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Oral Answers to Questions
(10 years ago)
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Mr Andrew Turner (Isle of Wight) (Con)
1. What plans she has to work with her international counterparts to address humanitarian needs in Gaza.
The Secretary of State for International Development (Justine Greening)
May I start by paying tribute to my right hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone), who now moves over to the Home Office but did some fantastic work alongside me on the women and girls agenda, and also wish the right hon. Member for East Renfrewshire (Mr Murphy) good luck in his mission impossible as he seeks to take over Labour in Scotland?
The UK will continue to work closely with international partners to address humanitarian needs in Gaza. We have already provided over £17 million in humanitarian assistance and recently committed a further £20 million at the international donor conference in Cairo to assist those affected, including hundreds of thousands left homeless as winter approaches.
Mr Turner
There are 1.8 million people in Gaza and it is physically smaller than the Isle of Wight. Does the Secretary of State accept that 485,000 people in Gaza need emergency food assistance and 273,000 people need school buildings for shelter and, most important of all, around 1 million people are desperate for work? What is the right hon. Lady doing about that?
Justine Greening
My hon. Friend raises some very good points. Gaza is one of the most densely populated parts of the world. As he says, we are, of course, providing shelter and basic services to many people, but we also increasingly work on private sector support, supporting livelihoods, and the key to that in the long term is a political settlement that means the economy in Gaza can thrive normally.
Sir Gerald Kaufman (Manchester, Gorton) (Lab)
Will the right hon. Lady condemn in the strongest terms the recent total closure of the Gaza border by Israel, in utter violation of the ceasefire, making it very difficult—even more difficult—for the aid she provides and the other aid for reconstruction after the terrible destruction imposed by the Israelis? This cannot go on.
Justine Greening
We are extremely concerned about the continued restrictions, which have a tremendous effect on the Gazan economy. Of course we understand the security concerns of Israel, but ultimately we need leadership from both parties to move forward to some political settlement. We will never get to provide the long-term support to people unless we can get in and out of Gaza easily and, as the right hon. Gentleman knows, that has been a very great problem for us.
Jason McCartney (Colne Valley) (Con)
10. Will the Secretary of State join me in thanking my constituents from Lockwood, Crosland Moor and Thornton Lodge for their fundraising efforts to help address the humanitarian crisis in Gaza, and will she confirm what steps the UK is taking to aid reconstruction in Gaza following the Cairo conference?
Justine Greening
I pay warm tribute to my hon. Friend’s constituents. They are among the millions of groups and communities around our country that do fantastic work supporting people in very difficult parts of our world. We are playing our role. Part of our announcement at the international donor conference was to make sure we can help fund some of the reconstruction that is now required in Gaza.
Richard Burden (Birmingham, Northfield) (Lab)
While I agree with the Secretary of State that a political settlement is vital, does she agree with me that there is still no excuse for Israeli forces firing on fishermen when all they are doing is trying to fish, or firing on farmers when all they are trying to do is farm their land, and what can she do to ensure that the Israeli forces stop doing this?
Justine Greening
We are always concerned about these sorts of incidents of violence. In the end, people will have to get back around the negotiating table, and we will have to have talks that go further than the ceasefire that is currently in place. They need to get back under way in Egypt, and ultimately people need to agree that the current status quo is simply untenable, and communities on both sides need to work towards having a better future for their children than they are currently experiencing.
Mr Peter Bone (Wellingborough) (Con)
The Secretary of State is absolutely right that we need a political settlement, but is she concerned that, of all the money that is being given, some will be siphoned away for Hamas to build new tunnels—terror tunnels—back into Israel? What is the Secretary of State doing to ensure that British taxpayers’ money does not contribute to that?
Justine Greening
I can categorically assure my hon. Friend that no aid money goes to Hamas. We have safeguards in place to ensure compliance with both UK and EU legislation on terror funding.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
15. Given this House’s historic vote to recognise Palestine, the decision of the Swedish Government and similar debates in the French and Irish Parliaments, what work is the Secretary of State doing with Palestinian civil society and structures to prepare the state for wider recognition?
Justine Greening
We do broad capacity-building with the Palestinian Authority. As the hon. Lady points out, there is a political element to the way forward that is the base for seeing any real progress in the long term. First, though, our focus has been on providing humanitarian support to people affected by the recent crisis, and then more broadly starting to be part of the reconstruction efforts so that we can get people back into their homes and, critically, get children back into their schools.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
2. What progress her Department has made on its work with the Ministry of Defence to tackle the Ebola crisis in west Africa.
Anas Sarwar (Glasgow Central) (Lab)
3. Whether pledges made by the international community at the “Defeating Ebola” conference in London on 2 October 2014 are being fulfilled.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
7. What steps she is taking to assist west African states in tackling the Ebola virus.
The Secretary of State for International Development (Justine Greening)
The UK is leading the international response to the Ebola crisis in Sierra Leone, committing £230 million so far. We are providing 700 beds, including at the Kerry Town treatment facility that opened today, ensuring safe burials are taking place, providing more community care and helping to train health care workers. The “Defeating Ebola” conference we held in London last month generated more than £100 million of support to the overall response.
Stephen Metcalfe
I am aware that my right hon. Friend recently visited Sierra Leone. Can she update the House on any specific projects she witnessed there that would reassure me and my constituents that we are doing all we can to fight this?
Justine Greening
I can. We can be very proud of the role the UK is playing: both the public’s response to the recent Disasters Emergency Committee appeal, which shows the British people’s generosity, and the work the Ministry of Defence is doing. I had the chance to see the Kerry Town facility as it was nearing completion a couple of weeks ago. It is opening today to treat patients and will save lives and stop the spread of the infection.
Anas Sarwar
The Secretary of State will know that the international community has a very proud record of making pledges when international crises happen, but a very poor record of delivering on the pledges. Given that every day delayed means more lives lost to the Ebola crisis, what pressure is she applying to the international community and all agencies to ensure that they deliver on their promises?
Justine Greening
The hon. Gentleman is right to raise these issues. The UN General Assembly and World Bank meetings were good opportunities for me to raise them, as was the recent EU Council, at which the Prime Minister successfully pushed to get more than £1 billion of support. We are now seeing many of the pledges made at the London conference come through. The most recent example is that the Norwegians will now be providing health care workers to help us operate some of those core facilities.
Mr Sheerman
The Secretary of State and many Members of this House will be familiar with the heartbreaking and moving diary of a young doctor from Huddersfield working in Sierra Leone. I hope she agrees that we owe Africa. Whatever we are doing, we are not doing enough: can we do more?
Justine Greening
As I said, I think we should be proud of the work we are doing, and we are doing a huge amount. Alongside the beds we are providing, we are helping to make sure that burials can take place safely, we are scaling up the training of health care workers—800 a week are being trained by the MOD—and we are rolling out more community care. As the hon. Gentleman says, this care is often being delivered by volunteers from Sierra Leone, who are involved in safe burials, and from our own country, and we should thank them for their generosity of spirit.
Sir Malcolm Bruce (Gordon) (LD)
Will the Secretary of State join me in thanking those dedicated workers from Sierra Leone, the UK and across the world who are risking their lives to tackle this? Will she also ensure that the UK Government’s cross-departmental working delivers a long-term legacy to Sierra Leone of a strong health service capable of preventing any such disaster from happening again?
Justine Greening
I am pleased that my right hon. Friend has given me the chance to give a very personal thank you to my staff, who have really played a role in leading our efforts on the ground in Africa, pulling together the MOD, Public Health England, and NHS workers—who have done an amazing job—alongside our Foreign Office staff. We have nearly doubled our DFID team in Sierra Leone. Many of them are people who thought they would be doing something entirely different, but are now working round the clock to tackle Ebola. We should be proud of what we are doing. My right hon. Friend is of course right that we should also look to ensure that we can strengthen health care systems in countries such as Sierra Leone, so they are better placed in future to combat these challenges on their own.
Gavin Shuker (Luton South) (Lab/Co-op)
We support the actions of this Government on Ebola, but the sluggishness of the international response raises alarming questions about the functioning of the World Health Organisation. There were warnings in April that the epidemic was unprecedented and in June that it was out of control but, amid reports of political leveraging and deliberate delay, the WHO waited until August to declare Ebola an international public health emergency. Will the Secretary of State tell me what exactly her Department has done to enact reform of the WHO since she came to office?
Justine Greening
The hon. Gentleman will be aware that one of the principal measures that we introduced was the multilateral aid review, which looks systematically across multilateral bodies to understand whether they give the taxpayer good value for money. We will continue to do that. As he says, a key element of the Ebola crisis has been the lack of a co-ordinated response at the beginning, and we need to learn from that.
Gavin Shuker
It was the fundamental lack of basic health coverage in pockets of west Africa that allowed this outbreak to go unchecked for so long. That was one element in the so-called perfect storm of Ebola. At present, the next worldwide deal on development calls merely for healthy lives and well-being, so will the Secretary of State now go further in strengthening the language of the stand-alone goal on health? Will she match the Labour party’s commitment to universal, guaranteed health care for all?
Justine Greening
This Government have finally honoured the UK’s commitment to spending 0.7% of our gross national income on aid, and we have significantly increased our spend in relation to providing critical health care. I can assure the hon. Gentleman that we are also playing a leading role in ensuring that the post-2015 development framework does indeed get great health outcomes for people in developing countries.
Chris Heaton-Harris (Daventry) (Con)
4. What steps her Department is taking to ensure that people with disabilities benefit from UK aid programmes.
The Minister of State, Department for International Development (Mr Desmond Swayne)
First, may I say that my right hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone) was a champion for this brief and for disabled people in the most vulnerable countries in the world? We are publishing a framework on 3 December, because we are determined that disabled people will benefit from UK aid.
Chris Heaton-Harris
I am delighted to hear that we are going to publish the disability framework on 3 December. How will it ensure that disabled people—particularly those with learning and intellectual disabilities —are systematically and consistently included in UK aid programmes?
Mr Swayne
I ask my hon. Friend to show some patience until 3 December. What I can tell him is that we have consulted widely and undertaken to quadruple the number of staff working on this. We have also appointed a senior management champion. With respect to mental health and disability, we are funding a major study in Asia and Africa to see what works in poorly resourced countries.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
Will the Minister assure the House that the Department for International Development will continue to focus on supporting excellent advocacy groups such as the one I met in Angola, where people are suffering from the effects of land mines? That is a very useful thing to do.
Mrs Caroline Spelman (Meriden) (Con)
Our troops have been withdrawn from Afghanistan, but there remains a legacy of unexploded ordnance and many disabled Afghans. Will the Minister tell the House what DFID will be doing to help those who suffer disability as a result of the armaments left by several conflicts in that poor country?
Fiona O’Donnell (East Lothian) (Lab)
I welcome the Minister’s commitment to improving the lives of people with disabilities in developing countries. To that end, will he support the proposal for a stand-alone goal on inequality in the post-2015 framework?
Kerry McCarthy (Bristol East) (Lab)
5. What recent discussions she has had with her international counterparts on including climate justice in future sustainable development goals.
The Secretary of State for International Development (Justine Greening)
I regularly discuss the sustainable development goals with my international counterparts, most recently doing so with the Secretary-General of the United Nations, Ban Ki-moon, at the UN General Assembly. Of course, ensuring that environmental sustainability and climate change are integrated into the sustainable development goals is a key priority for the UK Government.
Kerry McCarthy
I thank the Secretary of State for that response. Does it mean she supports the inclusion of climate change or a climate-related sustainable development goal as a stand-alone goal, or is this just something that she sees factored into other elements that will be in the goals?
Justine Greening
We think that making sure we have targets on areas such as climate change is vital. We also recognise that millennium development goal 7, on sustainable development, was ineffective, because people did not focus on it and it needed to be better mainstreamed into the rest of the framework. It is important that we focus on ensuring that sustainability is mainstreamed right the way through the post-2015 framework.
Duncan Hames (Chippenham) (LD)
Climate change disproportionately affects the poorest people in the world, so will the Secretary of State act on the calls of supporters of Christian Aid, including those from St Andrew’s church in Chippenham who met me recently, to do what she can to help make sure that next year’s Paris climate talks deliver an agreement that will tackle this threat and look after the very people her Department seeks to help?
Justine Greening
My hon. Friend is right to say that next year’s meeting in Paris is crucial to finally getting the international deal we need to tackle climate change. He will also be aware of a lot of the work my Department does on helping people cope with and adapt to the problems of climate change. The poor are always hit hardest and hit first by climate change, and they have the least wherewithal then to get their lives back on track.
Mr John Spellar (Warley) (Lab)
6. What support her Department is providing to Tunisia and the new Government of that country.
The Minister of State, Department for International Development (Mr Desmond Swayne)
DFID delivers its assistance on developing a more inclusive and democratic Tunisia through the Arab Partnership.
Mr Spellar
I thank the Minister for that answer. As I am sure he will recognise, last week’s welcome election result showed that Tunisia, where the Arab spring started, is a beacon of hope in the region. Will his Department prioritise support for Tunisia, to help it to make further progress and provide a working example of how real change can take place in that region?
Mr Swayne
I entirely endorse the right hon. Gentleman’s description of the progress Tunisia has made, and it is important that we keep that progress going. We have spent some £10 million in Tunisia since 2011, the European Union has a budget of €169 million this year, and there is money from the International Monetary Fund and other sources. We will continue to watch this brief.
Crispin Blunt (Reigate) (Con)
Some excellent work has been done to support politics in Tunisia, particularly by an organisation called Forward Thinking. I hope that that would come within the remit of the Department’s funding scheme.
Mr Gregory Campbell (East Londonderry) (DUP)
There are particular issues affecting the people of Tunisia that do not affect other north African countries. Does the Minister agree that we should build on bilateral relationships between Tunisia and the UK, and strengthen those links between the two nations?
Sir Tony Baldry (Banbury) (Con)
T1. If she will make a statement on her departmental responsibilities.
The Secretary of State for International Development (Justine Greening)
A fortnight ago, I visited Sierra Leone to see how Britain is helping that country battle Ebola and the part we are playing. Today, the first of six new UK Ebola treatment facilities opens to patients in Kerry Town. Last month, I attended the World Bank annual meetings in Washington, where the UK hosted several successful economic development events. I met UN Secretary-General Ban Ki-moon and World Bank president Jim Yong Kim to discuss the post-2015 development goals and the global response to the Ebola crisis. On Monday, I made a speech to the Family Planning 2020 event, where I set out how commitments we made at the London summit on family planning two years ago are delivering real progress.
Sir Tony Baldry
Recent rains and a huge effort have temporarily assisted millions of people threatened by famine in South Sudan. Will my right hon. Friend update the House as to how she sees the situation now and whether she thinks food stocks in South Sudan are going to last beyond December or January?
Justine Greening
My right hon. Friend is right to raise this issue. We have committed £42.5 million now to support refugees in the region; there are estimates that their number might rise to more than 700,000 by the end of the year, and 1.5 million are at risk of food insecurity. It is crucial that we make sure we have the humanitarian assistance in place to support these people.
Alison McGovern (Wirral South) (Lab)
The first problem with DFID’s inaction on corruption highlighted by last week’s report from the Independent Commission for Aid Impact is that the watchdog tells us that DFID’s objectives are
“not focused on the poor”.
The commission’s recommendations demand that DFID establish a new unit specifically to drive out this curse. Will the Secretary of State do so—yes or no?
Justine Greening
DFID does a huge amount of work tackling corruption. The One campaign said:
“The UK has a strong reputation for getting its own house in order on anti-corruption”,
so we do not need to take lectures from the Labour party. I can assure the hon. Lady that our strategy is also about tackling corruption upstream. Work that we have done in Nigeria, for example, with anti-corruption agencies has helped recover £1.5 billion and supported more than 2,500 corruption cases being brought.
Stuart Andrew (Pudsey) (Con)
T5. Given the recent withdrawal of British troops from Afghanistan, can my right hon. Friend reflect on the key achievements of her Department in development in Afghanistan over the past decade?
Justine Greening
We have provided health care access to millions of people, particularly women, who have never had it before. We have seen girls getting into school and having opportunities to pursue their lives in a way that they never had before. We have brought livelihood support to people, provided humanitarian support and worked to strengthen the Government in Afghanistan to enable them to deliver for their people in the long term. We should be hugely proud of the work that DFID has done, as well as being proud of the work that our brave servicemen and women have done.
Caroline Lucas (Brighton, Pavilion) (Green)
T2. Millions of children face violence every day, with both boys and girls suffering from abuse and exploitation. UNICEF’s children in danger campaign makes a powerful case for this to be a priority, so will the Secretary of State agree to push for a target to end all forms of violence against children to be included in the global development goals currently being negotiated?
Justine Greening
The hon. Lady makes a very good point. The UK is one of the leading donors to UNICEF; we recognise how important its work with children is. We are looking particularly at the vulnerability of children in Sierra Leone as many of them are orphaned as a result of the Ebola crisis.
Andrew Rosindell (Romford) (Con)
T6. The Secretary of State will be as alarmed as I am that President Kirchner of Argentina is purchasing 24 new fighter bombers at a time that Argentina is going cap in hand to the World Bank, expecting UK taxpayer money to prop up its failing economy. Will Her Majesty’s Government veto any attempt by Argentina to obtain more funds from the World Bank and urge our European allies and the United States to follow us in that veto?
Justine Greening
My hon. Friend will be pleased to know that I toughened up our policy in precisely that way several months ago. We do, therefore, take that stance and have been lobbying others. Unlike the Opposition, we do not want to see aid going to countries that do not need it or will misspend it. For example, under Labour Britain gave £83 million to China in 2007-08, the very year that China spent £20 billion hosting the Olympics.
Nia Griffith (Llanelli) (Lab)
T3. While £600 million of UK aid is being channelled through the New Alliance for Food Security and Nutrition—[Interruption.] What steps is the Secretary of State taking to ensure that the new alliance does not bully countries such as Ghana into passing legislation that is designed to restrict local farmers’ ability to save and exchange locally produced seed, making them dependent on a few big suppliers and decreasing biodiversity?
Mr Speaker
Order. It is quite difficult for people to hear the question. It is very important that the Secretary of State should hear it. These are extremely serious matters that we are discussing. Let us show some courtesy towards each other.
Justine Greening
The hon. Lady is right that as part of the new alliance, it is vital that we see support for smallholder farmers alongside the broader work that is taking place to strengthen agriculture in many of those countries that she has spoken about. It is part of an economic strategy as well as a food security strategy and it is immensely important.
Mr Henry Bellingham (North West Norfolk) (Con)
T7. Given the recent success of the Somali peace process, does my right hon. Friend agree that her aid programme for that country now needs to concentrate on building up the private sector and wealth creation?
Justine Greening
My hon. Friend will be aware that one of the things that DFID is doing more than ever before is work on economic development. It is vital that we help people and countries end aid dependency through jobs.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
T4. I am delighted that the Secretary of State has been to Sierra Leone, but does she realise that even though I have begged the Leader of the House, we still have not had a major debate on Ebola? We owe that to Africa. When are we going to move? When are we going to debate it in this House and when are we going to do more?
Justine Greening
The hon. Gentleman will be delighted to hear that there is an Adjournment debate on Ebola tonight, and oral questions provide a great opportunity to discuss and debate the work we are doing.
Martin Horwood (Cheltenham) (LD)
China has been very willing to exploit commercial opportunities and raw materials in Africa, but it has committed fewer funds to fighting Ebola than the UK has, despite having a GDP that is four times larger. Will the Government encourage China to live up to its responsibilities in Africa as well as exploiting the opportunities?
Justine Greening
It is important that countries such as China work alongside other members of the international community that are leading the fight, such as the UK, to ensure that we bear down on Ebola. We are working directly with the Chinese, but it is important that all countries step up and do more.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
Q1. If he will list his official engagements for Wednesday 5 November.
The Prime Minister (Mr David Cameron)
With Remembrance day next week, I am sure that the whole House will join me in remembering all those who sacrificed their lives defending our country and the freedoms we hold dear. This time of year once again reminds us of the incredible job that our armed forces do to ensure our safety and security. With combat troops coming home from Afghanistan, we will all want to pay particular tribute to the 453 soldiers who lost their lives and all those who were injured during that long campaign. Their sacrifice will never be forgotten.
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.
Tom Greatrex
May I first associate myself with the Prime Minister’s comments about Remembrance weekend, when we remember the contribution that so many have made, from all parts of the UK, in our armed forces?
Two weeks ago the Prime Minister said that concerned steelworkers at Clydebridge in my constituency and at sites across the UK should judge Klesch Group by its actions. With its record of asset stripping in France and Holland and the news overnight of the failure to purchase Milford Haven, does he believe that it is in the public and national interest for the strategically important UK foundation steel industry to be sold to Klesch Group?
The Prime Minister
First, I agree with the hon. Gentleman that what has happened at Milford Haven is very disappointing. We will continue to work with the company concerned and try to find employment opportunities for all those who work there. With regard to Tata Steel, Clydebridge employs around 90 people and, as he knows, is an integral part of the Long Products division. We took action in the Budget to support heavy industry, and we are working with Klesch Group and with the Scottish Government. It says that it is taking this on as a going concern and that due diligence has started. I think that the right thing to do is to work with the Klesch Group to try to ensure that its plans are to maintain that company. What we need overall is a situation in this country in which the steel industry continues to grow, as it has been doing under this Government.
Jeremy Lefroy (Stafford) (Con)
Q14. On behalf of my constituents, may I offer my sympathy to the families of those killed and to those injured in the tragic factory fire in Stafford last week, and may I also praise the wonderful response of the emergency services? UK exports to countries outside the European Union have gone up by a remarkable 22% over the past three years, including transformers, generators and financial services IT systems from my constituency. Will the Prime Minister look at whether the support given by UK Export Finance could be increased, particularly for small and medium-sized enterprises?
The Prime Minister
First, let me join my hon. Friend in offering condolences to the families of those killed in the fire in Stafford; we must get to the bottom of exactly how it started. In terms of supporting exporting companies, a very important part of our long-term economic plan is ensuring that we get more small and medium-sized companies exporting. As he will know, we have increased the budget for UK Export Finance and made available export contracts for small and medium-sized enterprises worth over £1 billion, and we will continue to work with those companies, including through the GREAT campaign, which is opening up new markets for British products to ensure that more of our companies choose to export.
Edward Miliband (Doncaster North) (Lab)
Let me join the Prime Minister in recognising the importance of Remembrance Sunday. This year has particular significance: it is the year of our withdrawal from Afghanistan and, of course, 100 years since the start of the first world war. It is a moment to remember all those who lost their lives in war and everyone who has served our country. That is why we will all be wearing our poppies with particular pride this year.
The Prime Minister is nearly two years into his renegotiation with the European Union. He has to get 27 countries to agree with him. How many has he got so far?
The Prime Minister
What we have is a set of things that we want to sort out in Europe. We want to sort out safeguards for the single market. We want to get out of ever-closer union. We want reform of immigration. But here is the difference. We have a plan. He has no plan. And we have a plan that will be put to the British people in an in/out referendum. Perhaps the right hon. Gentleman can tell us, when he gets to his feet: why is he frightened of the British public?
Edward Miliband
My position on the referendum is exactly the same as his was before he lost control of his party. I think we can take it from the answer to that question that the answer is none; he has no allies. He says that his
“admiration for Angela Merkel is enormous.”
After the last couple of days, we can see that the feeling is mutual. If it is going so swimmingly, why does he think that Chancellor Merkel has already rejected his proposals?
The Prime Minister
On that the right hon. Gentleman is completely wrong as well. She has herself said that there are problems in terms of free movement that need to be dealt with. He talks about support for a European referendum. Perhaps he would like to address this. The former Chancellor of the Exchequer, who has decided to leave the House of Commons—about the only person on the Labour Benches who had any economic credibility—has said that a European referendum is inevitable. He says:
“It’s a boil that has to be lanced.”
If it is inevitable, why is the Leader of the Opposition so frightened of the British public?
Edward Miliband
We know about the boil that has to be lanced—it is his divided party. The right hon. Gentleman should listen to what his own MPs are saying. The hon. Member for Basildon and Billericay (Mr Baron), the one who has not defected yet, says:
“vague promises about a better deal for Britain will not wash.”
They know his renegotiation is going nowhere. Two years ago, the Prime Minister gave an interview to The Daily Telegraph, and this is what it said:
“Mr Cameron will not countenance leaving the EU and says that he would never campaign for an out vote in an EU referendum.”
Is that still his position?
The Prime Minister
I think Britain is better off in a reformed European Union. But the point is this: I have a plan for renegotiating our situation and holding a referendum. The right hon. Gentleman has absolutely no plan whatsoever. He talks about the views of Back Benchers. I have the new view of one of his Front Benchers. This is the shadow Deputy Leader of the House, the man he appointed to the Front Bench, and I am sure the House will be interested. He said:
“the Labour Party…right now is…in a dreadful position.”
The hon. Member for Dunfermline and West Fife (Thomas Docherty) has been silent for too long. He goes on:
“And we’ve got to be honest about ourselves. We have very low esteem with the electorate. The electorate looks at us and has no idea what our policies are.”
He concludes:
“We have a moribund party”.
That is not the view of the commentators. It is not the view of the Back Benchers. It is the view of the Front Benchers. It is official. It is a dead parrot.
Edward Miliband
Let us talk about his party: defections, rebellions, demands for a pact with UKIP, and that is before the Rochester and Strood by-election. Everyone will have heard—[Interruption.]
Mr Speaker
Order. The Leader of the Opposition must be heard. However long it takes, that will happen. So people who are making a noise should calm themselves.
Edward Miliband
And he did not answer this fundamental question that matters to businesses and families. He used to say he would never be for leaving the European Union. That was his position two years ago. [Interruption.] Tory Members ask what my position is. I want to stay in the European Union. The right hon. Gentleman cannot even answer the question. That was his position then. I am just asking him to repeat the same words as he used then; that he would never campaign to leave the European Union. Yes or no?
The Prime Minister
I answered that question the last time round. I want Britain to stay in a reformed European Union, but we need the reform. We have a plan. The right hon. Gentleman has no plan. We say it is time to get out of ever-closer union. What do the Opposition say? Nothing. We say, “You have to safeguard the single market.” What do they say? Nothing. We say, “You have to reform immigration.” What do they say? Nothing. Absolutely feeble. That is why he faces a crisis in his leadership: because he has nothing to say about the deficit; nothing to say about the economy; nothing to say about welfare; and nothing to say about Europe. And the whole country can see they have a nothing Leader of the Opposition.
Edward Miliband
There is no point in the Prime Minister giving us the “fight them on the beaches” speech, because the last time he tried that was over Jean-Claude Juncker and he lost 26 votes to two. That is his leadership in Europe. Everyone will have heard his weasel words. He will not be straight with his Back Benchers and he will not be straight with the British people. He had a referendum on the alternative vote, and his position was crystal clear—he was for no. He had a referendum on Scotland, and his position was crystal clear—it was no. He wants a referendum on the EU. No ifs, no buts: is he for in or for out?
The Prime Minister
The right hon. Gentleman is asking me about a referendum that he will not support; the Labour party is so chicken when it comes to trusting the British people. His position is completely unbelievable. We say renegotiate, hold the referendum and let the British people make their choice. He will not even support a referendum. He also says that we should listen to Back Benchers. Perhaps he should try listening to the hon. Member for Dudley North (Ian Austin) who, on immigration, said:
“Let’s be honest about it.”
He said:
“If you make a mistake you should say sorry.”
So let me ask again: why will he not have a referendum, and will he apologise for the mess on immigration?
Edward Miliband
British business will be holding their heads in their hands about a Prime Minister who cannot say that he wants to stay in the European Union. His renegotiation is going nowhere. He is caught between his Back Benchers who want to leave and our national interest that demands we stay. That is why on Europe, he dare not say yes and he dare not say no. He is a “don’t know” Prime Minister.
The Prime Minister
I am afraid, Mr Speaker, that this is what happens if we write our questions before we listen to the answer. I could not be clearer: I want Britain to stay in a reformed European Union. Unlike the Labour party, we have a plan to get that reform and hold that referendum. This comes at the end of a week when the last Labour Chancellor said that the Tories are right over a referendum; the shadow Deputy Leader of the House said that Labour is in a dreadful position; and John Prescott said that Labour had a problem communicating in English. [Interruption] That is it. When you get a lecture from John Prescott on the English language, you are really in trouble. Everyone can see it: a leader in crisis and a party with nowhere to go.
Mr Gary Streeter (South West Devon) (Con)
Q15. May I ask the Prime Minister a sensible question? Does he welcome the fact that, for the first time ever, all local authorities, business leaders and local enterprise partnerships in Somerset, Devon and Cornwall have reached agreement on the improvements necessary to upgrade the transport infrastructure of the south-west? Will he agree to meet a small delegation from the peninsula so that we can discuss those proposals and he can help us put in place a long-term connectivity plan?
The Prime Minister
I am happy to have that meeting with my hon. Friend. He is absolutely right about the need to upgrade the transport links to the south-west, which is why we have been carrying out the rail study. Even before that, we have spent more than £31 million on important rail improvements. A number of road improvements, including the Kingskerswell bypass, have already been put in place. Our roads programme includes major and important work for the south-west. But I am happy to hold that meeting.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Q2. Today’s Health Committee report on mental health services for children and young people describes how budgets have been frozen or cut, services are being closed and young people are being sent hundreds of miles away from their families or kept in police cells because there are no beds. Is that what the Prime Minister means by parity of esteem for mental health services?
