parliament or the Welsh Assembly? There has been little focus on the effectiveness of the delivery of politics. The concept of devolution as a process of events needs to be re-examined.
I have some very close friends who voted yes. I challenged them on why they were voting yes. I put it to them about the currency union, “Do you agree with Jim Sillars about stupidity on stilts?”. “Yes”. I asked about Trident and NATO. “Can you get rid of Trident while simultaneously getting in to a nuclear club? Do you think that is consistent?”. “No”. “What about EU admission? Do you think there will be problems about that? Will there be automatic entry?”. “No. There will be problems, but we are voting yes”. One highly sophisticated friend said to me that he voted yes and hoped that the result would be no. That illustrates the disconnection that there was. When I asked them why they were voting yes, they said it was for a fairer, more socially just society. But there was no means to deliver that. There is a disconnect and we must appreciate that here.
Arsène Wenger, in the Times this morning, made the point that we are moving from a thinking society to an emotional one. We are losing our sense of perspective on events because of the requirement for instant reactions and opinions. As Nobel laureate Daniel Kahneman said in his bestselling book, instead of thinking fast, we should start to think slow. We have thought fast in the past and we have got ourselves into deep problems. We need a constitutional convention or a royal commission; one which is thought out; one where there is citizen engagement; one where we have to think out the purpose and the terms of reference. A constitutional convention or a royal commission is the way forward. We should do it slowly so that we get wise decisions out of it—wise decisions which can secure a union that is not safe yet and wise decisions which, through reconciliation and good disagreement, can secure the peace.
Lord Kerr of Kinlochard (CB)
My Lords, I agree with almost all the points that the noble Lord, Lord McFall, has just made. A great deal of wisdom has been on offer in this debate so far, but I am a little uneasy that we are looking back too much, with a little too much retrospection and recrimination. The noble Lord, Lord Hennessy, got it right when he said that the fundamental thing that was wrong with the 7 am Downing Street statement was that that was a time for binding up the wounds. It was not a time for inflicting a new wound and making a link that had never been mentioned when the promise was made.
The first thing that we should do in this debate is send a message of congratulations to Ms Sturgeon in Edinburgh, the next First Minister of Scotland and the first woman to hold that position—clearly a doughty fighter and a worthy successor to Alex Salmond. I disagree with almost everything that she stands for, but I think that it is extremely important that we have a civilised debate. I would like us to send a message to her. I am very pleased to see the Leader in her place, and I hope that she will consider advising the Prime Minister to send this message: we in this House believe that our debates would be greatly improved if the voice of the 37%—only 37%, to correct the noble Earl, Lord Arran—who voted in Scotland for independence was heard in our debates. It seems to me that it is very easy for us always to be attacking the Scottish National Party. The Scottish National Party should be here. I have never understood the logic of the position that it is possible for them to take seats in the House of Commons but not in the House of Lords. It is in their interests, it is in our interests and a warm invitation should be extended straight away to Ms Sturgeon to change her party’s position and agree that the party should be represented here.
I want to make two points, risk two unfashionable paradoxes and make one proposal. My first point has been made already—the ATM point, as made by the noble Lord, Lord Empey. I think that “no representation without taxation” is a good rule. Any parliament that is responsible for expenditure but does not have to raise the money is always going to be irresponsible about expenditure. I am strongly in favour of the Strathclyde proposal on the devolution of taxing power.
Paradox one: why is the European Parliament always so determined to increase expenditure more than the member states are prepared to allow? For the same reason: it has no power to raise revenue. Most other Governments believe that the taxing power for the EU, raising the 1% of GDP that is the EU budget, would be better than a levy or a Barnett formula, which occasionally leads to a review and, if a review has been postponed and resisted for very long, can lead to a very large correction that can provoke tantrums and kerfuffles. The tax would seem to be more logical, but if one proposes that to the British Government, they draw back their skirts in horror. Yet the logic on Strasbourg and on Holyrood should be the same. Just as we are all to be content to see more taxing power even than in the 2012 Act given to Scotland, so we should think again about whether the Government are right to have decided to make no contribution whatever to the review of the revenue side of the EU budget that Prime Minister Mario Monti has been asked to undertake, and which we have decided we will not contribute to. That is a very unfashionable analogy, but I think I have just about got away with it.
My second point is of course about EVEL. The correct answer to the West Lothian question in today’s political circumstances is: “Get over it”. It is a problem that has existed for a very long time and it does not need a solution now. A quick off-the-cuff solution of the kind that could emerge from Mr Hague’s commission seems to be just the way to reopen the wounds of the Scots that we should now be trying to bind up.
The European analogy is perhaps relevant again, so I might try to get away with it a second time. For three years the French have argued for a two-tier Parliament in Strasbourg. With perfect Cartesian logic, they have pointed out that, since the British have decided not to join monetary union, the so-called fiscal union or the banking union, it is pretty odd that the British should be voting on eurozone laws in all three areas. The British Government have—completely correctly, in my view—resisted that, pointing to the folly of deliberately widening the Channel and to the importance of retaining the single market. So we have hotly opposed what the French have suggested, and it seems that we have won.
I had the privilege yesterday of being in Brussels with the noble Lord, Lord Boswell, in his capacity as chairman of the Select Committee, and it is a pleasure to see him in his place. We discovered that nowhere in the European Parliament is there any eurozone-only structure. We discovered, although of course we knew already, that Mr Juncker, the President of the Commission whom we decided to insult and oppose, has decided that all EU laws must reflect the interest of all EU members, and has given the noble Lord, Lord Hill of Oareford, responsibility for the laws of the banking union that we would not join. Now that is magnanimity and statesmanship, and in my view that is what was lacking the morning after the referendum.
That was my second paradox; I now come to my little proposal. Actually, this proposal has been made already. I am a very strong believer in the royal commission or the constitutional convention, but I think that there is a House of Lords angle to this, rather as the noble Lord, Lord Steel of Aikwood, was suggesting—some sort of solution whereby the devolved Parliaments indirectly elect representatives here. That would be a very good way of cementing the union for which the Scots have voted. Promises must be kept, of course, so let us press ahead with the commission of the noble Lord, Lord Smith—I wish him good luck—but one should go very slowly on EVEL and, as the noble Lord, Lord Maclennan, suggested, one should be thinking now of the correct form of convention or royal commission.
Lord Dobbs (Con)
My Lords, the last time that I had the pleasure of being squeezed between the formidable frames of the noble Lords, Lord Kerr of Kinlochard and Lord Foulkes of Cumnock, was in the debate on the EU Referendum Bill. That was a bracing experience, and I am sure that this one will be just as much fun.
That wonderful novelist and Scotsman Walter Scott once wrote that there is no path that leads through the Highlands that has not at some time or other offered a little danger for an Englishman. He added that the clans may squabble among themselves, but in the end they will always unite against those who wear breeches on their bottoms and have purses in their pouches. Those of us who are enthusiastically English—or indeed Welsh, or Irish—might be forgiven for feeling that we have escaped that moment of danger and reached our goal, with a referendum result that has reaffirmed our union. But like so many Members of this House today, I wonder. The moment of greatest danger may yet lie ahead.
I want to salute Scotland and its people. When I was there campaigning, there was not a single voter that I met of any political hue who did not take the task in front of them with extraordinary seriousness. For Scotland, the referendum was a triumph, the turnout Herculean—almost Romanian—in proportions, and the result, thankfully, was decisive. Yet, on that long march back home, we picked up a few pebbles in our boots.
Financially, things will not be easy. The Barnett formula will live on, even when its own creator says that it should be dragged off to the knackers’ yard. The English will still be expected to pay, and the poor Welsh will undoubtedly still complain of injustice. Fiscally, with the threat of different income tax regimes either side of the border, how will companies and individuals resist the temptation to move perhaps only a handful of miles to greener pastures? If there is to be different provision on a wide scale, not just in health and education but in social services, how will we stop families border-hopping in search of the best outcome?
Perhaps the most difficult challenge of all, though, will be political. The West Lothian question has now become the “West-Minster” question. How do we guarantee fairness to English voters to ensure that they are not treated as second-class citizens? Many commitments have already been given. All those vows that were made shortly before the referendum were clearly a result of high principle rather than low panic, but the hounds still snap persistently at our haunches. How on the one hand do we satisfy the legitimate expectations of Scotland without, on the other, arousing the largely dormant demands of the English?
We should never underestimate the natural pride of the Scots. After all, why else—and I may never be forgiven for saying this—is Judy Murray still in “Strictly”? Not for the strength of her Scottish reels, I fear, but, I suggest, because of the depth of her Scottish roots. Yet we ignore the English, their sense of fair play and their tolerance at our peril.
I have one fundamental anxiety about this bright new world that lurks just around the corner. If, after the election next May, the English wake up to discover that they are being governed by a party, or particularly by a coalition of parties, that they themselves rejected in decisive numbers, in those new circumstances it could be the English who start questioning the union. If that coalition were to be held in place or even imposed on the English through the support of MPs from an overrepresented and devo-maxed Scotland, our union boat could be rocked to tipping point.
Lord Foulkes of Cumnock
My Lords, I am pleased to follow the noble Lord, Lord Dobbs, in spite of what he said. I hope that he will forgive me if I return to the opening speech by the noble Baroness, the Leader of the House, for whom I have the greatest of respect. I fear that in parts of her speech she gave away the fact that Whitehall seems to have learnt nothing from the referendum. I do not think that she and Whitehall realise how near to disaster we were. We were at the edge of a precipice and we nearly went over it. We only avoided it because, thankfully, the silent majority in Scotland saw what was at the bottom of the precipice and came back and voted no. Otherwise we would have gone over that precipice, with all of the United Kingdom’s institutions behind us, into total disaster. We really need to learn from that. This was a vote against separation, it was not a vote for the status quo. Paradoxically, the losing side are energised by what has happened and we, the winners—2 million of us—have been forced to come back, like King Edward, to think again. If we do not come up with a sensible, credible and, above all, stable alternative, we will be back to the precipice sooner rather than later. We must find a long-term solution.
I will look carefully at two aspects. First, on Scotland and the Smith commission, I agree with my noble friend Lord McConnell. Its decisions I hope will be based on principles and not on party horse-trading. Two key principles are that the powers to be devolved should be devolved for a purpose, that is sensible and appropriate to be carried out at the Scottish level, benefiting the Scots but not harming citizens of the United Kingdom; and that we need not what the nationalists call full fiscal economy, but what I call fiscal responsibility. As others have said, we should devise a way for them to be responsible for raising the money that they spend. That will not be easy. Some have pointed to the difficulties and others have pointed to the way forward. Surely with all the expertise that we have in the Treasury and elsewhere, something can be worked out. I look forward to the third Scotland Act. This is becoming a Shakespearean drama—but I must not go down that line or we will end up with “Macbeth”, and we all know how that ended: not very well.
We must also look at the English democratic deficit. Not the West Lothian question; the English democratic deficit. I remind noble Lords that before devolution, when we had peculiarly Scottish legislation decided here at Westminster, it was voted on for nearly 300 years by a large majority of English MPs. If we can thole that for 300 years, surely the English can thole the problem for a few months or years more. To try to solve it by changes to the Standing Orders—as others have said, creating two classes of MPs—is the wrong way of going about it. Others have said, and noble Lords have heard me say time and again in this Chamber, that we need a coherent and comprehensive look at our constitution through a convention or a royal commission. I think that we should move towards a federal, or quasi-federal, system. I said this when the Liberals were being quiet about their policy. I am not saying that there should be an English Parliament, or English regions, or a bit of both; that is for the commission to decide, as it consults widely and listens to people.
I am pleased that the noble Lords, Lord Maclennan and Lord Hennessy, in their excellent contributions, said the same thing—if the three party leaders can come up with a vow overnight, surely they can come up with an agreement in a week to set up a constitutional commission. It could be up and running now. That would make the English feel happier that we are addressing the question and we are under way. I hope that each of us, in our own party, will try to twist the arms of our leaders. I have been twisting the arm of my noble friend Lady Royall—she made a brilliant speech, all of which I agree with—that the Labour Party should go ahead with this and encourage the other parties to go ahead with it as soon as possible.
Such a convention could and should also look at the reform of this place and move towards what Ed Miliband described at the party conference as,
“a senate of the nations and regions”—
SONAR. I like the French system of choosing the senate, where grands électeurs—all the elected representatives in each of the départements—choose their senators. There are many other suggestions that can be put to the constitutional commission.
No one supported the status quo in the referendum. I did not hear anyone argue in favour of that. Unless we heed the call and realise the disaster that has been avoided, we will find ourselves facing another referendum. I hope that I will not shock my noble friend Lady Liddell of Coatdyke, the Secretary of State emeritus, but if we do face that, and if there have been no changes at the United Kingdom level, even I would be tempted to vote yes in that referendum. That is an indication of the problem that we face. We should all be warned that we need to change. We need radical change. The status quo is not an option.
Lord Tope (LD)
My Lords, I detected some surprise when the Leader of the House said in her opening remarks that England is the most decentralised part of the United Kingdom. However, she is right. It is the most decentralised part of the United Kingdom as well as, by some measure, the largest. That is really a comment about the state of the other three countries of the United Kingdom. I have heard it said many times that Scotland has become far more centralised under its own Parliament than when it was ruled from Westminster. The fact remains that the four countries of the United Kingdom, and therefore the United Kingdom as a whole, are the most centralised countries in the European Union. What we will do about that, particularly in relation to England, is for me the real English question.
I accept, because it has been placed so high on the agenda, that the West Lothian question must be addressed. I have a lot of sympathy with my noble friend Lord Glasgow, who said that we have lived with this for 30, or even 300, years, let us leave it alone. However, it is on the agenda and we must deal with it. If we think that a solution can be found by some rearrangement within the UK Parliament, or even worse the creation of an English Parliament, we are fooling ourselves. That does absolutely nothing to deal with the question of the centralisation of power in England and the need to devolve power in England. If that is all that we Westminster politicians can come up with in this debate, then many of the people of England will be deeply disappointed. Addressing the question of devolution within England is the real and major English question, of which the West Lothian question is a part, but only a part.
The Leader seemed to be suggesting that the Localism Act, on which I and many noble Lords spent many happy hours, was all that was needed to devolve power in England. I accept that, if properly and effectively implemented, it would have been a good start to devolving some power to some communities in England. It was particularly unfortunate that it coincided with the time of the greatest budget cuts that local government has ever known. We were encouraging local government and local communities to devolve at just the time when the resources needed to do so were being taken away very quickly and in very large measure, which was very unfortunate.
At this point, I should declare an interest as a vice-president of the Local Government Association. We still need to address the question of devolution to English communities, not just to local government, although we should remember that local government is made up of the elected represented representatives of local communities and has an important part to play. Even before the budget cuts, local government was working increasingly closely with other parts of the public sector and, especially, with the private sector. When we look at the devolution of power in England, it has to be to the whole community. We have to look at the public sector as a whole, not just one part of it, albeit an important part, called local government, and it has to involve the private sector in a new partnership relationship. City deals and the regional growth fund have been a very good start, but they are still central government giving money—very welcome and necessary money—and largesse to local government. We need to start to address the issue of local government in its representative role being able to raise more money and being responsible for the charging rate as well as receiving a greater share of the proceeds.
In the short time that remains to me, I shall say something about London because I think I am the only avowedly London politician who dares to speak in what appears to be a rather anti-London debate. I have had 40-plus years as a London politician, and in all that time I have heard my noble friend Lord Greaves telling me about the evils of the domination of London. I have tried over and over again to explain to him that there is a world of difference between government in London and the government of London. As I have been a London borough councillor for 40 years, I have to say to him that London or, as we in London usually call it, Whitehall, is frankly as far distant from the London Borough of Sutton as it ever is from Pendle or Newcastle. That is the issue, not the number of miles involved—the right to govern oneself. The dominance of London within the United Kingdom, certainly within England, is at least as important for London as it is for the rest of England and the rest of the United Kingdom.
