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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
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
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
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
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)
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
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, 1 month 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, 1 month 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
(10 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
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, 1 month 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, 1 month ago)
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Business, Innovation and Skills
(10 years, 1 month 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.
Westminster Hall
(10 years, 1 month ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Chilcot Inquiry (Costs)
(10 years, 1 month ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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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, 1 month 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, 1 month 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
(10 years, 1 month ago)
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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, 1 month 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
(10 years, 1 month ago)
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Military Air Traffic Management
(10 years, 1 month 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, 1 month 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, 1 month 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.