The Prime Minister
We have taken a whole series of steps in difficult economic circumstances, of which the first is parity of esteem in the NHS constitution. We have seen a big expansion of talking therapies that were not available under the previous Government; we have introduced for the first time a waiting time standard for young people with psychosis, which never existed under the previous Labour Government; and we have, for the first time, a Minister with dedicated responsibility for child and adolescent mental health services. Of course much more needs to be done. The demands on our mental health services are very great, but the steps that I have mentioned have not been taken by previous Governments. We have managed to take them because we have put the money in and made important reforms to get rid of bureaucracy. All of those things are possible only if there is a strong economy backing a strong NHS.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
Q3. On Saturday, the fountains of Trafalgar square, right through to Lancaster museum and Fleetwood’s Marine hall, were lit purple to raise awareness of pancreatic cancer. Will the Prime Minister look very carefully at the report produced last week by the all-party group on pancreatic cancer, with the support of Pancreatic Cancer UK, calling for more research into this dreadful disease before it becomes Britain’s fourth biggest killer in terms of cancer?
The Prime Minister
I pay tribute to my hon. Friend and the all-party group for the work that they do. I know how close this issue is to his heart and how much he feels this personally. The difficult situation here is that the one-year survival rate for those diagnosed with pancreatic cancer is about 20% and the five-year survival rate is only 5%, and that is not good enough. We are spending more money on research. We are investing a record £800 million over five years in a series of biomedical research centres, including the Liverpool pancreas biomedical research unit. We need the research to go in and for these new treatments to be properly tested so that we can improve these cancer survival rates as we have for other cancers.
Ian Paisley (North Antrim) (DUP)
Four weeks ago, a 150-year-old industry in my constituency announced that it will be pulling out of Northern Ireland, with the loss of 900 jobs—the equivalent of 32,000 jobs in the United Kingdom. To say that is a body blow would be an understatement. Will the Prime Minister agree to meet me and industry leaders to see if we can find a strategy and a way of keeping some of those jobs in Northern Ireland?
The Prime Minister
I am very happy to discuss this with the hon. Gentleman. Perhaps on a forthcoming visit to Northern Ireland, we might be able to meet in Ulster and discuss these issues. I think the issue he refers to is also plain paper packaging, where I want to see us make progress; I think there are important health benefits there. I am happy to discuss the issue with him.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
Q4. My right hon. Friend may be aware that my constituents Dr and Mrs Turner’s granddaughter died of the dreadful disease meningitis B. Thirty babies die of this a year. Much more worryingly, 300 babies are severely maimed; indeed, a baby in Bristol at the moment is facing quadruple amputations. There is a licensed and safe vaccine available; the issue is cost. Will my right hon. Friend please intervene to see what can be done to resolve this issue?
The Prime Minister
I am very grateful to my hon. Friend for bringing up this issue. I am certainly keen to help if I can. If we were able to introduce a vaccine, I think we would be the first country in the world to do so nationally. But as he says, there are issues. That is why, following advice from the Joint Committee on Vaccination and Immunisation, we are having discussions with the producer of the vaccine to see whether we can find a cost-effective way of doing this. The case that he raises, and many other heartbreaking cases, show how desirable it is to make progress on this issue.
Mr Ben Bradshaw (Exeter) (Lab)
Q5. People in Devon face being denied operations if they are overweight or smokers, as well as the loss of all fertility treatment, cataract operations restricted to just one eye, and the closure of Exeter’s very successful walk-in centre, all because of the unprecedented financial crisis facing my local NHS. Does the Prime Minister still think that his massive and costly reorganisation has been a success?
The Prime Minister
What we did by reducing the bureaucracy in the NHS is save £5 billion in this Parliament. That is why, nationally, there are over 8,000 more doctors and 2,500 more nurses. We have been able to do that only because there are 20,000 fewer administrators in the NHS. Those are the figures.
The Prime Minister
The right hon. Gentleman may shake his head, but those are the figures. His local clinical commissioning group is getting an £18 million cash increase in the next year, and it is going to get an additional £19 million through the Better Care fund, so locally there should be improvements in services rather than the picture he paints.
Stephen Lloyd (Eastbourne) (LD)
I am concerned that the revised criteria for exams in religious studies have yet to be published by the Department for Education. I am informed that the hold-up is in No. 10. Can the Prime Minister confirm that this is not the case and that they will be published very soon?
The Prime Minister
I will look carefully at the issue that the hon. Gentleman raises. It is important to get right the issue of how religious education is carried out. If there is a blockage in my office I will make sure that I go into Dyno-Rod mode and try to get rid of it.
Margaret Beckett (Derby South) (Lab)
Q6. At his party conference, the Prime Minister promised that, if re-elected, he would cut income tax by £7 billion. That money has got to come from somewhere, so just how big an increase in VAT has he got in mind this time?
The Prime Minister
We have demonstrated in this Parliament that if you manage the economy properly, it is possible to reduce spending, to reduce the deficit and to reduce taxes at the same time. That is exactly what we have done. During this Parliament, we have taken the personal allowance—the amount people can earn before paying income tax—from about £6,000 to £10,500. [Interruption.] I know the Labour party does not want to hear good news, but people are paying less income tax under this Government. We have taken 3 million people out of income tax altogether. If re-elected, we want to raise to £12,500 the amount of money that people can earn before they start paying income tax. Why do we want to do this? Because Government Members think people should have more of their own money to spend as they choose.
Jack Lopresti (Filton and Bradley Stoke) (Con)
Yesterday’s announcement by Rolls-Royce of significant job losses across the country will devastate people and homes, and could well damage our national engineering skills base. Will my right hon. Friend meet me and employee representatives from Rolls-Royce to see if we can try to minimise the effect of this by finding alternative engineering jobs and if we can try to preserve our vital engineering expertise? Will he reassure my constituents in Filton that he will continue to champion our world-renowned and world-class defence export manufacturing?
The Prime Minister
I can certainly assure my hon. Friend that I will do everything I can to champion companies such as Rolls-Royce, whether in civil aerospace or defence aerospace. I try to take it on as many of my trade missions as possible, because it is an absolutely world-class, world-beating company. Obviously, it is disappointing that it plans to reduce the number of people it employs. It is not yet clear how many of those job reductions will be here in the UK. Of course, Rolls-Royce employs over 25,000 people in the UK. If we look at what has happened to the aerospace industry over the past four years, we see that employment is up by 10%, exports are up by 48% and turnover is up by a fifth. This is a successful industry that is being backed by our modern industrial strategy, but we need to do everything we can to make sure this company, and others like it, continue to succeed in the years ahead.
Helen Jones (Warrington North) (Lab)
Q7. In 2010, Warrington had 127 full-time equivalent GPs. At the last count, it had 97, and some of my constituents are waiting up to two weeks for an appointment. Is the Prime Minister’s failure to provide access to basic health care a result of deliberate policy, or is it simply carelessness?
The Prime Minister
First of all, there are 1,000 more GPs across the country than there were in 2010. If the hon. Lady wants to know what has happened in Warrington under this Government: when I became Prime Minister, 130 people were waiting a year for an operation; today, that number is zero. That is what has happened under this Government. Because we are making the money available, it is possible to have more GPs coming into an area, alongside the 1,000 we have already introduced.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
At a time of economic crisis, the stability of the coalition has helped us to build a stronger economy. Does the Prime Minister agree that, in creating a fairer society, any further rise in the tax allowance should not be done on the backs of the poor?
The Prime Minister
It has been possible in this Parliament to raise the personal allowance to take some of the poorest people out of tax—3 million people have been taken out of tax, with a tax cut for 26 million people—at the same time as making decisions that are fair for all, such as, for instance, making sure the NHS gets an extra £12.7 billion. Of course, we do have to make difficult decisions. Some of the difficult decisions we have made have been looking at things such as the Home Office budget, where the police are being far more efficient than they were, and making changes to welfare, each and every one of which has been opposed by the Labour party. The fact is that if you manage the national finances carefully, get our economy to grow properly and ignore the shadow Chancellor, who nearly bankrupted the country, you can do these things together.
Siobhain McDonagh (Mitcham and Morden) (Lab)
Q8. After reading yesterday’s front page of The Times, may I welcome the Prime Minister’s late conversion to ID cards, even if they are—for now—virtual and without Labour’s biometric functionality? If the Prime Minister intends to keep his promise to keep our borders safe and secure, will he tell the House when the system will be in place, and why it has taken him so long?
The Prime Minister
It is a very interesting development that Labour Members are now back in favour of ID cards. I thought even they had seen the folly of their ways. We are introducing proper border checks so that we can count people in and count people out—something that was never available under Labour, and something that Labour actually helped to get rid of. We are also ensuring that we know more about those who are coming and when they have left.
Mr Andrew Lansley (South Cambridgeshire) (Con)
My right hon. Friend will recall our support for the training of Libyan troops at Bassingbourn barracks in my constituency. Does he share my concern that the programme failed to maintain discipline, and the consequences of that were very serious in my local community? Will the Ministry of Defence account fully to my constituents for the failures in the delivery of the programme, and does the Prime Minister agree that the Libyan soldiers should now be repatriated to Libya, and that there is no basis for any of them to seek or receive asylum in this country?
The Prime Minister
I agree with my right hon. Friend on every front. What has happened at Bassingbourn in Cambridgeshire is completely unacceptable. These are criminal actions, and I have asked the Chief of the Defence Staff for a report into that. A decision was taken at the National Security Council, which I chaired on 28 October, to end the training altogether. The trainees will be returning to Libya in the coming days and, in the meantime, all unescorted visits from the camp have been stopped altogether.
Lilian Greenwood (Nottingham South) (Lab)
Q9. Which does the Prime Minister believe is more immoral—raising VAT to 20%, or concealing the intention to do so?
The Prime Minister
I will tell the hon. Lady what is immoral, and that is racking up debts for our children that we are not prepared to pay ourselves. That is what we inherited. We inherited the biggest budget deficit of any country anywhere in the world. That is the moral—or rather immoral—inheritance that we received from the Labour party.
Guy Opperman (Hexham) (Con)
Q10. Returning to the economy, is the Prime Minister aware that the region with the most tech start-ups outside London, the fastest rate of growth in private sector businesses over the last quarter, and the highest rise in the value of exports, is the north-east of England? Does he agree that we should stick to the long-term economic plan so that we can all have the benefit of that?
The Prime Minister
My hon. Friend makes an important point. It is notable when we look at things like small business creation, exports and investment that growth is coming from around the country, including the north-east. That is a huge contrast with 13 years of Labour when in our economy, for every 10 jobs created in the south only one was created in the north. That is the record of the last Labour Government. We need to increase entrepreneurialism and start-ups in every part of our country—that is what start-up loans and the enterprise allowance scheme are doing. There is a new spirit of enterprise in Britain, and this Government are backing it.
Teresa Pearce (Erith and Thamesmead) (Lab)
Q11. In 2012 my constituent, Sam Boon, died while on a World Challenge trip to Morocco. He was 17. The coroner was so concerned at the multiple failings that she issued a section 28 report to the Minister for Schools to prevent future deaths. There are British safety standards, but they are entirely voluntary. Why is adherence to those standards not compulsory, so that no other parent has to suffer like Mr and Mrs Boon?
The Prime Minister
I would like to look carefully at the case the hon. Lady has mentioned and write to her about it. It is important to ensure that safety standards are upheld, and to try to prevent tragedies such as the one she refers to.
Martin Horwood (Cheltenham) (LD)
The Government have been absolutely right to push for 90% availability of superfast broadband by next year, and for universal basic broadband services. Is the Prime Minister aware that those targets could be missed even in urban areas such as Cheltenham, and will he ask Ministers to ensure that local delivery matches the Government’s ambition?
The Prime Minister
I will certainly do that. We review very regularly the performance of broadband targets, because that is absolutely essential, particularly for rural areas. If someone is left off superfast broadband, it is much more difficult to take part in the modern economy. Progress has been very good, and it has made a big difference that British Telecom is prepared to publish all the areas not yet covered, so that other companies can come in and see what they are able to provide. We are also making available broadband vouchers for small businesses, which are very successful, and we can look to see whether we can expand that. I am convinced that spreading broadband right around the country is one of the most important priorities for this Government.
Mr Michael Meacher (Oldham West and Royton) (Lab)
Q12. Since the Prime Minister likes to bang on about Labour overspending, is he aware that in Labour’s 11 years before the crash in 2008 the biggest deficit was 3.3% of GDP, whereas the Thatcher and Major Governments racked up deficits bigger than that in 10 out of their 18 years? So who are the over- spenders? It is a no-brainer.
The Prime Minister
There is only one problem with what the right hon. Gentleman says, which is that the deficit that Labour left, and we inherited, was 11.5% of GDP. It was bigger than almost any other country’s anywhere in the world. If he does not believe me, he can listen to his own shadow Chancellor, who said this:
“I think that the fact that you had the massive, global financial crisis which happened on our watch meant that people saw their living standards hit…I don’t think we would be being straight with people if we only said it was the financial crisis. It was also after 13 years in government we had made some mistakes.”
There we have it—some mistakes. You bet there were mistakes: overspending, over-borrowing, overtaxing, wasteful welfare, bloated expenditure. A complete and utter failure and it is extraordinary they are still sitting there on the Front Bench.
Pauline Latham (Mid Derbyshire) (Con)
The Prime Minister will be aware that millions of people have been to see the 888,246 poppies at the Tower of London, designed and commissioned by Paul Cummins from Derby. Will he congratulate the hundreds of volunteers who have helped to make them in Derby, and the hundreds and hundred of volunteers who helped to plant them, to commemorate this very important centenary?
The Prime Minister
I certainly join my hon. Friend in praising all those who have been involved in this extraordinary project, which has I think brought forward from the British public a huge amount of reverence for those who have given their lives and served our country. The numbers going to see this display have been truly extraordinary. It is worth remembering that out of this display a lot of good will come, because, as I understand it, the poppies are being auctioned to raise a lot of money for military and veterans charities that will be there to do good in many years to come. It is an extraordinary display and one that the country can be very proud of.
Keith Vaz (Leicester East) (Lab)
Q13. In the past 12 months, it is estimated that 24,000 people have died from diabetes-related complications. Next Friday is world diabetes day. As one of the 3.2 million diabetics, may I urge the Prime Minister to do all he can to raise awareness on this issue, in particular to introduce measures that will reduce the amount of sugar in our food and drink? We can prevent the onset of type 2 diabetes and we can save lives.
The Prime Minister
The right hon. Gentleman is absolutely right to raise the importance of this issue. The consequences of diabetes, in terms of appalling things such as leg amputations, cost the NHS literally billions of pounds a year. If we can get better at preventing diabetes, and then testing and better at helping diabetics themselves, we can make huge savings while improving people’s quality of life.
I gather the right hon. Gentleman also wants me to try to ban sugar and fizzy drinks in No. 10 Downing street for 24 hours. I will try to negotiate that with my children. He also, as I understand it, wants me to light my home blue. That is something I am all in favour of—keeping it that way for some time to come.
Martin Vickers (Cleethorpes) (Con)
HS3 and other improvements to rail connectivity in the north-west are important, but the recent parliamentary approval given to the Able UK development in northern Lincolnshire emphasises the importance of connections on the south trans-Pennine route between Cleethorpes and Manchester. Will my right hon. Friend assure me that my constituency and northern Lincolnshire will figure in future proposals to improve connectivity, so that the area can benefit from the Government’s long-term economic plan?
The Prime Minister
I certainly assure my hon. Friend that we are looking at all the elements of east-west connectivity and trying to make sure that we bring the benefits of faster journey times, greater capacity and electrification to all parts of the country. I know the Chancellor was listening very carefully to the statement he made.
Petition
Charlie Elphicke (Dover) (Con)
I rise to present a petition organised by my constituent, Susan Fox, and supported by 800 residents of Dover to protest about the closure of the Dover medical practice. They demand that NHS England put patients first and that primary health services are secured for the patients. The patient list should be kept together as a whole. For a large number of people, English is a second language, so translation services are important to them. Many patients have particular health needs related to their background, for which specialism is required. For this reason, the petitioners demand that if a practice is to close, there must be an orderly transition of the patient list to a practice set up to cope with the health and support needs of this group of people—my constituents.
The petition states:
The Petition of residents of the UK,
Declares that the Petitioners believe that Dover Medical Practice, situated in Dover Health Centre on Maison Dieu Road, should remain open; further that the Petitioners believe that it is the duty of NHS England to make sure all existing services continue to be available to its patients and to ensure that there are adequate staff for this to happen; and further that a local Petition on this matter in the Dover constituency received 803 signatures.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that Dover Medical Practice will not close; and further that the House of Commons urges the Department of Health to guarantee that NHS England continues to provide the present staff and services at the Dover Medical Practice for the benefit of the local community.
And the Petitioners remain, etc.
[P001396]
Rolls-Royce (Aerospace Group)
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Chris Williamson (Derby North) (Lab)
(Urgent Question): To ask the Minister for Business and Enterprise if he will make a statement on the Government’s response to the 2,600 job cuts announced by Rolls-Royce across its aerospace group and on plans to establish an economic response taskforce to assist those who lose their jobs in the United Kingdom.
The Minister for Business and Enterprise (Matthew Hancock)
Yesterday Rolls-Royce announced plans to reduce its global headcount by 2,600 over the next 18 months, mainly in its aerospace division. It has not yet decided where the losses will occur, although a significant proportion are expected to be in the UK. Rolls-Royce is in consultation with the work force and the unions about the details of how the reductions will be made. Rolls-Royce has explained that it needs to make the changes to secure its competitiveness in a challenging global market. I realise that this will be a worrying time for the work force and their families. My right hon. Friend the Business Secretary cannot be here as he has a prior speaking engagement, but both he and I have spoken to Rolls-Royce and made it clear that we will do all we can to work with the company to support those made redundant.
Since 2010, Rolls-Royce has created 4,000 new jobs in the UK. Part of that increase reflects the large engineering team needed to develop the new Trent engines for the Boeing 787 and the Airbus A350 XWB, or extra-wide body. Now that these engines have moved from the development phase to the production phase, Rolls-Royce believes that it needs to reduce its development work force. A high proportion of the affected jobs are likely to be engineering jobs, and we know that shortages of engineering skills exist across the UK. We are therefore operating the talent retention solution, which matches engineering talent with new job opportunities. This will be specifically tailored to the needs of Rolls-Royce.
Skills training will be made available where appropriate for those who need to retrain, and a taskforce based on the skills and jobs retention group, including local and national Government, local partners, Rolls-Royce, the supply chain and others, will be established to ensure that we do all we can. The group has a successful track record in redeploying engineering talent with other growing businesses, most recently working with BAE. It is already in contact with Rolls-Royce and other potential employers.
Rolls-Royce has a proud history in the UK in aerospace, employing nearly 25,000 people last year, out of a global work force of 55,000. Its aero engines power more than 30 types of commercial aircraft, with around 13,000 engines in service. Rolls-Royce is, and will remain, the second largest provider of defence aero engine products and services anywhere in the world. In the long term, the prospects for UK aerospace remain bright. Rolls-Royce will continue to take graduates and recruit apprentices, ensuring that it has a pipeline of talent for the future. Our aerospace growth partnership has put in place a long-term plan for the whole aerospace industry, and we have consistently supported Rolls’s investment in new technology, modern manufacturing processes and skills development.
We are determined to support Rolls-Royce while it makes the changes it needs, as part of our growing and world-beating aerospace sector, to ensure that it retains its dominant position. Announcements of job losses are never welcome. We will work with all involved to mitigate the impact, support those affected and ensure that British engineering and British manufacturing can rise to the challenge they face and build a secure future.
Chris Williamson
I am grateful to the Minister for his statement. He will know that Rolls-Royce was created in Derby and owes its success to Derby, and that this news will be a bitter blow to a proud work force who have delivered that great success for the company. I wonder whether I can probe him a little further on what he and the Government will do to work with the company to minimise job losses in the United Kingdom. Rolls-Royce is the biggest employer in Derby, employing highly skilled, well-paid engineers, so if there is a large job loss in the city, it will have a devastating impact on the wider economy.
Will the Minister also say something about potential skills shortages as a consequence of a short-term decision taken by Rolls-Royce? I appreciate his comments about the potential redeployment opportunities, and we will certainly work with the Government to assist wherever we can on that. The aerospace industry is obviously important, and Rolls-Royce is an iconic international company. It is therefore important, I think, that the Government look at what they can do to work with the company to make sure that this decision to reduce the work force does not lead to a skills shortage further down the track. I would also be grateful if he said something about the conversations he has had or will have with the company in relation to the 400 apprentices in the system, and what guarantees he might be able to secure for them when they complete their training.
Finally, is there anything more the Government can do with research and development, particularly with regard to reimbursable launch investments? Is there scope to be more creative in the use of them—not just for Rolls-Royce, but for the wider manufacturing industry? It is really important for the Government to do whatever they can to promote and increase the scope of manufacturing in our country. These are high-value jobs; they are not the zero-hour, part-time, low-paid jobs that we have seen as a feature of the economic and jobs growth over the last couple of years. These are vital high-skilled jobs, and we need more of them.
The Prime Minister visited Derby several years ago with the Cabinet to say that he wanted to rebalance the economy in favour of manufacturing industry. I just hope that when the Minister gets to his feet, he will be able to provide some reassurances on the points I have made and show that the Government mean what they say and will actually work with the company to ensure that these job losses are minimised. As I said, the success of Rolls-Royce is down to the tenacity, skills and dedication of the work force in Derby, so it is really important that the job losses in our city are minimised.
Mr Speaker
Order. The hon. Gentleman spoke with great passion and wisdom on matters with which he is intimately concerned. For the future, however, it would be helpful if people tried to stick to the time limits on these matters, because there are many colleagues to accommodate. I do not wish to embarrass her, but I think that colleagues will probably learn shortly from the right hon. Member for Derby South (Margaret Beckett) how it can be done pithily.
Matthew Hancock
Of course we are working to ensure that, as much as possible, those who face redundancy through this process have the support they need, especially to get other jobs in the sectors that are expanding fast. Aero as a whole is expanding, with its exports up sharply over the last four years.
I would, however, caution the hon. Member for Derby North (Chris Williamson). I very much look forward to working with him, colleagues and others to ensure that those who are affected get the support they need, but the 4,000-job increase in Rolls-Royce employment over the last four years has, in large part, been in exactly the sorts of high-skilled, high-quality jobs we all want to see. I do not think it behoves the hon. Gentleman well to try to deny that in some way. [Interruption.] On the contrary, what we are trying to do is ensure that, where there are skilled people, they get the retraining that they may need or the connection to those who are trying to expand, and where there are skills shortages in engineering, that undoubtedly means that there are opportunities and job vacancies for the people with those skills who are being made redundant by Rolls-Royce.
Jack Lopresti (Filton and Bradley Stoke) (Con)
I am grateful to my right hon. Friend for his commitment to try to alleviate and find alternative employment for the individuals affected by this devastating announcement, and for his support for and commitment to the aerospace industry, which is important to our global position as a country, enabling us to export, thrive and prosper. Does he also agree that Rolls-Royce engineers, such as the ones working at Filton, just around the corner from where I live, play a vital role in our defence sovereign capability, allowing us to defend our country by producing kit and equipment in the future?
Matthew Hancock
Of course they do. The UK Government’s annual expenditure on defence equipment is about £16 billion. Of course, we have a long-term equipment programme, which is financed and in balance. Rolls-Royce plays a vital part in the supply chain, contributing a huge amount to the defence of this country. On the defence side, those orders will undoubtedly continue to be effectively competed for by Rolls-Royce. Across the piece, our determination in the coming days and weeks is to ensure that anyone who is affected by Rolls-Royce’s final decision, once it is made, obtains the support they need to get the jobs that are increasingly available in engineering.
Mr Iain Wright (Hartlepool) (Lab)
I think the whole House will share my concern about the fate of workers at Rolls-Royce sites and across its supply chain, who today face uncertainty, anxiety and the risk of losing their jobs. The UK aerospace industry is the largest in Europe and is second only to that of the United States. We need to maintain and support the sector, which provides high-skilled, well-paid manufacturing jobs as well as world-leading innovation and product development.
May I ask the Minister what the implications of this decision are for the Government’s industrial strategy? Does he share my concern that a key part of our long-term manufacturing capability is being sacrificed in the interests of a short-term boost for share price and shareholders? Is he concerned that the proposed job losses are concentrated in engine development, exactly the part of the business and aerospace strategy in which we need to maintain and extend our competitive edge in the next few decades? We cannot lose that capability, so what is he actively doing to maintain it? Can the Minister reassure the House that this does not represent the fact that the Government’s aerospace strategy has been grounded at the slightest hint of turbulence?
This week’s announcement on Rolls-Royce has raised concerns and questions, but it has broader implications for British manufacturing through its supply chain. For every engine sold by Rolls-Royce, 3,000 jobs are supported in the supply chain. Following this decision, what active steps are the Government taking to ensure stability in the aerospace supply chain?
The irony has not been lost that the engineers for tomorrow’s engines face redundancy in Tomorrow’s Engineers week. As my hon. Friend the Member for Derby North (Chris Williamson) said, the jobs at risk at Rolls-Royce are exactly the type of high-skilled, well-paid jobs that we need to see more of; we must not see them leaving these shores or being lost to the industry. Therefore, what active steps are the Government taking to ensure that those vital skills are protected and not lost for good? Have Ministers sought assurances that the firm’s work force and employee representatives will be properly involved and consulted?
It is not good enough for the Minister to say that this is just a commercial consideration. The Chancellor of the Exchequer, in his foreword to the Aerospace Growth Partnership strategy, said:
“Aerospace is a national economic asset to be supported.”
It is time that the Minister acted.
Matthew Hancock
It is a pity that the hon. Gentleman wrote that before he heard my statement. Of course the consultations that he requested are taking place. I have received assurances from Rolls-Royce that it will consult widely. On the industrial strategy, first, having an industrial strategy is a big step forward. The Aerospace Growth Partnership is laying the foundations for long-term support of the UK aerospace sector to ensure that it is competitive in the long term. As part of ensuring that the sector is competitive, it should be allowed to change the formulation of the businesses if it feels that it needs to do that. The assurances I have sought and received are not only that consultation with staff will be widespread but that Rolls-Royce will participate with us in actively seeking other opportunities for those who are made redundant. The talent retention solution, our mechanism to ensure that, if people with a high skill set are made redundant in one company, other companies that have a shortage of that skill set are made aware of that, has worked with BAe, in Portsmouth and other places. We are working to ensure that everyone gets the best possible future.
Unemployment under this Government has fallen by 40% in Derby in the last four years. There is not an ounce of complacency on the Government Benches. We will do everything we can to ensure that everyone gets the opportunity that they need. We will work with the company, the unions and others to ensure that the impact of this is mitigated as much as it can be.
Mr Marcus Jones (Nuneaton) (Con)
I have many constituents who work for Rolls-Royce in Nuneaton, Coventry and Derby and they and their families will be extremely concerned by this news. Can my right hon. Friend assure me that he will do all he can to engage with the company to mitigate the effects of the announcement? Will he undertake to work with other Departments, particularly the Department for Work and Pensions, to give maximum support to anyone who is affected by this news?
Matthew Hancock
Absolutely. I pay tribute to my hon. Friend’s work in supporting his local industry, and I agree with him that all Government agencies should be involved in giving it the support that it needs. Work on that has already started. The details will of course depend on the detailed decision about where the job losses will fall, but the making of an announcement at the start of the process has helped us to get that work up and running. As I have said, the skills and jobs retention group—which, although based in the Department for Business, Innovation and Skills, is broadly based and includes many representatives of the industry—is already in contact with the company to make sure that we do all that we can.
Margaret Beckett (Derby South) (Lab)
The Minister has made it plain that there is concern about the individuals and families affected, and I think that the whole House will share that view. I hope he is aware that the work force and their union representatives have always made it clear to all local Members of Parliament that they are also concerned with the national interest. Maintaining the right balance of skills and capacity will enable not just this company but the whole industry to succeed. Will the Minister be sure to bear that in mind over the coming weeks?
Matthew Hancock
Those are wise words from a former Secretary of State. Rolls-Royce is not only a global success for British industry but a vital part of our industrial landscape, and, as has been pointed out, it also plays a crucial part in our defence capability. Of course we work very closely with the company, whose success is in the national interest as well as the interest of those who are employed there.
Chris Skidmore (Kingswood) (Con)
The Minister mentioned a talent retention group that would help to redeploy engineering talent. How will he ensure that the group is sent to Bristol and Filton quickly and with the maximum resources available, and will he arrange for its members to meet me, my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) and any other willing Bristol Members of Parliament, so that we can assist our constituents who are affected in any way that we can?
Matthew Hancock
Yes, I can certainly do that. While the main focus may be on Derby, there will be concerned employees and their families in many other sites, including Bristol. No decisions have yet been made on the locations of any redundancies, but, as well as consulting local stakeholders, we will ensure that local MPs are heavily involved in the consultation process.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
These are obviously very worrying times for Rolls-Royce employees. I broadly welcome the Government’s reassurances about the steps that they will take to alleviate those worries, but there is also a more significant national concern. We are desperately short of skilled engineers nationally, and we desperately need to recruit them and encourage young people to go into engineering; yet here we have a global blue-chip engineering company in this country that is actually laying people off. What measures can the Minister take to counter the negative impression that that creates, so that we can recruit the young people whom we need so much to do skilled engineering jobs throughout the country in the future?