One of the most encouraging things coming out of the debate about devolution within England is the joining together of Core Cities, which was originally formed to combat the influence of London, with the Greater London Authority and London Councils to recognise their shared interest in bringing about much greater devolution, not only to cities and the so-called city regions but within the United Kingdom. Every week, learned and erudite reports are being published—there are three more coming out in the next few months—about not whether to devolve but how to devolve real power and real fund-raising opportunities to local communities. The demand is there, the expectation is there, and it is now for government and all political parties to respond to that expectation.
Lord Birt (CB)
My Lords, patriotism is a positive force rooted in pride of place, common endeavour and shared culture, perspectives and values. Nationalism, on the other hand, can be a destructive force, and no one expressed that to me more keenly than Eric Hobsbawm, the late, esteemed Marxist historian. Eric was a near neighbour of mine in mid-Wales, and he and I would oft-times hike the glorious hills of Brecon and Radnor together. In the 1930s, as most will know, Eric as a child had to flee Berlin and the Nazis, and he had been forced to move once more in his life, in the 1980s, from north to mid-Wales to escape the poisonous nationalistic hostility that had confronted him in Snowdonia.
Lord Elis-Thomas (PC)
I am sorry to intervene on the esteemed noble Lord, but as the Member of Parliament at the time and as the Assembly Member for Meirionnydd, I can assure him that his version of events borders on an imaginative treatise that I will never be able to subscribe to.
Lord Birt
I can only say that, on our long walks together, he felt extremely passionate about it and it caused him to move home. He had lots of chapter and verse to support his feelings.
Though many on the yes side of the Scottish referendum campaign behaved with propriety and conviction, others acted dishonestly and with menace. The noble Baroness, Lady Liddell, brought that out extremely forcefully. The evasion about the critical issues in the referendum campaign—the currency, a central bank, the NHS or membership of the EU and NATO—was without precedent in any election or referendum campaign that I ever experienced.
There was no better example of menace, among the many, than the singling out by the First Minister of Nick Robinson and the BBC. At a very difficult moment in the campaign for the yes side, towards the end after a series of highly unwelcome interventions from business leaders, the First Minister held a press conference for foreign correspondents, extraordinarily packing it with fevered and noisy supporters. To distract from his difficulties—as usual playing the man and not the ball—the First Minister orchestrated an argy-bargy with Nick Robinson, the BBC’s political editor, a correspondent universally respected for his insight, independence and integrity.
Following Mr Robinson’s report of that conference, there was a demonstration against the BBC and its political editor, as the noble Lord, Lord McFall, mentioned. Some thousands of yes supporters gathered outside the headquarters of BBC Scotland, an intimidating and frightening experience for BBC staff. The First Minister was, however, to describe this demonstration as “joyous and peaceful”. Nick Robinson could only continue to report the final stages of the campaign with a bodyguard at his side.
The next challenge for the United Kingdom is a resurgence of English nationalism. What Eric Hobsbawm made me deeply conscious of on our walks was how nationalism evades the essential discourse between left and right about wealth creation, social justice and income distribution. For nationalists, there are always easy targets: immigrants are stealing your jobs; the Jews your money; the white farmers your land; the English your oil. Nationalism thrives on economic reverse and volatility.
It is a commonplace at the moment to claim that there is widespread disaffection with the Westminster classes and that the remedy is therefore to tear up our constitution and to devolve power here, there and everywhere. We should be very careful. The modern state is indeed a terrible tangle. It is indeed vital to ensure that real responsibility and power are lodged at the appropriate place, whether globally or at national, regional or local level. I agree with all noble Lords who said that we need to tease away at identifying the right balance between centralisation and devolution or decentralisation. We must, of course, honour our promise to Scotland, but we should take our time about everything else and answer the questions properly.
In particular, we should be extremely cautious of so-called English votes for English laws. It is indeed anomalous, as I am sure everybody agrees, that Scottish MPs vote on English matters, but perhaps, as the noble Lord, Lord Kerr, suggested, it is an anomaly that we should simply live with, for England is by population 84% of the United Kingdom. It is one thing to create special arrangements for three national regions representing respectively 8%, 5% and 3% of the population, but it is quite another to make special arrangements for 84% of the population. That would simply drive us further apart.
Let me cite an extreme example to illuminate a point. The noble Lord, Lord Tope, mentioned London. Imagine if London and the south-east, at some point in the future, pressed to be a city state. It is by far the most prosperous region in Europe, not just in the UK. Enormous wealth passes from London to the rest of the UK. Picture the impoverishment that would result in Wales and elsewhere from London’s independence. Picture also the vulnerability of a highly fragmented British Isles. Remember the Romans, the Vikings and the Normans, as well as the Nazis. A united nation shares its wealth and stands shoulder to shoulder when threatened.
The root of widespread disaffection in the electorate, which has been much mentioned in this debate, is not our constitution but the monumental failure of governance in the last decade or more. Governments the world over, including in the UK, have been fiscally irresponsible. Regulators have failed to protect us against systemic breakdown and the finance sector has failed to act with prudence and probity.
Lord Higgins (Con)
My Lords, 50 years ago, referendums were virtually unknown. Since then they have become increasingly fashionable. This is very often prompted by the argument that referendums are democratic. However, I have always felt that that is not really the case, at least not if you are trying to find the best form of democracy. Referendums tend to produce a situation that is really the dictatorship of the majority. I go along with Edmund Burke in taking the view that the better system is a representative system of parliamentary democracy, in which Members of Parliament are elected as representatives, not as delegates.
I therefore had considerable misgivings about the proposal for a Scottish referendum and I feel bound to say that my worries have been amply justified. We have avoided falling over the cliff to which many noble Lords have referred in terms of the vote going the wrong way but, at the same time, the referendum has made more acute many of the underlying problems which might otherwise have been dealt with in a more considered and leisurely manner. We now have to deal with a whole series of things and I feel it might have been better if we had not had the Scottish referendum at all.
That is water under the bridge but what has come out clearly in this debate is how acrimonious much of the debate in Scotland was. The situation was exacerbated by the panic ahead of the vote following the so-called vows by the party. As far as I can establish, these vows were made with absolutely no consultation whatever with their parties. It was further exacerbated by the immediate reaction of the Prime Minister following the vote, which set down a very tight timetable—a timetable reaffirmed by my noble friend the Leader of the House.
My noble friend did not deal at any great length with the ways in which the West Lothian question, which has been such a feature of this debate, would be dealt with. My own feeling is that it would be a serious mistake to try to deal with the problem by primary legislation. Making changes to the Standing Orders in the other place might be a better way of dealing with it. Perhaps the Speaker of the Commons could simply certify a Bill as being an English Bill, in the same way that he certifies whether a Bill is a money Bill. I suspect that the number of purely English Bills would be far fewer than one might think. Then there might be voluntary abstinence on the part of Scottish Members from voting on particular items where such matters were clearly dealt with in Scotland by the Scottish Parliament and so ought to be matters for English Members in the English Parliament. We should be very cautious about anything formal and certainly not establish such a thing as an English Parliament, which would undoubtedly lead to the break-up of the United Kingdom. The same problem would arise if we had two classes of Members of Parliament. That would also tend to lead to further fragmentation.
I turn quickly to the implications of the devolution of further tax-raising powers to the Scottish Parliament. In particular, I hope that the Smith commission will look very carefully at how the system will work if tax is devolved more to Scotland and there is then a situation where the Chancellor of the Exchequer has to deal with the consequences. We want a clear mechanism. I presume the Scottish situation would have to be clarified first and the Chancellor would then decide how he ought to respond. I also have some doubts about the motivation for having greater tax paying and, in particular, income tax changes in Scotland. If it is merely to alter the various rates and allowances, it is not clear why the situation in Scotland should be so different that they need a different set of rates. The difference between the two countries is not so great as to argue for it. If there is to be more devolved control over taxation in Scotland, it may be that the Scottish Parliament and the Scottish people would feel that they would get some benefit from it. The Government’s White Paper makes it clear that whatever changes are made in the devolution of taxation to Scotland ought not to result in a change in the balance of the allocation of resources between the two countries. If this goes ahead, I feel that there will be considerable disappointment in Scotland at the effect that controlling income tax rates and allowances actually gives.
Finally, because time is running out, I turn to the question of the balance between the two economies and, in particular, the Barnett formula. My noble friend Lord Lang of Monkton, in his splendid speech, spelt out very clearly all the problems associated with the so-called Barnett formula and, in particular, the allocation of the block grant. The present situation is not fair on England and the block grant probably needs to be adjusted. This point came out to some extent in the course of the referendum campaign. One must wish the Smith commission well on a very difficult range of issues. It will have to decide how to reconcile the devolution of tax powers to Scotland with the overall macroeconomic management of the economy by the Chancellor of the Exchequer on behalf of the United Kingdom as a whole.
Baroness Quin
My Lords, like others I welcome the fact that this debate is taking place after a no victory in the referendum in September. I also welcome the fact that the debate has been marked by the maiden contribution from my noble friend Lord Lennie, who gave us a very entertaining and thoughtful speech. As a fellow north-easterner, I am very pleased to welcome him to the House and echo his kind words about that special and historic town of Tynemouth, where I was born and lived for a number of years.
I spent most of the summer campaigning for Better Together in the borders region of Scotland, which is not far from my home just south of the border in Northumberland. It was an exhilarating and troubling experience—exhilarating because it was a real pleasure to work alongside young volunteers in the borders regional office. It was the first time in many years of political campaigning that I have taken my leafleting and canvassing instructions from 19 and 20 year-olds, but they were extremely able and inspiring young people, to whom I pay a very warm tribute.
At the same time, there were many troubling elements of the campaign, referred to particularly by my noble friend Lady Liddell. Even in the borders, where it was clear that the no vote was in a strong majority, people were nervous about putting no posters up in their window or no stickers in their car. There was an intimidatory side of nationalism which really troubled me throughout the whole of that campaign; that is something that we have to think very carefully about when we move forward in the period that lies ahead.
In my experience, people voted no not because of the last-minute promise of powers, although they are important and I support them. They voted no for two reasons. First, Scots are well aware of the interdependent nature of the UK economy in terms of trade, business and currency; but the other reason, which I think was just as strong, was their recognition of the close family links and bonds that unite us across the United Kingdom and make people in the borders and elsewhere in Scotland feel British as well as Scottish and not wanting to destroy those links for the future.
My conclusion from the work that I did during the campaign was really that our first priority should be to ensure that the UK as a whole works better together for the future. Indeed, crossing, as I did, the border every day, I would certainly like to promote some cross-border infrastructure projects, which would be very necessary—in particular, the long overdue dualling of the A1 between Newcastle and Edinburgh, which I seem to have berated every Government about for the last 30 years, yet we still have not made the progress that we would like. There are also train links, which are very topical at the moment with all the talk about HS2 and HS3; so far, they do not seem to benefit hugely the north-east and Scottish link. Perhaps that could also be looked at. Furthermore, we should try to make the devolution settlement that we have at the moment work better, perhaps by having a better dialogue between the different bodies. I thought about this when supporting what the Welsh Government did in terms of plastic bags. We in England may at long last be going down that route, but surely it would have been good to have had more dialogue about it between the devolved authorities. When it is a good idea, perhaps we can work together and perhaps in a more timely way than has been done so far.
Unsurprisingly, a lot of this debate has been devoted to the so-called English question. I am not at all attracted to the kind of pan-England or all-England solution that has been mentioned, particularly that of English votes for English issues. Even if Scotland, Wales and Northern Ireland did not exist, there would be a very great centralisation problem in England, which would need to be addressed. We should keep that firmly in our minds. I feel that very strongly in the north-east. In many ways, I think that we would feel as marginalised in an English Parliament as we would in a UK Parliament—perhaps particularly so because our voting patterns are much closer to voting patterns in Scotland and Wales than they are to certain parts of England.
Devolution is not just about nationality; it is also about taking decisions at an appropriate level. I remember when I was Prisons Minister for a short time, in 1997, when we put forward the devolution legislation. In the course of my work, I spent two days with the Scottish prison service; at the end of that, I felt that it would rather be Scottish Prisons Minister than England and Wales Prisons Minister, simply because the scale on which the Scottish Minister operated meant that it was possible to get prison governors and the people involved in the prison system around a table to hammer out a policy on an appropriate scale. We must keep thinking of the appropriateness of decision-making when we approach this devolution issue in England.
We should not hurry. We should deliver on our promises to Scotland—that is vital, because we have made those promises—but then we should think carefully, either via a royal commission or a constitutional convention, and not impose a top-down solution. While I personally favour regional government in the north-east and hope that it can come back on to the agenda as my noble friend Lord Prescott outlined, I none the less think that England will need different solutions for different areas. Simply trying to draw something up within Whitehall and Westminster is not good enough. We have to think carefully about how we involve people as we move ahead.
Lord Thomas of Gresford
My Lords, it was a great pleasure to hear the noble Baroness, Lady Quin, deal with the most outstanding achievement of the Welsh Labour Government, and that is to put a charge of 5p on plastic bags.
Home rule is a Liberal invention. Mr Gladstone said in Aberdeen in September 1871:
“This United Kingdom which we have endeavoured to make a united kingdom in heart as well as in law, will, we trust, remain a united kingdom. If the doctrines of Home Rule are to be established in Ireland, I protest on your behalf that you will be just as well entitled to it in Scotland. Moreover I protest on behalf of Wales, in which I have lived a good deal and where there are 800,000 people who to this day, such is their sentiment of nationality, speak hardly anything but their own Celtic tongue—I protest on behalf of Wales that they are entitled to Home Rule there”.
Mr Lloyd George echoed those sentiments in 1891, calling for “Home Rule all round”. Jo Grimond believed that power was not to come top-down, as the noble Baroness said, but to spring up from the people. He wrote:
“I find it difficult to see how, if the case for Scottish and Welsh self-government is accepted at all, any powers can be reserved to the UK government except foreign affairs, defence, and the wider issues of economic policy linked to a common currency and common trade policies”.
This was the model in the Hooson Bill for a Welsh Parliament in 1967, which I drafted myself.
Home Rule is not independence. We in Wales agree with Mr Gladstone that this is a United Kingdom of the heart, as much as of political economy. The first impact of the Scottish referendum on Wales was to reduce the support for independence for Wales from 7% to 3%. This was according to a BBC random poll of over a 1,000 adult respondents between September 19 and 22. This is not in the least surprising. Welsh nationalism has always been focused more on cultural identity, tinged perhaps with a little bit of arson, rather than political power. The Scottish referendum campaigns revealed only too starkly the impact that independence was likely to have upon the economy in the relocation of banks and of industry, upon the pound in the pocket, upon relationships world-wide, upon defence obligations and upon jobs.
It was argued by the yes campaign that Scotland paid more in taxes than it received; it would easily be more than self-sufficient, and they could afford to go their own way without detriment to the people. This calculation, dubious in itself, was in any event dependent upon the total success of all their claims in negotiations with the rest of the United Kingdom. That assumed a hearty goodwill and a desire on the part of the taxpayers of England, Wales and Northern Ireland to underwrite the economy and banking system of an independent country north of a newly defined border. It was a fantasy.
Wales is not Scotland. We raise in taxes only 70% of the money we spend. It is not because we are weak or poor in ability or ingenuity; it is because our basic industries of coal, slate and steel are exhausted. Wales shares its wealth, as the noble Lord, Lord Birt, said. We did not call it Welsh coal when it was mined.
However, today, according to key economic indicators published by the Office for National Statistics last July, we are the poorest part of the United Kingdom. We had hoped that a devolved Government would lift us economically, but it has not happened. Public services in education and health are falling behind England. It is clear that a devolved Government in Wales requires some form of equalisation funding.