Matthew Hancock
Obviously this announcement is not a cheerful one, but Rolls-Royce has made it clear that it will continue both its graduate programme and its apprenticeship programme, which I know at first hand to be excellent. It is good news that Rolls-Royce is continuing to supply younger talent. It undoubtedly has an eye on the long-term future, and the need to ensure that there is a talented skills base. As for the shorter term, the fact that there are skill shortages in similar areas means that there are more job opportunities for those who are made redundant, and we must make the most of that.
Pauline Latham (Mid Derbyshire) (Con)
Rolls-Royce clearly did not make this decision lightly. Making it will have taken the company a great deal of time. The problem is, however, that the employees will be very uncertain until they know exactly what the position is. Will my right hon. Friend ensure that packages are in place as soon as possible once people know what is going to happen? Will he also ensure that the Prime Minister, the Chancellor and the Department for Business, Innovation and Skills work with UKTI to ensure that Rolls-Royce secures more orders in the future, so that we can retain as many members of its highly paid, skilled work force as possible in the Derby area?
Matthew Hancock
My hon. Friend has made a very good point. The decision to make these reductions over a period of 18 months does, of course, mean that there will be a period of uncertainty, but the fact that the announcement was made at the start is helpful, because it means that we can line up the support that will be provided by the Government and others. We engaged in discussions with the company for a couple of weeks before the announcement to ensure that everything would be ready in time for it, and we must ensure that consultations with the work force and their unions continue.
Kerry McCarthy (Bristol East) (Lab)
I was slightly concerned by the Minister’s response to the hon. Member for Kingswood (Chris Skidmore), which suggested that he did not realise how much of an impact this decision could have on Bristol as well as Derby, those being the sites of the two largest aerospace sections. Rolls-Royce has a very good apprenticeship scheme, and I am particularly concerned about the people who are beginning apprenticeships now. What hope can the Minister give them that if older workers are laid off—whether voluntarily or not—there will be jobs for them, so they ought to stick at it and obtain the skills that they are currently trying to acquire?
Matthew Hancock
I do not think that the hon. Lady’s initial characterisation was fair. Bristol is home to a significant Rolls-Royce operation and more than 4,000 apprenticeships have been started in her constituency since 2010, so I entirely understand her concern about the future of apprentices. However, I think that the announcement by Rolls-Royce that it will maintain its graduate and apprenticeship programmes is an important statement of intent to support the younger work force.
David Mowat (Warrington South) (Con)
About a month ago, Rolls-Royce issued a profit warning in which it said that the problem that it faced was the effect of the imposition of sanctions on Russia. Have my right hon. Friend’s discussions with the company over the last couple of weeks included any discussion of the proportion of the job losses that will have been caused, or affected, by our position in regard to sanctions?
Matthew Hancock
That issue has not been raised with me directly. However, the question of whether we impose sanctions on Russia, and the question of how we deal with Russia, must be considered in the context of the national interest as a whole. Furthermore, international stability and ensuring that sovereign territory is not violated by other sovereign states constitute a crucial principle of global order, and that in itself means that it is necessary to take sanctions against Russia following its action in Ukraine. Some UK interests may be directly affected, but there is a much bigger picture: the need to ensure that we have a more stable international order.
Jack Dromey (Birmingham, Erdington) (Lab)
As one who, in his former being, dealt with Rolls-Royce and many other companies and conducted many processes of consultation, I find it extraordinary that the Minister should say that the role of the Government is “to help Rolls-Royce to make the changes”. The purpose of any consultation is first and foremost to establish whether proposed changes should go ahead. Given that, in this instance, there are significant national interest issues ranging from defence to engine development, will the Minister meet representatives of the company to establish whether it would be prepared to change its decision in whole or in part?
Matthew Hancock
As I said earlier, I have met Rolls-Royce executives and spoken to them about the decision, as has my right hon. Friend the Secretary of State. Rolls-Royce faces a competitive international environment, and if it is to be successful in the future, it will need to be competitive in the future. As has been mentioned, there have been financial pressures on the company, and it is important for it to defend itself against them. Our job is to support those who are affected, and also to talk to the company while it is making its decisions about who will be affected. It is doing that in a consultative way, which I think is the right approach, and we will continue our own engagement.
Heather Wheeler (South Derbyshire) (Con)
Will my right hon. Friend expand on the conversations that he has been having? I think that there are real opportunities for many of those whose jobs may be at risk to move into other parts of the Rolls-Royce family. I am thinking particularly of the new gas-fired power stations, because there are some innovative ways of using aero-engines to run them. It would be a tragic loss if Rolls-Royce did not consider every possible opportunity to redeploy the 1,400 or so of my constituents who currently work at Rolls-Royce in Derby.
Matthew Hancock
I am sure that will be taken into consideration. Also, as this is an 18-month process, if things change during that time—for instance, if new orders come in or other parts of the business are successful—I am sure that can be taken into account. I also want to make sure that opportunities outside Rolls-Royce are made available to those made redundant. All these matters must be taken into account.
Mr Jim Cunningham (Coventry South) (Lab)
I and many other MPs represent constituencies with a Rolls-Royce presence. Coventry may be particularly badly affected by this news, although we do not know the final outcome. The Minister should recognise the hard work put in by the labour force in changing working practices and the other changes that they have been prepared to make. Will the Minister meet a delegation of concerned MPs to discuss this? Families up and down the country are going to be very worried as this is a national issue. Cuts in defence affect Rolls-Royce as much as cuts in the civil arena. The Minister should also bear in mind the fact that Rolls-Royce gets a lot of Government grants for research and development, as he may want to use that as a lever to get the truth out of the company.
Matthew Hancock
Of course the relationship between the Government and Rolls-Royce is a very close one, not least because of the support we give it for research and development, but also because of the defence relationship, which is vital to our national security. Of course, I should be very happy to meet the hon. Gentleman and other colleagues about this issue. I agree that we should pay tribute to the work of Rolls-Royce employees and the fact that they have a modern and flexible set of practices across the business in order to help Rolls-Royce be a world-beating company. They are determined to continue that, and we are determined to see that continue too.
Henry Smith (Crawley) (Con)
Yesterday I was very pleased to host Crawley headquarters, Virgin Atlantic airways here in the House of Commons. It has just ordered 21 Boeing 787s, all with Rolls-Royce engines. Does my right hon. Friend agree that the growth of our innovative aviation sector is key to ensuring that, wherever possible, we maintain a high degree of engineering capability?
Matthew Hancock
One of the explanations that Rolls-Royce has given for this news is that it is coming to the end of a development phase and moving into a production phase for exactly the engines my hon. Friend mentions. Such changes in timing have their effects of course, but the overall picture for the UK aerospace industry is a bright one. Exports are up by almost 50% over the last four years, employment is up, turnover is up and our share of the global market is growing—we are second to the United States and we will remain so. Overall, therefore, there is a positive picture across the industry and we must make the most of that, while also dealing with the direct impact of this decision on individuals who are understandably concerned.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister will know of my long-term interest in the manufacturing sector and, of course, suppliers in Huddersfield supply to Rolls-Royce. This is a brilliant company in a very fast-moving sector. The Minister said we have developed an engine that is moving into production, but my one concern is that if we are going to keep up with the competition, we will need to be developing new engines. Is that not a problem? Is that a worry or a concern?
Matthew Hancock
If the hon. Gentleman says that that is his one concern, he must be a very happy man. There are lots of concerns, all of which we need to take into account. Making sure that we remain at the forefront and the cutting edge of development is, of course, important. I pay tribute to the hon. Gentleman for the work he has done to support manufacturing and to push for an industrial strategy across the manufacturing sector. He is at the forefront of Members in driving this agenda forward, and I look forward to working with him as we get through these times.
Nigel Mills (Amber Valley) (Con)
This sad news will also be a great concern to the 500-plus people in my constituency who work for Rolls-Royce. The company also plays a great role in training young people who work for small and medium-sized businesses all around Derbyshire. Will the Minister work to ensure that training is not lost through these changes?
Matthew Hancock
My hon. Friend makes an important point. The supply chain is vital, and it relies on Rolls-Royce for contracts, but it also relies on Rolls-Royce because it has a policy of training apprentices, and some of those apprentices then go out into the supply chain, making sure the supply chain gets the skills training it needs. That has worked incredibly effectively, so I am very pleased that the Rolls-Royce apprenticeship programme will continue and that that was part of the announcement, because the point my hon. Friend made is incredibly important.
Ian Lucas (Wrexham) (Lab)
The aerospace growth partnership and the defence growth partnership are welcome long-term commitments by the Government, very strongly supported by the Opposition, to the aerospace industry. Is the Minister as disappointed as I am that that long-termism from Government is not mirrored by long-termism by Rolls-Royce? Should we not also have a long-term approach to our aerospace industry from large companies in the sector such as Rolls-Royce?
Matthew Hancock
I welcome the Opposition’s support for the aerospace growth partnership and the defence growth partnership. These are good models that are broadly very successful and are being copied around the world. I am sure the hon. Gentleman will recognise that having a plan that works in the long term is not the same as keeping everything the same, and changes do have to be made from time to time—most of the time, in fact—to ensure companies stay competitive within that long-term framework. That is why our task is to make sure there are more jobs in engineering and that those affected by this decision can get those jobs.
Andrew Stephenson (Pendle) (Con)
Rolls-Royce has sites at Bankfield and Ghyll Brow in Barnoldswick in my constituency, where it currently employs more than 1,000 people producing aerospace fan-blades. Sadly, under the previous Government Rolls-Royce opened a mirror factory in Singapore to manufacture the same fan-blades, as the company opted to invest abroad rather than in the UK, and, unfortunately, already this year we have seen 100 job losses at the Barnoldswick sites. My right hon. Friend has been kind enough to visit Pendle in the past, so may I invite him to visit again so he can see the fantastic Rolls-Royce facilities we have in Pendle and their importance to our whole local economy?
Matthew Hancock
Yes, I would be delighted to come back to Pendle. I well remember my visit and seeing some of the apprentices who are being trained in Pendle in exactly these sorts of areas. We have got to make sure that that continues in the future, so I look forward to coming back in the next six months.
Lilian Greenwood (Nottingham South) (Lab)
The Minister will know that Derby and Derbyshire are home to the largest cluster of rail engineering companies in the world. What assessment has he made of the impact of Rolls-Royce’s announcement on the wider engineering and manufacturing supply chain in the east midlands—he mentioned apprenticeships—and what is he doing to address the concerns?
Matthew Hancock
Of course any impact on the supply chain must be taken into account in responding to this decision. The fact that there are engineering shortages, which I think the hon. Lady acknowledges, is a challenge for this country, but it is also a glimmer of light for those affected by this decision, because it means there are more job opportunities in engineering and related activities. We must make the most of that glimmer of light, while supporting those made redundant following this decision.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I thank my right hon. Friend for his statement. I share the concern of my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) about the damage this decision could do to the defence industry. Will my right hon. Friend meet me and Babcock which, as he may know, will potentially be facing a shortage of nuclear engineers, especially with Hinkley C coming on board? We shall need to make sure that it can continue to do the work of refitting and refuelling our nuclear submarines in the best dockyard in the country.
Matthew Hancock
My hon. Friend certainly represents one of the best dockyards in the country. I am very happy to have the meeting he suggests; maybe we should have that meeting in Plymouth at some time during the next six months.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I was extremely worried when this morning at an event in the House of Lords for Nissan the Business Secretary seemed to say that the potential loss of thousands of highly skilled engineering jobs at the factory in my constituency in Washington, and those of others around the country, would be good news for other employers, who could snap them up. Would the Minister like to clarify those comments on behalf of his boss and give us an assurance today that he will fight, rather than accept, the loss of these highly skilled, much needed jobs?
Matthew Hancock
Of course, I was not present at this morning’s event, and I doubt very much whether that was my right hon. Friend’s intention. However, the point is that we have engineering and manufacturing growth, and this has been a difficult achievement and something of a turnaround job. Partly as a consequence of the lack of engineering training in the previous decade, we have engineering shortages, and I hope they can be filled, including from those affected by this decision. As I said in my statement, any decision to have redundancies is undoubtedly an unwelcome one, but it is our job to ensure that the people affected get every best possible potential chance for the future, and we will work night and day to do that.
Mr Mark Spencer (Sherwood) (Con)
Can the Minister assure the House that he will liaise with local enterprise partnerships such as D2N2 to secure long-term capital investment in sites such as the Hucknall site, in my constituency, so that those factories can continue to be the most efficient in the world and we can secure the high-skilled engineering jobs they currently provide?
Matthew Hancock
D2N2 is one of the LEPs that make a very strong case for investment in the local area—in Hucknall and in other parts of Nottinghamshire, and of course in Derbyshire. I look forward to working with my hon. Friend on that, as on many other matters.
Andrew Gwynne (Denton and Reddish) (Lab)
Aerospace is one of Britain’s key trading sectors, as the Minister has acknowledged today at the Dispatch Box. Within it, Rolls-Royce is an important exporter for the United Kingdom. Given that, can the Minister update the House today on the implications of this week’s announcement by Rolls-Royce for the Government’s strategy of doubling exports to £1 trillion by 2020?
Matthew Hancock
As I have said, aerospace industry exports have gone up by almost 50% in the last few years, supported by the aerospace industrial partnership and by the excellent work of UK Trade & Investment. We want to see that increase continue. We are growing our aerospace global market share and developing new products, and we absolutely and fully support that. This decision does not reflect changes to orders; it reflects the company’s decision on how to fulfil its obligations. The enthusiasm for and weight behind those strategies, which have cross-party support, to increase both civil and defence aerospace exports will absolutely continue.
Mark Pawsey (Rugby) (Con)
Yesterday’s announcement was viewed with concern by Rolls-Royce workers at the Ansty site in my constituency. Does the Minister agree on the importance of the company working with employees to ensure that any redundancies in the UK are made on a voluntary basis, and does he agree on the need for flexibility within the work force to ensure that this first-class British company can respond efficiently to a fast-changing world market?
Matthew Hancock
Absolutely. The site at Ansty that supports innovation in aerospace, which my hon. Friend and I have visited, has received £60 million of investment and is a crucial part of ensuring that we have the highest-value, high-end, highly innovative, high-technology manufacturing. Of course Rolls-Royce plays a part in that, and it is a very important part of their future, so we must ensure that the momentum behind that continues.
Gavin Shuker (Luton South) (Lab/Co-op)
It was not inconceivable that the engineering phase of the Trent engine project’s reaching a quieter stage would result in personnel changes. How did the Department’s sectoral strategy reflect this?
Matthew Hancock
The sectoral strategy is about making sure that the aerospace industry and, more broadly, engineering in the UK as a whole works: making sure that we have the organisations ready to help people move out of roles that are becoming redundant and go into growing roles with similar skill sets for which there are vacancies—whether within or outside that company. Those structures are set up. We are setting up a specific group to support those who are made redundant through this process, because we must ensure that, where there are skill shortages, they are filled.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
As we have heard, there is a skills shortage across the whole of our economy in both trained and trainee engineers, as identified in a recent Science and Technology Committee report. Will my right hon. Friend therefore ensure that, despite this disappointing news, the message goes out stronger than ever to students who are about to choose their options that engineering is still much needed and is still a great career to train for?
Matthew Hancock
Yes, absolutely. Employment in engineering is rising, engineers are well paid and it is an exciting profession. Some of the estimates of the skills shortages across the country are far higher than the 2,600 redundancies globally we are talking about today. These careers are exciting and long term. Britain is a world leader in this regard, and I would encourage anybody who is considering an engineering career to look at it incredibly closely if they want an exciting future.
Points of Order
Mr Laurence Robertson (Tewkesbury) (Con)
On a point of order, Mr Speaker. The Northern Ireland Affairs Committee, which I chair, is looking into the administrative scheme for so-called on-the-runs, which caused a stay to be put on the prosecution of someone accused of carrying out the Hyde Park bombings in 1982, when four people were killed. One of the most important witnesses is of course the former Prime Minister Tony Blair. Mr Blair has failed to offer us any date when he could come before the Committee. He has not refused to do so, but in effect he has by not offering any date. He has offered to submit written answers, which I am sure you will appreciate is totally unsatisfactory. Given the importance of this inquiry, its sensitive nature and what it means to people in Northern Ireland and indeed beyond, I wonder whether you could advise the Committee how we might proceed.
Mr Speaker
I am grateful to the hon. Gentleman for his point of order and for giving me notice of this matter. It is of course open to the Northern Ireland Affairs Committee, which the hon. Gentleman so ably chairs, to exercise its formal power to summon witnesses, but I hope it will be possible to resolve the issue without recourse to that. The hon. Gentleman has made his point and exposed the issue publicly. I am sure that the former Prime Minister intends no discourtesy and will swiftly respond.
For the record, I can also advise the hon. Gentleman that some years ago, when I served as a member of the International Development Committee under the chairmanship of the right hon. Member for Gordon (Sir Malcolm Bruce), who of course continues to chair it, we asked to see former Prime Minister Blair in relation to the middle east peace process. Mr Blair did attend and addressed us knowledgably and with alacrity, so I hope the hon. Gentleman will keep his hopes alive.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. You know that tomorrow, we will have an innovation in this House. For the first time ever, the front of the Order Paper will acknowledge that 100 years ago, Captain Arthur O’Neill, the former Member for Mid-Antrim and Captain, 2nd Battalion, The Lifeguards, was killed in action in Belgium during the first world war. That puts our acknowledgement of his service on the record on the Order Paper, but I wonder whether, in your infinite wisdom, you could find a way to ensure that it ends up in the written record of tomorrow’s proceedings as well.
Mr Speaker
In my “infinite wisdom”—the hon. Gentleman’s words, not mine—I can, and I will.
Armed Forces (Prevention of Discrimination)
Thomas Docherty (Dunfermline and West Fife) (Lab)
I beg to move,
That leave be given to bring in a Bill to make provision in relation to the reserve forces of the Crown; to provide that certain offences committed towards members of the armed forces and their families shall be treated as aggravated; to prohibit discrimination against members of the armed forces and their families in terms of provision of goods, services and employment; and for connected purposes.
Remembrance week is always a poignant time for communities across the United Kingdom. We not only remember the sacrifices made by previous generations stretching back over the past century; we also honour those of the current generation who have given their lives to safeguard our country and protect our freedoms and those of our friends around the globe.
This year is particularly significant as it marks not just the 100th anniversary of the start of the first world war and the 70th anniversary of D-day but the end of combat operations in Afghanistan. Although the scale of each conflict is different, the loss to each family of those brave young people who have been killed will be no less today than it was in those earlier wars. The Under-Secretary of State for Northern Ireland, the hon. Member for South West Wiltshire (Dr Murrison), wrote a few years ago:
“In this age of moral equivalence it must be said that no other occupational group in the United Kingdom matches up to UNMS”—
the unique nature of military service.
“In particular, none belong 24/7 to the Crown, is exempted from normal working practices of the sort governed by the European working-time directive and national minimum wage legislation, has no organised representation, may not easily terminate their service particularly on notice for deployment, will probably sustain some sort of illness or injury if deployed and has liability up to and including death with all that means for dependants cascading through the generations.”
I think the whole House recognises that we owe a special debt to those who risk their lives abroad to defend our freedoms, and that we must ensure that they receive, as they deserve, the full shield of Government protection when they return home.
That is why the Bill seeks to tackle the discrimination that our armed forces and their families suffer in four areas. First, the House will recall that the noble Lord Ashcroft carried out a survey in 2012, with the support of the Ministry of Defence, of some 9,000 serving personnel across all three armed services. Some quite astonishing and scandalous figures came out of that survey. About 5% of members of our armed forces reported that they or their family had suffered physical assault or attempted physical assault during the previous five years, and 19% of them reported that they had been the victim of verbal abuse in that period. I am sure we can all think of the type of abuse that, regrettably, is hurled by a mindless minority at members of our armed forces. Only last week a 15-year-old Army cadet was assaulted by a drunken yob for no other reason than that he was wearing his uniform and selling poppies. The Bill would make such crimes aggravated offences. It is not acceptable to abuse someone for wearing the uniform of our country.
Secondly, Lord Ashcroft’s survey found that one in five members of the armed forces or their families had been refused service in shops, pubs or restaurants simply because of their profession. In Edinburgh last year, a pub refused to serve the crew of HMS Edinburgh—who, ironically, had just been awarded the freedom of the city—because they were in their dress uniforms and the landlord claimed that they might have caused trouble, despite the fact that it was the middle of the day and they were completely sober. This type of prejudice is unacceptable and must be tackled.
Thirdly, it is not just when they are in uniform that our armed forces face prejudice or adversity. The Defence Committee highlighted last year—and the Ministry of Defence accepted—that too many reservists face discrimination when seeking work. Many employers recognise the advantages that reservists can bring: they are hard working self-starters who know how to work well in a team. Babcock, BT and BAE Systems are just three examples of major British companies actively promoting the benefits of serving in the reserves. However, too many companies are refusing to hire reservists because they operate under the mistaken impression that their business operations will be disrupted when the reservists are called up. The Bill would stop companies refusing to hire reservists.
We want every business to follow the example set by those companies that recognise and appreciate our reserves, but the reality is that warm words will not help those men and women who want to serve our nation while at the same time working in civilian professions. So, fourthly, we also recognise the challenges that some reservists face in meeting their training commitments on their company’s annual leave allocation. To its credit, the MOD acknowledges this problem and has been trying—albeit unsuccessfully—to persuade businesses voluntarily to give additional unpaid leave to reservists so that they can complete their required training each year. This failure is not just bad for our armed forces; it is bad news for the good employers who provide additional support to allow reservists to fulfil their obligations. That is why, if the voluntary approach is failing, we must use mandatory methods. We have a duty to our reservists and to our good companies. Above all else, we have a duty to support our nation’s defences.
This weekend, Members from both sides of the House will return to their constituencies to pay tribute to those who have given their lives to protect our nation. Today we have an opportunity not just to pay tribute but to protect those who continue to serve our nation at home and around the globe. I hope that the House will support the Bill.
Mr Andrew Robathan (South Leicestershire) (Con)
In opposing this measure, I feel that I should declare an interest. I spent 18 years in the regular armed forces. I also spent 17 years in the reserves—not doing very much, I should add. I am delighted to say that I receive a military pension. As they say in Tesco’s, “Every little helps”, and actually it does quite a lot to help, so I am very grateful for it. So I have some sympathy with what the hon. Member for Dunfermline and West Fife (Thomas Docherty) has been saying.
I should like to describe some of my experiences in the armed forces. Was I discriminated against? Yes, I was. I was at university at the time when the war memorial in St Giles in Oxford was covered in red paint just after Bloody Sunday. The truth is that the soldiers involved in Bloody Sunday behaved very badly. I think we all know that. They did not cover themselves in glory. In Hong Kong more recently, I remember seeing a big sign outside a club saying, “No squaddies”. I think we did actually get in, but I was very upset for my soldiers, who were not allowed in. That was quite wrong.
As a Minister, I remember writing to more than one person who had refused to serve soldiers, sailors or airmen—and women, for that matter—or discriminated against them in some other way. I was proud to wear the uniform, but for a lot of my time in the Army, I was unable to wear it because of security threats. I know that other hon. Members sitting in the Chamber today will have been in the same predicament.
My question to the hon. Gentleman is: do we really need more legislation? What is the problem that he is trying to solve? He mentioned the Army cadet who had a blowtorch used against him. The person who did that is quite rightly being hunted, and I hope that he will be caught. Funnily enough, it is already against the law to use a blowtorch on somebody, so I do not think we need more legislation on that issue. The hon. Gentleman’s point about reservists is a good one. However, I understand that the Ministry of Defence is tackling that problem with employers—the Minister of State, Ministry of Defence, my hon. Friend the Member for Broxtowe (Anna Soubry), who is sitting on the Front Bench, will correct me if I am wrong—and it is important that we should do that. So what is the problem that we are trying to solve?
Typically, this kind of discrimination is aimed at keeping the “rude, licentious soldiery” out of pubs. I think that that was Shakespeare’s term—you will correct me if I am wrong, Mr Speaker. Actually, from time to time the soldiery—and even, dare I say it, the officers—are rude and licentious. [Interruption.] I am pleased to hear the hon. Member for Colchester (Sir Bob Russell) saying that that could not happen in Colchester. Sometimes the commanding officer of a battalion or unit will declare a pub out of bounds because they do not want the soldiery—or the sailors or the aircraftspeople—to go into it, because they know that they could end up having scraps. That is just a fact. Not everyone likes people in uniform, but I do not think it is up to us to tell them that they have to like them.
So, do we need this Bill? The armed forces have never been more respected, over the course of my lifetime, than they are now. I am delighted by that. I do not know whether other hon. Members have visited the moat around the Tower of London, but I went there today. It was a moving sight, although I did not feel the need to take a photographer with me and to weep, as Mr Farage did. The number of people visiting it reveals the respect that our armed forces command.
We also have the military covenant. As I recall, the hon. Gentleman was involved with the Bill that brought the covenant into law. The whole point of it was that no one should suffer disadvantage for being a member of the armed forces. We have ensured that the genuine disadvantage in relation to education and health, for example, has now ceased to exist. I put it gently to the hon. Gentleman that we need to alter attitudes. However, I do not believe that in this case it would be appropriate to use the heavy hand of legislation and of litigation, which inevitably follows—unless we want to pay lawyers’ fees.
I know the hon. Gentleman and he may be surprised to hear me say that I quite like him. [Hon. Members: “Ah!”] I am sorry. That will ruin his career. I believe that his heart is in the right place, but I do not believe that our proud soldiers, sailors and airmen and women would want to be patronised in any way. They do not want to be pitied; they want to be respected, and every one of us and every member of our society should be respecting them. The Bill’s plea for special treatment would not be particularly wanted by the armed forces. Most of them would look quizzically at it and think, “What’s all this about then?” Some of them, rude and licentious, might then go down the pub and get into a scrap.
In conclusion, I was refused service in Springfield road when I went to buy some mustard by Kelly’s corner. I was cross because we needed some mustard. Kelly’s corner is on the junction of Springfield road and Whiterock road, but I think Kelly’s has been knocked down. The shopkeeper would not serve me, so I asked why. The answer was, “Because you’re a soldier.” So I remained in the shop with my soldiers and said, “I am not leaving until your serve me.” He did so in the end, because it was more trouble to get me out than to serve me—he may have even given me the mustard. Our soldiers, sailors and airmen deserve the respect of everyone in society, but they do not want to be singled out and patronised, in any way.
Mr Speaker
The House will take its own view on the matter. I simply recall that the right hon. Member for South Leicestershire (Mr Robathan) was a soldier for at least 15 years, but I cannot believe that he was ever either rude or licentious. The thought simply does not occur. [Interruption.] The Minister does not seem quite so convinced.
Question put (Standing Order No. 23) and agreed to.
Ordered,
That Thomas Docherty, Ms Gisela Stuart, Ian Murray, John Woodcock, Andy Sawford, Bob Stewart, Conor Burns, Mr Russell Brown, Graham Jones, Gavin Shuker and Jim Shannon present the Bill.
Thomas Docherty accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 21 November, and to be printed (Bill 115).
Opposition Day
Income Tax
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:10 - The House divided: - Ayes: 248 / Noes: 287 - Question accordingly negatived.
Chris Leslie (Nottingham East) (Lab/Co-op)
I beg to move,
That this House believes it is a mistake to reduce the top rate of income tax at a time when working people, who are on average £1,600 a year worse off since 2010, are not feeling the recovery and while the deficit also remains high; notes that figures from the Institute for Fiscal Studies show that, by next year, households will be on average £974 a year worse off because of tax and benefit changes since 2010; believes that a fair plan to balance the books would reverse the cut in the top rate of income tax, which is worth £3 billion a year for the top one per cent of earners, for the next Parliament, and introduce a lower 10p starting rate of tax; and calls on the Government to rule out a further reduction in the top rate of income tax on earnings over £150,000 a year.
Four and a half years into this Government, the squeeze on lower and middle earners is as bad as ever. Wages are still failing to keep pace with prices, and the typical working person is £1,600 worse off. This is the longest suppression of living standards since the 1870s, and my Labour colleagues know that this gap is getting wider and wider. This Government are presiding over one of the worst records on income growth of any European country—only Portugal, Cyprus and Greece have seen wages erode more severely than we have. For most people, there is no economic recovery at all.
When the Chancellor was asked, however, in a recent ITV news interview why there was no feel-good factor, his answer was, “Well, I simply don’t accept that.” Of course, in the world the Chancellor and the Prime Minister inhabit life is sweet. Someone lucky enough to be in the richest 1% of society has seen their share of the nation’s income grow considerably. Over the past year, the share of the national post-tax income of the top 1% of taxpayers—just 300,000 people—has risen from 8.2% to 9.8%, whereas the bottom 90%, a total of 27 million taxpayers, have seen their share fall from 71.3% to 70.4%. Those are Her Majesty’s Revenue and Customs’ own statistics. That most privileged 1% elite have not just seen their fortunes grow by chance while others have fallen behind; they have been actively helped along by a cut in income tax for those earning more than £150,000. The shrinking share of national wealth held by the vast majority when compared with the growing share held by the richest does not represent a recovery for the many rather than the few.
Sir Bob Russell (Colchester) (LD)
Will the hon. Gentleman concede that the coalition Government, thanks to the input of the Liberal Democrats, have raised millions of people out of paying any income tax? Will he give an assurance that should there be a Labour Government they will match the pledge to raise to £12,500 the level before which income tax is levied?
Chris Leslie
There are a number of facets to the hon. Gentleman’s question. Let us just remember that it was the Liberal Democrats who voted to cut that top rate of income tax from 50p to 45p.
Chris Leslie
The hon. Gentleman nods and says, “Quite right” from a sedentary position, but of course he is not seeking re-election and so he is brave enough to say that. I wonder whether his Liberal Democrat colleagues would also say that about the cut from 50p to 45p. I will give way if Liberal Members want to defend the way they voted on that.
The hon. Member for Colchester (Sir Bob Russell) raised the issue of the personal allowance, and I expect the Minister will do the same. But the public out there are not going to be fooled by Government Members saying, “Just look over here at this particular change”, because they know very well by now that Tories and Liberals give a little with one hand but take away far more with the other. On the tax burden, there is a sense of people being worse off year after year, and they know the truth.
Charlie Elphicke (Dover) (Con)
If Labour went down the route of a 10p tax band in place of the £12,500 personal allowance that Government Members want to see, surely that would leave people on £11,000 worse off.
Chris Leslie
No, we believe that instead of having the married couples break, which does not actually help many married couples, it would be far fairer to introduce that 10p starting rate of tax, because it would help many, many more people. The hon. Gentleman has hit upon yet another example—perhaps this is one for an Opposition day debate on a different occasion—where the Government constantly choose the route of unfairness, limiting the help to those who need support and assistance. Labour believes that everybody should have a share in growth and prosperity, which is precisely the opposite of the trickle-down economics that we have had so far from the parties in the Government.
Pete Wishart (Perth and North Perthshire) (SNP)
Getting back to the 50p tax rate, does the hon. Gentleman have any explanation for the fact that when we voted on it in March 2012 only two Labour Members voted in that Division and the rest abstained? What is the explanation for that?
Chris Leslie
We have consistently opposed this outrageous change to dish out a tax cut for the very privileged 1% in society. The hon. Gentleman should join us, and I hope he will, in voting for today’s motion, as it is about a key divide in British politics and in Scottish politics. It is very important that we expose the fact that by cutting the top rate of tax on earnings above £150,000 from 50p to 45p Ministers have wilfully accelerated the divide between the majority and the richest 1%.
Andrew Bridgen (North West Leicestershire) (Con)
Will the shadow Minister concede that the considerable increase in personal allowances under this Government has been of no benefit to those earning more than £150,000 because between £100,000-worth and £110,000-worth of earnings all the personal allowances are removed?
Chris Leslie
The hon. Gentleman has done more for the very wealthy earning over £150,000. At this time of pressure on our public spending and on his constituents and mine, what did he decide to do? A typical millionaire, he gave away a benefit worth £100,000. He voted for that cut in the 50p rate of tax, which the vast majority of people feel is an obscene example of the unfairness of this Government. It is particularly a stain on the reputation of the Conservatives, but I want to hear how the Liberal Democrats justify their votes for the cut in that 50p rate.
Sir Malcolm Bruce (Gordon) (LD)
Apart from the fact that the top rate of tax was 40% for all but 39 days of the Labour Government’s time in office, will the hon. Gentleman tell us which Chancellor of the Exchequer cut capital gains tax to 18%, which this Government have now increased to 28%, and which Government capped the amount of tax relief for high earners on pensions? It was not his Government, but the present Government.
Chris Leslie
It sounds as though the right hon. Gentleman is trying to wriggle out of voting for that cut in the 50p rate. He tries to change the subject—“Look over here, we’ve done this” or “We’ve done that,” but he voted for a cut in the 50p rate for the very wealthiest in society. He asks—I am sure we will hear this from the Minister as well—why we did not do that for 13 years. We had a global financial crisis that hit tax receipts significantly, and in 2009, looking at the state of the public finances, we felt that the fairest thing to do was to raise the rate to 50p, which is obviously shocking to Government Members.
Mr Jim Cunningham (Coventry South) (Lab)
The financial crisis actually started in America with JP Morgan. The Government are trying to rewrite history. Is it not true that under this Government people are worse off to the tune of £1,600 a year, and that the purchasing power of their wages has dropped 6%?
Chris Leslie
People faced a double whammy—the tax and the changes to their tax credits by the Conservatives, together with that squeeze on living standards as a result of wages failing to keep pace with prices.
We are doing the Government a favour today. We are trying our best to persuade them of the error of their ways. We have tabled a motion that allows them to put right the wrong they have done, get their priorities right and admit it was a mistake to reduce the top rate of income tax at a time when working people are not feeling any recovery.
Paul Uppal (Wolverhampton South West) (Con)
For nearly half a century the Indians and the Chinese pursued a punitive ideological politics. Since they turned away from that, they have pulled hundreds of millions of people out of poverty. With the exception of the Labour Front-Bench team and President Hollande, I think the hon. Gentleman will find himself very much in the minority. As Abraham Lincoln famously said, you never pull anybody up by pulling somebody down. Is not this debate about the Opposition’s political opportunism, rather than long-term economic reality?
Chris Leslie
There we have it—the voice of the ideological right wing of the Conservative party, which says we should not have progressive taxation in this country. The hon. Gentleman almost espouses the flat tax mentality, on which we know the Conservatives all agree. Perhaps he wants to elaborate.
Paul Uppal
Unlike those on the Opposition Benches, I have been poor—dirt poor. [Interruption.] I do not want any sympathy. The reason I sit on the Conservative Benches is that I want to empower the people in my constituency and give them a ladder of opportunity to escape from poverty, not keep them in poverty, which is the position of those on the Opposition Benches.
Chris Leslie
That ladder of opportunity is being pulled up by the hon. Gentleman. At a time when people’s pay is failing to keep pace with prices and the burden of taxation is greater, he not only votes to give tax benefits to the wealthiest in society but says, “If you’re lower or middle income, you have to pay higher VAT. You’re not going to leave the country. We have to reduce those tax credits and all the support that has been available before, but if you’re a wealthy individual in society, if you’re earning over £150,000, we have to cut your taxes because you might just leave the country.” That is not what has happened.
Chris Leslie
I will give way to my right hon. Friend, but first I want to hear a little more of the logic and the ideology espoused by the hon. Member for Wolverhampton South West (Paul Uppal).
Paul Uppal
If the hon. Gentleman is correct in what he says, will he explain why, under the Labour Government, venture capitalists paid 10% tax, as opposed to their cleaners, who paid 20%, whereas they had previously paid 10%?
Chris Leslie
Again, Conservative Members do not want to talk about the 50p rate of tax. They will find any example of other things. They will talk about the personal allowance or venture capital arrangements, and maybe we will get them on to VAT. We want to know the ideological basis for cutting the 50p rate to 45p. They may have thought that that would suddenly enliven enterprise across the country, but it has not done so.
Frank Dobson
There have been references to the ladder of opportunity. Education and training are a major part of that. It is this Government who have taken away the education maintenance allowance, which allowed large numbers of working class children to stay on at school, at college and in training. Taking that away has shifted several steps out of the ladder of opportunity.
Chris Leslie
It is important that we look in aggregate at the fate that has befallen so many of our constituents since 2010. We have had 24 different tax rises, as well as the effect of wages not keeping pace with prices. Let us look at some of the changes that have taken place since 2010—freezing child benefit, cutting maternity grants, cutting tax credits, abolishing the education maintenance allowance, higher insurance premium taxes, a frozen higher rate threshold, the granny tax, freezing allowances for pensioners and, of course, raising VAT to 20%.
In what must count as one of the most brazen transfers from the least well-off to the richest in recent years, the Chancellor announced in his conference speech a £3 billion strivers tax hit on tax credits until 2018—the same £3 billion sum given away in the tax cut to millionaires. There we have the comparative priorities—£3 billion in a tax cut to the very wealthiest in society, and the same amount taken away from some of the poorest and middle income families.
Chris Ruane (Vale of Clwyd) (Lab)
My hon. Friend mentions the Chancellor of the Exchequer. What does he say about the Chancellor’s words in 2009, when he said:
“Well, I’ve set out the principles we will adopt when it comes to the 50p rate. I’m not a fan. I regard it as a temporary feature but I cannot even consider lifting it while I’m asking others in the economy to bear a burden.”
Chris Leslie
My hon. Friend hits the nail on the head—as if our constituents are not still bearing a burden. The Chancellor of the Exchequer said that he could not countenance reducing that 50p rate until people were no longer bearing that economic burden. Are we in that position? Absolutely not. What does he do? He chooses to give that tax cut to the very wealthiest in society. Has there ever been a fallacy greater than the Chancellor’s hollow claim that “we’re all in this together”?
How strange that before the last election, as my hon. Friend says, the Chancellor said, “No, no, no, we certainly wouldn’t tackle that 50p rate,” but after the election, amazingly, he decides to do what Conservatives always do. That was at a time when Oxfam reports that 20 million meals were given out in food banks last year, up by more than 50% on the previous year. Its chief executive is right to say that the fact that they are needed in 21st century Britain is a stain on our national conscience. We cannot and we must not allow these warped and perverse priorities to go unchallenged.
There is an alternative and a different set of choices. When Government borrowing is 10% higher in the past six months compared with the same period last year and the deficit is rising, the Treasury cannot afford to dole out tax breaks to those at the top of the pile. Borrowing so far this year has been £58 billion, compared with just over £52 billion for the first six months of last year. The revenue from the 50p rate of tax remains essential when that deficit is pressing so heavily on vital public services and bearing down on the shoulders of lower and middle income households in our constituencies.
Geraint Davies (Swansea West) (Lab/Co-op)
As my hon. Friend will know, income tax receipts were projected to rise by 7% this year but have, in fact, gone up by only 0.1%, so there is a pressing need for extra income. He will also know—perhaps he will comment on this—that the marginal rate of tax for national insurance and income tax is 62% for people on incomes between £100,000 and £120,000, so how can the Government argue that behavioural changes resulting from a 50p rate will suddenly drive everyone away? It is obviously a load of bunkum designed to protect their rich friends.
Chris Leslie
It is amazing what contortions Ministers have forced their officials into in trying to justify why the 50p rate could no longer continue—the sort of ideological nonsense we heard from the hon. Member for Wolverhampton South West—such as the suggestion that somehow it would not raise important revenues at a time when our deficit is actually rising.
Chris Leslie
I am sure that the Financial Secretary will confirm that the deficit is actually rising.
Mr Gauke
The shadow Chief Secretary might be aware that earlier today the Daily Mail reported on its website that a former Labour Cabinet Minister, Alan Milburn, said at a Labour party conference fringe event that, as far as the state of the public finances was concerned, increasing the 45p rate to 50p would be “absolutely incidental”. Does he agree?
Chris Leslie
I do not agree that it would be incidental, but I have never suggested that it is the full solution to dealing with the deficit. However, it is an important part of it—[Interruption.] The Financial Secretary says that it is not an important part of it. He says that we should not worry about the revenues we would get from a 50p rate. I am sorry, but the country cannot afford that sort of attitude and those priorities from Government Members. The deficit affects our constituents because of its effects on public services and the accumulating interest that has to be paid to service the mounting debt under the Conservatives. We have a choice about a tax rate that would raise £3 billion, and it is important that we take that opportunity to tackle our deficit, rather than giving that money away to those people who are already in an extremely privileged position.
Chris Leslie
I do, and let me explain why. We have to debunk this myth, because it is essentially the argument that the Minister will set out in his speech today. The static cost of the 50p tax rate before behavioural effects are taken into account is £3 billion—those are the official HMRC figures and the Minister agrees with them. Ministers, however, including this one, have strained every sinew to try to prove that those behavioural effects would almost entirely erase any revenue generation whatsoever, claiming that it would raise only a net £100 million. That is the figure we have. However, we must not forget—perhaps he can confirm this—that it was a ministerial decision to pick the tax income elasticity rate of 0.45, which miraculously massaged the official figure down to that £100 million. Was that a Government decision, because that is what the HMRC figures say?
Mr Gauke
It was HMRC that determined that, but I just want to be absolutely clear about what the shadow Chief Secretary is saying. He is right that the £3 billion is the static cost, but he is saying that that is the actual cost that the Labour party believes it would raise. He is saying that there would be no behavioural change as a consequence of a 50p rate of income tax. That is the most extraordinary and incredible position, and it is inconsistent with the position that the Labour Government took when they introduced this some years ago. If that is what he really believes, he is stretching credibility even further.
Chris Leslie
We are making a little progress, because the Minister has at least acknowledged that the static cost of this change is £3 billion, and we have also pinned down the fact that it was HMRC and the Treasury, not the Office for Budget Responsibility, that picked the TIE rate, which is the device he used to massage the figure down to £100 million. [Interruption.] He says that that was not Ministers, so we will have to see whether a freedom of information request can elicit more information.
Even if we accepted the behavioural changes that the Minister has suggested, rather than tackling the tricks and manoeuvre used to avoid paying the tax, what is the attitude of the Treasury and the Minister? Their attitude is to wave the white flag and basically say, “Let’s allow them to get away with those behavioural effects.”
Chris Leslie
I will give way to my hon. Friend the Member for Inverclyde (Mr McKenzie).
Mr Speaker
Order. The shadow Chief Secretary is being most generous and accommodating in giving way. I simply point out to the House that the second debate has a comparable number of would-be contributors as does this one. If we are working on the assumption that this debate will finish at about 4 o’clock, it is important to ensure that there is maximum time available for Back Benchers who wish to make speeches. After that, I am in the hands of the House.
Mr Iain McKenzie (Inverclyde) (Lab)
To bring my hon. Friend back to the whole subject of fairness in taxation, especially in these economic times, it was this Government who told us that those with the broadest shoulders should bear the majority of the burden, yet the first thing they did was reduce the tax rate to take that burden off their shoulders. [Interruption.]
Chris Leslie
There is a lot of protest coming from Government Members. Only those who are not standing for Parliament again will dare to stand up and defend cutting the 50p rate. Mr Speaker, I have heard your entreaties about being a little more strategic in the way we progress through the arguments, but I thought that it was important—[Interruption.]
Mr Speaker
Order. I say to the hon. Member for Taunton Deane (Mr Browne)—[Interruption.] Order. I have always regarded the hon. Gentleman as a very cerebral denizen of his House. I do not know whether he has become a bit demob happy because he is standing down, but I look to the hon. Gentleman, whom I have always regarded as a gentleman, to comport himself with a dignity comparable to that of his right hon. Friend the Member for Gordon (Sir Malcolm Bruce), who is beaming on the Liberal Democrat Front Bench.
Chris Leslie
The hon. Member for Taunton Deane (Mr Browne) might be demob happy, but his constituents are demob happier.
I want to look at some of the other arguments we will hear from the Minister. When he came up with his calculation of £100 million, which was supposedly the only revenue from cutting the 50p rate, HMRC did not take into account the forestalling effect it would have—[Interruption.] No, it did not. If the Minister reads the small print of the Treasury costing, he will see that it did not take account of forestalling. I will send it to him, because it is there in black and white.
Everybody knows that wealthy individuals, usually paying themselves through personal services companies, merely changed the date when they paid themselves, from the financial year when the tax rate was 50p, and waited until the Chancellor did the business and cut it to 45p. The OBR has observed that substantial amounts of PAYE tax liabilities were deferred from the end of 2012-13 to the early part of 2013-14 in order to be taxed at 45p, rather than 50p. It estimates that around £1.7 billion in tax was deferred in that way. If that charge was at the lower rate, clearly there would be far more income lost to the Exchequer. The Chancellor has colluded in the wholesale avoidance of the 50p rate, and they telegraphed it so far in advance that they almost created the circumstances in which they were able to give the impression that it did not really matter that it would not have an effect.
The Conservatives will also make a number of other allegations about the 50p rate. They will say that it stifles enterprise and repels entrepreneurs abroad. However, recent studies have shown that a 50p rate did not deter or discourage wealthy people from locating in the United Kingdom. A new report from the New World Wealth organisation looked at millionaire migration and found that more millionaires migrated to the UK between 2003 and 2013 than to any other country.
The real question in the minds of so many Conservative ideologues, as Conservative Members are, is whether they will get their way and see this 45p rate cut even further to 40p, because that is essentially what they want.
Chris Leslie
There are plenty of the Chancellor’s friends, some of them standing opposite, who want that to happen. The Mayor of London, Boris Johnson, says:
“The Government should open up some more blue water, and cut the top rate back to 40p.”
The hon. Member for Altrincham and Sale West (Mr Brady) says that 40p would be his priority. The politics of the 45p cut
“was very straightforward and it really wouldn’t have made any difference to the popularity…of the measure if you went from 50p to 40p rather than 45p.”
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Does my hon. Friend agree that the important point is that, yes, a marginal income is raised through the top rate of tax, but it is also about the principle? We know that the UK has one of the highest levels of income inequality, with the impact that that has on matters such as life expectancy and health. If the Government do not recognise the divisions and hardship that this is creating, it is a sad day.
Chris Leslie
I sometimes get the impression from Ministers that they would not understand fairness if it hit them in the face. They certainly do not get it when it comes to the moral imperative as well as the economics of ensuring that we have a fair tax system that ensures that those with the broadest shoulders contribute a fairer share.
A Labour Government would reduce the deficit in a fairer way than the approach that we have seen from the Government. Of course, we have not seen much deficit reduction in recent years. We want to balance the books as soon as possible in the next Parliament, but to do so in that fairer and balanced way. We will reverse this Tory and Liberal Democrat tax cut for millionaires. We have to make some tough choices.
Chris Leslie
No, we have heard enough from the hon. Gentleman.
We will stop paying winter fuel allowances to the richest pensioners. We will have to raise child benefit by just 1% for two years, and Ministers’ pay also should be restrained. But we also have to cut out the waste and incompetence of this Government —£3 billion wasted on an NHS reorganisation; the universal credit debacle; the pointless exercise of a worse than useless Work programme. A fair plan to balance the books in the next Parliament would reverse this obscene tax cut for the top 1% of earners. We will have to finish the job that this Chancellor has so patently failed to deliver, and we will do so with a plan that will create sustained and balanced growth, 200,000 homes by 2020 and a British investment bank; cutting business rates for small firms; providing a jobs guarantee and child care to help people back to work; reconnecting the wealth of our country with the finances of individuals and families; and, above all, ending dogmatic trickle-down Tory economics, which hits lower and middle income households while the Government lavish tax cuts on the rich.
The Financial Secretary to the Treasury (Mr David Gauke)
It is a rare privilege for a Treasury Minister to respond to an Opposition day debate on an economic matter this year. In the course of 2014, we had a debate on banking in January and a debate on the Office for Budget Responsibility in June, and now this. Why the reticence on the part of the shadow Treasury team? Imagine the scene in the shadow Cabinet room. With the general election fast approaching and Labour’s economic credibility at record lows, the pressure is on for the shadow Treasury team to make their big economic argument. So they all sit there, straining to come up with a topic for an Opposition day debate. They could set out their case on economic growth, but having spent years saying that our policies inevitably meant that the economy would flatline—remember the hand gestures—we are now projected to be the fastest-growing economy in the G7. They could talk about unemployment. Remember the predictions of another 1 million unemployed. But employment is at record levels, and unemployment, youth unemployment and long-term unemployment numbers are dropping like a stone. They could talk about the exciting plans a Labour Government might have to make our economy more competitive and dynamic, except that they have not got such plans, only plans to increase business taxes. What about the cost of living? The problem here is that hardly anyone believes that a Labour Government would make a positive difference to the cost of living, because we need policies for growth and jobs to deliver improvements in standards of living. They could talk about how Labour would deal with the deficit, except, presumably, everyone forgot to mention it in the meeting. “We must have something we can say,” someone says in desperation, and after a long and painful silence someone eventually says, “We could always trot out the 50p tax cut again. Yes, that will have to do.” So for the first tax and spend Opposition day debate of 2014, we return to a lazy and populist measure, which, as a former Labour Cabinet Minister has been reported to say today, is incidental to the state of the public finances.
Kate Green (Stretford and Urmston) (Lab)
A moment ago, the Minister commented on employment rates among young people, and across other groups too. Does it not trouble him and his colleagues that while employment rates are rising, in-work poverty is also rising, and the Government have no strategy to deal with this? What will he do about that?
Mr Gauke
The way to address that is by improving our productivity, by attracting additional business investment, and by ensuring that we are a good climate for businesses to invest in. That is how we get growth. It is through enterprise, not through punitive taxation that fails to deliver public finances to the Exchequer.
Geraint Davies
Will the Minister confirm that the amount of business loans from banks, including RBS, to businesses, is 30% down compared with 2008, and down 40% for small business, yet the loans for mortgages, for houses that already exist, are at 2008 levels? All the money is going into existing houses instead of into productivity and business. Why does he not do something about it?
Mr Gauke
The hon. Gentleman should also be aware that business investment is increasing. The last few quarters have been very positive on that front, and we are moving in the right direction, despite having to deal with the mess that we inherited. The truth is that in the place where a credible Opposition economic policy should be, we have an empty gesture that will do nothing for economic growth, nothing for job creation, nothing for the public finances, and nothing to help reduce taxes for working people.
Charlie Elphicke
Will my hon. Friend confirm the position on the change in receipts? It looks to me from my studies of Inland Revenue statistics, which are frequent, that the receipts from this additional rate seem to have risen from about £40 billion to £49 billion.
Mr Gauke
I will turn to the analysis done by Her Majesty’s Revenue and Customs, which is at the heart of the debate, but there is no reason to believe that that has proven to be inaccurate, or that suddenly there is this huge stream of revenue that is available to the Exchequer that we have forgone. The truth is that there are much better ways of raising money from the wealthiest than a 50p rate that proved to be ineffective.
Chris Leslie
Does the Minister agree with the Institute for Fiscal Studies, which says:
“The uncertainty around HMRC’s estimates mean it is possible that the 50p rate would be somewhat more effective at raising revenue than their initial estimate suggests”—
because we have had several subsequent financial years?
“Given this, there is certainly a case for HMRC looking again”.
Will the Treasury now conduct an impartial analysis of the true revenues of that 50p rate?
Mr Gauke
Let me quote what the IFS said in January of this year:
“there is little additional evidence to suggest that a 50p rate would raise more than was estimated by HMRC back in 2012…the best evidence we have still suggests that raising the top rate of tax would raise little revenue and make, at best, a marginal contribution to reducing the budget deficit”.
If the hon. Gentleman wants to pray in aid the Institute for Fiscal Studies, I can tell him that one thing that it would dismiss is the idea of a £3 billion pot here. The idea that there is no behavioural impact at all, which is the argument that we heard from him, is entirely fanciful.
Chris Leslie
I have quoted from the Institute for Fiscal Studies. Does the Minister disagree with the Office for Budget Responsibility, which questions the nature of the Treasury evaluation, calling it “highly uncertain?”
Mr Gauke
But it was the OBR that signed off the numbers in the March 2012 Budget. The hon. Gentleman seeks to pray in aid both the OBR and the IFS, but their position has been supportive of the Government. The fact that he suggests there is no behavioural impact here—that appears to be his position—is absolutely absurd.
Let us set out a few facts. As my right hon. Friend the Member for Gordon (Sir Malcolm Bruce) mentioned, the previous Government had a top rate of 40p for all but 36 of their 4,758 days in office. It is also the case that the richest in our society now pay more than at any point under the previous Government, with HMRC statistics showing that the top 1% is expected to pay 27.4% of all income tax this year. At the same time, 25 million working people are paying less income tax than they did in 2010. It is of course right that those with the broadest shoulders bear the greatest burden, and I will set out our actions in a few moments.
Consideration must also be given to ensuring that the United Kingdom is competitive in attracting wealth-creating individuals to locate and stay in this country, which is a point that even the previous Labour Government recognised for most of their time in office. Making our country an attractive place in which to invest is something that this Government are committed to doing. Indeed last week, the World Bank published its 2015 Ease of Doing Business report, placing the UK eighth overall and sixth among the OECD countries.
As I have already noted, the right hon. Member for Edinburgh South West (Mr Darling) announced in his 2009 Budget that the additional rate of income tax would come into effect in April 2010. It was accepted by that Government that there would be behavioural changes as a result of this policy. To be specific, not including forestalling, they accepted that it would result in revenues from the additional rate being around £4 billion lower than the static cost of the change. That is an important point. The 2009 analysis that Labour produced suggested that it would raise £2.5 billion, with £4 billion having been lost because of behavioural changes. Those behavioural changes are now being ignored by Labour, which is extraordinary.
The previous Government told us that the increase from 40p to 50p for incomes above £150,000 would raise approximately £2.5 billion a year. But the evidence suggests that it fell short of even that, raising at best £1 billion and at worst less than nothing. That is the conclusion not of my party, but of the HMRC report, which was laid before the House by the Chancellor alongside the Budget in 2012. The report lays out thorough and compelling evidence on the impact of the 50p rate. It showed that the additional rate was distorted, inefficient and damaging to our international competitiveness and that the previous Government greatly understated the impact of the additional rate on the behaviour of those affected. It has been criticised by business and has damaged the UK economy. The Government have decided not to stifle the economy further, but to show that we are open for business, which is why we reduced the rate to 45p.
Guy Opperman (Hexham) (Con)
Lower taxes allow more businesses to be set up and create employment, and we are beginning, slowly but surely, to see that in the north-east. I am sure that the Minister will wish to celebrate with me the fact that the north-east has seen the highest rise in the value of exports, the fastest rate of private sector growth in the past quarter and the most tech start-ups of any part of this country outside London.
Mr Gauke
My hon. Friend makes a good point. He also made a good point when he intervened on the Prime Minister earlier today. I am delighted that he has again had the opportunity to talk about what the Government are doing and the benefits that are being spread across this country.
The move to 45p, based on the central estimate of the taxable income elasticity, only cost £100 million a year, which is a small price to pay to regain some of the international competitiveness that we lost as a result of the previous Government’s decisions. The additional rate not only harmed our economy and contributed little to the Exchequer, but had significant impacts on our international competitiveness. It placed us in the unenviable position of having the highest statutory rate of income tax in the G20, which is precisely what we do not want when we need investment, jobs and long-term economic growth. By creating a competitive tax environment, this Government’s actions to reduce the additional rate have unambiguously been in the UK’s best interest. A return to the 50p rate would be to ignore the long-term interest of this country.
As a Government, our tax policy has focused on three broad areas: it has ensured that people play by the rules and pay the taxes they owe; that the highest earners make a fair contribution without damaging this country’s competitiveness; and that we lower taxes for hard-working people. I am proud that we have taken concrete action on all three fronts in every single Budget while delivering the fastest economic growth in the G7. This Government’s policies have repeatedly increased the tax contribution of the wealthy, creating a fairer tax system in which those with the broadest shoulders bear the greatest burden. We increased the rates of capital gains tax to 18% and 28%, ending the situation in which a director could pay a lower rate of tax than their secretary. We have introduced a stamp duty rise that will raise around £200 million a year from those who buy properties worth more than £2 million, and we have been particularly harsh on evasion and aggressive tax avoidance. For example, at Budget 2011, we introduced the disguised remuneration legislation, which raises £3 billion and protects almost £3 billion over the next five years, mainly from higher and additional rate taxpayers—a policy, by the way, that Labour voted against.
The loopholes that were closed at various Budgets mean that we have around three quarters of a billion pounds more coming into the Exchequer. Our policies do not stop there. We have also imposed a 15% rate of stamp duty land tax on residential properties bought through companies; introduced a cap on certain unlimited reliefs to limit their excessive use to reduce taxable incomes; and introduced the general anti-abuse rule. We are also requiring that tax is paid up front, preventing the richest from gaining unfair cash flow advantage by delaying tax payments. As we recognise that tax systems no longer operate on just a national level, we have signed information-sharing agreements with many countries to tackle overseas tax evasion, ensuring that no one can get away with evading payment of the tax they owe.
Geraint Davies
I thank the Minister for his generosity in giving way. After mentioning all these improvements he has made to tax efficiency and collection, he said that the Labour party calculated that there would be a behavioural shift of £4 billion but a tax take of £2.5 billion. If we apply that ratio to the £3 billion static figure, we would be getting £1.15 billion, and not £100 million. How does he explain that discrepancy?
Mr Gauke
I can go through it slowly if it is helpful. There are two points there. That was the analysis of the previous Government in 2009, and, as I said earlier, that understated the behavioural impact. It is also the case that the impact of the behavioural changes is greater between 45p and 50p than it is between 40p and 45p, so there is no discrepancy there. I am interested in the fact that the hon. Gentleman has reduced by a little the claims of his Front-Bench team that the measure would raise £3 billion. At least he acknowledges that the static cost cannot be entirely relied on, which is a degree of progress for which we should be grateful.
Mr Gauke
I have given way to the hon. Gentleman on a number of occasions, and I know that many Members wish to speak in this debate.
I have set out the measures we have taken on avoidance and evasion. At the same time, though, we have used the tax system to help hard-working people on lower middle incomes to keep more of the income they earn through personal allowances. The tax-free allowance has increased from £6,475 in 2010 to £10,500 in April 2015—a tax saving of £805 for a typical basic-rate taxpayer. These changes will have given tax breaks to over 25 million individuals and will have taken 3.2 million low-income individuals out of income tax altogether by the end of this Parliament. A future Conservative Government will go further, increasing the personal allowance to £12,500 and the higher-rate tax threshold to £50,000.