The Barnett formula, while generous to Scotland, as the noble Lord, Lord Lang, pointed out, underfunds Wales, according to the Holtham commission, to the tune of some £300 million a year. We need fair funding: a needs-based formula which would restore parity to our communities and our public services. As an immediate stop-gap, the Holtham commission recommended a “Barnett flaw”. If anybody wants to know what that is, perhaps they would like to buy me a drink afterwards and I will explain.
In the medium term, a formula must be devised which takes into account an ageing population in Wales, the additional health burdens which mark a post-industrial society, but above all the need to revive and develop the Welsh economy and create jobs. I remain wholly committed to devolution. There are signs of progress. The coalition agreement in paragraph 24 recognised the concerns of the Holtham commission and undertook to establish a process similar to the Calman commission in Scotland. This resulted in the Silk commission and we are currently putting through this House part 1 of its proposals, which will chiefly introduce borrowing and taxation powers. It is a sad commentary that the Government in Wales refuse to hold the referendum which would bring those taxation powers into operation.
We also have it in our Liberal Democrat manifesto to implement part 2 of the Silk commission, which will move Wales to the reserved powers model called for—
Lord Elis-Thomas
Did I hear the noble Lord right? Did he accuse the Government of Wales of refusing to hold a referendum on taxation powers? How can a Government possibly hold a referendum on something which has not yet been passed by this House?
Lord Thomas of Gresford
I am sorry, I did not quite catch what the noble Lord said.
Lord Elis-Thomas
I am grateful to the noble Lord for allowing me to intervene again. I heard him imply that the Welsh Government had refused to hold a referendum on tax-varying powers in Wales. How is it that a Welsh Government, or any other Government, for that matter, can hold a referendum on a matter which has not yet been legislated?
Lord Thomas of Gresford
That is the stated policy of the First Minister of Wales, as the noble Lord knows perfectly well.
We have in our own manifesto the intention to implement part 2 of the Silk commission, which will move Wales to the reserved powers model that was called for by Jo Grimond and which operates at the moment both in Scotland and Northern Ireland. We hope that normal political processes will operate to install in the Assembly a Government which will use the levers that they are being given to deliver the infrastructure upon which an expanding economy depends: outstanding education in accordance with Welsh traditions and a healthy NHS. Let us see if Scotland can match us then.
Earl of Stair (CB)
“Should Scotland be an independent country?” is the straightforward question which was put to the people of Scotland and voted for on 18 September. The result, by 55% to 45%, was a clear statement of the settled will of the people, with the largest turnout in recent times. It will, I hope, be respected.
Scotland should stay united with the remainder of the country. Whether the result would have been any different without “The Vow”, and all the other last-minute promises and speeches, we will never know. I can only say that the majority of people that I spoke to in a mostly rural area were adamant that they had made their minds up several months before September, and many had already voted by post.
Irrespective of the result, there would always be approximately 50% of the population who would be dissatisfied with the result. This prediction has sadly proved to be correct. Those supporting independence have always been more vocal, and we should be in absolutely no doubt that the passion for independence is as strong as ever before. Add to this the new leadership of the SNP and the claimed increased membership, and I would urge the Government in this House and the other place not to be complacent about the present result.
However, I feel that I should not only acknowledge the SNP and the work that it did on the campaign that it conducted, which was extremely well organised, but also pay compliment to many individual members of the other political parties—MPs, Peers, and MSPs—who worked so hard for the no campaign, sometimes, as we have heard already, under extremely unpleasant circumstances. Sadly, at the regional and lower levels of campaigning, the issues started getting confused, and deep divisions were created between families and friends.
What started as a clear question became further confused when the Westminster leaders began to realise that what had been considered to be an unlikely yes result was in fact a very real danger to the 300 year-old United Kingdom. That a referendum in the United Kingdom should provoke foreign Governments and businesses to comment should have been a further warning. I met an ITN cameraman who had arrived in Scotland to cover the referendum day. He was deeply surprised by what he found in comparison to the briefings that he had been receiving in London.
I agree with the noble Lords, Lord Steel and Lord McConnell, that the Prime Minister made a terrible mistake on 19 September, when rather than quietly accepting the result and making every effort to reunify the United Kingdom, he chose to open two new issues that have completely distracted from the referendum result. The West Lothian question and devolution for cities and regions in England and the remainder of the United Kingdom should never have been raised until the Scottish referendum had been dealt with and put finally to bed. It would have been a very good idea if, rather than standing on the steps of Downing Street, he had gone to Edinburgh and made a statement there.
We now have the Smith commission, which will produce recommendations for further devolution. This will almost certainly involve devolving further financial control, tax-raising powers and many other recommendations. Many of these are being put forward by independence supporters and could lead to virtual independence by the back door. I hope that there will be very careful consideration of the recommendations and the debate will not become a political mêlée in the lead-up to the general election.
Whatever is concluded from the Smith commission, the organisation that started life some 15 years ago as the Scottish Executive has evolved to a Government and is soon to be an even more powerful Executive. Because of this, I would like to raise a question. When the Scotland Bill was debated in this Chamber many years ago, there were numerous exchanges between the late Lord Mackay of Ardbrecknish and the noble Lord, Lord Sewel, on the necessity for a second Chamber in the Scottish Parliament. It was deemed not to be necessary. This has proved not to be correct. I believe the following is still in the Westminster Government’s power, but may require primary legislation—I am sure that the Minister will correct me. With the inevitable greater powers, will the Scottish Parliament be reorganised to allow for a second Chamber, or at least have the committee system reorganised to prevent the party in power from scrutinising its own legislation, particularly in the light of further financial and other powers being transferred?
I conclude with two brief statements. First, the clear majority wish to remain in the union and this must not, under any circumstances, be forgotten. Secondly, the obligations that have been mentioned before to the vows must be fulfilled, but not at any cost that we will all later regret.
Lord Cormack (Con)
My Lords, we are having a fascinating debate, as we always do on these topics, and we have heard some remarkable speeches, including a very notable maiden speech.
There is a danger of losing sight of the fact that it was a very positive result. If in the general election next year one party had 10%-plus more votes than the other, the papers would be writing about landslides. That is the context. We also have to remember, as someone pointed out earlier, that the percentage of the Scottish electorate who actually voted for independence was 37%. The figures are just under 45% of those who voted and 37% of the electorate. However, that should give us no cause for complacency.
We have heard various views and I want to turn to England in a minute, but one thing that has run through this debate is that everyone believes that the pledges that were made must be honoured. I happen to believe that some of those pledges were unnecessary and that some of them were made as there was a lurch from complacency to panic based on one rogue poll. Nevertheless, we must not devalue the political currency or the credibility of the United Kingdom by reneging on those pledges.
I agree very much with those, including the noble Earl, Lord Stair, who say that it was a pity that in the immediate aftermath of the referendum a commitment was made to accelerate the examination of the wider implications and to fix an English timetable. I was in the other place when we debated devolution in the early 1970s. I did not vote for it because I feared—and I said so at the time—that some of the things that have happened would come to pass. However, that is all over; we cannot go back. We have the Scottish Parliament and we must sustain it, but the West Lothian question has been around for 37 years and it does not need to be solved in 37 days.
Concerning the acronym EVEL, I would say, “Speak no evil, see no evil, hear no evil”. “English votes for English laws” is a phrase that comes trippingly off the tongue, but it does not recognise the fact that almost 85% of the population of the United Kingdom is in England. We are not able to have a normal federation in this country, nor do I want to drift down that road. However, the 85% have to exercise a degree of magnanimity in order to maintain the union. Although, when new powers have been devolved, there has been a case for fewer Scottish MPs—there is a precedent for that both in Ireland and in Scotland itself—I do not believe that there is a case for having two classes of MP at the other end of the corridor. I think that would be a retrograde step and it would indeed be playing to English nationalism.
The noble Lord, Lord Birt, talked about the difference between patriotism and nationalism. English nationalism could be a very ugly force. It could do great damage and could indeed lead to the break-up of the United Kingdom. I hope very much that there will be considered reflection in high places and that all the calls that have come from this Chamber today for a commission or a convention will be heeded. I personally would favour a royal commission, and I am glad to see the noble Lord, Lord Hennessy, who I thought made a brilliant speech, nodding at that point. There are not trite solutions that are right solutions, and there are not glib answers that are glad answers. It is crucial that we get this right because we have to look to the future.
Half my family is in Scotland. My eldest grand-daughter voted at the age of 16. I do not necessarily agree with the noble Baroness, Lady Liddell, on that, but I know that my grand-daughter and all her classmates took this matter exceptionally seriously. Why did they vote as they did? They did so because they believed that the opportunities and the heritage would be greater if they remained British and part of the United Kingdom. That is something that the campaign lost sight of. How right the noble Lord, Lord McFall, was to talk about how unfortunate we were to put ourselves in the position where, to maintain the United Kingdom, people had to vote no. That should never have been conceded. If there is a referendum in the future, it has to be under the auspices of the United Kingdom Parliament and we have to look very carefully at the question. I hope and believe that that will not be necessary.
I believe profoundly in this United Kingdom and I believe profoundly in the good that it has done. We should not forget that the greatest days of this country were when there was one Parliament for one country. Although those days will not return—I accept that entirely—we should try to recreate the spirit of the United Kingdom. It took us through the war and we will be commemorating the 70th anniversary of its end next year. As we commemorate that and the 50th anniversary of Churchill’s death, let us remember that the United Kingdom together is, as we have said before, so much more than the sum of its constituent parts. In satisfying certain demands within England, we must not forget that magnanimity in victory should always be our English slogan.
Lord Beecham (Lab)
My Lords, I refer to my local government interests contained in the register, and I join other noble Lords in congratulating my noble friend Lord Lennie on a remarkable maiden speech. He has the somewhat dubious distinction of having at one time been a constituent of mine, and I suppose it is possible that he might even have voted for me in the odd council election—or not.
There is a danger when debating devolution of being sucked into discussions about systems, processes and boundaries when what matters is outcomes in localities. I prefer to frame the debate as one about decentralisation in one of the most centralised countries in Europe. I concur with the dissent expressed by the noble Lord, Lord Tope, from the Leader’s view to the contrary. The prime duty that we have if we are to acknowledge and deal with varying local needs and local opportunities in the economy, the environment and social provision is to ensure that local government is strengthened and enabled to work effectively with central government and its agencies.
I have long been interested in the problems of the north-east and what became known as regional policy. I served on the regional policy group of my noble friend Lord Prescott in the 1990s and regret that the Labour Government did not adopt its more ambitious proposals. But, perhaps more relevantly, I was also involved with the Local Government Association in developing the concept of Total Place—the idea that councils should lead partnerships in which the totality of public spending for an area could be brought together, with government departments and agencies, local councils and the directorates getting out of their silo-based approach to policy development and service delivery. In that way, they would be much more strategic and effective, with the added potential bonus of generating efficiencies by sharing services. To their credit, the Labour Government adopted the idea, with the Treasury being particularly supportive alongside the DCLG. Sadly, other departments were not similarly engaged and progress was slow, with very little evidence of any enthusiasm for the concept in the last four years.
There have been some welcome initiatives—for example, city deals, which have been mentioned this afternoon—but little in the way of bringing together such programmes as health, welfare, education, including further and higher education, housing, transport and others, which, in addition to economic development, need to be marshalled if the problems of communities are to be effectively addressed.
The creation of combined authorities, with Greater Manchester leading the way—I note that my noble friend Lord Smith of Leigh will be speaking in this debate and no doubt will refer to it—offers a potentially powerful mechanism to drive part of this agenda. Although it seems obvious, for example, that the Highways Agency should be accountable to authorities in the different areas in which it operates, and that it and other public services and agencies should be part of the Total Place partnerships, there are two critical requirements without which decentralisation will fail.
The present Government have deliberately offloaded responsibilities to local authorities, for example in the area of council tax support, without the necessary financial resources. I have described this process as passing the buck without passing the bucks. Moreover, they have deliberately skewed the system of local government finance to impose much larger reductions in grants, and therefore cuts, on predominantly urban authorities. This has led to huge and disproportionate cuts, not only for the north and Midlands but also for inner London boroughs such as Newham, Lambeth and Hackney, and coastal towns such as Great Yarmouth and Blackpool. This has had devastating consequences for essential services. Merely passing tax-raising and tax-collecting powers to local councils will avail little if the tax base is inadequate. The grant system must be based on need. In effect, we need an English version of the Barnett formula, as recommended by the noble Lord, Lord Lang.
Higher priority needs to be given to infrastructure investment. Compare, for example, the £15 billion spent on Crossrail with the estimated £7 billion that just might be spent, at some point in the dim and very distant future, on the misnamed HS3 project to improve the rail system linking the north-west, Yorkshire and the north-east, with a population roughly the same size as that of London. In addition, there should be national minimum entitlements to key services, not the minimal entitlements to which we are rapidly descending.
We need to redress the profound inequalities which disfigure our society and hamper our efforts to grow the economy in a globalised, competitive world. We need to restore hope to a generation of young people and to communities where too many lives are stunted by poverty, ill health and the sense of being neglected. Power and resources must be restored to democratically elected local government, in partnership with central government. To facilitate these developments and ensure genuine cross-government involvement, we should also restore a regional presence for government itself. In the 1980s, the Conservative Government established regional offices, eventually involving most departments, which became an invaluable two-way conduit for concerns, information and dialogue between localities and the centre. The present Government abolished them, along with the regional development agencies, a piece of politically inspired vandalism which has greatly weakened the intelligence base of individual departments and the Government as a whole, as well as the capacity to harness resources across the board.
The changes I advocate seek to address the real problems we face, not the political gamesmanship of English votes for English laws. It is an agenda of decentralisation and partnership. Call it what you will; call it devolution if you must, but let us get on, with the urgency that the situation demands, with empowering local government and central government to work together—and, yes, with the private sector—in the interests of ensuring that they make the necessary impact on the lives of communities and citizens.
Baroness O'Neill of Bengarve (CB)
My Lords, I begin with two declarations of interest, one of the heart and one of the head. Both are relevant to this debate. From the heart, I have four grandparents, one Irish, one Scots, one Welsh and one English. That means I have a stake in many parts of this debate. I spent a lot of the six months leading up to the referendum with sleepless nights, worrying, not just about what would happen to Scotland, but about the results for Northern Ireland had there been a yes vote. The noble Lord, Lord Empey, has already hinted at these and I suspect the noble Lord, Lord Bew, will tell us more. Thank goodness we will never know what those results would have been, but those people in both Belfast and Dublin who knew the situation best thought that they could well be catastrophic. It is a fragile settlement.
From the head, because I chair the Equality and Human Rights Commission, I have had occasion to look at some aspects of our ragged devolution settlements. They are quite different, but it is worth noting that both the Scottish and Northern Irish settlements refer directly to the Human Rights Act, yet we have suggestions from some quarters that that legislation might be repealed. If it were, we do not know whether that means unpicking the Scottish and Northern Irish devolution settlements. I hope not—I think it may just have been overlooked—but that was the implication of what has been proposed.
Some noble Lords may think it has now gone away, but I have another worry, which is about the notion of devo-max. It played a very large part in discussions, over the last couple of years, about what would happen in the event of a no vote, which is what we actually got. It is a very unclear slogan and I suppose it was meant to indicate an aspiration. However, it seems to me that it was well chosen to indicate an illusory and ill defined aspiration. Devolution is the sort of thing that anybody would be pretty ill advised to try to maximise. To me, maximising means that you have got some clear unit and you get as much as possible. What is devo-max and what was it meant to be? As we think forward about devolution we should surely aspire, not to maximise something but to get something coherent and workable in which powers are not devolved without the responsibility to exercise them or without the resources or tax-raising competence to do so or without accountability for how it is done. The overall aim must be to secure devo-coherence for each part of the United Kingdom, not devo-max. My slogan is, therefore, the not very enlightening one: devo-coherent.