Chris Leslie
We asked the Chancellor a question yesterday and did not get very far, and my right hon. Friend the Member for Derby South (Margaret Beckett) asked it of the Prime Minister today and did not get very far, so can this Minister now tell us how, specifically, the £7.2 billion promise that he has repeated will be paid for?
Mr Gauke
I have answered the hon. Gentleman’s question and the Chancellor answered it yesterday—we will reduce public spending to pay for it.
Members in all parts of the House agree that those who can most afford it should contribute their fair share to the Exchequer, but Labour Members insist that we should achieve that through a 50p rate that damaged our economy, sacrificed our international competitiveness, and did not raise the revenues intended. Those advocating a return to a 50p rate have to answer this question: given that it will not raise any significant amount of revenue, is “absolutely incidental” to the public finances, to use Alan Milburn’s phrase, and may even cost money, why do it? It is not about deficit reduction, it is not about economics, and it is not even about getting more from the wealthy, because there are better ways of doing that. It is all about the politics—but at what cost? At a time when the UK must compete to prosper in a global world and when we have a choice as to whether we sink or swim, those who advocate a 50p rate are taking the easy choice—short-term populism triumphing over increased competitiveness, with a stone age message of “bash the rich” prevailing over the need to attract wealth creators and keep them in this country.
This country’s route to success will not be through the lazy populism we have heard from Labour. Instead, we have taken steps to ensure that those with the most contribute the most, while maintaining a tax system that enables us to compete on a global stage. We are creating a tax system that is not only fairer but shows that the UK is open for business, encourages work, and gets people doing the right thing.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. I inform hon. Members that if each Back-Bench contribution takes nine minutes—fewer than 10, including interventions—it will not be necessary to have a formal time limit, but if the early speakers speak for longer than 10 minutes, then subsequent speakers will find themselves on a time limit. I hope that everybody can co-operate to ensure a fair allocation of time.
Kate Green (Stretford and Urmston) (Lab)
I hope to be very brief, Madam Deputy Speaker. I am grateful to you for calling me early in the debate. I apologise for the fact that I will have to leave for some of it, but I will be back for the winding-up speeches.
I want to make a few points on behalf of my constituents. I do not know the exact numbers, but I would guess that only a handful of my constituents are going to benefit from a tax cut on the basis that they earn £150,000 a year or more. In fact, it is quite possible that nobody in Stretford and Urmston stands to benefit. Therefore, my first question to the Minister is about the geographically distributional impact of this proposal. In this House, we talk repeatedly, and rightly, about our concern to rebalance our economy, our wealth and our resources around the country, but nowhere have I seen an analysis of where, physically, the beneficiaries of the cut in the 50p tax rate are. I would very much welcome seeing that information by constituency.
Jenny Chapman (Darlington) (Lab)
I am grateful to my hon. Friend for giving way, because she might save me the trouble of making my speech. Only 8% of taxpayers in the north-east of England pay the higher or additional rate of tax—I imagine that the situation is very similar in her part of the world—in comparison with the south, where about twice as many people pay the additional or higher rate.
Kate Green
I agree with my hon. Friend. Mine is not by any means one of the poorest constituencies in the country, yet we stand to benefit relatively little. I would therefore be grateful if the Minister said something about the geographical context.
Andrew Bridgen
The hon. Lady claims that her constituents are not benefiting from the cut in the top rate of tax from 50p to 45p. However, they are benefiting from the highest economic growth of any country in the G7 and from the 1.8 million new jobs created in this country—more than in the whole of the rest of Europe added together.
Kate Green
That brings me to my second point, which is about how this growth, and jobs growth, is affecting—allegedly benefiting—my constituents.
Ministers are very fond of asserting that work is the best route out of poverty and that the increase in jobs is therefore of benefit to working families. Of course, work ought to be the best route out of poverty, but the wage squeeze that we have seen in recent years means that that is simply not proving to be the case. When two thirds of children in poverty are living in households where someone is in paid employment, Ministers cannot be satisfied with a growth strategy that so misses the point in terms of rewarding those who aim to work and do the right thing. One of the reasons why those families are not benefiting from this jobs growth, apart from wage restraint, is that many of the in-work financial support measures that we put in place to support low wages—as indeed did earlier Conservative Governments, through family credit—have been eroded, frozen or cut under this Government. My second request to the Minister is for a more comprehensive answer than the one he gave a few moments ago to my question about what exactly is Ministers’ strategy for addressing in-work poverty, which is felt very acutely by many families in my constituency.
My third question for the Minister is one that I asked of Ministers at Treasury questions yesterday about the gender impact of a cut in the top rate of tax. As we know, men are disproportionately likely to benefit from cuts to income tax, particularly cuts to higher-rate taxes, and women are disproportionately affected by rises in consumption taxes because of their responsibility for managing the household budget. This has a direct feed-through to levels of child poverty. If women—[Interruption.] The hon. Member for Taunton Deane (Mr Browne) has clearly not looked at the many decades of social policy analysis in relation to this. If he has time later, I will take him through it. There is plenty of evidence that poor children have poor mothers. [Interruption.] If he thinks that this is sex discrimination, I am afraid that his analysis of the gender dimension of fiscal policy is even slighter than I understood it to be.
Yesterday I asked Ministers whether they could explain the gender analysis of their fiscal policy, which is exacerbated by things like their marriage tax breaks, the vast majority of which will benefit men, putting money in wallets, not purses. That will mean, again, that children lose out and child poverty is impacted.
Sir Malcolm Bruce
What about child care, free school meals and the pupil premium?
Kate Green
Free school meals have yet to be delivered, I should point out to the right hon. Gentleman. We see from this Government very generous promises, totally unfunded.
My final question for the Minister relates to inequality. Ministers are very fond of telling us that inequality is reducing—
Kate Green
More women in work on poor pay.
Ministers are very fond of telling us that inequality is reducing under this Government. It is true that there is a coalescing effect, with lower wages and middle wages meeting as middle-level earnings become stuck, but what is absolutely not in doubt is that the very richest continue to get richer and richer, with not only the top 1% but the top 0.1% seeing super soaraway growth. What measures are Ministers really taking to address the widening inequality between a very, very privileged sector at the top and those on middle and average incomes who are absolutely not feeling the benefit of their economic policies? The Government can look at measures on inequality that suit their arguments, but it is important that we have a wide range of measures and a wide range of strategies to address this rising incomes discrepancy.
Our proposal is one measure—a small one, I admit—to address and reverse some of the income inequality. It will not do all the heavy lifting, as my hon. Friend the Member for Nottingham East (Chris Leslie) said, but it will certainly be a step in the right direction.
Finally, increasing the tax threshold, as has happened under the present Government, is certainly one strategy for improving the incomes of relatively low-paid working families, but the benefits do not reach those on the very lowest pay who fall below the tax threshold. Of course, as the threshold rises the law of diminishing returns sets in. Meanwhile many of us—in fact, probably all of us—benefit from the continuing rise in the income tax threshold as more of our income is sheltered below the threshold.
I ask Ministers to come clean on the genuine progressivity of their fiscal policies. Those policies are not genuinely progressive, and they know it. Those policies fail to address in-work poverty or to tackle rising inequality in relation to wealth and income at the very top, and the Treasury seems to think that it is perfectly okay to overlook their distributional impact.
Andrew Bridgen (North West Leicestershire) (Con)
I welcome today’s Opposition motion, which is an opportunity to show the clear ideological divide between Opposition and Government Members. The Opposition’s motion reiterates their intent to reintroduce the discredited 50p tax rate, which, taken with other policy announcements, such as the so-called mansion tax, clearly demonstrates their willingness to sacrifice the current economic growth and prosperity and, indeed, our nation’s economic future, on the altar of their socialist beliefs. It is probably an attempt to shore up a sort of core-vote strategy—a failing strategy—that will do nothing to increase the nation’s belief in the credibility of either the Leader of the Opposition or the shadow Chancellor.
If we go back to the politics of the 1970s, as the Labour party is proposing, we might want to remember the words attributed to the then Labour Chancellor, Denis Healey who, talking of tax, said that he would squeeze the rich “until the pips squeak”. Social mobility and the ability to move between countries was not as high in the 1970s, but that policy led to what was called the brain drain. I seem to remember from my childhood that, given our economy then, we were regarded as the sick man of Europe, which we are far away from being under this Government’s long-term economic plan.
Frank Dobson
Does the hon. Gentleman acknowledge that average annual economic growth during the Callaghan and Wilson Governments was almost exactly equal to the miraculous levels achieved during Mrs Thatcher’s prime ministership?
Andrew Bridgen
The right hon. Gentleman, whom I much respect, has the advantage of me in years and service in this House. His figures may well be correct—I cannot challenge them with the information I have—but he must look at the economic backdrop of the relative growth of other economies in the world at the moment, and at the challenges that we face, such as the drag of the eurozone. There is no doubt that this Government are set to deliver the highest economic growth of any developed economy in the world this year.
Mr Jeremy Browne
I hope that my hon. Friend can shed light on an aspect of the Opposition’s outlook. Given that the shadow Chief Secretary to the Treasury thinks that the introduction of a 50p rate would have no behavioural impact, and that it is inherently virtuous to have higher taxes on people who create businesses and wealth and who employ people, why would he be willing to stop at 50p when he could go up to the levels of personal taxation that Labour presided over last time they were elected without Tony Blair as their leader?
Andrew Bridgen
My hon. Friend is absolutely right. [Interruption.] It is in the nature of the Labour party that there is always another tax. Labour Members say, “One more tax will do it”, but it never ends, does it? He is quite right that the ability to earn—I stress that the word is “earn”, not “be given” or “inherit”—£150,000 a year or more does not—[Interruption.] Madam Deputy Speaker, this is ridiculous.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. This is getting absolutely ridiculous. The hon. Gentleman has the Floor. We do not need the rest of the Members in the Chamber to engage in separate conversations. If they wish to do so, they can go outside and have a conversation. Otherwise, they should listen respectfully to the hon. Gentleman who has the Floor.
Andrew Bridgen
Thank you, Madam Deputy Speaker. If the shadow Minister wishes to intervene, I am more than happy to give way.
Chris Leslie
The hon. Gentleman said that the 50p rate was clearly ridiculous, but my hon. Friend the Member for Vale of Clwyd (Chris Ruane) quoted the previous Chancellor of the Exchequer, my right hon. Friend the Member for Edinburgh South West (Mr Darling), who said before the last election that he could not countenance reducing the 50p rate while so many people were bearing such a burden in our society. Does the hon. Gentleman really think that that burden has lifted?
Andrew Bridgen
The deficit of £150 billion that we inherited from the previous Labour Government has been reduced by a third, but there is much more work to be done. If the hon. Gentleman will bear with me and listen to my speech, during which he will have the chance to intervene, I think that I will answer many of his questions.
The ability to earn more than £150,000 does not give or guarantee happiness, health or friends, but it does give choices. People who earn more money have more choices. My definition of poverty is having no choices: people with no choices are in poverty. One of the choices people have is about where they are domiciled for tax. With taxes rising in France, there has been a flight of people to the UK, to such an extent that, as was pointed out at a meeting with the Mayor of London a few months ago, so many French people live in London that it is the fourth largest French city.
I have always been a great believer in this quote:
“Those who do not learn from history are doomed to repeat it.”
When the right hon. Member for Edinburgh South West (Mr Darling) brought in the 50p tax rate before the last election, I naturally assumed that he did not take on board George Santayana’s sentiments, as history has told us time and again that
“for a nation to try to tax itself into prosperity, is like a man standing in a bucket and trying to lift himself up by the handle.”
Yet the Labour party persist in this notion that having one of the highest top rates of tax in the world will increase revenues and make the country more competitive. My hon. Friend the Member for Wolverhampton South West (Paul Uppal) was quite right to quote Abraham Lincoln, who said:
“You can’t make the poor richer by making the rich poorer.”
He described economic inequality as benign, rather than malevolent. Understanding the difference leads to understanding why allowing the greatest number of opportunities works better for increasing everyone’s wealth than trying to equalise outcomes. That was true then, and it remains true now.
The Labour party’s economic blindness seems to extend to failing to take note of what is happening over the channel in France. It is in its third year of being led by the Leader of the Opposition’s comrade Francois Hollande. After the Socialist Government increased a range of taxes, including the top rate of tax, revenues have proven to be half of what was expected. France has virtually no economic growth, and it has a black hole of billions of euros in its public accounts, to the point that it now wants the UK to pay €2 billion to help to bail it out. An uncompetitive top rate of tax decreases the incentive to work, reduces the amount of money for investment and, as has been seen in France, ultimately reduces the size of the economy.
What the Opposition do not seem to grasp as they play 1970s politics is that we live in a different world from that of the 1970s, when the UK had draconian top rates of tax. The principal difference is that high earners now have the option to live elsewhere, without any inconvenience, because of the internet and much improved air travel. We do not want to go back to the brain drain, and to being the sick man of Europe.
Plenty of people have offered advice on this issue to the Labour party. Let us take the comments of Mark Giddens, a partner at UHY Hacker Young, who stated:
“We would lose some of the edge that we currently have over other Western European countries in attracting successful entrepreneurs and investors. We will also find it harder to compete against other major English speaking economies such as the USA”.
The evidence seems clear. Under the French model we see high tax rates, anaemic growth, high unemployment and lower Government revenues; under our current model the long-term economic plan is working, we have the fastest economic growth in the developed world, and an economy that has created more jobs than the rest of the EU combined, leading to more tax revenue.
We can see in the HMRC analysis that was mentioned by the Minister and published in 2012, that the 50p rate was raising nothing like the £3 billion that Labour estimated at the time and continues to hold dear. Indeed, the direct cost of the reduction in the rate of income tax at that time was estimated at only £100 million. When other lost tax revenues are taken into account, it is evident that there was no direct cost to the Treasury in cutting the top rate of tax from 50p to 45p, not to mention the wider economic impact of that higher rate of tax, as we have seen in the French economy.
When Nigel Lawson cut the top rate of tax from 60p to 40p in 1988, the tax take rose and top earners paid a larger share of it. When the Treasury decided to set the rate of capital gains tax at 28%—up from 18% under the previous Labour Government—it stated that its studies had concluded that that rate maximised the tax take. If the optimum rate of unearned income is 28%, I suggest it is unlikely that the optimum rate of income tax should be nearly double that level. Figures show that less than 1% of the population earn more than £150,000 a year, yet those people contribute approximately 30% of the total income tax take. That is a total of £49 billion from the 45p rate, compared with only £40 billion raised the year before when the rate was 50p— evidence that when we cut the rate of tax, revenues rise.
What is Labour’s case for tax rates that will lead to decreased revenues? When the measure was first suggested it was nothing more than a pre-election attempt to convince its core vote that it was still the party of squeezing the rich, and remains so today. At the same time, Labour was obviously laying a bear trap for the incoming coalition Government. It was a Trojan horse of a policy; a Trojan horse of a tax. Members will have noticed that I have referred to France rather a lot in my speech. That is because for the future of the UK should Labour win the next election, we have only to look across the channel and see what has happened. As the Leader of the Opposition said previously, “What Hollande is doing in France I want to do in Britain.”
Mr McKenzie
How does the hon. Gentleman feel about comments from the hon. Member for Harlow (Robert Halfon) who said that cutting the rate of tax to 45p would emphasise to the public that again, the Conservative party is indeed the party of the rich?
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. I said at the beginning of the debate that if we co-operated with each other and each speaker spoke for no more than nine or a maximum of 10 minutes, everybody would be able to speak without a time limit. The hon. Gentleman has now spoken for 13 minutes, so I would be grateful if he would think about drawing his remarks to a conclusion.
Andrew Bridgen
I am sorry, Madam Deputy Speaker, but I was enjoying myself. In conclusion, by continuing to advocate a return to the 50p rate of tax, the Labour party is demonstrating that it is not a credible party of opposition, and certainly not of government. It is in fact a left-wing pressure group, ignoring economic evidence from around the world and determined to represent the interests of its union bosses.
Geraint Davies (Swansea West) (Lab/Co-op)
It is a great joy to follow the hon. Member for North West Leicestershire (Andrew Bridgen). He told me that he is capable of generating energy out of potato peelings, and he certainly illustrated that today. I am also pleased to follow my hon. Friend the Member for Stretford and Urmston (Kate Green), who made a point about the inequality imposed by the Government’s economic policies. Given the inequality between men and women’s earnings, if women earned the same as men—they do not—I understand that they would basically be working for free from today onwards. That is the level of inequality we face.
It is all very well talking about raising tax thresholds. Everybody likes that, I guess, but as has been pointed out, it is not a panacea, certainly not for people who are moving in and out of work on zero-hours contracts—the 1.1 million people moving in and out of benefits—and having to go to food banks and so on, or those who cannot get jobs regularly. While many people welcome raising tax thresholds, it is costing us £11 billion a year. I mention that because it has been suggested that the measure under discussion today, the 50p tax rate—the static value of which is supposed to be £3 billion—is somehow insignificant and incidental, but it is still a significant figure, given the money the Government are giving away in raising tax thresholds.
Today the Prime Minister said again that he will be giving away £7 billion—there will basically be cuts in public services to pay for more tax giveaways. We are moving now to a situation where the Tories are saying, “Public services bad; tax cutting good” and many communities are feeling the pinch as a result, which is unfortunate.
During Prime Minister’s questions, the Prime Minister said that it would be “immoral” to rack up debt and leave it to our children as an inheritance, yet I put it to the Minister that the Government are doing precisely that. Their economic strategy is generating a low-income, low-wage economy, at the same time as pushing up the tax thresholds, which people have welcomed. The net outcome is that income tax receipts are going down. Instead of going up by 7%, they have risen by 0.1%, and the tax and national insurance increase that was supposed to continue to rise is £13 billion short this year.
The deficit reduction that the Chancellor planned for the autumn statement will be £11 billion down. Why? Because he predicted that wages would rise by 2.5% and they have risen by 0.5%. And why is that? As I mentioned, it is about insufficient investment from banks in productivity, and cuts to benefits for students or fees for sixth formers. In addition, the infrastructure that generates productivity and higher wages is being undermined, so the tax take is getting worse. Under Labour, 55% of the economy was debt; it is now about 75%. Borrowing under this Government over the past four years has been more than in 13 years of a Labour Government. It is a complete catastrophe.
Geraint Davies
I will give way to the hon. Gentleman in a moment. He was banging on about the 1970s, but let us remember more recent history and the fact that in the 10 years to 2008, the economy grew under Labour by 40% before we met the banking disaster. Two years on, thanks to the fiscal intervention of Brown and Obama, it was growing again by 2010. We have been flatlining since then because of the economic incompetence of the hon. Gentleman and his colleagues.
Andrew Bridgen
Perhaps I can drag the hon. Gentleman back to today’s motion and Labour’s wish to bring back the 50p tax rate. What does he say about the comments of Lord Myners, a Labour peer, who said of the shadow Chancellor:
“The economic logic behind his thinking would not get him a pass at GCSE economics…he takes us back to old Labour and the politics of envy”?
That was in The Daily Telegraph on 25 January 2014.
Geraint Davies
As the hon. Gentleman knows, being from south Wales I normally support miners, but I would say that he is very much an intellectual minor. [Interruption.] Yes he is. Yes—we all know where Lord Myners came from, God help us.
Focusing on the 50p tax rate, I have already made the case that income tax receipts are not going up owing to Government mismanagement—a low-wage economy with low skills and low productivity, and raising tax thresholds, which does not add up. It may be desirable to raise tax thresholds, but it does not add up and it is incompetent. Labour is talking about people making a marginal contribution at the 50p level.
Geraint Davies
I will not just now. We have heard the hon. Gentleman muttering for a while, but I shall take an intervention in a moment.
Let us consider behavioural changes. The rate of tax went from 40p to 50p to 45p. The hon. Member for North West Leicestershire, being a business man, knows that if someone running a business who wants to minimise their tax liability faces that quick succession, they will move their finances. Instead of bearing down on the 50p rate, they will pay much more tax in the 40p year, and then the following year they will move their expenses from the previous year into that year at the 50p rate, so they do not pay that as tax, and then to the 45p rate. It is therefore no surprise that companies, like his own probably, made behavioural changes in a rational way to limit the amount of higher rate tax. But it does not follow that if the rate is kept forever at 50p rather than going up and down, they can play games and not pay that tax. Of course, there would be behavioural changes, and the Labour party’s assumption is not that instead of raising £3 billion, £100 million would be raised—that is one thirtieth, which is frankly ridiculous and preposterous; it is more likely to be well over a third. We appreciate that there may be some behavioural changes, but we are talking about taking billions of pounds from the richest people at a time when the Minister, who is sitting there pointing, is basically arguing that we should save £400 million—against, say, a £1 billion take from the richest—by taking money out of the mouths of some of the poorest children through the bedroom tax.
Mr Browne
On the higher rates of personal taxation, I would like to quote Tony Blair from 2001 when he was Prime Minister. He rejected higher tax rates for the rich in a “Newsnight” interview, saying:
“It is not a burning ambition for me to make sure that David Beckham earns less money.”
This is the only Labour leader who has won a working majority in the past 48 years. Why has Labour decided to abandon his wise approach and adopt an avaricious socialist approach instead, which has proved to be both a political and economic failure?
Geraint Davies
I do not want to say anything rude about David Beckham. Tony Blair was obviously a very successful Prime Minister, and as I have already pointed out, he increased the size of the British economy by 40%. If we were not sitting here after four years of the Tories borrowing more than Labour did in 13 years and with the debt going up and up, we would not have to think of measures to raise more money. It is because of the economic incompetence and failure of this Government that we need to raise more tax at this point.
I have pointed out that there are people who already pay marginal tax rates of 62p—national insurance plus income tax. They are doing that and they are not suddenly leaving the country. This is a sustainable tax that can be borne at this point in the economic calendar, and we need to do it to protect the very poorest. As I have already pointed out, we are ripping £400 million—incidentally, the area most affected by the bedroom tax is Wales, where 42% of council households face it—away from people who have virtually no money. It is simply unfair that those judgments are made.
Mark Garnier (Wyre Forest) (Con)
The hon. Gentleman has said on a couple of occasions that under Labour the economy grew by 40%. He is absolutely right: it did grow by 40% under Labour in the years leading up to the 2008 crisis. However, that came from a massive asset bubble that was fuelled by a colossal rise in household debt. One of the greatest crimes of the Labour Government in the lead-up to the financial catastrophe was that it allowed household debt to increase by £1 trillion. It went from £450 billion to £1.45 trillion, an increase of household leverage from 100% to 175%. That debt is still with millions and millions of people.
Geraint Davies
I am very grateful indeed for that intervention. The reality is that less than a third of the deficit inherited in 2010 was due to the Government. The Government were spending more than they were earning to gear us out of recession, which was the right thing to do to stop a world depression. We had growth at that time, but thanks to the Chancellor of the Exchequer, the right hon. Member for Tatton (Mr Osborne), suddenly announcing in May 2010 that he was going to sack 500,000 people, everyone stopped spending money in the public sector and demand flatlined. We have had no growth so we do not have the tax receipts.
On debt, what is happening now, as I mentioned earlier, is that banks are lending 30% less to businesses to invest in productivity, entrepreneurship and growth, and they are giving the same amount as they did in 2008 to household debt to buy houses. That is not to build new houses, but to inflate houses in the south-east. There are no new houses, and it is ratcheting up the debt the hon. Gentleman rightly refers to. That is being inspired by the Government’s right-to-buy schemes and so on. That is completely irresponsible, so I am grateful to the hon. Gentleman for making the point about how irresponsible and poor the Government’s financial strategy is.
On infrastructure, a disproportionate sum is being spent in London and the south-east, when it should be spread across the country. Finally, if we want to get away from a low wage, low tax receipt economy, we need to invest in productivity. We need to think again about our strategy for tuition fees versus Germany and elsewhere. Ultimately—I am coming to a conclusion, Madam Deputy Speaker—we find ourselves in a situation where the poor are getting so poor that eventually they turn to parties like UKIP and worse. They start to blame immigration and all the rest of it, and we have social fracturing that will only continue unless we bring about a more equal, robust, fairer and stronger economy. This measure is a step towards that.
Sir Malcolm Bruce (Gordon) (LD)
The motion seems to me a distraction for a party that has no credible economic policy and wants to draw attention away from that fact. We, as Liberal Democrats, voted for the reduction from 50p to 45p, but on the conditions which we negotiated within the Government, that rich people would pay substantially more in taxes as a direct result. That is precisely what has happened. It ill behoves the Labour party to latch on to a headline figure when its analysis does not stand up. There has been talk about the low wage, low tax economy, but I happen to remember the first two years of the Blair Government, when sticking to Conservative party spending plans meant tens of thousands of experienced doctors, teachers, nurses and public sector workers were thrown out of work by the Labour Government and then had to be re-employed subsequently at much higher cost.
Sir Malcolm Bruce
No, I will not at this time, and I want to let other hon. Members in. That is what happened and I had the debate then.
The point I want to make is that the Labour party has never yet had the will to say sorry to the British people for what it bequeathed to us. The fact is that the economy collapsed by 7% in a single year. It has been a huge heavy lifting task for this Government to rebuild the economy to the point where we now have a strong and balanced recovery. My party’s objective is precisely to have a stronger economy and a fairer society. We believe we have made a very significant contribution to achieving that. In particular, I am slightly surprised at the disdainful way Labour Members treat the raising of the tax threshold, which has been hugely beneficial to many people on low earnings by taking them out of tax.
I have to say that I am astonished that the motion refers to the 10p tax, which has been nothing but a source of political embarrassment and division for the Labour party ever since it was thought up, invented and abolished by the Labour party. It is not clear to me whether Labour Members want to replace the 0p rate by a 10p rate, which of course means that what we are talking about is a tax increase, or whether they will follow the advice of the IFS, which says that raising the tax threshold is a much more efficient way of delivering benefits to poor people than a 10p rate. That is why we have supported raising the threshold and delivered it.
Mr Jeremy Browne
My right hon. Friend’s memory has momentarily failed him. The previous Labour Government did not abolish the 10p rate; they doubled the 10p rate. Everybody who was paying a marginal rate of tax at 10p started paying 20p. Some of the poorest people in my constituency and his were clobbered with a doubling of their tax rate under the previous Labour leader.
Sir Malcolm Bruce
I am grateful for that. My hon. Friend is right. This is the point: to hear the pious tone of debate from a party whose incompetence in government and inconsistency was astronomical frankly takes my breath away. We have had to struggle to get the economy to where it is now, taking really difficult decisions for which we have certainly taken a political hit. I am not ashamed of the fact that we were prepared to do that to get a result that puts us in a better place than any other developed country in the current economic situation. I should also repeat the point that Labour cut capital gains tax to 18%. We have managed to raise it back to 28%.
The truth is that what we are seeing here is the end of new Labour and the re-emergence of old Labour. New Labour knew these policies would not work and would not make it electable. Old Labour has decided to try the old failed policies again. I suspect it will get the old failed result, which is that we do not need them. It is not the answer to the country’s problems.
The fact is that the highest earners are now paying more as a percentage of the total tax bill than they were. The figure increased from 22.7% of the total take to 24.2% between 2011 and 2013. We have not only introduced measures to increase the taxes on higher earners, but we have, for example, restricted their tax relief on pensions. Under the previous Government it was £250,000; it is now £40,000. In reality, a millionaire will pay £381,000 more tax on their income under this Government than they did under the Labour Government, so we are in fact building a fairer, more balanced tax system, best fitted to our needs.
I completely accept that we have not got the recovery to the place where we want it to be. Earnings are not growing as we would like them to, and it is absolutely true—I am not going to deny it—that many working poor people are still not getting the full benefits of economic recovery. However, they would be far worse off if we had not raised the tax threshold. As we move through the recovery, I hope we will start to get the productivity improvements that will ensure that real wages start to increase, and then those people will get even more benefit from the raised tax threshold than they do currently.
We have laid the foundations for what can become a sustained, fair and balanced recovery. The motion that Labour wants us to vote for today would take us backwards, not forwards. It would take us in a direction that historically has not worked and that would not work in the future. It is worth remembering that when the right hon. Member for Edinburgh South West (Mr Darling) introduced the 50p rate, he was quite clear that it was a temporary measure. I appreciate that people have said that he has qualified what he meant by that—although he is not here today, I notice—but in the circumstances it is worth pointing out that he said:
“I want to say a word about the 50p rate of tax, since I introduced it. At the time, I said it was a temporary measure. I did not particularly want to introduce it”.—[Official Report, 26 March 2012; Vol. 542, c. 1199.]
It was only introduced on the day that that Parliament was dissolved.
The history of the Labour party was one of giving huge tax concessions to the wealthy, whereas this Government, surprisingly enough, have reduced the 50p rate to 45p—which is still 5p higher than it ever was under most of the Labour Government—as well as imposing other tax restrictions and closing tax loopholes, many of which were opened by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) when he was Chancellor of the Exchequer. We have also been much more rigorous in pursuing unpaid tax, with the Treasury estimating that £100 billion of unpaid tax will be recovered over the course of this Parliament as a result of measures taken by the present Government.