I will say a little bit about devolution and delegation. Mere delegation of powers, responsibilities and resources does not constitute a feasible scheme of devolution. Devolution is not the same as delegation for many different reasons, but I will emphasise one which is often overlooked. Powers have often been delegated on the assumption that, at the other end, there are bodies that are delivery agencies of centrally prescribed aims. There is little gain for anybody in devolving powers and then prescribing exactly how they have to be discharged. The supposed gain in democratic accountability that might be achieved by a coherent scheme of devolution would be entirely lost if it was accompanied by a centrally prescribed set of boxes to be ticked, performance indicators to be met and measures that effectively remove all discretion in the use of the supposedly devolved powers. This has corollaries that may not always be welcome. If devolution is about permitting variation and decision-making at a lower level and if variation is allowed then complaints about postcode lotteries when various decisions are made are simply out of bounds. This does not mean that accountability for devolved decisions is out of bounds; on the contrary, it becomes more essential. However, it does mean that the forms of accountability adopted must fit the case and in smaller jurisdictions where, as we say, everybody knows everybody, thinking how to make forms of accountability effective can be quite divisive.
Devolution, variability and parity are aims we should all have. I return to our ragged set of devolution settlements. There is no need for uniformity. Inevitably, the settlements for Scotland, with its ancient legal system, and Northern Ireland with its partly necessary—if considerably dysfunctional—consociational constitutional settlement, will need to be varied to take account of realities. However, it is also essential to take account of and respect the unitary status of citizenship in the United Kingdom and to ensure that fundamental rights and protections are there for all, and that advantages and disadvantages are traceable to accountable, devolved decisions and not to asymmetries in the way the overall devolution settlements treat those living in the various jurisdictions. We need to think very hard about the rights of citizens and the sorts of redress for breaches of rights that must be available to all. Like the noble and learned Lord, Lord Hope of Craighead, I believe that common citizenship requires devolved structures that respect the same underlying standards and provide rights of appeal to the Supreme Court for all in every jurisdiction.
We have to accept that Scotland will get ahead in devolution. The promises, the vow, guaranteed that. We probably have to accept that for a time Scotland continues to enjoy more favourable financial terms than the rest of us. Again, we had better swallow that. But we do not have to accept that the status quo is the future. I believe that it will take a constitutional convention and genuine leadership if we are to have a wider and coherent form of devolution.
Lord Lexden (Con)
It is an enormous pleasure to follow a most distinguished member of one of Ulster’s oldest families with strong family links, as we have heard, throughout the United Kingdom. I take the view that the union on which our great country is based gained no more than a reprieve in the recent referendum. I could not disagree more with those who say that the referendum result made the union secure for a generation. We face the extraordinarily difficult task of putting our United Kingdom on a secure, long-term basis for the future to preserve it for the generations that are to come. Above all, we must work to infuse all four constituent parts of our country with a sense of common purpose which they have increasingly lacked as devolved institutions develop separately from one another in three of the four parts. That should be done by revivifying unionism, of which my noble friend Lord Lang of Monkton and others spoke eloquently in the debate in January.
Once upon a time unionism was practised successfully by the Conservative and Unionist Party, particularly in the days when it was known simply as the Unionist Party, a name which it retained in Scotland until 1965. The Conservative Party needs to recover its unionist mission, and fast, just as the leaders of all political parties need to recover a sense of statesmanship, the central point in the truly brilliant speech made by the noble Lord, Lord Hennessy.
I hope that I will be forgiven for dwelling a little on certain aspects of the past, which provide one or two useful points for the present. The extraordinarily difficult constitutional terrain in which we now find ourselves was very familiar to our country’s politicians in the 30 years before the First World War, as they grappled unsuccessfully with the problem of putting the Government of Ireland on a secure long-term basis within the union.
The Irish home rule proposals brought forward by Mr Gladstone in 1886 to provide for limited devolution to a Parliament in Dublin at once exposed to view the central difficulties of Westminster representation and taxation. Mr Gladstone anticipated Tam Dalyell and Enoch Powell by nearly a century. His notes for the great speech in which he introduced the first home rule Bill in April 1886 contained poignant words of enduring interest. He said:
“Ireland is to have a domestic Legislature for Irish affairs”,
and “cannot come here” for,
“English and Scotch affairs … The one thing follows from the other. There cannot be a domestic Legislature in Ireland dealing with Irish affairs, and Irish Peers and Irish Representatives sitting in Parliament at Westminster to take part in English and Scotch affairs.”.—[Official Report, Commons, 8/4/1886; col. 1055.]
Scotch, incidentally, was a widely used alternative to Scottish before it became confined to the most delicious beverage known to man.
Gladstone offered the proposed Dublin Parliament very limited powers of taxation. Reluctantly, he reconsidered his initial plan for the total exclusion of Irish representatives from Westminster. His second home rule Bill in 1893 proposed to cut the number of Irish MPs at Westminster from more than 100 to 40 but without restricting the matters on which they could vote. The same approach was embodied in the third home rule Bill, which Mr Asquith introduced in 1912. Indeed, this was the way in which the issue was settled in 1920 when Northern Ireland’s devolved Parliament was created. Ulster was given 13 MPs, significantly fewer than its population warranted, with a subsequent reduction to 12 when university representation was abolished. The arrangement gained general acquiescence with occasional protests from the Labour Party. It is a point on which we need to reflect.
Significantly, no one in the late 19th century contemplated for long the approach which so many favour in relation to Scotland: arrangements to prevent MPs from Ireland voting at Westminster on matters that were to be devolved to Dublin. Gladstone toyed with the idea but swiftly rejected it. Not for him, not for that generation, was the notion of two categories, two classes of MPs, to be seriously entertained. For my part, I strongly deprecate it as incompatible with a successful union settlement.
It is perhaps a source of some comfort and some relief to recall that the severe constitutional difficulties with which we now wrestle absorbed great political intellects in the past. In the end, they found it impossible to devise a constitutional framework that would satisfactorily reconcile devolution with the existing dispensation at Westminster. Will we in the end be led to the same conclusion? If so, we will find that there is another great figure in the unionist tradition from this period who can help us.
This year marks the centenary of the death of Joe Chamberlain, the radical firebrand who entered into alliance with the Conservatives to preserve the union. He said that it could only be done on a federal basis. There was no other way of reconciling devolution with constitutional harmony and fairness.
Speaking at the inaugural meeting of his National Radical Union on 17 June 1886, Joe Chamberlain said that in any rearrangement of our constitutional system we are bound to see that new provisions are so devolved as to be applicable to Scotland, Wales and other parts of the United Kingdom as well as Ireland. In the weeks since the Scottish referendum and the announcements of further devolution to Edinburgh, I have found myself wondering more and more whether Joe Chamberlain should perhaps be our guide at this grave hour in our nation’s constitutional history.
Lord Judd (Lab)
My Lords, I regard myself as English and Scottish. I had an English father and a Scottish mother who both were very proud of their nationhood. Therefore, I have always seen the United Kingdom as a marriage between two partners, each with their own vivid background. History, culture and religion—each has its identity. I look at the right reverend Prelates opposite and I am glad to see them here as members of the Church of England. When I look at them I think of the vivid stories told to me by my mother and my grandmother. They spoke about the General Assembly of the Church of Scotland and all that that meant to them, and the character and the verve of the General Assembly and the rest. That was very real too. My grandfather was a minister in the Church of Scotland and secretary of its foreign missions.
I keep very close to my English and my Scottish family. I was surprised and rather shaken by the number of them who told me in very firm terms that they were going to vote yes. They were mostly church people. I confess that they were professional, middle-class people who were mainly in the caring professions and education. When I reasoned with them and said, “Look at all the issues facing both England and Scotland, and Wales and Ireland. Can’t we tackle them more effectively together?”. One cousin, in very firm terms, said, “Frank, that is a very powerful argument but it is too late. We are absolutely exasperated and fed up with the arrogance of the south-east and London, which runs the United Kingdom almost totally from that standpoint and does not recognise our identity”.
We have to recognise that there is a powerful feeling in the people of Scotland of a strong desire to express their nationhood, and their self-confidence in their nationhood. We may have won a vote by 55% to 45%, which is a quite significant result, but we have not finished the argument. What now follows will be crucial. If there is disillusion in what follows, goodness knows what will happen the next time that there is a referendum. I agree with those who argue that it will come sooner rather than later. We must discharge what we have promised, and we must discharge it rapidly and by the timetable that has been announced.
Some of these issues, of course, are not just about Scotland. In many parts of England and Wales there is a feeling of alienation from the political system. There is a feeling of loss of significance and identity, and people are yearning for them. When we know that the body politic, of which we are a part here in Westminster, is held in great disrepute by many people in our country, we have to recognise that it is this feeling of loss of personal significance that is very central to it and which lays many people in this country open to appeals from populists and extremists.
We therefore have to get on with the final, comprehensive constitutional settlement. When I look at what has been happening with our constitution in recent years, it seems that it has been a patchwork affair, and very confusing for many people throughout the United Kingdom. It has been dealing with this or that issue, which always has implications for other issues, but there has been no road map, no master plan, no goal, and no sense of destiny or direction. I think that is why a royal commission or other convention is so essential, and quickly, so that we produce a road map which can enable people to look at the interrelated issues and how we are going to take the situation forward convincingly. This is precisely not the time for knee-jerk reactions and populist moves of one kind or another.
That work has to be transparent. It has to engage and involve the widest possible cross-section of the community. I am quite convinced that, unless we have it, we will be facing one constitutional crisis after another. I believe that, given the logic of all that has been happening, with the priority that devolution has been taking in recent years, the logical way is to get on with building a federal United Kingdom. We will have a stronger United Kingdom on a federal basis than we do by trying to insist that it remain upon a unitary basis.
Lord Shipley (LD)
My Lords, as someone who also comes from the north-east of England, I congratulate the noble Lord, Lord Lennie, on his admirable maiden speech.
I am much encouraged by the Government’s achievements in devolving power across the UK since 2010, with the Scotland Act 2012, with the Wales Bill, together with city deals and local growth deals in England, which have enabled local economic areas to lead investment decisions. The referendum result in Scotland is now accelerating that process in England where there is an appetite for greater devolution.
There is, however, a huge difference between Scotland—which already has a parliament and significant devolved powers, and which debated independence for two years—and English regions and subregions, which have no directly elected structures and few devolved powers and have not, with a few honourable exceptions, been thinking much about devolution other than in terms of general ambitions. Defining what is wanted in detail, with clarity about governance and resourcing, place by place, is an essential prerequisite to successful devolution.
There have been a number of think tank reports on devolution within England, together with policy statements by bodies such as the Local Government Association, of which I am a vice-president, Core Cities, the County Councils Network and the London Finance Commission. With the City Growth Commission adding its weight last week and with two further independent commissions reporting over the next three months—the Independent Commission on Economic Growth and the Future of Public Services in Non-metropolitan England and the Independent Commission on Local Government Finance—a detailed set of evidence is being assembled.
Scotland voted no in the knowledge that even a no vote would result in extensive new powers following the vow delivered from Westminster a few days before polling day. Newspapers across the north of England followed up on the day after the Scottish referendum result, asking the Government, “Now what is your vow to the North?”. It is a reasonable question, but it invites the reply “Exactly what powers do you want?”.
Thankfully, ResPublica, with Greater Manchester, has produced for that part of England a route map, Devo Max—Devo Manc. Sensibly, it understands the need for incremental devolution leading within a few years to the full devolution of the £22.5 billion annual public sector spend in that area. This is where we need to be headed for all parts of England willing and able to take on greater responsibilities.
This is because there are two major advantages to the UK in devolution within England. First, it will help to drive growth, as many think tanks have demonstrated, particularly through a better fit in skills investment, which responds more directly to the needs of employers, and in planning for housing and transport. Secondly, it will make public services more efficient because they will be better joined up when run at a local level.
We must combat the silo approach of Whitehall departments and the 50 central institutions which channel public spending into England with more than 1,000 funding lines. I am pleased that my own party resolved at our Glasgow conference that it would introduce a devolution-enabling Bill in the new Parliament to permit devolution on demand to councils or groups of councils.
During the passage of the Scotland Act 2012, the UK Government set out three devolution principles. These were that proposals should have broad cross-party support, should be based on evidence and should not be to the detriment of other parts of the UK. I think those principles should apply to those parts of England now wishing to secure devolved powers from Westminster. There are others.
First, on equalisation of resources, however the detail of devo max for Scotland turns out, it will inevitably and rightly give Scotland much greater responsibility for tax raising. In this situation, even without the Barnett formula, tax raised and public spending would be broadly in balance if Scotland keeps the corporation tax raised there. This is a very important matter, not least because it establishes the principle of geographical ring-fencing within the UK.
Some voices in London, not least some mayoral candidates, are suggesting that what is good for Scotland is good for London. There is an increasing demand for London to keep more of the tax raised in London. This has the potential to become a very dangerous trend for the rest of England and for Wales if it is not handled extremely carefully.
In the case of Greater Manchester, for example, the ResPublica report shows that public spending is £22.5 billion yet tax raised is only £17.7 billion. Devolution of responsibilities to Greater Manchester would make public spending go further and would increase tax revenues by increasing growth. The ambition is to bring tax and spending further into balance, and that is right, but not all places can do this, and we will still need a system of equalisation which protects those areas less able to increase their tax revenues.
Secondly, the UK must remain responsible for UK-wide policies, such as major infrastructure investment, and for the core policies behind public services and welfare provision.
Thirdly, on governance, with devolved powers come extra responsibilities for delivering growth and greater efficiency and for managing investment and risk. Having a governance structure that is fit for purpose and commands public support will be essential. We will have to build on the structures we have, on city regions and, we hope, county regions and combined authorities. As they grow in their responsibilities, such authorities will need a more secure democratic mandate. I think that must mean direct elections using a system of proportional representation.
In conclusion, the next step has to be a constitutional convention to examine powers, responsibilities, capacity building, governance, tax-raising powers and spending powers for devolution within England. I hope that we will do that.
Lord Sanderson of Bowden (Con)
My Lords, like my noble friend Lord Steel, I must congratulate my own Scottish Borders on returning the highest no vote in mainland Scotland, but there is no doubt that the referendum has created the most divisions throughout Scotland that I have ever witnessed. It will take a very long time to heal the wounds. Splits in communities were very obvious and in many families there was division. As the noble Lord, Lord Foulkes, said, we were very near the precipice. The situation was not helped by the Scottish Government’s White Paper, parts of which were more akin to an election manifesto, when we were really dealing with the most fundamental constitutional change for our country.
Having succeeded in that no vote, we are now faced with producing proposals for enhancing the many existing powers devolved to Scotland, which in the case of tax raising have never been used since inception. I have with me the report of the commission of my noble friend Lord Strathclyde, published in May, and I am glad to see one of its members, my noble friend Lady Mobarik, here in her place. That report stated:
“The sad fact is that, even after 15 years of devolution, it is still far too easy for Scottish Ministers to blame difficult financial decisions on others. This is both unhealthy for the Union and unattractive for Scotland. Closing the fiscal gap through the means of fiscal devolution would create a more responsible Scottish politics and would help to remove this grievance culture from it”.
This is a major task for the Smith commission, but one of its most important tasks.
The extended tax-raising powers must ensure that MSPs are held responsible for raising, particularly through income tax, the requisite amount of money to cover devolved expenditure. It will also allow other parts of the UK to vote on their tax and spending issues. This is the only way to get a sustainable solution that fits in with the wider responsibilities of the UK Government. It means that MSPs will have to justify to their constituents the taxes necessary for their schemes and, as the report suggests,
“Scottish versions of the Personal Tax Statements should be issued by HMRC, highlighting taxes under the control of the Scottish Parliament”.
I hope that this can be enshrined in legislation.
On other proposals in the Strathclyde commission report, I would ask the commission to make haste slowly in any changes that involve the universal credit arrangements. It is a difficult and complex area and I would not wish the Government to act hastily and repent at leisure.
I do not wish to comment on the West Lothian question, which others have talked with great knowledge about, but I believe that it has to be settled essentially by the other place.
I turn to the final recommendation of the Strathclyde commission report, which is the creation of,
“A Committee of all the Parliaments and Assemblies of the United Kingdom … to consider the developing role of the United Kingdom, its Parliaments and Assemblies and their respective powers, representation and financing”.
Ever since the devolution Bill was debated in this House, I have been worried about the lop-sided arrangement that was brought about as a result. Some said at that time that it was a slippery slope leading to independence. We now know, 15 years later, how near that possibility came.
Nothing less than what Strathclyde proposes should be acceptable, as a lop-sided house inevitably will in time crash to the ground. If we are to keep the United Kingdom united, whether it is a quasi-federal system or whatever, the matter really needs to be addressed. There is a stirring in England for progress to devolve. The great northern cities are uniting under the banner of the City Growth Commission, headed by the very capable Jim O’Neill, whose aim is to galvanise the north and to start by getting its transport arrangements improved, with a lot of help, I hope, from the Treasury. This is all well and good, but consideration needs to be given to all the major changes taking place in all parts of the United Kingdom. The Strathclyde recommendation is quite clear. The wider effects of the pending Scottish changes should not be underestimated by the rest of the UK and its institutions.
But of one thing I am certain. In keeping the United Kingdom united, we must have the ability to choose a Prime Minister coming from any part of the United Kingdom. In the interests of democracy, that is an essential part of any commission’s deliberations.
Lord Smith of Leigh (Lab)
My Lords, this has been a very wide-ranging debate on all aspects of devolution. I shall start by saying that I am not the noble Lord, Lord Smith, who is struggling to get together by Burns Night the promises made before the referendum—I am sure that he has a very difficult task—but, as my noble friend Lord Beecham said, I am chairman of the Greater Manchester Combined Authority and so declare my interest. You can therefore see that my interest in devolution is devolution to cities in England, which is what I shall concentrate on today.
I was surprised by the contribution of the noble Baroness the Leader of the House, who seemed to say that devolution in England was okay and that we had done everything. The aftermath of the referendum in Scotland, as the noble Lord, Lord Shipley, said, has made people question the overcentralisation that still exists across the UK and England in particular. We have seen numerous reports on devolution come out. The noble Lord, Lord Shipley, referred to Devo Max—Devo Manc, which, obviously, we are particularly pleased with, but the other reports have shown what impact some devolution would have. Every political party in this country now seems to be espousing the idea. Senior members of the Government, of both parties, have made their contribution to that. Even the Labour Party now has a policy on devolution that I am sure we can support, so it is an idea whose time has come. I was therefore surprised at what the noble Baroness, Lady Stowell, said.
Of the three aspects of policy that should be devolved to cities, the first is, clearly, economic powers, the second is place(-based) public services and the third is some form of fiscal devolution. I shall not repeat what people have said about the economic powers, but, clearly, skills, transport and housing are key issues that will make a real difference to our cities. That is particularly true of skills. When we have a Skills Funding Agency based in Whitehall, trying to determine what new skills are needed across Greater Manchester, well, it is no wonder that we have so many hairdressers being trained for jobs that do not exist. We need to get hold of that money and we need to be able to commission it locally, working with the private sector and colleges to make sure that we get a better deal.
I have spoken in this House on a number of occasions on public service reform, about which I am passionate. It was begun, as the noble Lord, Lord Beecham, said, under the Labour Government and what they called Total Place. There has been movement under the current Government in the various experiments that they have conducted—we were a pilot area in Greater Manchester for public service reform—but we have not tackled this fundamental problem of a silo-based approach, where each central government department works on its own and does not understand the nature of what is going on.
We often find that it is the same individuals and the same families who need support, because they have very complex needs. We need to understand that and stop trying to sort out the problems of those individuals in different areas with different people involved; we should look at the position as a whole. We have started in Greater Manchester on a “Work Programme plus”. People have different views about the success of the Work Programme, but quite a large number of people were never shifted by the Work Programme because they were too difficult. Using the resources of local authorities and others, we have begun to understand what problems individuals have in getting jobs. Is it homelessness? Is it some kind of mental problem? Do they have drug issues? We ask what the issue is and how we can support it, and then we can help them get back into work. We need to stop dealing with failures, as public services often do, and try to look at things across the piece.
As the noble Lord, Lord Shipley, reminded the House, in Greater Manchester public spending is about £22 billion to £22.5 billion and it has been that figure for a time. We have had government austerity and the cuts. The cuts have affected Greater Manchester—public services such as local authorities and the police have taken huge hits in their spending—but, because of rises in welfare and health spending, the total has remained the same. We are not going to tackle it unless we get control of that money altogether. We need to do that much more. We are happy to take what we would regard as a risk and reward situation. We will tell the Government that we will make savings and share them with them—some of the savings can come back and some of it we will do.
The benefits of such a system have been shown. We know that there will be better economic growth and it will be better distributed across the country. This country is too reliant on London and the south-east and we need to spread wealth across the country. That will happen. Public services will be more efficient and cheaper and actually deliver better outcomes for the people they are meant to support.
We recognise that with devolution comes responsibility. We cannot simply take it on board now. We probably have the most sophisticated government in Greater Manchester because we have been doing it long enough but we know we need to change. I hope on Friday I will get an agreement on some very significant changes in Greater Manchester to take on these new responsibilities to make sure we are accountable to Parliament and to government. We need to do that.
Most of the changes I have suggested do not need to wait for the big constitutional convention. They do not need to wait for massive new legislation. They can be done now. All that is required is the political will to do it.
Lord Purvis of Tweed
It is a genuine pleasure to follow the noble Lord’s forward-looking and very practical contribution to the debate today. It was very interesting to hear of the broad areas of common ground between him and my noble friend Lord Shipley, pointing out some practical ways forward to noble Lords.
Over the last month since the vote in the referendum I have reflected on two main areas and they have stuck with me. The first is that for many people who voted in the referendum the issue was less what country they wanted to be a citizen of and more about what kind of country they wanted to live in and bring up their children in. It has been something that all parties that believe in the United Kingdom need to continue to reflect on. The noble Lord, Lord Kerr, and others accurately pointed out that of those eligible to vote, 37% voted yes. We can use exactly the same definition when we come to the rather stark figure that 47% voted no. That, for me, is one of the areas where it is quite telling.
The second area, which is a much more optimistic reflection and one that shapes the rest of my contribution to today’s debate, was the discussions, interaction, listening and taking part in debates with 16 and 17 year-olds in the referendum. It was politically reaffirming but it also struck me that as a group a majority of them voted no. Many of them had their own definition of what a country and a state should look like. They frame what they want the country to be like to give them the best opportunity for the future in this fast-changing and complex world. They defined what a state would be and in many respects they rejected what was on offer by the Scottish Government in the White Paper, which they considered remarkably old-fashioned and in many areas incoherent. We need to challenge the threats ahead of us as a country, which take up much of our time in Parliament both here and in the one where I was proud to serve when I was in the Scottish Parliament. That is why for the year I have been in this place I have tried to take as many opportunities as I can to shape the debate about what happens next.
In June this year I was fortunate enough to have a Question for Short Debate:
“To ask Her Majesty’s Government what plans they have for further reform and decentralisation of the United Kingdom in the event of Scotland voting “no” in the independence referendum in September”.
I have been in this House just a year, as I said, but I served two terms in the Scottish Parliament and five years on the Scottish Parliament’s finance committee. My views have been framed over that period. I was well aware very early on that in 1998 we created a devolved legislative but we did not create a Government in Edinburgh that had fiscal responsibility commensurate with legislative competence. Indeed, in many respects it is that key aspect that we are debating today. It is a coincidence perhaps, but a good one nevertheless, that it was the plenary of the Smith commission—a different Lord Smith—meeting in Edinburgh today discussing taxation: what tax basket would be the responsibility of the Scottish Parliament—addressing the very issues on which the noble Lord, Lord Lang of Monkton, and others have been challenging us. A lot of thinking has been done in this area and there are lessons we can learn. There are strong, long-held principles on fiscal federalism from other countries in the world that are more comparable to the United Kingdom—as my noble friend Lord Tyler indicated with Canada and Australia—than perhaps other European federal nations. There are long-held principles of fiscal federalism that we can learn from in the United Kingdom. We do not always need to listen to the Treasury briefings that say that everything is really difficult and the default answer is no. We need to set political leadership and then the Treasury and others will follow.
Between being in the Scottish Parliament and in this place I wrote a series of proposals looking at these areas in detail. It was a regret to me at the time that when I met the Conservative Party it was holding to a line in the sand for no further powers and when I met the Labour Party a senior member of the party said to me, “We just do not like the choreography of being on the same stage as the Conservatives and you Liberals”. When I tried to propose two years ago a Glasgow agreement of common ground, common language and a common platform to go into the referendum campaign with a progressive narrative of what the United Kingdom is and can be, there was rebuff. It is an absolute delight that we are now in a position where all five parties in Scotland are around the table and this Parliament is seized of the positive opportunities ahead of us. We may yet still have a form of Glasgow agreement coming out of the Smith report and I declare an interest as chair of an all-party parliamentary group in this place set up on a cross-party basis trying as parliamentarians to forge that way forward.
Finally, I agree with other Members that one of the ways forward is what I have proposed as a conference of the new union meeting straight after the general election. My final appeal is that this should not be an opportunity to long-grass many of the issues or to rediscover many of the questions. We know what we need to resolve. The difficult part is political parties with vested interests often having to make uncomfortable compromises for their own sake. We have to do it because the figures of 37% and 47% should always stay in our mind. If that is the case, we have that on our shoulder but let us be optimistic and seize the opportunity that has been presented to us.
Lord Elis-Thomas
My Lords, it is always a delight to follow the noble Lord, Lord Purvis of Tweed, in our devolution debates. When we go back to the later stages of the Wales Bill in the coming weeks I hope he will be able to find time to share his wisdom with us as he has done before. I was particularly pleased to hear what he had to say about his experience in the Scottish Parliament and his emphasis on co-operation across parties. As I am sure Members of this House and certainly the Government know well, this is precisely what has been happening in the National Assembly for Wales. Only last week a resolution was passed unanimously by all the four parties, put down jointly by all four party leaders. The essential part of that is the emphasis on the timescale for getting draft legislation— certainly before the end of the current Westminster parliamentary Session—to implement the further report of the commission so ably chaired by Paul Silk, a former clerk and chief executive of the National Assembly.
In a sense, the process in Wales was ahead of that now taking place in Scotland; but it has also been overtaken by events, in that the process in Scotland is going further. The negotiation that the party leaders in Wales are seeking jointly with the UK Government is precisely to sharpen up the proposals in the Wales Bill. It is also important that, as powers mature in Scotland, we have devolution to the English regions—for example, the north of England—alongside what is happening in Scotland, Wales and Northern Ireland. I speak as someone who is highly reliant on transport starting from Manchester, whether trains or planes.
In the short time available, I shall not venture into the English question as a whole, except to emphasise the point that we already have a clear statement at all times of the territorial extent and application of all our legislation. Wherever there are areas which overlap, we work through legislative consent Motions, both in the Scottish Parliament—substantially used, dare I say, by the SNP Government—to ensure that we can co-legislate when that is deemed the best way forward.
I will emphasise the aspects on which the party leaders in Wales are keen to get movement. The leader of the Opposition, the Conservative leader, Andrew RT Davies, is very keen on having the power to determine our electoral arrangements and the size of the Assembly, subject to the use of a super-majority, a two-thirds majority, whenever those decisions are taken.
As I said, there is an emphasis on the need to develop the legislative proposals in what we call Silk 2, but also to ensure that as we get further powers, there is serious co-decision between the UK Government and the Welsh Government, between this Parliament and the National Assembly, whenever we consider a referendum, for example. That is my clear response to what the noble Lord, Lord Thomas of Gresford, said. We must recognise that any decisions taken on holding a referendum on tax-raising powers should reflect the views of the people of Wales, and the UK Government should accommodate that.
It is essential that the discussions taking place between Wales and the UK Government parallel the process that is taking place in Scotland. I join colleagues in saying how good it is to see the SNP Government and the Scottish Greens as part of the post-referendum process.
I get a bit tired of the ideological attacks on a form of nationalism that I certainly never espoused, which does not belong in the 21st century. The civic nationalism of the Ministers who I know in the Scottish Government does not fit the description of my old friend Eric Hobsbawm. Whatever reason he had to leave his home in Croesor, in my former Westminster constituency, I am certain that it was not ethnic cleansing, although he seemed to think that that was the case.
As we look forward to the progress that the coalition Government are leading on devolution across the United Kingdom, for which I thank them, it is an opportunity for us to restate, in this building of all buildings, that in our history the relationships between the nations, regions and peoples of these islands have always been changing. The key thing is to realise that they are relationships. Constitutions are made by relationships, not the other way around.
Lord Horam (Con)
It is probably appropriate in the context of this debate that an Englishman should follow a Welshman and a Welshman should follow a Scotsman. If only we had someone from Northern Ireland, we would have the whole of the United Kingdom encapsulated in the Chamber in one moment.
One of the central points and problems of this debate was raised by the noble Lord, Lord Birt: that 84% of the total population of the United Kingdom is English, with 8% being Scottish, 5% being Welsh and 3% Northern Irish; I hope that that makes 100%. As a result, I have always well understood the desire of the Welsh, the Scots and the Northern Irish for more control over their affairs, rather than the possibility of being swamped by England. I agree that “swamped” is a dangerous word in the present context, but I think that the House appreciates what I mean.
We rightly have devolution to Scotland, Wales and Northern Ireland. In those circumstances, there are really only two alternatives to handle it. The first is that England puts up with it. After all, England gets a huge amount from having associated for so long in our history with Scotland, Wales and, for a long time, Ireland as a whole, but now Northern Ireland. Whatever little disadvantages occur to England and English voters, we should not underestimate that that is a big plus. Who can doubt that if Scotland had left us in the independence referendum, it would have been a massive blow not only to the United Kingdom, obviously, but also to England? Let us bear that in mind.
In that context, the English have been pretty good about all this in the 15 years or so since we have had devolution to Scotland, Wales and Northern Ireland. We have rumbled a bit about the West Lothian question; we have agitated a little about the Barnett formula; but it has not been a huge issue in England. We English are rather mild and tolerant people. I think that George Orwell got it about right: we wear our patriotism rather lightly, although it is none the less deeply felt.
Therefore, the question now becomes, as we have gone through the past 15 years or so with the devolution that we have had: will that attitude be sustained with the greater devolution that we are committed to giving to Scotland? There is no doubt or question that we have to deliver on that. We therefore have to consider whether we can, first, make the devolution proposals being considered by the noble Lord, Lord Smith, work, and, secondly, whether we can make some sort of acknowledgement of the English problem work as well. I think that both of them could work. I see no reason in principle why both of those cannot be made to work, even in the limited time available.
The question of income tax and other taxation has been raised. I do not see that as a problem of principle or an economic problem. There was a very good article in the Financial Times the other day saying that, economically, it could quite well work with income tax devolved in the way that my party has suggested to a very full extent.
Equally, on English votes for English laws, with its EVEL acronym, I must say that I am rather a minimalist. If the Standing Orders of the House of Commons could be changed without primary legislation—which I always abhor where we can avoid it—that would be a way forward. Whether we do that or not, I agree with the noble Lord, Lord Forsyth, on this issue, that a better solution would be to have fewer MPs in Scotland and Wales if we have more devolution.