Labour Members should go back to their constituencies and prepare to explain why they got us into this mess and when they will find an economic policy that will legitimately get us out in a fair and balanced way, because that is what the Liberal Democrats have been doing. We get nothing but criticism from Labour, but absolutely no policies.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I do not envy the historian who will eventually write the book on the record of this Government. When such a history is written, the decision to cut the 50p top rate of tax will surely be seen as a turning point—the moment when this Government revealed their true colours; when they talked of hard choices for those on lower incomes, while awarding the richest 1% a tax cut worth £3 billion; and when the phrase “We’re all in this together” turned into material for satire.
People in my constituency and across the UK are facing a cost of living crisis, the scale of which the Government are unable to understand or empathise with, never mind tackle. The one part of the previous speech that I agreed with was the bit at the end, about how so many people continue to struggle. We all need to come up with a way forward that serves their interests. That is what I want to focus on. On average, households will be £1,600 a year worse off by 2015 due to tax and benefit changes made by this Government. Changes made to taxes and benefits since 2010 have meant that families where one parent is working to support children are nearly £4,000 worse off.
Let us consider youth unemployment, which is still close to 800,000. Why is it that Government Members—[Interruption]—I hope the hon. Member for Taunton Deane (Mr Browne) will stop heckling—cannot consider how this tax break could have instead been used to get those 800,000 young people back to work? Surely they deserve a chance to make a contribution to our economy. Time and again—
Rushanara Ali
I think the hon. Gentleman has had plenty to say already. I am going to continue, because the time limit—
Rushanara Ali
If I get through my speech without the hon. Gentleman interrupting and heckling, I might consider giving way to him.
Time and again, it is those most in need who are suffering on this Government’s watch. Shockingly, 2.6 million children across the UK face poverty, which is 600,000 more than in 2010. The recent report by the End Child Poverty coalition found that half the children in my constituency are growing up in poverty, a figure that has risen since 2010. Of those, two in three are in working households. One in five people across the country face low pay. Against that backdrop, it says everything about this Government that they chose to focus their efforts on reducing tax rates for the highest earners. Surely we should think about putting in place a more just and fairer tax system, but also one that gives opportunity to young people who are out of work.
Those working people across the country who are struggling at the moment will no doubt wonder why this is happening. In this House, the Chancellor said in 2011 that he was
“not going to balance the budget on the backs of the poor”.
At the same Budget, he went on to say that it would not be right to remove the 50p tax rate, asking those on much lower incomes to make sacrifices. The Government should be clear: the working people in constituencies such as mine and beyond do not feel as if they have stopped making sacrifices. We must keep remembering that. They have not stopped making sacrifices. Those people face low wages and they continue, day in, day out, to experience hypocrisy from this Government, who refuse to tackle poverty—both in-work poverty and child poverty—and when child poverty continues to rise, year in, year out. It is a disgrace and it needs to be taken seriously.
The hypocrisy continues. Only last month, the Chancellor remarked at the Conservative party conference:
“there remains a large budget deficit and our national debt is dangerously high.”
What was his answer? It was a two-year freeze of tax credits and benefits, yet two thirds of those who will be affected are in work. Such a measure, hitting the least well-off, is deemed necessary, but the pressure on the top earners is off. How is that acceptable? How is that fair? How is that justified?
Rushanara Ali
If I am going to give way, it will be to the hon. Member for Taunton Deane—unless he starts heckling again.
According to calculations by the Office for Budget Responsibility, the Treasury lost around £200 million from top earners due to them deferring income, as my hon. Friend the Member for Nottingham East (Chris Leslie) said in his opening speech. The Chancellor will also struggle to resist calls to cut the top tax rate even further, as he and the Prime Minister have refused to rule that out. Perhaps the Minister will clarify whether the rate will be reduced further, or perhaps she will be able to rule that out.
Our approach on the Labour Benches is about a broad-based recovery, where everybody makes a contribution and where those who are most able to can make a bigger contribution. If we are serious about getting people back into work and giving young people an opportunity, this tax cut should be reversed. We need fairness embedded in the tax system, starting with top earners. That is why I support today’s motion.
I am happy to take an intervention from the hon. Member for Taunton Deane now, but I hope he will show some manners.
Mr Jeremy Browne
I am always respectful of good arguments in this House; I just do not understand the hon. Lady’s argument that the way to help with youth unemployment is to have a much higher top rate of personal tax than existed under Tony Blair. We have had a fall in youth unemployment under this Government. We have had a fall since the top rate of tax was cut from 50p to 45p, and we have a much lower rate of youth unemployment than France, which has higher rates of personal tax on high earners. With all due respect, I just do not understand the central premise of the hon. Lady’s speech, but at the end of it maybe she can clarify it for me.
Rushanara Ali
The hon. Gentleman seems to have forgotten that we got a 1 million young people into work, while over the last four years youth unemployment has remained close to 1 million. It has only recently gone down, but it remains at some 800,000. Perhaps the hon. Gentleman could explain to those young people who do not have an opportunity, who have been unable to get work and who do not have much to look forward to when it comes to making a contribution by getting jobs what he and his party, working with the Government, propose to do about it. Frankly, he is living on another planet if he cannot understand the plight of some 800,000 young people who remain unemployed today.
Time is running out, so I shall conclude by saying that we need to think carefully about how best to support those who cannot manage to make ends meet. We need to be aware that the £3 billion-worth of tax cuts could have been used to stimulate the economy by supporting those who are not in work at the moment. Frankly, that £3 billion could be used to create more apprenticeship and training opportunities for those not currently in work. I hope that Government Members will consider what it means to create a fairer society. It does not mean giving tax breaks to those who are most well off—the top 1%—when everyone else in our country is struggling.
Mark Garnier (Wyre Forest) (Con)
Let me start by confessing—it is no secret to hon. Members—that before I came to this House I was an investment banker and a hedge fund manager. Now that I am a politician, I have had the three most unpopular jobs known to humanity! As a result of my previous life, I happen to know a great many people who were paying the 50p tax rate when it applied and the 45p tax rate now. At risk of having myself excluded once and for all from the dinner party circuit of all my friends, I have to say that when I hear their bleating and complaining about the higher rate of tax I have absolutely no sympathy for them whatever. I feel that everybody with the broadest shoulders should absolutely pay their fair share of taxation—and I do not think that any Member of any party would disagree with that fundamental premise.
There is no doubt that a very low earner, earning barely above a subsistence level, has no freedom or choices to make, as my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) said. It is right that the Government raised the tax-free threshold to £10,000, and they have every intention of raising it to £12,500 in the next Parliament. It is absolutely right, too, that this Government have recognised that the 40p tax rate at £41,000 to £42,000 is cutting in at an earlier point than was ever intended when it was first introduced. It is right for the better-paid nurses and the better-paid police officers to have their higher tax threshold raised to £50,000 by the end of the next Parliament.
What I think is crucial to this debate—I do not want to take up a huge amount of time talking about it—is to recognise that the way to address youth unemployment, mentioned by the hon. Member for Bethnal Green and Bow (Rushanara Ali), and to get those 800,000 people back into work is to create jobs. Crucial to creating jobs and repairing our economy is seeking inward investment in this country. It is vital that we become internationally competitive. That is why we have seen a relentless cutting of the corporation tax rate, resulting in a great amount of inward investment. That is why the personal taxation rates are so important, because entrepreneurs from overseas will look to see what is going to happen here.
I represent a constituency in which the average household income is about £23,000 a year—about a 10th of the earnings of the people I used to work with as an investment banker, which is why I have no sympathy for them. In common with every Member, I care passionately about the constituents I serve and want to ensure that better opportunities are available to them.
I am incredibly lucky because in the last three weeks it was announced that the international automotive supply chain manufacturer Amtek—an Indian company—will be making a significant investment in Wyre Forest, creating 500 skilled jobs in the automotive supply chain. There are reasons why the company came here: we are part of the European Union; we have a substantial and strong automotive and aerospace industry; we have good skills, good rule of law and competitive taxes; and we have competitive personal taxation rates.
An important point behind this has, I think, been missed. It is one thing for us to be able to go out and make an international case that we have the most competitive internal taxation regime in the G20 and that we have the best economy in the G7, but it is vital that we also send a clear and coherent message to the international world when it is considering whether to invest in this country. That message must be, at the very least, some type of tax certainty and must provide some assurance. Companies need to know that if they invest in this country there will not be any political tomfoolery, mucking around with taxation rates at the last minute of a Parliament.
I can remember having conversations—I think that my hon. Friend the Member for Harlow (Robert Halfon) might have been in them, too—with the then shadow Chancellor of the Exchequer prior to the financial crisis. We asked him whether he thought the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) would do anything stupid—laying Trojan horses or elephant traps—in the run-up to the election. He said, “No, no, no; even he would not be that stupid”, yet to our utter dismay the right hon. Member for Kirkcaldy and Cowdenbeath brought in the 50p tax rate at the last minute.
Rushanara Ali
I understand that the hon. Member for Harlow (Robert Halfon) said on “ConservativeHome” that the 50p tax rate would make the Conservatives look like they were looking after vested interests.
Mark Garnier
The hon. Lady will have to ask my hon. Friend about that. I was referring to the shadow Chancellor and saying that if my hon. Friend was at the conversation he would know what was said. In any case, my hon. Friend has a career in front of him.
We need inward investment. We have talked about the 1970s when we had exchange controls in a very different type of economy. Now we need to set a direction of travel to provide absolute certainty to any company looking to invest in this country. It can never, ever be the case that the message coming out from this place is one where politics overrides the interest of investors coming into the country. The hon. Member for Bethnal Green and Bow talks about vested interests, but if we are referring to the vested interests of someone who is going to invest in this country, I would do everything I could to support those vested interests, because it means bringing jobs for my constituents. The more jobs they bring, the higher the salaries, the better the standard of living. It will work.
Andrew Bridgen
My hon. Friend is bringing his knowledge of taxation to the Chamber. Does he agree with me and with Lord Digby Jones, who was the Trade and Industry Minister under the last Labour Government, when he said recently on the BBC of the 50p tax rate:
“It’s great politics but it’s lousy economics…Are we talking politics or are we talking what’s right to create wealth and jobs in the nation?”?
Mark Garnier
My hon. Friend makes a fine point. Digby Jones is a wise and sensible—[Interruption.] He was a Minister in the former Labour Government, although he was the only Minister ever not to be aligned with a political party—I concede that point.
The key point about the direction of travel is that we must make every effort to give certainty to those investors coming into the country. Mucking around with the tax rates and providing a confused message about the top level of tax is bad economics. I hope that the Minister—although now may not be the right time—will give us some indication that, should the economic recovery and the recovery of the public finances continue, there will ultimately be a 40p tax rate as a target. I suspect she may not want to commit herself at this point. As I say, mucking around with tax rates is detrimental to our economic recovery.
Mr Iain McKenzie (Inverclyde) (Lab)
I will follow your direction, Madam Deputy Speaker, on the length of Members’ contributions because I know that some Members still wish to speak in the debate.
I think that we will have no argument about the fact that austerity has been painful. What divides us in the Chamber is where we see that pain being inflicted most. Labour Members believe that it is targeted on the whole at people at the lower end of the income scale—they have been feeling most of the pain in these difficult economic times. Incredibly, billions in tax cuts have been given to people at the upper end of the income scale. The top 1% of earners have been given a tax cut worth £3 billion, in stark contrast to those at the other end of the income scale, who have been struggling in these difficult times.
Let us look at what little has been given to lower earners and how that was paid for. It did not come from the top earners; it came from the Government dragging down the tax bracket to take in middle-income families, who have paid through going into the higher tax bracket for anything that has been conceded to people at the lower end by moving the threshold up. I suspect that the Government wished that to go unnoticed but we have well and truly figured that one out and the public have noticed it, too.
On top of that, households will on average be nearly £1,000 a year worse off by 2015 as a result of Government tax cuts and benefit changes. That means that hard-working, middle-income families are being squeezed into a cost of living crisis. We see that day in, day out. I certainly do in Inverclyde. I see that in everyday events. More and more families are having to shop around during their weekly shop, looking for bargains. Those families are in work, yet they are finding it difficult.
As has been highlighted, whatever happened to putting into practice the Government’s well-used phrase, “Those with the broadest shoulders should bear more of the burden”? That was pushed to one side when those people were relieved of that burden through tax cuts.
If people can pay more, they should pay more in these difficult times. That is only fair. That is what this debate is about—fairness in these times of tax pain. It is not only me saying that. Some members on the Government Benches have been saying it, too. The coalition partners, the Liberal Democrats, have been saying it. Most notably, the Deputy Prime Minister said that this was the wrong time to send the wrong message by cutting the higher-tax level. Even Lord Heseltine, who once looked as if he would lead the Conservative party and become the next Prime Minister, has said that it is the wrong message to send out.
Tax avoidance is increasing under this Government. As we heard only the other day, £35 billion of tax has been avoided, yet the Government are reluctant to go after the tax-avoidance loopholes and to take the burden off lower-income earners. In addition, the Government have again cut staff levels at HMRC.
Austerity is being applied at the wrong end of the social spectrum by this Government. That is as clear as day. By their actions, those who can least afford it will be asked time and again to step up and make that contribution. It is not just the lowest paid—middle to low-income earners are also taking the brunt of the austerity.
Let me talk a little about hard-working families in Inverclyde. Government Members claim that they are producing more employment—that more people are in jobs. In Inverclyde, 26% of children live in poverty. Three quarters of them come from working homes. It is an absolute disgrace that, in this day and age, that level of child poverty is allowed to exist.
People say that good things come to those who wait and they talk about the Government’s long-term economic strategy. I will tell Members what good things came to those who waited: it came to those bankers who paid themselves a bonus after waiting to cash in on the lower tax rate. However, it did not come for one of my constituents, who waited almost a year to be assessed for her disability benefit and had to rely on the good will of others.
We support lifting many of the low paid out of tax altogether. They are not being lifted out of poverty. They are still captured in the circle of poverty. Their outlay does not match their income and that is evident when we look at where they are buying the basics of life: they have to look for bargains time and again.
Andrew Bridgen
The hon. Gentleman is talking with great passion and emotion about the hard-pressed people in his constituency. I am completely with him on that, but can he explain how deterring the top 1% of earners, who are already paying 30% of all income tax, from economic activity, or even driving them out of the country, will help his hard-pressed, hard-working constituents, or mine?
Mr McKenzie
The hon. Gentleman argues that, if we put the 50p rate back in place, we would see a mass exodus of billionaires. It is not me who is saying that that would not happen; it is his coalition partners. The Lib Dems say that that would not happen; they do not see it transpiring. If he is talking about the employment that has been created, he will see that in my area of the country, part-time work and temporary work, especially at this time of year, are on the increase. Labour Front Benchers have talked about helping those on lower pay and lowering the starting rate of tax to 10p. The public were hit by one of the first increases in tax that the Government put in place: the VAT rise, which has hit them hard, too.
Remember that this Government promised to balance the books in this Parliament. They have reneged on that promise and are actually borrowing more. Therefore, the time scale to balance the books under this Government has been pushed out even further. That can mean only one thing for those already feeling the pinch of austerity: they are going to feel the punch of austerity if this Government get back into power. It is about balancing the books in a fairer way.
We say that a 50p higher rate would help to do that. It is time for the economic circumstances to require those who can pay more to pay more. A 5p increase will not chase them out of the country, despite what the hon. Member for North West Leicestershire (Andrew Bridgen) thinks. Labour will reverse the £3 billion tax cut for the top 1% of earners as part of our plan to balance the books in a fairer way. In contrast this Government have increased tax for millions while millionaires are given huge tax cuts. It is time for top earners to pay the 50p rate. If this Government will not put that in place, the next Labour Government will.
Liz McInnes (Heywood and Middleton) (Lab)
I will be brief. Like my hon. Friend the Member for Stretford and Urmston (Kate Green), I doubt that many of my constituents would find themselves in the position of having to pay a 50p tax rate. It is right that we should be discussing reversing this Government’s tax cut for millionaires.
The Government’s decision to cut the 50p tax rate handed a £3 billion tax cut to the richest 1% in this country, yet at the same time ordinary people are worse off, with families paying hundreds of pounds a year more in VAT, thanks to the Government’s decision to raise VAT to 20%. In addition, Tory cuts to tax credits have hit millions of working families. Figures from the Institute for Fiscal Studies show that households will be nearly £1,000 a year worse off by the time of the next general election because of tax and benefit changes that have been made since 2010. We are most definitely not “all in this together”.
Like the constituents of my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali), people in my constituency are struggling with the cost of living, with wages flatlining and the prices of food, fuel and energy increasing all the time. They are told that the economy is in recovery, but they are not feeling it. As winter approaches, many families in my constituency will face a stark choice between heating and eating, for they cannot afford to do both.
It is absolutely right and proper for the 50p tax rate to be brought back for high earners. It is simply not right for them to be given tax cuts while the poor and the vulnerable bear the brunt of this Government’s austerity programme. This Government give tax cuts to millionaires while penalising the disabled for having an extra bedroom in which to store their medical equipment. This Government give tax cuts to millionaires, yet deny NHS workers a below-inflation 1% pay rise. It is clear whose side this Government are on, and it is not the side of ordinary people. They have no sympathy for those who are struggling on low incomes, yet defend to the hilt the right of high earners not to pay their share. That is why we will reverse the £3 billion tax cut for the top 1% of earners, as part of our plan to balance the books in a fairer and more equal way.
Frank Dobson (Holborn and St Pancras) (Lab)
I support the motion, because I think it is about time that the rich paid a fairer share of income tax. They have been getting away with 40%, 40p in the pound, for far too long—[Interruption]—since 1988-89. Let me point out to Government Members, who usually rant on about the wonders of the Thatcher Government, that the top rate of income tax came down to 40p only after Mrs Thatcher had been Prime Minister for nine years. For nine of her 11 years in office, the top rate was 60%. The standard rate of income tax was 30%, also for eight or nine years. To describe the 50p rate as an easy choice, the product of socialist beliefs, and bashing the rich is ludicrous. When Government Members portray that rate—which is lower than Mrs Thatcher’s top rate—in such terms, it shows that they are actually harsher than Mrs Thatcher.
My colleagues have talked about the impact on people who are badly off, but I want to draw attention to the major beneficiaries, most of whom are in banking or associated finance businesses. They have benefited not just from this tax cut, but from the taxpayer bail-out of their useless, greedy, stupid, incompetent banks. They have benefited more than anyone else from quantitative easing. At the same time nurses, teachers and doctors have been faced with—
Frank Dobson
No, I will not, because others wish to speak.
Let me make it clear that the Labour Government did not bring down the top rate of income tax to benefit the richest and at the same time freeze the pay of nurses, freeze the pay of doctors and freeze the pay of teachers, while at the same time the bankers got their bonuses. At HSBC, which lost £27 billion in the credit crash, Barclays, which lost £8 billion, and Lloyds, which lost £5 billion, bankers’ bonuses have risen, in 2012 and since then. At HSBC, 239 people are currently receiving £1 million or more a year. The worst off received a £40,000 tax benefit, and most will have received £100,000. For example, Mr Stuart Gulliver, chief executive of HSBC, apparently receives £32,000 a week in what are described as “special allowances”. I do not even know whether he pays tax on those special allowances, but that means that he receives, each week, an amount that is close to the national average annual income that is over and above his pay, yet Members on the Government Benches object to the idea that he should pay 50p in the pound tax on that. All I can say is that, following his and his predecessor’s efforts, he obviously has to spend a lot of time trying to minimise the amount of money he has to set aside to pay off for swindling exchange rates and to pay off for the consequences of money laundering and what happened with LIBOR and, generally speaking, in organising an outfit that might be described as the tax avoiders’ alliance.
We have heard talk of behavioural change reducing the possible income from a 50p rate of tax, but these bankers are really good at behavioural change. They do nothing else. They organise all the way around the world, helping people to avoid tax. With the exception of Lloyds, more than 30% of the subsidiary companies of these banks—in some cases these companies exceed more than 1,000 in number—are located in tax havens, and they are not located in tax havens just because the weather is better; it is because they are involved in promoting tax avoidance.
Bankers also say that their pay is a compensation package. I have checked the Oxford dictionary and compensation means recompense for loss, injury or suffering. What have any of these bankers experienced in the way of loss, injury or suffering? It is the rest of us who have had to experience loss, injury or suffering as a result of their stupidity leading up to the financial crisis. Their incompetence and greed inflicted loss, injury or suffering on the rest of us. I thought at one point that it was a perversion of language to use the word compensation in such circumstances, but I actually believe it is a perversion of mindset. They have obviously concluded that they should be compensated for inflicting loss, injury and suffering on the rest of us.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Will the right hon. Gentleman give way?
Frank Dobson
No, as I shall finish shortly.
None of these people would have any difficulty finding an extra 5p or even 10p in the pound on their income tax.
Barbara Keeley (Worsley and Eccles South) (Lab)
Will my right hon. Friend give way?
Barbara Keeley
I wanted to intervene because my right hon. Friend is talking about behavioural change among bankers, but Government Members were shaking their heads and tutting when we were referring to disabled people, and I—[Interruption.] Yes they were; they were doing so when we referred to disabled people being hit by this Government and their priorities. Does my right hon. Friend agree that one group of people who cannot change their behaviour are the 60,000 carers who are required by this Government to pay the bedroom tax? They cannot change their behaviour: they cannot work; they cannot change their hours. Some people can afford to pay 5p or 10p extra in the pound, but people who are being hit badly—disabled people and carers—cannot do so.
Frank Dobson
I entirely agree with my hon. Friend.
My final point is this: the bulk of people who will benefit are in the banks and the rest of the finance industry. This is a very privileged industry, because every other industry in the country has to pay a 20% transaction tax, which is known as VAT, yet the City businesses pay virtually no transaction tax. I think if we want to raise some more money we ought to be introducing a transaction tax in line with what Mrs Merkel has been suggesting.
Mr Jeremy Browne (Taunton Deane) (LD)
I am grateful to you, Madam Deputy Speaker, for letting me make a short contribution to this debate. I want to make only two main points—a practical one and a philosophical one—but first, let me make a brief political point.
I say this as impartially as it is possible for an aligned Member of the House of Commons to be: it is a great tragedy for the Labour party, but actually a sadness for our country, that new Labour has been so emphatically buried by the leader of that party and by the sort of speech we just heard from the right hon. Member for Holborn and St Pancras (Frank Dobson), who, we must remember, is a former Cabinet member and was happy to pay a top rate of tax of only 40% on his inflated Cabinet salary, but seems happy now to have rates much higher than 50p—he was not willing to stop there.
It is no coincidence that the last time Labour won a working majority without Tony Blair as leader, England won the World cup. The reason why it has been such a long time since Labour—the principal Opposition party and one of the two largest parties in the country—won without Tony Blair as leader is that there is no majority in the country, as we can see now, for avaricious, punitive taxation levels and the punishment of successful, entrepreneurial people who create wealth. It was not a difficult realisation that Tony Blair came to, but it was an important one and it is sad to me that the Labour party has abandoned that.
The New Statesman, the only publication that supported the current Labour leader when he put himself forward in 2010, has published an edition today entitled, “Running out of time”, referring to Labour. The article on Labour states:
“Miliband is very much an old-style Hampstead socialist. He”—
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. Mr Browne, you know full well that this debate is not a general debate on the Labour party or its leader, but a debate on income tax. You are now ranging far too wide, and I should be grateful if you came back to the point of today’s debate. I am sure you will find other ways to express your wider political views on the Labour party.
Mr Browne
I will do, and thank you for your guidance. I will move on to my practical and philosophical points.
My practical point echoes much of what was said by my hon. Friend the Member for Wyre Forest (Mark Garnier). The basics of being a globally successful, wealth-creating economy are not that difficult to grasp. What we have to do is make sure that businesses can start up, expand and create jobs. I was struck by the fact that quite a few contributors to this debate said that they do not have many people in their constituency who earn over £150,000. However, that is not a source for celebration: we want to have more people who are starting companies successfully and are able to earn more than £150,000 because they are employing hundreds of people, exporting around the world and meeting demand in markets. The idea that these people should be reviled is utterly perverse. We want more of these people in every constituency.
Mark Garnier
Was my hon. Friend not struck, as I was, by the previous speech, which ended up being an endless rant against the bankers and did not take into account any of the wealth creators in this country such as the entrepreneurs my hon. Friend has just described, or the risk-takers who mortgage their houses to invest in creating jobs? These are the people, who have taken huge risks, who are being punished by this tax. The bankers are irrelevant in this argument.
Mr Browne
In a moment—the hon. Gentleman has only just come into the Chamber. It seems to me that those people should be lauded and celebrated for their achievements, and they should pay a reasonable amount of tax—and they do under this Government—but they should not be reviled by politicians. The reason why unemployment is falling and the economy is growing is that we have more wealth creation, and that is what we need to do more to encourage.
The Labour party—not just Labour; there are others, I am sure, Madam Deputy Speaker—seems to me to have an extremely narrow, parochial focus. There are economies right around the world that are expanding and are wealthier than ever before. Hundreds of millions of people in Asia are being lifted out of material poverty because those countries are embracing the basics of free-market economics and wealth creation. Those countries are seeing the benefits of improved health care systems, improved life expectancy, reduced infant mortality and improved education outcomes. We must not allow ourselves to adopt an approach of insular socialism in just this one country. That approach involves a belief that we can continue to penalise a small number of wealth creators for being successful, which is completely counter-productive.
We need to step back and ask ourselves what a country would do if it wanted to be competitive in a globalised economy. What could we do to encourage businesses not to locate to France, Germany or the United States or, increasingly, to Mexico, Brazil or India? What could we do to encourage them to locate here? Could we ensure that we had competitive levels of corporation tax? I congratulate the Government on achieving that. Could we ensure that we had competitive levels of personal taxation? In my view, we are in a reasonable place on that. We would be in a worse place if the gist of this motion were accepted.
Perhaps we could ensure that the percentage the state took from overall GDP was sustainable. At the moment, the Government spend a much bigger proportion of GDP than they did in any of the 10 years that Tony Blair was Prime Minister, and in my view that is too much. It is unsustainable. Could we ensure that we were not borrowing too much and living beyond our means? At the moment, we are clearly living beyond our means. These are all straightforward propositions for a country that wants to be successful in a global marketplace.
Mr MacNeil
I am almost sorry to interrupt the hon. Gentleman’s sermon in favour of inequality. Why, according to this Government, do the poor have to be punished and the rich have to be incentivised? The only thing that the bedroom tax, VAT and the millionaires’ tax have in common is that Labour abstained on all those issues, which were designed either to punish the poor or to incentivise the rich. The hon. Gentleman seems to believe that the poor must be punished and that the rich must be incentivised. Why?
Mr Browne
I have not the faintest idea what the hon. Gentleman is talking about. It seems like complete nonsense. I am not in favour of punishing anybody. If people can keep a higher proportion of the product of their labour, they will be incentivised to keep working and be productive. That applies to people who are earning £20,000, and who have seen a big cut in their income tax under this Government, but it also applies to people who are earning £220,000 and who might have set up successful companies employing 150 people in the hon. Gentleman’s constituency or in mine. I am not seeking to punish people. I am not one of those politicians who believes that we can make some people happy only by making others unhappy. I want us to be a harmonious country in which everyone is incentivised to work and can see the product of their labour.
Andrew Bridgen
My hon. Friend has hit the nail on the head. Does he agree that Opposition Members are still failing to appreciate that we need a strong economy, driven by entrepreneurial people, in order to have the strong public services that we need? That is where all the money comes from.
Mr Browne
I do agree with that, although I do not always agree with everything put forward by those on the Government Front Bench. For example, it is important—as the hon. Member for Wyre Forest said—that we should remain a member of the European Union. I know that some Conservative Members are uncomfortable with that, but we are part of the world’s biggest single market. It is an attraction to investors from outside the EU that they can invest in the United Kingdom not only because it is the sixth biggest economy in the world but because we can act as a stepping stone into the largest single market.
We also need to adopt a broadly liberal approach to migration. It is extremely important for our country that we can attract high-talent people from outside the European Union. We see quite a lot of that in London, with people coming to our capital city as well as to the other parts of the United Kingdom to invest and to grow businesses. That is important for our national prosperity.
I take an economically liberal approach across the board, but it is important that we have an enterprise economy for all the reasons that I have stated. An enterprise economy is important if we are to fund public services, for example. Many Members will have travelled widely. I would simply recommend that they try out the public services in countries that have had a heavy dose of socialism. After all, people were only escaping over the Berlin wall in one direction. They were not trying to escape from the west to the east in search of a better quality of life or better public services. A lot of the dysfunctional countries with real social problems are those that do not raise enough money to be able to fund decent public services. In no country in the world do politicians want to have bad hospitals and bad schools. Some countries do not have good hospitals and good schools because they cannot afford to fund them, and that is because they do not have an economy that raises enough revenue to do that. That is because they keep deterring wealth-creating entrepreneurial behaviour. It is all so straightforward that it feels frustrating having to explain it to people.
My philosophical and concluding point is this: all the money we are talking about is being earned by individuals working; it is not our money, the Government’s money or the Leader of the Opposition’s money. When he talks about giving money back, as if he were some sort of Santa Claus figure who is there to decide how much of your own money you are allowed to have and we should be extremely grateful to him, or to the shadow Chief Secretary, for benevolently allowing us to keep a bit of it—
Mr Browne
Let me finish this point. The crucial philosophical problem I have with a 50p tax rate is the underlying presumption that the state co-owns your income with you, and that when you work you are in a 50:50 shareholding relationship and for every extra hour of work you do, half the money belongs to the former Member for Shipley and half belongs to you. It is as though it is good of him that he is letting me keep half my cash; I do not accept that as a basic philosophical argument.