The House will recall the solution that we came to at the time of the division of Ireland in the 1920s, when they went down to 12 or 13 Members of Parliament for the UK Parliament, and, when direct rule was reintroduced, they went back up to 17. If we are to have MPs all treated the same—they should all be treated in the same way, with no fancy nonsense at the edges if you can possibly avoid it—that sort of solution, having fewer MPs in Scotland or Wales, should and, I hope, will be considered by my good friend William Hague. Who could be better to do that than him? He is an excellent choice for that role.
I would like that to be considered as part of the ongoing discussions of how we can make some sort of sensible commitment in England to dealing with this whole thing without too much of a consequence. However, there is always the danger—it has been obvious throughout—that this will unravel. Therefore, I come to the conclusion, along with others like the noble Lords, Lord Purvis and Lord Judd, who mentioned this recently, that in the final analysis some sort of federal solution may well have to be considered. I do not mean now; I hope that the present arrangements can be made to work. It certainly has to be considered in a calm atmosphere, as I believe the noble Lord, Lord Hennessy, said. Then we could get it before a general election. Some sort of federal solution with Parliaments all round, with the UK Parliament at the top, I think is the final bulwark. That would be fair to everybody and would be the right way forward if we cannot make the rest of this work. I profoundly hope that we can. I am in politics because I am a proud Brit, and I am proud of all parts of the United Kingdom. We have a hugely successful history and I see no reason why we cannot have a hugely successful future.
Lord Soley (Lab)
It is almost a year since I expressed the view to the noble and learned Lord, Lord Wallace of Tankerness, in this House that we were in acute danger of losing the most successful political and economic union that the world has ever seen. I was worried about that throughout this period, but I recently became confident that the Scottish people would throw us a lifeline; they did, and they did it very solidly. Not only did they throw out the nationalist cause of the SNP but, more importantly, what we need to remember now is that they threw us all, the whole United Kingdom, a lifeline. We need to redesign our constitution for the 21st century.
If your answer to a question now is nationalism, then you are asking yourself a question more appropriate to the 19th century. Nationalism of the sort that is very common both in the SNP and in some other groups—and would be common in England if we awaken the English nationalist cause—is profoundly dangerous. It is particularly dangerous to a successful union, so my message is that we should use the opportunity that the Scottish people have given us to take this forward. I would love to spell out how I think that should go but I do not have time. I will just say that the first question to ask ourselves is: what do we want the union for? There is a detailed answer to that but there are a couple of simple answers. Part of it is about what it has given us for 300 years. It has given us political stability, political progress, economic stability, economic balance and things such as the Industrial Revolution and has thrown out the danger of a return to the authoritarian divine right of kings. That was the positive side.
One message I have for the Government is that, instead of playing around with ideas that encourage English nationalism, such as English votes for English regions, we need to get the message out about what the union is for. There is some criticism that the no campaign did not put out a progressive answer about what the union is for. That is a fair comment, although the negative answer was essential because it was vital that the Scottish people understood that, although they could always use the pound—just as the Chinese, the Russians, the Americans or anyone else could do—what you cannot do is use the pound and then have a say in setting the interest rates or determining the regulation of the financial sector or whatever. In other words, you lose independence in the 21st century unless you recognise that you need the integration between nation states.
I would say to the noble Baroness who opened for the Government—in a way, I am sorry about that speech because it focused so much on the question of English votes for English regions—that she is in acute danger of actually aggravating the situation. It is a gift to separatists—English separatists, Welsh separatists, Scottish separatists and Northern Irish separatists. If she does not believe me, she can watch some of the heads nodding when I say this and when others have said it. It plays into the hands of separatists. If that is not a good enough reason for her, let her please get the Prime Minister to read and reread the speech by the noble Lord, Lord Empey. When I got involved in Northern Ireland politics in the 1970s and 1980s, we looked back to what we did in 1922 and saw what a disastrous mistake it was. In effect, we created a statelet which wanted to be part of the United Kingdom, and in name it was part of the United Kingdom, but in fact it was something very different and very separate, with disastrous consequences. If you go down the road of just thinking that we have to have English votes for English regions, you emphasise that separatism.
We have to go down the road of devolution. I, personally, like the city regions that have come to the fore from the Chancellor of the Exchequer. I think that that is a good and positive road to go down. However, if you go down this road of English votes for English regions, look at what you do for England: you awaken English nationalism and threaten the union. If the Prime Minister does not understand that, he is making a truly fatal mistake. It is very important that we look at that.
Devolution is vital not just because Alex Salmond and others were able to play on the idea of Westminster being remote. It is not just remote from parts of Scotland; it is remote from the south-west of England, from the north-west of England, from the north-east of England and, at times, it has been remote from Essex and Surrey. There is a problem about the feeling of distance. Alex Salmond should not be allowed to get away with this either, because Shetland feels remote from Holyrood; so does Orkney, so does the north-west of Scotland and so does the north-east of Scotland. One of the dangers of this, which the SNP and others do not understand at times, is that when countries break up they often disintegrate rather than separating into neat little blocks. Shetland has a very strong view about this. Its inhabitants do not regard their oil as Scotland’s oil; it is Shetland’s oil up there. If anybody goes up there and asks them, they will make it very clear. The dangers in this are very deep.
We need to reconnect with people and to do so by devolving power. This is a problem not just for Britain but around the world, yet Britain has been incredibly successful at doing constitutions. The German constitution, which is one of the most successful in the world, was virtually written by Britain and there are many others. We have been incredibly successful over 300 years of doing this but, at the moment, we are in danger of losing the plot by focusing on one or two issues, such as English votes for English regions. We have to break out of that and recognise that we have to find a form of devolution that works throughout the United Kingdom, while recognising that the union is important because it gives us political and economic strength across the piece.
I wrote to the Prime Minister shortly before the referendum and asked him to look at having a constitutional conference—whether we won or lost that referendum, incidentally. I still think that is the right road to go down. I do not mind whether it is a royal commission but I say to the noble Baroness, so that she may convey it to the Prime Minister, that we do not need simplistic political solutions at the moment. We need statesmanship and we look to the Prime Minister for it. At the moment, we are not getting it.
Lord Stephen (LD)
My Lords, I compliment the noble Lord, Lord Soley, on his insightful contribution. I share his deep concern about the dangers that we faced at one point of this referendum: of losing so much of what the union has been over the last 300 years.
This has been a very good debate and there have been some very wise comments, particularly on the nature, appeal and real dangers of nationalism. Nationalism has the ability, in the right place and at the right time, to whip up passion and fervour among those who feel disconnected, disengaged or disfranchised. I think that the noble Baroness, Lady Liddell, was the first to point out that there was a very nasty edge to this referendum campaign. I spoke in a previous debate about the treatment, for example, of JK Rowling or that of the mother of a disabled child—who dared to say that she intended to vote no—by the First Minister’s media adviser. You could see it on the streets as well. What did it for me was seeing not the treatment of Jim Murphy but rather the ugly heckling and barging of an elderly woman who dared to approach him, simply to ask a question about the campaign. That is not the sort of Scotland that I ever want to see again.
I have no doubt that if the yes vote had won, there would have been a carnival of triumphalism. George Square and its fountains would have been occupied for days. The no voters are very different. There was a sigh of huge relief across Scotland after weeks of agony about the outcome but no triumphalism there. Instead, there was sensible and constrained silence except, sadly, as several noble Lords such as my noble friend Lord Steel and the noble Lord, Lord McConnell, have pointed out, from the steps of No. 10 Downing Street. Rather than the Prime Minister’s essentially partisan speech which was trying to gain party advantage that morning, he and the other party leaders should have travelled to Scotland together to give substance to their pledge, show respect for the decision of the people of Scotland and help to unite and heal. There is still time for that to be done.
I have considerable confidence in the ability of the noble Lord, Lord Smith, and his team to deliver a radical set of proposals for significant new powers on both tax and policy to Scotland. It is worth pointing out that, for the first time, the Scottish National Party is participating in the process of delivering a stronger, more powerful Scottish Parliament. It turned its back on the Scottish Constitutional Convention and the Calman commission but now it is part of the Smith commission, which is a good thing. I wish all members of that commission well in their endeavours. I have considerable confidence in their ability to deliver home rule for Scotland—home rule of the kind for which my noble friend Lord Tyler and I, along with many others in this Chamber, have always campaigned.
There is a kind of federalism which is beginning to develop momentum for the rest of the UK. I have heard many noble Lords, such as the noble Lord, Lord Foulkes, talk about federalism in a passionate way, which bodes well for future debate on this issue. However, I have considerable concern about the issue of shaping the future of the rest of the UK. I do not care whether it is a commission or a convention, frankly, or whether it is royal or not. What I care about is that it should be rapid, radical and federal.
By “rapid” I do not mean that it has to be decided in the next 100 days or by Burns night, or whenever the deadline might be. Quite clearly, Scotland has to come first and that is the vow. However, it does mean getting on with it for the rest of the UK. By “radical”, I do not mean that I want to force a particular solution on England; it means that giving more powers to local government in England is simply not nearly enough. By federalism, moreover, I do not mean a single, fixed solution but more the federalism of the kind emphasised by my noble friend Lord Tyler and the noble and learned Lord, Lord Hope of Craighead. It is the sort of approach that can be taken in Australia, South Africa, Canada or Spain. There are so many examples around the modern democratic world but it appears not to be able to be grasped here in the United Kingdom.
Lord Cormack
But there is no federation where one country within that federation has 85% of its population.
Lord Stephen
Exactly, which is why we must devolve within England; this is exactly the point that I hope to come on to. We can have different approaches in devolving power across England. We need a coherent structure for that, but we can be very flexible inside that structure. Canada is a very good example. However, the current focus on a purely English solution—a sort of English nationalism—is for me simply not good enough. I believe in devolution, not simply because Scotland is a nation and is the only part of the United Kingdom that deserves these powers, but because decentralising power is a good thing. It makes for better decision-making. A decentralised United Kingdom would in my view be a better democracy for us all.
If the referendum in Scotland leads to this—to a better more decentralised democracy for all of the United Kingdom—then there could be no better tribute to those who quietly but passionately voted no. Those who trusted the Westminster party leaders and had faith in something better are the people who have created this opportunity. It is now our responsibility together, across the political divide, to deliver. The very future of our united nation depends on it.
Lord Bew (CB)
My Lords, the noble Baroness, Lady O’Neill, has already made this point very strongly. There is one respect in which the referendum result in Scotland has been stabilising for the rest of the United Kingdom, and that is with respect to the experiment in Northern Ireland. There is no possible way, if Scotland had elected to leave the United Kingdom, it could have been stabilising in its implications for Northern Ireland. As a strong supporter of the settlement embodied in the Belfast agreement, along with the noble Lord, Lord Empey, who worked so hard both to see the Belfast agreement pass in a referendum and also to maintain the institutions in the first few difficult years, I am delighted by that really excellent outcome.
In more general terms, however, the mainstream English political mind has had a problem for a century, which is that it tends to be too sentimental about devolution as the answer to problems in the United Kingdom. It may be absolutely necessary—and I have already said that I believe it is absolutely necessary for Northern Ireland, and I accept, in the context in which we live, for Scotland and Wales—but nor has it worked in the way that it was expected to work and we must face up to this. There is a reason for that, I think. For much of the century people believed that, if only we had achieved devolution as a settlement for Ireland, we would have avoided all the violence and the separation of Ireland from the rest of the United Kingdom, but this fine magical solution, because of short-sighted behaviour of some major political players, was not made available to us.
However, the Scottish experience of the last few years raises a major question about that. Scottish nationalism, which I accept is a serious force, does not have anything like the deep historical roots of Irish nationalism, yet it came to the point where 45% of Scots, after a sustained period of devolution, were prepared to vote for separation. Anybody, therefore, who thinks that had we had devolution for Ireland earlier in the century that would automatically have switched off the separatist urge is, I think, deluded. None the less, the idea is there and we think about it in a sentimental way.
Often the poor performance of the devolved regions—look, for example, at the performance of Wales in terms of its educational structures in international tests—does not receive the attention that it should. We say, again and again, “Local people making local decisions—it is going to work and it is going to be better”. Actually, not all the figures, if you look at the educational culture of the devolved regions at any level, would for example suggest that that is necessarily the case. In this debate, many noble Lords whose opinions I greatly respect—
Lord McConnell of Glenscorrodale
Perhaps the noble Lord would address this point. There is a feeling in Scotland that at least part of that accumulation of support for independence is due to increased confidence. That is partly because Scotland’s performance economically today compared to the rest of the United Kingdom is significantly better than when the Parliament was established. Population decline has been reversed and a number of other improvements in Scottish society have been made. That confidence is perhaps part of the reason why people feel they can take on the additional powers of independence.
Lord Bew
I accept the noble Lord’s point, but the same point could be made about Irish nationalism, which also becomes more intense at certain points when there is more self-confidence as a result of good economic performance. Indeed, in the period leading up to Ireland’s break with the United Kingdom, the First World War was a tremendous boon for Irish farmers and most people in Ireland were farmers. So I accept the point.
On the issue of the federalist moment, which so many have conjured up this evening, I have no intellectual objection to it and I understand its appeal, but I just want to express one point of scepticism. In 1910, all the major parties and all the major players had a serious interest in separatism, with Winston Churchill at the heart of it. Why? Because they could see the Irish home rule crisis about to come and they could see the threat of civil war. They could see the danger that the unwritten rules of the British constitution were going to be absolutely torn apart. Federalism was the wonderful, magical way in which all these contradictions could be resolved, everyone could be happily secured in their identity and the Irish could be given the substance of what they wanted. If we could not do it then, when the political class on all sides thought that this was the right way to go, are we likely to be able to do it now, when the pressures are nothing like so great? It may be so, but—this is not a judgment on the concept of federalism; it is a judgment on just what it requires to get people to move in that direction—I am not sure that we are quite there at this point.
The noble Lord, Lord Forsyth, has already made the point about the reduction of MPs in Westminster from the devolved regions being the obvious solution to the West Lothian question. When I met the McKay commission, I made exactly the same point as the noble Lord, Lord Lexden, that this was the approach adopted with respect to Ireland. It is the obvious and logical way of approaching that question. However, we are now in a situation where the McKay commission has decided to go a different way.
I just want to say a couple of words about that commission, because noble Lords are afraid of too speedy a reaction. Sir William McKay, a former Clerk of the House of Commons who deeply respects its traditions, has produced an answer to this difficulty that does not create two fundamentally different classes of MPs, which is the great danger at stake, but allows a greater register of English opinion. If we are in the situation where the West Lothian question will not go away—currently, it is the Conservative Party that is most active on this; in the 1960s, it was the Labour Party, which was furious that a Labour Government with a majority of only five or six had to put up with 12 Ulster Unionist MPs and Labour MPs could not ask questions about what was going on in County Antrim—today it is a different party that finds the West Lothian question hard to endure. However, if we are in a position where we have to act on this matter, a report of this sort may not have the answer but deserves some serious consideration.
Above all, the characteristic of that report, as we might expect from William McKay, is what the union requires to survive: it is dominated by the language of civility. That is the sine qua non for the survival of the UK as we approach these problems.
Lord Forsyth of Drumlean
My Lords, it is a great pleasure to follow the noble Lord, Lord Bew. The great weakness in the McKay report was that it addressed only the West Lothian question and not the much bigger one of the imbalance that arises because of the Barnett formula. I am sure he would agree with that.
Anyone listening to Nicola Sturgeon, who is the sort of First Minister designate in Scotland, on the “Today” programme this morning demanding a Scottish veto on any European referendum result could be forgiven for thinking that the nationalists had not been comprehensively defeated on a massive turnout on 18 September. Not content with one referendum on Europe, she wants to have four. Alex Salmond was absolutely convinced that he was going to win the campaign, where he used the patronage of the Scottish Government ruthlessly—and, by the way, is still doing so, ringing people up and saying he is going to get them because they did not support his side of the argument. Intimidation reared its ugly head at every level, inspired by these nationalists, causing unionists to be fearful about acknowledging their support for their cause.
In the end, Alex Salmond failed because of economic uncertainty. His support, however, came from an electorate, as the noble Lord, Lord McConnell, pointed out, utterly disillusioned with the political system and still hurting from the consequences of the financial crash of 2008. The nationalists, just like Mr Farage and UKIP in the south, offered hope and easy answers, and many hard-pressed voters thought that things could not get worse for them and they could risk taking a chance on separation. The separatists exploited the consequences of poorly thought-out constitutional change and complacency and lethargy in their opponents, as the noble Lord, Lord McFall, pointed out earlier. The Prime Minister allowed Alex Salmond to choose the question, the timing and even the franchise for the referendum, despite it being the United Kingdom’s constitutional responsibility. The result was that we had a two-year long campaign during which all the levers of the Scottish Government were used to advance the nationalist cause and promote a grievance culture. The question on the ballot paper demanded a negative answer to maintain the status quo. Instead of, “Should Scotland remain part of the United Kingdom?”, Salmond insisted on, “Should Scotland be an independent country?”. As my noble friend Lord Cormack pointed out, the unionists were thus forced to campaign for a no vote while enduring attacks from Salmond that the campaign was negative. Of course campaigning for a negative is negative. He deliberately set it up that way.
He promised that this referendum would be a once-in-a-generation event. He said that because he thought that he would win it. His word has proved to be worthless; it turns out that he had the lifetime of a butterfly in mind. He resigned as First Minister in defeat, leaving his left-wing successor—she is left wing—to renege on the nationalist promise and refusing to rule out a further referendum. It is clear that a vote for the SNP is now a vote for divisive, disruptive and damaging neverendums. Salmond himself will almost certainly fight the general election, hoping to win a seat at Westminster, in the Parliament he so despises, and lead a ragbag of disruptive latter-day Parnellites. That is his plan.
The United Kingdom has been put at risk by tactical misjudgments and constitutional tinkering for political advantage. The Conservatives, Labour and the Scottish nationalists have all been opposed to the creation of a Scottish Parliament in my lifetime. They have changed their positions for reasons of political expediency rather than principle and have sought to amend the constitutional position to suit themselves. Alex Salmond was opposed to devolution and the creation of a Scottish Parliament with limited powers but changed his mind when he decided that it could be a Trojan horse to destroy the United Kingdom. Sadly, my Labour opponent is not in his place. As a friend, I have great respect for the noble Lord, Lord Robertson of Port Ellen. When I was Secretary of State, he was my shadow. He predicted that devolution would kill nationalism stone dead. Labour thought that it would enable the left to keep the Conservatives out of power in Scotland and that they could devise a complex voting system which would ensure that no one party could dominate the Scottish Parliament. They adopted the language of nationalism, branding the Conservatives as anti-Scottish, arguing that the Conservatives had no mandate to govern in Scotland and denouncing our policies as Anglicisation. Even today, Labour MSPs have not learnt the foolishness of their actions because I see them in the newspapers contemptuously referring to their Scottish colleagues as Westminster Labour.
In 2011 the nationalists won an “impossible” overall majority in the Scottish Parliament with 69 seats on a manifesto that pledged an illegal referendum on independence. So much for devolution killing nationalism stone dead. Westminster had no choice but to grant it, but had delayed grasping the issue for too long. Gordon Brown as Prime Minister crushed a proposal to hold a referendum in 2008 from the Labour leader in the Scottish Parliament, Wendy Alexander.
In the final few days of the referendum campaign, after many people, including me, had already voted by post, an opinion poll which had eliminated the “don’t knows”—who turned out to be the “no but won’t says”—put the separatists in the lead. The three unionist party leaders panicked and published a joint statement—not a vow—in an exclusive for a tabloid newspaper, pledging more undefined powers to the Scottish Parliament. This was done by three privy counsellors without consulting Parliament and, we now learn, without even consulting their party leadership in Scotland. Not since Henry VIII have we had laws enacted by proclamation, even by such distinguished figures as Nick Clegg, Ed Miliband and the Prime Minister. There have been several references to a vow during this debate. The statement was turned into a vow by the newspaper’s headline writer. It proclaimed:
“We agree that the UK exists to ensure opportunity and security for all by sharing our resources equitably”—
as the noble Lord pointed out—
“across all four nations to secure the defence, prosperity and welfare of every citizen. And because of the continuation of the Barnett allocation for resources and the powers of the Scottish Parliament to raise revenue we can state categorically that the final say on how much is spent on the NHS will be a matter for the Scottish Parliament”.
It is, of course, complete gobbledygook.
The Barnett allocation, as the noble Lord, Lord Turnbull, pointed out, gives Scotland an extra £1 per person for roughly every £5 spent in the rest of the UK and is not based on need. A commitment, such as in this so-called vow, to share resources equitably would mean ending Barnett and would leave an enormous black hole in Scotland’s block grant. We have just won the argument in the referendum campaign that even if Scotland had all tax revenues she would be utterly dependent on the oil price or very much higher taxes just to maintain the status quo. Similarly, Barnett gives Scotland roughly 10% of any increases in expenditure decided at Westminster, and any allocation in respect of the NHS will be determined there, not in Scotland. When water was privatised in England, the block grant was reduced and the funds required to maintain it in public ownership came from the allocations to other services.
These promised new powers and the funding arrangements are not thought through; nor are the consequences for the rest of the United Kingdom which had no say in the referendum. The reason given for having no devo-max question was that it was a matter for the UK as a whole while independence was for Scotland to decide. With a general election due next May, the necessary legislation cannot be put through Parliament and there is no time to find an agreed solution which will bind the United Kingdom together and ensure fairness for each of its constituent four nations. Once again, political expediency is playing its part in handing the game over to the separatists.
The way forward must command support in every corner of the United Kingdom. The fact that 45% of the voters in Scotland on a turnout of 85% were prepared to abandon Britain cannot be ignored or fixed by more asymmetric devolution. Nor can the remedy be left in the hands of political parties. A constitutional convention drawn from Scotland, England, Wales and Northern Ireland and involving central, devolved and local government as well as civic society could address the issue of funding, the role of the Westminster Parliament, regional issues and the central purpose and benefits of a United Kingdom. This is not just a matter for Scotland but one for the British people as a whole if the United Kingdom is to be secured on sound foundations for the next 300 years.
Lord Elder (Lab)
My Lords, moving as we are towards the end of a long debate, I start by wishing the noble Lord, Lord Smith of Kelvin, well and his fellow committee members the best of luck. I say that as someone who spent eight years, I think, on the Scottish Constitutional Convention, most of them on its Executive, who was in the Scottish Office at the time of the White Paper and Bill and who, more recently, was on the Calman commission, so I kind of know the course.
I want to make a couple of general points. First, I suggest very strongly that we take care with the language we use in discussing further devolution. In the years running up to 1997, when we were talking about devolution we said that everything was reserved and then published a long—an increasingly long—list of things that were to be devolved. That was reversed in the 1998 Act, which says that everything is devolved except a much shorter list of central powers that are to be reserved. The issue is not just what powers we need to devolve—I am, of course, prepared to look at further powers to be devolved—but what powers we need to retain if the union, which was backed in the referendum by a substantial majority, is to be upheld. The SNP will always want more powers. We should be more careful, as was Scotland in the referendum vote.
Some of the more extreme suggestions—devolving all income tax, VAT, social security—look to be ending the union by the back door. If all that is left is defence and foreign affairs, and perhaps a residual and declining Barnett formula, then the Scottish people will feel that they have got rather less than they expected. The SNP of course wants to become a member of NATO, a nuclear-backed alliance, though it does not want to have anything to do with nuclear weapons. The fear is that, if we end up with this further great swathe of economic powers being devolved in some way, the majority in the referendum will feel hugely and rightly let down.
There has always been a school of thought in Scotland that you could stifle independence by granting more powers to the Scottish Parliament. That has always seemed to me to be flawed. If you argue for more powers in all circumstances, then you are actually arguing for independence, but with a slightly longer timetable—and that is not what Scotland voted for.
Secondly, I note the very tight timetable that is being followed by the new Commission. I wonder whether we might be in a better position if the same degree of urgency had been shown about the introduction of the Calman proposals, particularly those about tax. I declare an interest both as a member of the Calman commission and as someone who had a heavy hand in these tax proposals.
The commission reported in June 2009 and I believe that the tax changes are going to be introduced in 2016-17. These are substantial powers, and I should have liked to have seen how they might have changed the argument, had they been introduced rather more quickly. It is after all one of the ironies of devolution to Scotland that the income tax powers in the Scotland Act, backed by the people of Scotland in a separate referendum question, were allowed to lapse, not because they were not in the interests of the people of Scotland— who had voted for them explicitly—but because they did not fit well with the very narrow party aims of the SNP.
I hope the day will come when the debate in Scotland is not about more powers alone, but that we will move on to the vastly more important point of what is to be done with the powers that are there. For goodness’ sake, let us get back to the business of health and education policy, the power of local government, and all the rest. That is what is now needed.
Lord McAvoy (Lab)
My Lords, this has been a powerful debate, with some very powerful speeches made by some very powerful speakers. It would take me too long to go through every single one of them but particular mention must be made of the former Secretaries of State for Scotland, my noble friend Lady Liddell of Coatdyke and the noble Lord, Lord Forsyth of Drumlean, as well as of the noble Lord, Lord Lang of Monkton.
I share the view of a number of noble Lords that the most dangerous time was not before the referendum. I believe that the most dangerous time is now. If we do not handle this collectively, if we do not handle it properly in a collegiate way, it will lead to an inevitable separation and a separate Scotland. The word “Westminster” has become an epithet—an insult. This has been contributed to by Mr Farage and by Mr Salmond. There is a disengagement between the so-called establishment parties and the public. The noble Lord, Lord McConnell of Glenscorrodale, mentioned this disengagement in the context of Westminster and the Scottish Parliament. The paradox is that, in Scotland, more people turn out for Westminster elections than they do for Scottish Parliament elections, so there is a quandary there.
More powers are guaranteed for Scotland within the agreement. Although a lot of people do not like this or that power promised in the vow, as it has come to be known, if we do not deliver on it, we are guaranteed trouble. More powers for Scotland are guaranteed, regardless of what the SNP says. We guaranteed these collectively during the referendum campaign and we must deliver on that. My party has always led on devolution and we will engage with the Smith commission in a spirit of openness and partnership with the other political parties. As has been mentioned, it is a good thing for the Scottish National Party to be involved in that.
There are a couple of things that I have been confused about all night. There have been constant attacks on the Barnett formula, and it has been stated by some very knowledgeable people that it is not based on need. Since I came into politics, although I have not studied the Barnett formula—I would not want to be up all night—I have always been told that it is based on need, and in Scotland's case that it is based partly on the geographical nature and the large physical area of Scotland. There is a new gospel out, but I certainly believed that that was part of the calculation, along with the lower incomes in Scotland and social factors. The Barnett formula has been a great boon to Scotland, because it shares the resources of the United Kingdom with a poorer part of the country. However, I accept that there is concern about the democratic deficit, and I think that there is merit in that. I am not a mathematician but, surely, if the Scottish Parliament collects more of its own spending, there is a hope that the Barnett formula—but before I can finish, the gloom and doom merchant from Drumlean is shaking his head at me. He is starting to intimidate me. In the fullness of time, I hope that the Barnett formula can be a less important consideration in the overall look, especially in financial matters.
Lord Thomas of Gresford
The Barnett formula quite simply, as far as Wales is concerned, is a multiplication of departmental spending from the departments devolved to Wales by the population, which is 5.3% of the United Kingdom. That is where the money comes from; it has nothing at all to do with need.
Lord McAvoy
As I said, if you started to debate the ins and outs of the Barnett formula, we would be here a long time. I am being honest in telling your Lordships' House that my understanding of the formula since I came into politics was always that it was based on need.
I want to address the serious question of EVEL. If we get to the stage that there are two classes of Members of Parliament, it will come across as trying to take party advantage of a situation. The noble Lord, Lord Bew, mentioned the Northern Ireland situation. I do not recall the Labour Party in my time in the House of Commons making too much of the fact that there were Ulster Unionist MPs who more or less voted with the Conservatives, because my party and I took the view that that anomaly was worth carrying for the sake of the United Kingdom. I do not recall the noble Lords, Lord Forsyth of Drumlean or Lord Blencathra, or other Conservative Peers, mentioning the injustice of that situation all those years ago. So they seem to be a bit picky about it. There is a danger that that sort of seemingly political calculation by the Conservative Party could ruin its approach to the Smith commission.
My party supports a royal commission and a constitutional convention, because it is clear that we have to establish a mode of operation through the entire United Kingdom that will be settled, will last and endure and will be of value to all the people of the United Kingdom.
The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
My Lords, the House has heard a very important and comprehensive range of contributions on complex and interlinked constitutional issues. I am pleased that we have had the opportunity to hear such a range of views and perspectives from all parts of our United Kingdom; it has been very important to hear views not just from Scotland but from England, north and south, as well as from Wales and Northern Ireland.
I was delighted to hear the contribution of the noble Lord, Lord Lennie, in his maiden speech. I understand that he is not only a Newcastle United fan but a participant in the Great North Run. No doubt that will allow him the stamina to take part in debates that go on for the best part of six hours. He summed up a recurring theme of our debate when he talked about the disconnect between politicians and voters that needed to be reduced. He entertained us and he informed us, and I know that the House looks forward very much to his contributions to your Lordships’ House in the future.
As noble Lords will have heard, the issues considered in this debate fall into three broad categories. The first relates to Scotland and the fulfilment of the joint commitment by the three party leaders to deliver more powers to the Scottish Parliament in light of the referendum no vote. The second category of issues relates to how to ensure that power is properly devolved and decentralised to all the nations, communities and individuals who comprise all parts of our United Kingdom. The third, separately but rightly—not as an alternative to devolution within England—considers how we might address the so-called West Lothian question, which has come about as a consequence of devolving power to specific parts of the United Kingdom.
I will address first the issue of the referendum in Scotland. It was legal and fair in its conduct and decisive in its outcome. It is important that we reflect on the points made by a number of noble Lords, including the noble Baroness, Lady Liddell, and the noble Lord, Lord Birt, who highlighted the appalling treatment of Nick Robinson in a country which ought to take pride in the freedom of the press and of the media. My noble friends Lord Stephen and Lord Forsyth also highlighted some of the many real problems that were encountered during the referendum. We should not lose sight of these when we think of what kind of Scotland we want to see in the future.
Some noble Lords questioned the fact that the Scottish Parliament devised the referendum. It was important that the referendum was, as it were, made in Scotland. In its immediate aftermath, we heard today of the conspiracy theories that counters at polling stations were filling in blank ballot papers. If the referendum had been devised at Westminster, the view that it was all a trick and a conspiracy would still be echoing loud and clear. The referendum was devised by the Scottish Government—they had everything going for them, and they lost. That is what makes the result decisive.
The people of Scotland expect that the interests of 100% of Scotland within the United Kingdom are taken forward. No one is under any illusion that a no vote was a vote for the status quo or that, somehow or other, we are out of the woods. As the noble Lord, Lord Hennessy, said—I think he spoke for many of us, myself included—our relief has been suffused with anxiety. As the noble Lord said, we are all seeking to achieve a strong and lasting settlement across the United Kingdom.