Chris Leslie
The hon. Gentleman’s conversion to Conservatism is now complete. Let me ask him a clear question. He is implying that the 50p rate is on the entirety of somebody’s income. Does he accept that it applies on earnings of more than £150,000 of income or has he totally abandoned any notion of progressivity in our tax system? Is he arguing for a flat rate of income tax?
Mr Browne
I will finish in a moment, Madam Deputy Speaker. I have not abandoned that, which is why people earning up to £10,500 pay no income tax under this Government, whereas under Labour the relevant figure was £6,500. Of course there is then a standard rate and a higher rate. The hon. Gentleman made a mistake in his speech when he talked about tax cuts for millionaires. Let me give an example, which is party political. The Leader of the Opposition is a millionaire who does not pay this top rate of tax, but somebody who has just got a job earning £160,000 a year is not a millionaire but does pay his 50p rate of tax. It was deliberately misleading from the hon. Gentleman and it reflected badly on him.
Madam Deputy Speaker (Dame Dawn Primarolo)
Order. The hon. Gentleman will rephrase his point about the shadow Chief Secretary misleading the Chamber and then he will conclude his remarks because he knows we now need to move to the wind-ups.
Madam Deputy Speaker
Order. You are not to question the Chair. I am telling you, as the Chair, that you have accused the Opposition spokesperson of misleading this House, and that is unparliamentary and unworthy of you as an experienced parliamentarian. Therefore, I am asking you to rephrase it.
Madam Deputy Speaker
Order. Don’t play games, please, Mr Browne. You clearly said on the record that the shadow Chief Secretary, in his opening remarks, misled this House. Under the conventions of the House, that is not permitted. So I am, again, asking you now to rephrase or withdraw that remark.
Mr Browne
I withdraw the remark that I made a few moments ago and I apologise, of course, for behaving inappropriately in my speech. I conclude, as you would wish me to do, Madam Deputy Speaker, before we have the wind-ups, by urging the House to reject the motion, which would make the country as a whole poorer and make it harder for us to fund the public services on which everybody, including the least well-off, rely. It would also undermine the personal freedom of people who work, are entrepreneurial and create the necessary preconditions for us to be a successful country.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
We have had a good debate today with some excellent contributions, including those from my hon. Friends the Members for Stretford and Urmston (Kate Green), for Swansea West (Geraint Davies), for Bethnal Green and Bow (Rushanara Ali), for Inverclyde (Mr McKenzie), and for Heywood and Middleton (Liz McInnes) and my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson). We have seen the real divide that exists between Opposition Members and those on the Government Benches about the choices that have to be made at a time when the deficit is still high and rising. Tough times are set to last well into the next Parliament.
We are clear that the difficult choices that have to be made while we get the deficit down must be made fairly, but under this Government, while millions of people have seen their taxes go up, millionaires have been given a huge tax cut. That tax cut is worth an average of £100,000 for those earning over £1 million, and this at a time when households will be on average £974 a year worse off as a result of tax and benefit changes made since 2010. At the top end of the income scale people are a hundred grand a year better off, but at the other end people are nearly a grand a year worse off.
What does that £100,000 look like in the real world? In my constituency, the median income of the tax-paying self-employed person based on the 2011-12 census figures was £8,410, so a tax break of £100,000 for the wealthiest is troubling to me. That £100,000 tax break reflects more than 11 years’ worth of work by the self-employed worker of Birmingham, Ladywood. To put that another way, based on average rents in inner-city Birmingham, £100,000 equates to about 15 years’ worth of rent, so when we throw these figures around, we would do well to remind ourselves what that money means in the real world, and to ask ourselves which policy—the restoration of the 50p rate or the retention of the status quo—most people in my constituency and across the country would find fair.
This Government have totally failed on tax fairness. Sure, they said the words, and they said some very strong words, with clear and unambiguous meanings. The Chancellor told the Tory party conference in 2012 that his famous line “We’re all in this together” was more than a slogan. He said that it
“spoke of our values and of our intent”.
“We’re all in this together”—a sign of Tory values and intent. Who does he think he is kidding? That was just six months before the decision to cut the 50p top rate to 45p took effect. He can say the words as many times as he likes, but it is his actions that he will be judged on, and the Chancellor’s actions show clearly that we are definitely not all in this together.
How do the Government try to get away with making such an unfair choice? Well, their main argument—we heard this today—is that the 50p rate did not raise very much money. The static costing of the cut to 45p is £3 billion, but after behavioural effects are taken into account, they say that the cost of the measure falls to £100 million. But the 2012 HMRC report “The Exchequer effect of the 50 per cent additional rate of income tax”, which the Government relied on to cut the top rate, acknowledges that the scale and value of the behavioural change is highly uncertain.
The scale of the behavioural change is calculated by doing an assessment of taxable income elasticity, and the rate of taxable income elasticity to apply when calculating the scale of behavioural change is ultimately decided by Ministers themselves. Given how desperate they were to get to the pre-determined outcome that the measure raised no money, scepticism about the calculation that they relied on is justified. The IFS and the OBR both say, as I have said, that the figures are highly uncertain. In January this year the IFS said:
“The uncertainty around HMRC’s estimates mean it is also possible that the 50p rate would be somewhat more effective at raising revenue than their initial analysis suggests. HMRC made their calculations at great speed on the basis of one year’s data that had only just become available. Indeed only around 95% of the data was available at the time they made the calculation. By now they have data for 2011-12 too, and soon they will have data for 2012-13 as well. Given this there is certainly a case for HMRC looking again.”
Yet each time we have tabled amendments to Finance Bills since the 2012 Budget asking the Government to produce reviews that would effectively carry out that analysis again, but with more comprehensive datasets, they have refused to accept them. Why? Is it possible that they are afraid that further and deeper analysis might remove their central justification for cutting the tax rate in the first place?
It is not as if the Government do not know that the announcement that the 50p top rate of tax would be cut prompted large amounts of income shifting by higher earners. The OBR has confirmed that money was deferred from the end of 2012-13 to the early part of 2013-14 so that it could be taxed at 45p, rather than 50p. We know that bonuses in the financial services sector jumped by 76%—a staggering sum—in April 2013 as bankers waited until the top rate was cut before paying themselves their bonuses.
The Government’s claim that the cut would cost only £100 million did not take into account the impact of forestalling. They recognised that point themselves when they published the 2012 HMRC report—it was in the small print beneath one of the graphs—and the Minister kindly acknowledged it again today. In its 2013 forecast evaluation, the OBR estimated that £1.7 billion of tax was deferred from 2012-13 as a result of the cut, and the difference between all that money being taxed at 50p in 2012-13 and at 45p in 2013-14 is between £150 million and £200 million. The Government like to say that top earners are paying more as a result of the cut, conveniently ignoring the income shifting that they know, and everyone else has confirmed, took place.
What is more baffling is that tax revenue from the 50p rate has been ceded at a time when the Chancellor and his team are singularly failing to bring the deficit down at the speed they said they would. They said that they would balance the books by the end of this Parliament, but clearly they will not; the deficit is actually rising. They said that they would tackle the problem of uncollected tax, but the tax gap has grown by £3 billion on their watch. We know that people will be worse off in 2015 than they were in 2010—a fact that no Minister likes to confirm at the Dispatch Box.
Furthermore, the Government have just made £7 billion-worth of uncosted pre-election give-away promises, described by the Financial Times as “neither sober nor realistic”. The Minister today ducked the opportunity to give some specific details about where that £7 billion would be found. That is clear evidence that their priorities, which have been wrong to date, will continue to be wrong if they form the next Government.
It was clearly a mistake to reduce the top rate of income tax. It is neither fair, at a time when working people are on average £1,600 a year worse off since 2010, nor economically sensible, when the deficit remains high and is rising on this Government’s watch. I urge hon. Members to vote with us in the Lobby today.
The Exchequer Secretary to the Treasury (Priti Patel)
We have had a lively debate this afternoon, and that is no great surprise, as it is only the third Treasury Opposition day debate this year. We have heard from the Opposition repeated claims that the decision to reduce the additional rate of income tax was the same as handing cheques to millionaires. Those claims show the Opposition’s true colours when it comes to tax, and how they would revert to their failed policies of spending more than this country can afford, with hard-working taxpayers continuing to pay back Labour’s debt.
The Opposition had 13 years to take action and ensure that those with the most to contribute in tax did so, yet it was their discredited and failed Government who introduced the 50p rate just 36 days before they were kicked out of office.
When it comes to fairness this Government will not take any lectures, because it was a Conservative Chancellor who took the decisive action to ensure that those with the most to contribute did so. It was measures announced by this Government throughout this Parliament that increased the contribution of the wealthiest by many times more than the cost of reducing the additional rate to 45p. It was this Government, led by a Conservative Chancellor of the Exchequer, who delivered lower taxes for more than 25 million hard-working people, taking low earners out of tax altogether.
It is worth reflecting on the number of low earners taken out of tax altogether. The hon. Member for Bethnal Green and Bow (Rushanara Ali) spoke about justice and fairness in the tax system. I remind the House that it is this Government who are supporting hard-working people. In her constituency alone, more than 52,000 people are now benefiting from the increases in personal allowances introduced by this Government. In Inverclyde 34,000 people, in Heywood and Middleton more than 41,000 people, and in Holborn and St Pancras more than 61,000 are benefiting from this Government’s policy and the increases in personal allowances. That is down to the fact that we trust the British people with their money, unlike the Labour party, which believes that it is right to take more of people’s money out of their pockets.
The report laid before the House alongside the Budget found that the 50p rate of income tax raised considerably less than the anticipated sum. A number of contributions have highlighted that simple fact today, and I pay tribute to my hon. Friend the Member for North West Leicestershire (Andrew Bridgen), my right hon. Friend the Member for Gordon (Sir Malcolm Bruce), my hon. Friend the Member for Wyre Forest (Mark Garnier), and, in particular, my hon. Friend the Member for Taunton Deane (Mr Browne) for his concise contribution on basic economics, showing that higher tax rates do not result in greater revenues, and, more important, damage the country’s long-term economic stability.
The 50p rate has been distortive and uncompetitive, and it pushes away the very wealth creators that this country needs to create jobs and economic growth. At a time when labour mobility is greater than it has ever been before, the Government recognise that the UK is competing for talented individuals and business investment. It is investment that creates jobs, economic security and a long-term economic future for Britain. A 50p rate of income tax does not help to do that. At a time when global economies are still struggling to compete, it is this Government who understand the value of ensuring that Britain is open for business.
The evidence speaks for itself. The 50p rate did not work. This Government reduced the rate to 45p because it was not rational to persist with a tax rate that was distortive and harmful to this country’s economy and did not raise any revenue. We have heard that the 50p rate left the UK with the highest statutory rate of income tax in the G20. In a world of increasing competition, it would be totally irresponsible for a Government of any colour to put this country at an economic disadvantage with a punitive rate of tax.
Hon. Members have heard throughout today’s debate that the top 1% of taxpayers pay more than 27% of income tax revenue, more than at any point under previous Governments. Maintaining an uncompetitive rate is counter-productive and will result in long-term economic failure. When it comes to long-term economic failure, we know that the Labour party has a specialism in that area. Clearly, tax competitiveness and a sustainable, prosperous economy do not matter to the Labour party, because if they did we would not be having this debate. As the HMRC report shows, we would not just be losing the additional tax revenues as a result of the higher rate, but would lose all the tax revenue of that group of taxpayers.
Britain is a country that is open for business. We want those with the most to offer and the most to contribute in tax working in the UK, creating wealth, jobs and growth, and, importantly, paying taxes. It is this Government who have shown that contrary to the myth generated by the Opposition, we have made the changes in every Budget to ensure that those with the broadest shoulders contribute more. We have increased capital gains and introduced the new rate of stamp duty on properties over £2 million, we are restricting the excessive use of certain tax reliefs, and, most significantly, we are clamping down on the minority of individuals who choose to avoid and evade tax.
The Labour party had 13 years to undertake such measures and it did not do so. We have made historic steps to support those on low and middle incomes. We have more people in employment and more young people and women in work. We have increased the personal allowance, frozen fuel duty, frozen council tax, and increased the national minimum wage.
Labour wishes to use an inefficient income tax rate to damage our economy, and to put our international competitiveness at risk by backing a failed tax. It is willing to drive wealth creators out of this country and to risk long-term damage to the economy. That is not what a responsible Government would do, and it is certainly not what we are doing. We have a long-term economic plan that is working. We are getting on with the job of putting the economy back on track, creating jobs and growth and securing Britain’s long-term economic future, which is why the motion should be thoroughly rejected.
Question put.
Local Bus Services
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:00 - The House divided: - Ayes: 208 / Noes: 278 - Question accordingly negatived.
Mary Creagh (Wakefield) (Lab)
I beg to move,
That this House recognises that buses are an important tool to promote economic growth; regrets that, outside London, bus use is in decline; notes that since 2010 1,300 bus routes have been lost; further notes that since 2010 bus fares have risen five times faster than wages; further regrets that deregulation of the bus industry removed the ability of local authorities to co-ordinate their public transport networks; and calls on the Government to ensure that city and county regions are able to make use of London-style powers to develop more integrated, frequent, cheaper and greener bus services with integrated Oyster card-style ticketing.
Buses are the lifelines of our cities, towns and villages, but unfortunately, since 2010, 1,300 bus routes have been axed, and passenger numbers outside London have fallen as people have been priced off the buses. Bus fares have risen five times faster than wages, contributing to the longest cost of living crisis that any of us has ever seen. The Government have cut bus funding by 17% in just three years. We must get better value for the public subsidy that remains, which makes up 40% of bus operators’ income. We must reform the broken market for buses, and ensure that competition benefits passengers. We must move decisions and powers on transport services closer to the people who use them—away from Whitehall and closer to the town hall. We want simple, smart ticketing with a daily cap that can be used across buses, trams and trains. We want public authorities to have powers to set routes, and to help working people and businesses succeed.
Martin Horwood (Cheltenham) (LD)
I want to question the bus usage statistic that the hon. Lady just gave. My statistics on passenger journeys state that there were 5.2 billion journeys in the most recent year—2013-14—which is clearly more than in 2009-10 and the situation we inherited from the previous Government.
Mary Creagh
I am glad the hon. Gentleman raised that point because that is the only year in which numbers of bus journeys outside London have increased since 1986. If he looks at bus statistics for the past 28 years, he will see that there is a one-year blip—that year is the exception that proves the rule, which is that outside London bus services are in long-term decline.
Mary Creagh
I want to make some progress; the hon. Gentleman has made his point. We want more people to use buses, because when they do they are able to participate fully in economic, cultural, and social life.
Mr Jim Cunningham (Coventry South) (Lab)
It is worth remembering that the previous Conservative Government cut the subsidies and imposed privatisation on local authorities. I support the motion, but we must ensure that local authorities are given the tools to do the job. That means money coming from central Government, not passing the issue on to local authorities so that they have to provide the subsidy.
Mary Creagh
My hon. Friend makes a good point, and only this morning I met Councillor John McNicholas from Coventry to discuss some of the issues with Centro and the west midlands.
I want to talk about three big issues. The first is why buses are so important to our economy, and the second is what has happened to buses under this Government. Finally, I will set out how a Labour Government will empower local authorities to take control of local transport.
Let me begin with why buses are important. Buses give people the freedom to work, learn, explore new places and connect with new people. Nearly 5 billion bus trips are made in Britain each year, and three times more trips are made by bus than by train. Buses take the unemployed to job interviews and to work, and they take young people to their exams, colleges and into their futures.
I congratulate Councillor Liam Robinson, chair of Merseytravel, who spotted that young people from larger families were not turning up to school on Thursdays and Fridays. Why? Their families had run out of money for bus fares. He negotiated a young person’s ticket where the fare is capped at £2 a day instead of £1.30 a journey. The number of bus users has grown as a result, and young people in Liverpool and Merseyside no longer miss out on their education.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend is right to mention the affordability of bus services. Is she aware that in Manchester, for example, to travel six miles on buses costs more than £3, yet here in London that same six-mile journey using an Oyster card would cost just £1.45? Do we not need affordable public transport too?
Mary Creagh
I could not agree more with my hon. Friend, and I was talking to Councillor Andrew Fender only this morning about some of the difficulties faced in the Greater Manchester area. If someone travels over a whole day in London within certain zones their bus fare will be capped at £4.40, but if they live anywhere outside London their fare is not capped and they pay far more.
Buses take people to the GP and to hospital appointments. When I visited Plymouth in July, Labour council leader Tudor Evans, my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) and Labour candidate Luke Pollard told me how a previous short-sighted Tory city council had sold off the city’s municipal bus company. [Interruption.] We heard the word “excellent” from the hon. Member for Thurrock (Jackie Doyle-Price). I am sure her constituents would be pleased to hear that.
Jackie Doyle-Price (Thurrock) (Con)
The largest provider of bus services in my constituency is Ensign, which runs a very successful commercial operation. In principle, privatised bus services can offer a very good service to constituents. Why is the hon. Lady so against them?
Mary Creagh
The bus services are privatised in London too. I have nothing against privatisation. [Interruption.] I will tell the hon. Lady a little bit about what I learned on my trip to Plymouth and maybe she will learn something about her constituency.
Cuts in bus services have forced people to take taxis or ambulances to hospital, putting pressure on NHS budgets. I am delighted to report that my Plymouth colleagues, working alongside Councillor Pauline Murphy who is undoubtedly known to the hon. Lady, has secured a new bus service from Efford to Derriford. I congratulate them on that result.
Buses bring economic and environmental benefits. The UK is one of the most congested countries in the developed world. British motorists spend an average of 124 hours—more than five days a year—stuck in traffic. Traffic jams cause air pollution, which causes the early deaths of an estimated 29,000 people a year. In Worcester last Thursday, I met Joy Squires and others who are campaigning to bring back their park and ride service. It was scrapped by a Tory city and a Tory county council, yet—here is the irony—local taxpayers are paying £3,000 a month just to keep the site secure even as Worcester, England’s third most congested city, clogs up with even more traffic. Where is the sense in that?
Sir Greg Knight (East Yorkshire) (Con)
Does the hon. Lady agree that there are various reasons for congestion in our cities? For example, we have a plethora of 24-hour bus lanes when we do not have 24 hour buses. Will she therefore applaud Liverpool council, which has carried out an experiment and decided to scrap 22 of its 26 bus lanes to ease congestion for all motorists?
Mary Creagh
I am always happy to pay tribute to Joe Anderson, the mayor of Liverpool, and to Councillor Liam Robinson. It is clear to me, from my discussions around the country, that we need properly enforced bus lanes and that they are a necessary but not sufficient part of getting regular, reliable bus services. If people think they are going to be sitting on a bus behind a load of car traffic, they will choose to take their car and add to it. Buses take people off the roads.
Sir Greg Knight
Will the hon. Lady look closely at the experiment Liverpool carried out? I understand that it found that although removing the bus lanes led to a small increase in bus journey times it had no effect whatever on the number of people using buses.
Mary Creagh
I thank the right hon. Gentleman for that point. There is now a lot we can do, phasing traffic lights and all sorts of clever ways, to give buses priority. They all need to be considered.
Toby Perkins (Chesterfield) (Lab)
I am delighted my hon. Friend has secured the debate, which is incredibly important for my constituents. Does she agree that one of the big impacts on local bus services has been the massive cuts to local government, particularly in northern areas where local authorities have seen massive cuts to the subsidies they can provide for unprofitable services? People are able to get a bus to work during rush hour but are not able to get one home when their shift finishes. Is there not just a responsibility on the Minister here, but on the Secretary of State for Communities and Local Government, the right hon. Member for Brentwood and Ongar (Mr Pickles)?
Mary Creagh
I completely agree with my hon. Friend on that issue. County councils and city councils of whatever colour or hue have been forced into some very difficult decisions by the cuts made by this Government. It is a short-sighted policy that has caused genuine hardship across the country.
Mr Marcus Jones (Nuneaton) (Con)
Does the hon. Lady welcome the partnership between Stagecoach, Conservative-led Warwickshire county council and employers on the new service from Nuneaton to Birch Coppice? The service is being run in conjunction with employers to fit their shift patterns, which will help many Nuneaton people to get to work.
Mary Creagh
I do indeed welcome that. I welcome any innovation from bus companies. It is important that we get large employers working with bus companies to talk about their shift patterns and, in particular, with NHS hospitals, which often tend to be built by the NHS outside city centres, without any consequential thinking about how people will access those health services or designing a bus service for people to use.
Mr Jim Cunningham
Despite the cuts to local authorities, which are horrendous in the West Midlands to say the least, we hope to maintain free bus passes for pensioners, although I am not sure that the same goes for Warwickshire.
Mary Creagh
My hon. Friend makes an interesting point. Of course, the Prime Minister famously said that he would protect bus passes for pensioners; what he did not say is that there would be any bus services left for people to get on.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I would like to put on record the fact that in Scotland it was Labour that introduced free bus passes. However, with the present Administration north of the border, it is questionable whether they will continue.
Mary Creagh
My hon. Friend makes an interesting point. Of course, the relationship between the owner of Stagecoach and a particular party north of the border is well known, although I will leave it at that.
On air pollution, Labour’s parliamentary candidate, Andrew Pakes, invited me to Milton Keynes, where I was delighted—[Interruption]—it was very nice too—to see that the Labour council had worked with Arriva to introduce the first all-electric bus route with charging plates.
Mary Creagh
I think hon. Members will find that the green bus fund was actually started under a Labour Government.
Buses are key to tackling congestion and air pollution. Buses power the early morning economy—the shift workers, the security guards and the cleaners—and they power the night-time economy, bringing young people safely in and out of city and town centres to work and have fun. However, I do not think Ministers understand the importance of buses, because they and their friends do not use them. If they did, they would not have slashed bus funding by 17% in real terms in just three years. We have seen bus fares outside London rise by 25%, five times faster than wages. The frail and the vulnerable are disproportionately affected.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
My hon. Friend will no doubt be aware that Baroness Thatcher reportedly said that the man who finds himself on a bus after the age of 25 can consider himself a failure. Does she agree that that kind of contempt for buses is why Conservative Members can never champion the kind of good quality and good value services that our constituents need?
Mary Creagh
I think that comment dates from another time. I agree that the sort of prejudice against public transport in that comment is deeply unhelpful. I think that a man or woman who finds themselves on a bus at the age of 46, as I did this morning, has achieved a great deal in life. I want buses to be seen as an aspirational form of public transport, not something that people take only if they cannot afford something better.
Mr Tom Harris (Glasgow South) (Lab)
Very briefly, for clarity and in defence of Baroness Thatcher—[Interruption]—that is a quote that will haunt me for some time—she never actually said those words, which have been attributed to her. It was actually Loelia, Duchess of Westminster.
Mary Creagh
I aspire to a country in which even the Duchess of Westminster travels on the Clapham omnibus—or even the Westminster omnibus.
We know that the rise in bus fares has disproportionately affected the frail and the vulnerable, as well as young jobseekers and those on low incomes without access to a car. We know, too, that in some rural areas, bus services have all but disappeared—the result of this Government’s deep cuts to supported services, which my hon. Friend the Member for Coventry South (Mr Cunningham) mentioned. Freedom of information requests by my right hon. Friend the Member for Leeds Central (Hilary Benn) uncovered the fact that local authority bus subsidies across shire counties were cut by 23% in real terms between 2010 and 2014. Conservative Northamptonshire county council cut its subsidy by 55%, and Conservative-run Suffolk by 50%.
In cities outside London, there is a chaotic mix of local control over trams and metros, private provision of buses and nationally operated rail franchises—no integrated ticketing, no real-time information and no fares information at the bus stop. The bus companies say, “Ask the driver”, but can we imagine going to Tesco for a loaf of bread and being told that we have to take it to the checkout to find out the price? There is often no usable map of the bus networks and their connections. Instead, different bus companies compete for fares.
Andrew Gwynne
Is not the issue here that Transport for London set the frequency and set the standards and bus companies bid to be part of the network, whereas Transport for Greater Manchester does not currently have those powers so that private bus companies set the network and TFGM has to infill with minuscule resources that it does not have?
Mary Creagh
That is indeed an important point. The competition in London happens at the point of contracting the routes, whereas in Manchester the theoretical competition happens on the road. I was on a bus in Manchester last Friday, so I know my hon. Friend makes an important point about the sort of private provision and the sort of competition that benefit not just people, but our economy, jobs and growth. If we do not have transport mobility, we will not have social mobility because people will not be able to move out of their areas to look for work, further their education and better themselves.
Mr John Spellar (Warley) (Lab)
It is not, of course, just Manchester, as this applies across the country. When bus services to local hospitals were cut, there was little Centro could do about it—it was the bus companies that did it—and there was nothing that local councils could do either. It required an excellent campaign such as the one conducted by our Labour candidate, Stephanie Peacock, to get the bus services working again.
Mary Creagh
I pay tribute to Stephanie Peacock. My right hon. Friend reinforces my point about linking up to health services. Interestingly during this period of cuts to bus services, what we have seen is that when services that were once “supported services” were cut by the transport authorities, they magically reappeared when bus companies suddenly found that they could operate the services commercially after all. When the taxpayer is paying but a service is suddenly found to be commercially viable, it is a further sign of a market that is not working properly.
Mr Mark Spencer (Sherwood) (Con)
The hon. Lady will recognise that there is a great deal of cross-party agreement about the need for bus services and their importance, but I hope she will also recognise the importance of rail services, which might be able to take off some of the pressure on the bus routes if towns are fortunate enough to have a railway station. Will she support my campaign to extend the Robin Hood line in Nottingham to the villages of Edwinstowe and Ollerton?
Mary Creagh
I was talking to the transport lead on Nottinghamshire county council this morning. I agree with the hon. Gentleman that trains also play a part. Trains are important, but the difficulties experienced by his Government—around the franchising process, the transfer of rolling stock and the delays in electrification—make reliance on the train as a substitute for bus services more difficult. We have had a freeze in the letting of franchises, with very big difficulties, particularly in the north of England, where carriages are going to be transferred down to Chiltern Railways. The services obviously need to be part of a planned network. The people who come to those stations either by car or bus use a different form of ticket when they get there and the point we are trying to get across is that devolving such decisions closer to communities will allow the system for rail, tram, underground, metro and bus services to be the same. Ease of interchange is key to encouraging people to use those services.
At the moment, outside London, our transport network adds up to less than the sum of its parts. Different forms of transport compete needlessly, instead of providing seamless journeys from A to B, and there is a lack of competition. That does not work in the passengers’ interests, the public interest or for local businesses. The Competition Commission has estimated that the failure of competition in the bus market costs the taxpayer £305 million every year.
London is the exception. Transport in the capital works far better for passengers than in any other British city. That is not simply because there is more money and there are more people. It is because Ken Livingstone, as London’s first directly elected Mayor, took some hard decisions. He introduced the congestion charge and properly enforced bus lanes. Labour understands how important it is to equip our cities with similar powers to make their transport systems work. Bus services should be available, accessible, affordable and convenient, which is why we have announced plans to give London-style bus powers to any city or county region that wants them.
Kerry McCarthy (Bristol East) (Lab)
In Bristol, First has a near monopoly on buses. I have just asked for a meeting with the latest in a long line of managing directors so I can present yet another dossier of complaints from the public about unreliable services and high fares. Bristol is crying out for the sort of change that my hon. Friend has just mentioned. We need local control of bus services. May I urge her to make good speed in trying to bring in those changes? Perhaps she can visit Bristol to see just how much we need them.
Mary Creagh
I would be happy to visit Bristol to look at some of the issues there. I know that Bristol is a good cycling city. I have been invited there to try the cycling, so perhaps I can combine the visit.
Mike Thornton (Eastleigh) (LD)
The interesting thing is that the hon. Lady almost dismisses the vast amount of extra money that London transport receives, the hugely increased population, which is larger than that of Scotland, and the compactness of the area in which London transport operates. It is totally different from anywhere else in the country. If one looks at Hampshire or Dorset, one can surely see the difference.
Mary Creagh
I do understand the difference between a big city and a little city. I also understand the difference between a big city that is growing by 70,000 to 80,000 people a year and that has a thriving tourist economy and counties such as Hampshire and Dorset, which are dealing with problems of geography, topography and in many cases poorly maintained roads. However, the bus subsidy in London is not that out of kilter, given the number of people per head who travel on buses. It is a hugely used form of public transport. I did not dismiss those differences. I do understand them.
The Secretary of State knows that the current legislation to regulate buses is too onerous, but that has not stopped the determined trying. I pay tribute to the combined authorities in the north-east and west Yorkshire, who I visited last week. There, far-sighted local leaders have spent the past four years trying to achieve better buses through a quality contract. They will have my full support in government.
We are delighted that the Chancellor, belatedly, seems to agree with us that London-style transport powers unlock growth. Does the Secretary of State for Transport agree with him? A small yes, a possible yes, or a sphinx-like silence? Perhaps there is trouble in paradise. If he does agree with the Chancellor, will he explain why any transport authority that pursued a quality contract—in essence, London-style bus powers—was penalised by his Department and banned from bidding for his better bus fund?
This morning, I held a bus summit with city and county council leaders to discuss how devolution can give city and county regions better buses.