That is what we intend to do. The vow made by the Prime Minister, the Deputy Prime Minister and the leader of the Opposition has already been put into practice. My noble friend Lord Selkirk of Douglas sought the reassurance that that would be adhered to. Even those who contributed to your Lordships’ debate, who were sceptical about the commitments made, nevertheless all agreed that it was essential that that promise is honoured. It has been honoured. The Command Paper setting out the parties’ positions was due by the end of October. In fact, it was published two weeks ago. It is continuing to be honoured with the work of the Smith commission. It will be honoured because we have undertaken that the heads of agreement, which we look forward to the noble Lord, Lord Smith of Kelvin, announcing, will be taken forward with clauses by Burns Night.
Equally, the Scottish National Party should remember the statements it made ahead of the referendum that it expected it to be a once-in-a generation or once-in-a lifetime event. Nicola Sturgeon, whom I congratulate on becoming, as she will become, the First Minister of Scotland, said one year ahead of the referendum—on 18 September 2013—that this was a once-in-a lifetime opportunity for Scotland. If our parties are expected to honour commitments, the least we can expect is that the Scottish National Party will honour its commitment to the people of Scotland that this is for once in a generation.
The commission chaired by the noble Lord, Lord Smith of Kelvin, was up and running on 19 September. His terms of reference make it clear that the recommendations will deliver more financial, welfare and taxation powers, strengthening the Scottish Parliament within the United Kingdom. Last week, he convened the first meeting of cross-party talks to reach agreement on proposals for further devolution. All 10 nominees from each of the represented political parties attended. The noble Lord has said that they have,
“committed to work together to achieve a positive outcome to this process”.
The noble Lords, Lord McConnell and Lord Foulkes, emphasised the importance of this being, as it were, a principles-based approach rather than a horse-trading approach. I believe that that is what the noble Lord, Lord Smith, indicated after that first meeting. The parties have agreed a set of principles which include, but are by no means limited to, forming a substantial and cohesive package of powers, enabling the delivery of outcomes that are meaningful to the people of Scotland, and strengthening the Scottish devolution settlement and the Scottish Parliament within the United Kingdom, including the Parliament’s levels of financial accountability. The noble Baroness the Leader of the Opposition, as well as the noble and learned Lord, Lord Hope of Craighead, and my noble friend Lord Glasgow, sought an express assurance that that would be within the context of the United Kingdom honouring the outcome of the referendum. There is also a principle that it will not cause detriment to the United Kingdom as a whole nor to any of its constituent parts.
However, this process is not just about the parties. The referendum saw an opening up of civic engagement, and the noble Lord, Lord Smith, has made it clear that he wants to hear from all the various groups to ensure that the recommendations that he produces are informed by views from right across Scottish society. By St Andrew’s Day, he intends to publish heads of agreement. As I have indicated, the Government are committed to turning these recommendations into draft clauses by Burns Night 2015. It is a demanding timetable but that is because the demand is there, in Scotland, to see change delivered, and it is a demand that we intend to meet.
Scotland will have further powers but we believe that that must be within the context of Scotland being a part of the United Kingdom. It must not start to unravel the fabric that binds us together, because that would be a denial of the outcome of the referendum. However, I very much share the view expressed by the noble Lords, Lord McConnell and Lord Elder, that the exercise of these powers is vital to the whole range of devolved responsibilities. It would be very refreshing to get the political debate back on to how we improve education, health, transport, agriculture, sport and local government in Scotland.
Not surprisingly, the question of funding was raised. I certainly take the point made by the noble Lord, Lord Empey, who referred to the “ATM approach”—a point reiterated by the noble Lord, Lord Kerr of Kinlochard—where there has been spending by the Scottish Parliament without responsibility for raising the funding. Indeed, my noble friend Lord Purvis of Tweed highlighted that fiscal responsibility gap. One of the objects of those who served on the Calman commission—as I did, along with my noble friend Lord Selkirk of Douglas, and the noble Lord, Lord Elder—was to address that and to ensure that there was greater accountability for spending. Therefore, with the additional tax powers come additional responsibility and accountability.
We have been clear as a Government that the act of devolution in and of itself should not result in a change in the budget, but it is important to note that this is also one of the key principles highlighted by the Smith commission. However, we have been equally clear—this addresses a point raised by my noble friend Lord MacGregor of Pulham Market—that if decisions are taken by the Scottish Government which result in a lower tax yield than the current arrangements, the Scottish Government will have to take spending decisions in line with that reduced tax yield. The noble Lord, Lord Kerr, will put me right on this but I think that the Azores judgment means that where tax is fully devolved and there is a shortfall, it cannot be topped up.
The noble Lords, Lord Blencathra and Lord McAvoy, made the point that, as more tax-raising powers are devolved, the amount of money transferred to Scotland under the Barnett formula will decline.
Lord Forsyth of Drumlean
Can my noble friend just deal with the point in the so-called vow where it says that our resources will be shared,
“equitably across all four nations”?
How is that consistent with keeping Barnett? Can he also deal with the notion that, by giving the Scottish Parliament more tax-raising powers, Barnett can be phased out? If the tax base in Scotland is lower than the uplift in the Barnett formula, compared to the average for the United Kingdom, how will that gap be filled?
Lord Wallace of Tankerness
My Lords, an important issue which was always there but was articulated well, not least by the former Prime Minister, Mr Gordon Brown, in the latter stages, was the notion of the social union; the equitable arrangement within our United Kingdom where, if one part of the kingdom is thriving, there is a transfer of resources to a part that is not doing so well. That is one of the important things that binds our United Kingdom together and I see that as an equitable distribution of resources within it.
Lord Turnbull
I query why a country which claims to be more prosperous than the United Kingdom as a whole is the recipient of the highest transfer compared with Wales, which is the poorest part but receives a much lower transfer. That cannot be equitable.
Lord Wallace of Tankerness
The noble Lord, Lord Turnbull, quoted very accurately the words used in the statement in the Daily Record. As I indicated to my noble friend Lord Forsyth, with all his success in getting more money, it is the base line that is applied. With regard to Wales, it is understood and recognised—
Lord Purvis of Tweed
If the Minister will give way I will, for the information of the House, quote from the public expenditure statistical analysis by the Treasury in 2013 which shows that in 2008-09 the DEL resource grant, which may well be considered the transfer, was 7.7% of all of the grants for that year. The plans for 2015-16 are 7.96%, which is below the population share for Scotland. The point has been made about how you would balance that grant with the further tax powers. This is the work of the fiscal federalism principles of looking over a 10-year profile over economic cycles to make sure it is a balanced and fair proposal. The Strathclyde commission did it; the Liberal Democrat commission did it. There is work being done to inform this quite considerably.
Lord Wallace of Tankerness
My Lords, with respect to my noble friend who I know has studied it in great detail, I hesitate before going down the line of a 10-year fiscal federalism profile. I was about to answer the point made by the noble and learned Lord, Lord Hope of Craighead, and the noble Baroness, Lady O’Neill, with regard to the Supreme Court. The Scottish National Party has made a specific proposal. It would be wrong to second guess the Smith commission, but on the noble and learned Lord’s point about the role of the Supreme Court, if you have got a single market you should have a common set of principles and legal interpretation. This is very important and, as he will be well aware, both my own department and the Scottish Government established working groups during the passage of the Scotland Act 2012 to look at the role of the Supreme Court with regard to devolution issues. These are now compatibility issues and I hope that the Smith commission will have regard to that work, as both working groups reached very similar conclusions. I hope that gives some reassurance to the noble Lord.
The commitment to deliver further powers for Scotland is of course in keeping with this Government’s record in decentralising power. As my noble friend the Leader of the House has indicated, this Government have made huge progress in devolving both responsibility and funding for schemes to a local level. Local enterprise partnerships and the ambitious city deals programme, which has been mentioned by a number of noble Lords who have contributed to the debate, are clear examples of our commitment to empowering local leaders to take decisions which best fit local circumstances and needs.
That is a demonstration of open-mindedness about how more powers might be devolved. We certainly do not believe that power should be hoarded at the centre but that it should be devolved to the nations, communities and individuals that will benefit from it. I was struck, in the course of our debate, by the very important contributions from those with a rich experience in local government: the noble Lords, Lord Smith of Leigh and Lord Beecham, and my noble friends Lord Shipley and Lord Tope. They shared very constructive ideas with your Lordships’ House as to how we might improve existing arrangements, what new ones might be made and how powers might be used more imaginatively in our communities, our cities and those parts of the country which are not immediately connected with a major city. That is clearly an agenda which must be pursued as we go forward examining a whole range of constitutional issues.
With regard to other devolution of power within England, my noble friend Lord Dobbs referred to Walter Scott and the path to the Highlands and the danger for an Englishman. Treading into devolution for England by a Scotsman is almost as dangerous. I always tread very carefully indeed. From what was said this evening, it is very clear that this is something which should be addressed. As I indicated earlier, this is not an alternative to the so-called EVEL; it is a both/and rather than an either/or.
As my noble friend Lord Greaves, the northern home-ruler, said, there is no consensus in England as to where we might go. There must be an opportunity for further debate. The noble Lord, Lord Prescott, made a very clear case for greater devolution within England. He said that the regions of England had to be consulted as to where they might go. There are proponents of regional government throughout England. There are difficult issues over the possibility of the creation of extra layers of government. There have been advocates of a separate English Parliament, although that raises questions over location and composition, and whether it would be any more decentralised than the present arrangements. While in Scotland there was a settled role of the Scottish Parliament, the picture in England is less clear. My noble friend Lord Tyler indicated that my own party advocates provisions of flexible and responsive devolution on demand. There is a wider debate to be had. My noble friend Lord Shipley set out a strong, healthy agenda for such a debate.
Lord Blencathra
The latest polls show that 78% of people in England favour English votes for English laws. That seems fairly like consensus to me.
Lord Wallace of Tankerness
I was coming on to the question of English votes for English laws. I do not believe that English votes for English laws is an answer to the whole question of devolution within England; I think that that point is accepted. As my noble friend Lord Tope said, it is not a question of if—it must be a question of how. Moving on to the point raised by the noble Lord, Lord Blencathra, and numerous contributors to the debate with regard to English votes for English laws, I was going to say, “Over the last few weeks,” but my noble friend Lord Macgregor reminded us that the issue was live when he entered the House of Commons in 1974 and my noble friend Lord Lexden reminded us that it was live when Mr Gladstone and Joseph Chamberlain were in the House of Commons. This matter has generated debate and questions for well over a century. The welcome transfer of powers to Scotland, Wales, Northern Ireland and the London Assembly, and the prospect of further devolution have created not just an anomaly but a complex one. The asymmetric devolution of powers to these bodies makes the issue of which MPs’ constituents are affected by which laws a highly varied one. It is not a simple question with an easy answer, but we nevertheless should seek an answer, as my noble friend Lord Macgregor said. It is a question of fairness.
Each of the three main UK parties in the United Kingdom Parliament has expressed its views on the West Lothian question. This House has considered the issue. We have had the views of the McKay commission and reports such that of the democracy taskforce. My right honourable friend David Laws has noted that a grand committee should be appointed proportionately to vet laws that will apply only in England, joined by Welsh MPs when matters affecting Wales are debated.
The noble Lord, Lord Elis-Thomas, mentioned that Bills have a territorial extent. I know that my own Office of the Advocate General looks at all Bills with regard to whether legislative consent Motions will be required in Scotland. It can be complex. The Marine and Coastal Access Bill in which I took part is an example that was referred to by my noble friend Lord Greaves. Although my noble friend Lord Blencathra said that it could be relatively easy, I remember when the legislation was going through the House of Commons with regard to the increase of tuition fees under the Labour Government. When that passed, I was the Minister with responsibility for higher education in Scotland and I knew full well that that had far-reaching consequences for Scotland, which led to the Further and Higher Education (Scotland) Act 2005. It is not always easy. This matter deserves careful consideration.
Lord Foulkes of Cumnock
The noble and learned Lord is absolutely right. Will he deal with the point that I raised that, for more than 300 years, until 1999, all Scottish legislation—on education, on health and on the legal system—was dealt with by this Parliament by a majority of English, Welsh and Northern Irish Members?
Lord Wallace of Tankerness
The noble Lord is right. That was one of the reasons we established the Scottish Parliament. It is a matter which I think ought to be addressed—and far better that it be addressed where there is cross-party working and consensus-forming. That was the basis on which we established the devolved Administrations, and I do hope we can work on a cross-party basis to address this important issue as well.
Baroness Royall of Blaisdon
On the EVEL issue, is the noble and learned Lord content—I do not wish to try to put fissures in the coalition—that the committee that has been set up by Mr William Hague, of which the noble Baroness is a member, is a committee of people from Westminster behind closed doors looking for a quick-fix solution? Is the noble and learned Lord himself content with that as a way forward?
Lord Wallace of Tankerness
My Lords, my experience is that Cabinet committees tend to be that. They are Cabinet committees. However, as we have experienced in this debate, the debate is not confined to those members of the committee. It would be very helpful if there were contributions from not just the two coalition parties, which, as the noble Baroness points out, are not entirely at one in this, as the article by my right honourable friend David Laws has shown. It would be very healthy if we had views, not only from the other political parties but others as well.
Lord Cormack
I am extremely grateful to my noble and learned friend. A variety of views on English laws have been expressed in the debate. But surely one message has come through very clearly: people do not want to rush this. Many people who have made this point have also said that this is an appropriate subject for a commission or a convention.
Lord Wallace of Tankerness
My Lords, we are not just going to park it. I was coming on to the very point that my noble friend makes about the convention. I have a whole list here—I am not going to read it out—of noble Lords who have talked about a convention—that constitutional change should be achieved through a convention. I make it clear that the Government will consider proposals for the establishment of such a convention because, while debate is needed in both Houses, it is important that we engage with the public as well. We should not simply be continuing our constitution behind closed doors, if that is what the noble Baroness the Leader of the Opposition was suggesting. We must listen to other people’s views and opinions on this. The noble Baroness, Lady Quin, and my noble friend Lord Thomas of Gresford said it should not be a top-down approach. Many of us would accept that view.
Baroness Royall of Blaisdon
My Lords, I know that the noble and learned Lord wishes to finish, but, that being the case, that the Government are open to having a constitutional convention, which is extremely welcome, why is it that they are bent on taking a decision on EVEL before the general election and before a constitutional convention has been set up?
Lord Wallace of Tankerness
A view has to be taken on some issues. My noble friend Lord Maclennan has been an advocate of a constitutional convention probably longer than anyone else I can recall. He was perhaps suggesting that the proposals that might emanate from the Smith commission should go to a constitutional convention. I believe there are some things which cannot wait and to try to do that would give rise to allegations of bad faith. We have heard in our debate a whole range of issues which a constitutional convention should raise. My noble friend Lord Steel talked about the role of the second Chamber. Should it be a second Chamber that reflects the different regions and nations of the United Kingdom? The noble Baroness herself mentioned votes at 16, which would be an important constitutional change, one which, again, I think is ripe for debate. It is important that we respond to the suggestions and concerns raised. Our structures need to be responsive to that.
In conclusion, the United Kingdom is the strongest family of nations the world has ever seen. My noble friend Lord Thomas reminded us of what Mr. Gladstone said—that home rule must be in the heart as well as in the law. Many of us feel that it is something that is in our DNA and in our hearts. Together we have made remarkable discoveries and inventions, delivered changes that have improved the lives of citizens not just in the United Kingdom but globally. Together we have one of the most stable currencies in the world. Through our strong internal trade links, we create jobs across the United Kingdom. Together, we make our savings and our pensions more secure. These are valuable things. They should perhaps have been said better and more often during the campaign, but I think that they did actually get through. We must remember that the people of Scotland at the end of the day voted to remain together in the United Kingdom. It is important that we engage not only the people of Scotland as we go forward but that we recognise that the referendum campaign threw up some important issues, not least the disconnect that so often exists between the people and those in power. That is an important issue that has to be addressed.
I am sure that we agree that we should try to do this with the maximum degree of consensus. Perhaps the watchword for us all is to deliver a strong and lasting solution for all the United Kingdom.