Mary Creagh
It was, and it included Conservative representation. [Interruption.] The hon. Gentleman can see me afterwards if he wants the names, but I do not know whether—[Interruption.] Actually, I think that I am going to make sure that they are secret.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. It is unsuitable for the shadow Minister to answer sedentary interventions. If Members wish to ask questions of the hon. Lady, they can stand up and indicate their wish to do so, and then she can answer.
Mary Creagh
Thank you, Madam Deputy Speaker. Perhaps we should have a bell that Members can ring.
I am not sure that I should say who attended the summit. Officers from Devon county council attended, as did one Conservative leader, but I am not sure that he would be pleased with me if I named him. [Hon. Members: “Name him!”] No, I will not. It is for me to know and for other Members to find out. [Interruption.] It was not a secret summit. All 105 city and county leaders were invited.
At the summit, we discussed how London-style powers could bring more small and medium-sized bus companies into a market in which five big companies take 70% of the business. We noted that those five operators all complain about a regulated market outside London, but are happy to operate in a regulated London bus market. We discussed how the voice of the passenger left waiting at a bus stop could be heard, how we could overcome the barriers to open data about buses, how ticketing could be linked with trams and trains, and how interchanges could be made easier. We also discussed the fact that communities can be isolated just a mile from a city centre if there is no bus, which is what happens on the Peacock estate in Wakefield.
On Monday, Stagecoach claimed that it could deliver multi-operator Oyster-style ticketing across the country by 2015, which came as a surprise to many Members. We know that unless the law is changed, it will not be able to deliver multi-operator tickets with a daily price cap. Stagecoach has also claimed that politicians are
“peddling the myth that London is best”
for buses. This morning, however, one councillor referred to London as the “magic kingdom” of buses. London has 7 million regular Oyster card users. In contrast, the Secretary of State this morning heaped praise on Centro in the west midlands for having just 3,000 smart card users.
I want to seize this opportunity to fix the broken bus market. The current problems stem from an over-centralised state, and the Government have done nothing to change that. All local authorities face different transport challenges. Only when public transport, cycling and walking become attractive options will they grow and improve.
I do not think it is fair that only London provides passengers with one ticket for every form of public transport, always guaranteeing the lowest fare and capping daily bus usage at £4.40.
Andrew Gwynne
My hon. Friend is right to mention the multi-modal travel that is made possible by the Oyster card. If someone began a journey in Manchester on the train, transferred to Metrolink and then transferred to a bus, people would think that they were absolutely bonkers. Not only do those three travel modes not join up, but it is not possible to obtain a single ticket that can be used on all of them.
Mary Creagh
My hon. Friend has made another excellent point. I have experienced that myself. When I caught a tram from the station, a return journey cost £1.50, and I then had to take a bus to the venue, which cost £1.40.
I do not think it is fair that only London provides audio-visual announcements on all buses for the benefit of deaf, blind and partially sighted people. I do not think it is fair that only London provides seamless interchanges with real-time information that makes door-to-door journeys easy. When I was visiting—I think—Milton Keynes, a lady said to me “We call them ghost buses. You stand at the bus stop and you see from the countdown that buses are coming, but when they are due, they just do not turn up. Why are there these ghost buses in the system?” We know that there are problems with technology and other equipment, but why are the problems ironed out in some cities and not in others? Labour will ensure that cities are given the powers they need to take control of their transport system, no longer playing second fiddle to the capital. Bus provision where cities let the routes will unlock efficiencies to cut fares, run more buses and invest in growing the network. Bus provision must become quicker and easier to achieve. We want a bus market that is growing, not dying by a thousand cuts.
Transport plays a vital role in driving economic growth. Devolution is important and control over transport is important, but transport is much more than that. It has profound effects on us as people and on the places where we live. It affects our health, our environment and our quality of life. Buses are the lifelines of our cities, towns and villages. Buses enable people to get to work, bring jobs and growth to our high streets, reduce isolation and ensure mobility for those unable to drive.
Labour is the party of the bus user. In government over 13 years we increased funding for buses from £774 million in 1997 to £2.3 billion in 2010.
Caroline Nokes (Romsey and Southampton North) (Con)
The hon. Lady makes the valid point that buses bring mobility to those who are unable to drive. How then does she feel about Southampton city council removing concessionary passes from disabled people, who have previously enjoyed them?
Mary Creagh
As I have said, Southampton council is doing no more than delivering the very strong cuts to its budgets that the hon. Lady’s Government have imposed on it and that she has voted for as a loyal servant of her party, so I tell the people of Southampton to vote Labour next time.
Mary Creagh
No, I am going to conclude my remarks as many Members wish to speak.
We introduced free concessionary bus travel for pensioners and the disabled, bringing freedom to millions.
Mary Creagh
I will not give way; I have two sentences left, and then I am going to sit down.
Only a Labour Government will tackle the cost of living crisis and drive renewal of our buses. Britain’s bus market is broken. The next Labour Government will fix it, and make buses once again a transport of delight.
The Secretary of State for Transport (Mr Patrick McLoughlin)
I welcome this debate, and may I take this opportunity to do something fairly unusual by welcoming the hon. Member for Wakefield (Mary Creagh) to her first Opposition day debate on transport even though she has been in her post for over 15 months? One could say it has been a long time in coming, but I hope this will not be like what sometimes happens with buses when we get two at once.
I certainly agree with the hon. Lady that buses matter and that they matter to a huge amount of people, and that sometimes their importance is overlooked. I could say that I think that has been overlooked by the hon. Lady, because she has not asked a single oral question about buses in all the oral questions to me as Transport Secretary in this House and, indeed, there have been only four written questions about buses from her to me or the Department. So I am pleased about her newly awakened interest in buses, and perhaps what awoke her interest was the announcement by the Chancellor of the Exchequer earlier this week on proper devolution to Greater Manchester, with a new, powerful mayor. That was announced by the Chancellor alongside many leaders, including from her own party—who did not keep their identity a secret, unlike, it would seem, those who attended the summit with the hon. Lady.
I must also say that, despite all the points the Opposition make about the state of the bus industry and the changing of the regulations so far as the cities are concerned, over 13 years in office they did nothing—despite all the grand programmes, over 13 years in power they did nothing.
Mr McLoughlin
I cannot blame the hon. Lady because she was not here during those heady days of Labour party power, but if she wants to mount a defence for why her party did nothing in 13 years, I will give way to her.
Chi Onwurah
I thank the right hon. Gentleman for giving way so graciously. Does he agree with me that, by giving local authorities the power to institute quality contracts, the last Labour Government did do something for good services? Will he also join my hon. Friend the Member for Wakefield (Mary Creagh) in welcoming the fact that the North East combined authority is seeking to deliver good quality contracts for constituents?
Mr McLoughlin
The simple fact is that, if my memory is correct, it is legislation enacted in 2000 that allowed quality contracts to come in, yet none was introduced during that time. [Interruption.] I am saying no, but I will check the exact date.
I should point out that it is this Government who are making the difference—even Labour in the north know it now—and I am proud of our record on buses. So perhaps today, I can put straight a few of the facts; indeed, we might end up even agreeing. Let me spell them out. The motion today says that buses matter to the economy. Of course they do, which is why we have been investing heavily in them. The motion also says that bus use outside London is falling. I have some good news for the House and the hon. Member for Wakefield: actually, it is not falling at all; it is going up, reversing the trend we inherited from the last Government. In the last year alone, there have been 4.7 billion bus journeys in England, the highest number since records began. There is growth outside London as well—up 1.5% on last year. Buses in England are busier. In 2013-14, 16.1 billion passenger miles were travelled on buses in England, up from 15.2 billion in 2009-10—an increase of 900 million journey miles.
Mr Tom Harris
But if the Secretary of State excludes all London bus journeys from those figures, historically—from the point of deregulation in 1986 to the present day—bus passenger numbers outside London have plummeted.
Mr McLoughlin
No. As I have just pointed out, the trend has been reversed—[Interruption]—in the last year for which figures were available, and not just inside London but outside it too.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
Returning to the point made by my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), will the Secretary of State now take this opportunity, very belatedly, to back the North East combined authority in the decision that has been taken to press ahead with the quality contract scheme in Tyne and Wear?
Mr McLoughlin
It has to go through a process that involves the traffic commissioners, and it would be wrong of me at this stage to take a view one way or the other. The process was set out in legislation introduced by the last Government.
As I was saying, we have started to see growth under this Government, because the services are better. Buses are becoming more accessible, so that everyone can use them: well over three quarters of the fleet is now fully accessible. Buses are also getting safer: there is CCTV on 82% of buses in England, an all-time high. Buses are getting easier to use, with smart card readers on 86% of English buses outside London, up from just 25% when the last Government were in power.
So when the hon. Member for Wakefield calls for Oyster-style ticketing, there is good news: we are making it happen, when the last Government did not. A lot of progress has been made. Those are the real facts: a growing industry, a popular industry, with high and rising passenger satisfaction levels. Investment is going into the industry—£1.4 billion of private capital over the last five years by the major operators alone. That means newer, cleaner, greener buses, better services and new information systems. The “Boris bus” in London is a world beater, and the pensioner pass has been protected. This year, we will fund spending on concessionary travel by nearly £1 billion.
Toby Perkins
I am very grateful that the Secretary of State has chosen to do that, and he will know that many of his constituents choose to do that. However, if they choose to do so on Derbyshire’s bus services, they would probably not recognise the description he has just given. Will he at least recognise that many people in our constituencies—old people, who really rely on bus services, and people who cannot get to work without them—would not recognise the rosy picture he is attempting to paint?
Mr McLoughlin
The hon. Gentleman talks about a “rosy picture”; I am just giving him the facts and figures. If he does not like the facts, no doubt he will change them. However, I will stick by the facts that I have here.
James Morris (Halesowen and Rowley Regis) (Con)
National Express, which plays an important role in providing bus services in my constituency, made a decision to re-route some services to the Lodgefield estate without consulting the local authority and without enough consultation with local people. Does my right hon. Friend agree that such companies need to understand that safety issues can be resolved if they work with their Member of Parliament and with the local authority? We have now had a promise that one of the routes is to be restored.
Mr McLoughlin
I entirely agree with my hon. Friend. I have no doubt that that route is going to be restored as a result of the bus company taking notice of the campaign that he led. I would recommend such action to all Members of Parliament. Perhaps I can also set the record straight in relation to Milton Keynes. The scheme to which the hon. Member for Wakefield referred was in fact started by Milton Keynes council when it was Conservative controlled. The pressure for it came from my Parliamentary Private Secretary, my hon. Friend the Member for Milton Keynes South (Iain Stewart), who has a long-standing interest in transport, having also served on the Transport Select Committee. He, too, knows a bit about campaigning for good services for local constituents.
Andrew Gwynne
It is all fine and well for private bus companies to have smart card technology on their buses, but does not the Secretary of State understand that what we want is proper integration between the various modes of public transport? We want a single pricing structure across all those modes so that my constituents in Greater Manchester—and others outside Manchester and London—can move from train to tram to bus easily.
Mr McLoughlin
I do not disagree with the hon. Gentleman on the desirability of easier access to the various modes of public transport, whether in relation to the trams and buses in his own area or to other forms of inter-modal change. He is absolutely right. When people turn up in a city that they are new to, they need to be able to get a better understanding of the public transport there, rather than having to find their way through a maze of information. I hope that recent advances in technology—they were not there five years ago so I cannot blame the last Government for not implementing them—will mean that bus and tram operators can all provide the much better service that passengers want for the longer term.
Tom Blenkinsop
I want to raise an issue relating to the Government’s record on concessionary travel for pensioners and disabled people using coach services. This Government removed that concessionary travel in 2011. Pensioners from my constituency who wanted to go to Newcastle, York or Leeds, for example, used to rely on those coach services, but they no longer exist. Will the Secretary of State look into that matter?
Mr McLoughlin
Everybody tries to look at the various services. I have not heard any commitments about new money from the Opposition in this regard. I am not sure whether they are committing today to putting more money into that particular area. Overall, I think we have a strong record. I have heard the shadow Chancellor say that the Opposition Front Bench will make no further commitments, in which case I do not see how they can reverse any of the many changes that have been made.
As I have said, we will spend nearly £1 billion on concessionary travel this year, and that relates not only to the funds that go into the public transport network. A huge amount of money also goes into public transport relating to education and to the health service.
Sir Greg Knight
Has the Secretary of State seen the excellent report by Dick Tracey, a former Member of this House, which suggests that we could cut congestion, reduce journey times for buses and other traffic and save money if we switched off some traffic lights during the evenings? May we have a trial of that excellent idea?
Mr McLoughlin
I think I am grateful to my right hon. Friend for that intervention. I have not read that pamphlet by Richard Tracey, but I am sure, knowing my right hon. Friend, that he will ensure that I have a copy in the next few days and I will certainly look at it. Some areas already have part-time traffic lights, which at certain stages are turned off. I would perhaps need a lot more convincing that such lights are practical in every set of circumstances, but I look forward to receiving a letter from him pointing these things out.
As I said, more than £300 million has been allocated to fund major local authority bus projects since 2010, which means: the changes on the ground in places such as Mansfield, Rochdale and Ipswich; two brand new park and ride hubs in York; Bristol’s ambitious £180 million MetroBus network; and, through our £70 million better bus areas fund in 2012, we have supported improvement schemes in 24 local authorities.
Kerry McCarthy
I am glad that the Secretary of State mentioned the MetroBus BRT—bus rapid transit—scheme in Bristol. Is he aware that the local community has concerns about how that scheme is rolling out? We have been told that the Department is not prepared to negotiate or revisit some of the details of the scheme to make sure it represents a good way of spending taxpayers’ money. I am due to meet the Minister in the other place, Baroness Kramer, soon, but can the Secretary of State assure me that the Department is prepared to be as flexible as possible so that we can deliver a bus service that actually tackles Bristol’s hideous congestion?
Mr McLoughlin
The hon. Lady already has a meeting fixed up with my noble Friend, and I am sure she will certainly take on board the points the hon. Lady makes. Whenever these schemes are rolled out we want to ensure that they are the best possible for the areas concerned. Obviously, this scheme is being done in conjunction with the mayor and the local authorities, so I am interested to hear what she is saying about it. I would point out that most schemes are often controversial in their early days and it is only once they are up and running that people see the benefit. A number of cities that have had trams and tram links or other such schemes have found that they start off with some controversy but eventually the benefits are seen.
I was talking about the £70 million we had set aside for the better buses fund in 2012, which supported schemes in 24 local authorities. In Blackpool, a £1.5 million programme has seen investment in traffic management systems, bus lanes and bus shelters. Enhancing buses is a feature of 95% of the projects supported by the £600 million of local sustainable transport fund money. Passenger numbers are going up in Sheffield, thanks to the better bus area, backed by £18 million from the better bus area fund from my Department. Of course it is not just money that counts; we also need to back the ambition and vision. That is what my right hon. Friend the Chancellor did on Monday: a directly elected city region mayor with strong powers will be able to provide the strategic direction for the people and economy of Greater Manchester. It will mean more joined-up decision making in transport, housing and growth. This Government fundamentally believe that devolution and taking this decision will help make that a reality.
Graham Stringer (Blackley and Broughton) (Lab)
Like the leaders in Greater Manchester, I welcome the Chancellor of the Exchequer’s statement and, in particular, the powers that are going to be given to the mayor to introduce a franchising system for buses in Greater Manchester. Does that represent a sea change in the Government’s view of franchising, with franchising being seen as a superior way of creating on-road competition for buses?
Mr McLoughlin
I do not think that reflects a change. I would like to have a mosaic of transport systems. What is applicable in certain areas will not be applicable in others, but I am willing to have discussions with leaders in other areas and with people who would put an alternative view of how we best approach these matters. It is important not to get obsessed with one-size-fits-all regulation; a common-sense approach is best for each community.
Bridget Phillipson
I am grateful to the Secretary of State for allowing me to intervene a second time. Does he not understand the apparent inconsistency in the argument being advanced here? On the one hand we are told that Greater Manchester should have these powers, but on the other hand his Department has failed over the past four years to back Tyne and Wear in its very similar approach to these matters. Is there not an inconsistency?
Mr McLoughlin
I do not think that there is inconsistency at all. What we have seen in Greater Manchester is a coming together that goes much wider than just the Manchester authorities, with a much more imaginative scheme that includes the powers of the police and crime commissioner and many services in the area. I think that it is bold and imaginative, and I am sorry that Opposition Members seem to be a bit upset about it—I can see Manchester Members nodding in vigorous agreement with what we are doing.
We must also recognise what great things have been done by the private sector. I want devolution to be a success, based on the best that the public and private sectors can do. The private sector brings ingenuity, creativity and innovation to transport, and that must continue. We have manufacturers in the UK at the cutting edge of technological innovation, and we have operators setting the benchmark for new customer services and investing massively in new vehicles. That includes over 800 new low-carbon buses, supported by Government funding. Through the Office for Low Emission Vehicles, we will be supporting the purchase of hundreds more. I was at the bus expo in Birmingham this morning, seeing for myself what the bus and coach industry has to offer. No one could fail to be impressed by the dynamism of hundreds of the exhibitors.
Of course, there are challenges ahead. We need to go back to good transport in rural areas, for instance. As a resident of rural Derbyshire, I know how important buses are to people in the countryside. For many isolated communities, buses can be a lifeline. The old model of services is changing, and we need to ensure that as it changes people retain access to good transport. We all need to work together to get it right. I want to pay tribute to the brilliant work done by community transport operators and their many volunteers. There are three such operators in my constituency: Bakewell and Eyam Community Transport, Ashbourne Community Transport and Amber Valley Community Transport. They do a fantastic job, as do other community transport operators across the rest of the country. I want to do more to help them, and very soon I will say more on how we can do that.
Mr Jim Cunningham
In principle, I do not have a problem with devolving transport to local authorities, but the resources must go with it. The bill must not become a burden on local authorities so that the Government can get rid of the subsidies.
Mr McLoughlin
As I have set out, I am very committed and will help support the bus industry in this country.
As I was just talking about community transport, I will also say that I want to see faster movement on smart ticketing. That is happening. Only this week, five of the main operators announced a welcome roll-out of joint smart ticketing in cities across England. In west Yorkshire the MCard, launched in July last year, can already be used on 98% of buses in the area and on local rail services. There are now over 500,000 live smart cards and over 1 million smart card transactions per week—I am sure that the hon. Member for Wakefield, as a west Yorkshire MP, already has one in her pocket. Liverpool is launching a multi-operator smart ticket this month. Centro in the west midlands is making great progress too. In August the Solent Go smart ticket was launched, covering Southampton, Hampshire, Portsmouth and the Isle of Wight. That is an excellent model of collaboration. We need to see smaller operators in the towns and the countryside do that too. Great operators, such as Trentbarton in the east midlands, are already there.
That is our record: a Government who have backed business; an industry that is growing; better services attracting more passengers; and real devolution, not just talking about it. This Government are making the difference, unlike the Labour party, which did nothing for bus services when it was in government.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I am very pleased that buses are being debated here in this important national forum. Buses are a lifeline to millions of people. There are more than 5.2 billion bus passenger journeys a year and two thirds of all journeys are taken by bus, but it is rare that buses receive national attention.
The Transport Committee has looked at bus services on three occasions in this Parliament. We have looked at competition in local bus services, we have looked at access to transport for disabled people, where buses featured strongly, and we have looked at transport problems for isolated communities. Those isolated communities are not, as is commonly thought, concentrated in rural areas; they also involve urban areas, and increasingly so, where local transport services, including buses, are often withdrawn. As so many hon. Members have already mentioned this afternoon, buses are essential for many people to get to work, to educational facilities, to important health services and amenities, and to social facilities. They matter for millions of people throughout the country.
The Transport Committee reached a number of conclusions, but there was one overriding message: while there are certainly areas where there has been success and where there are examples of local authority innovation and working together, overall the deregulated system is not working effectively. When bus deregulation was first introduced and started to operate in 1986, the legislation was extremely controversial. The image put forward by its supporters was that the dead hand of local authority involvement would be done away with to be replaced by a new deregulated system, where private operators competed across transport routes and the public sector came in where there was failure, which it was thought would be a small area. It was thought that the private sector would thrive, with lots of operators competing with one another to improve services and bring bus fares down.
That has simply not happened. Instead, there are a small number of monopoly bus operators and fares have not come down. Far from coming down, in the last four years alone bus fares have increased by 42%, and public subsidy for bus services has increased. There is now a £2.5 billion subsidy for bus services, and that constitutes 45% of operators’ revenue, so the promise of deregulation as a new system simply has not been fulfilled.
Andrew Gwynne
I commend the work of my hon. Friend’s Committee in highlighting many of these issues. In my constituency, a deregulated transport system means that Audenshaw now has a really good bus service provided by Stagecoach trying to compete with a really good tram service provided by Transport for Greater Manchester, providing good alternative public transport, but along the A57 corridor, through Denton, where there is no alternative tram or train provision, we have a skeleton bus service. We have the worst of both worlds. We are paying more and getting less.
Mrs Ellman
My hon. Friend makes a good point. At the moment, the system does not allow proper integration to meet the transport needs of people across an area. We must always remember that deregulation was never introduced for the whole of the country. London was always left out, and that is why the London system has thrived while we have experienced all the problems elsewhere. It is certainly true that there are many local areas where the local authorities have innovated and used some of the provisions of the Transport Act 1985 to develop partnerships that could be successful—when the Transport Committee looked at what was happening in Oxford, we were impressed by what we saw, and individual Members will all have their own experiences—but they are examples and not the system that affects the majority of people.
Community transport, which was mentioned by the Secretary of State, is also important. When we did our work, looking at what is happening in isolated communities where services are being withdrawn, we found some good examples of community transport. However, community transport, which is run mainly by volunteers, cannot fill the gap that is created when local bus services are withdrawn. It simply cannot do that.
On the last information we had, about 47% of local authorities were being forced to reduce their subsidies to local bus services because of cuts in their expenditure. It looks as if the withdrawal of local services will be a growing problem: commercial services simply withdraw when they are not making a profit, and local authorities are under increasing financial pressure. Unless something different happens, there will be a reduction in services in areas where this affects vulnerable people.
Services on busy transport routes, which are profitable and used by significant numbers of people, will not be withdrawn because private operators will continue to operate them. There are many other areas, however, where bus services are a lifeline for people—I am talking about people who need buses to get to work or to try to get a job—but are being withdrawn. In the evening, people want to go out, but there may not be sufficient numbers to create a profitable service, so such services are being withdrawn. The difficulty is not on busy routes where there are large numbers of people and where there might be some competition—although we have a virtual monopoly situation—but in all the other areas, affecting millions of people.
I think it has been recognised that something needs to be done. In the last Parliament, the Local Transport Act 2008 introduced quality contracts, which was seen as a way of trying to address the problem. Many Members felt that it did not go far enough, but it was progress on the system that had been inherited. It was a matter of regret that the then Opposition opposed that Act. I was surprised by that and found it difficult to understand. There were also those who felt that the Act should have gone further.
Quality contracts have not solved the problem. The North East combined authority comprises the only group of transport authorities that got close to securing a quality contract. It is now consulting on some admirable proposals, but it has taken a long time to get there. The whole process has been protracted and difficult, as the authority had not only to negotiate with a number of people but to face opposition from some of the transport operators. I hope it is successful, as it is making great efforts. The proposals it has put together offer a great deal of promise to the people in their areas.
The Government must recognise that more needs to be done. The current devolution proposals that have been put forward include the plan for the Greater Manchester combined authority to be given transport powers, very much along the lines of the powers that already exist in London. I welcome that move, but if those powers are going to be good enough for the combined authority in Manchester, why can they not be made available for other transport authorities as well?
It is a matter not of imposing a system everywhere, but of permitting local authorities and transport authorities to acquire those powers if they want to do so. At the moment, that cannot be done, but I wish the combined authority proposal great success in Manchester, and I hope that it can be proffered in other areas as well.
Buses matter for millions of people across the country. It is high time that they were part of a national debate. I hope that as a result of today’s debate, and all the other discussions and investigations of bus services, buses get a much higher profile and secure more national recognition and more Government support. Yes, we should encourage variety and innovation, but we should recognise that the deregulation of buses has not, of itself, brought about massive competition to the benefit of passengers. Outside London, it has led to a reduction in bus usage, and we must reverse that everywhere.
Chloe Smith (Norwich North) (Con)
It is a great pleasure to follow the hon. Member for Liverpool, Riverside (Mrs Ellman), alongside whom I have the pleasure of serving on the Select Committee on Transport—a very important subject. Despite being a relatively recent addition to her Committee, I was present for much of the inquiry she outlined and found it highly significant.
I would like, if I may, to begin my comments with a reflection on a detailed area that the hon. Lady summarised but perhaps did not have time to go into—the sections of society that can and do use passenger transport, and value it very deeply. As she rightly said, as did my right hon. Friend the Secretary of State, buses do matter, and I will set out some of the groups for whom they matter most. The first is older people, because many elderly people are unable to drive. Then there are younger people, who, as we heard in the Committee, make significantly fewer car journeys than before, with a 10% drop, over the past decade and a bit, in the number of 17 to 20-year-olds holding a driving licence. Passenger transport is essential for unemployed people because it allows them to sign on at a jobcentre and then look for work. That is particularly relevant to cities and counties like mine, Norwich and Norfolk, where work may be in a city amid a rural area.
Kerry McCarthy
Is the hon. Lady aware that when bus services are as unreliable as they are in places such as Bristol, there is an increasing problem in that people seeking work are being sanctioned by jobcentres because they cannot make it to their appointments on time? If they are 20 minutes late, through no fault of their own, they can find that they are losing a couple of weeks’ money and have absolutely nothing to live on.
Chloe Smith
I shall respond to that intervention, which is of course on a topic unrelated to the motion, by referring to a very good scheme that operates in Norfolk called Kickstart, which is open particularly to young people. For the price of perhaps only a few bus tickets—when one does the sums—it offers a very affordable moped. Buses are not necessarily the only way for jobseekers to get to where they need to go. I pay tribute to the Kickstart project and what it does to help square this circle.
The Committee heard about two more groups, the first of which is people who are not necessarily unemployed but have low incomes, and may well be more dependent than others on bus travel. Finally, and importantly, there are disabled people. Passenger transport allows disabled people to access not only employment but community and family life, and the entire range of things that one would like them to be able to do. The Campaign For Better Transport told us that disabled people use buses about 20% more frequently than the non-disabled population..
I want to mention a couple of cases that have recently been raised with me by disabled constituents, both of which involved complaints about a particular bus company and what was perceived to be unfair treatment of disabled passengers. In one case, the disabled passenger himself wrote to me; in the other, it was somebody who described what they had seen. There is a common thread between the two. I would like to draw the House’s attention to a tension within the law relating to disabled passengers. It relates to the shared space on buses for both wheelchair users and buggies, a subject well known to everyone in the House. In one case, the bus driver failed to ask a pushchair user to make space for a wheelchair user. After looking into the regulations that apply to the bus company and investigating the case with the Department for Transport, it has become clear that the bus company ought to do the right thing.
We are all familiar with the Equality Act 2010, which rightly makes it unlawful for any bus operator to discriminate against a disabled person simply because they are disabled. The Public Service Vehicles Accessibility Regulations 2000 require there to be certain facilities on board. However, there is a point at which there has to be a conversation between the two types of users who want to occupy that space on the bus, or a point at which one has to be told to make way for the other.
I do not seek to propose a solution to that tension in this debate, but I simply wanted to mention it because constituents have raised it with me more than once. Obviously, being left at the side of the road can be a source of deep distress to a wheelchair user who is not able to get to their destination. I do not need to describe to the House how bad such a situation can be. I of course hope that all bus drivers would demonstrate maximum respect for their disabled passengers, as would other passengers in such difficult situations.
I am confident that the Department is encouraging bus companies to do the right thing. I know that the bus company has had words with those responsible, and that it will do its best to discharge its duty.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Given that rationale, why have so many bus companies from across the country not taken up the Royal National Institute of Blind People’s campaign for talking buses? Why, outside London, do so many buses not have such a system?
Chloe Smith
I will leave the technical answer to the companies or my right hon. Friends on the Front Bench. However, I reassure the hon. Lady that I recognise what the campaign stands for—I have been on a bus journey with my blind constituent Mrs Bernie Reddington, who is a force of nature as a campaigner in her own right—and I strongly support its aims.
I want to talk about young people, who are one of the groups I mentioned, and about how bus travel for them varies between rural and urban areas. Young people in London enjoy free travel, but the choices outside London or the major metropolises—you can tell me whether that is the plural of metropolis, Madam Deputy Speaker; I only went to a comprehensive school, so I do not know what it is—can be limited or non-existent for those who need to get to college, work or wherever they wish to be.
The shadow Secretary of State has described a situation in which there is an angelic choir of Labour authorities up and down the country and then there is everybody else, but that is not what we are seeing. For example, Labour-controlled Norfolk county council is hiking transport costs for 16 to 19-year-old students. I want to say more about that because I joined the students who were campaigning strongly against that in Norfolk and very firmly backed the campaign that they had to have last year. The county council has deferred the matter for another year, so its original decision still stands.
Slashing the bus subsidy for 16 to 19-year-olds would be wrong. Students told me that even young apprentices who are earning a wage were worried about finding that kind of money, and many students do not do anything in addition to their studies to earn money. What the Labour authority has proposed will cause a genuine cost of living problem. It would hit the poorest students hardest, and it would deprive them of the choice of where to study in Norfolk, which will have a real impact on the future generation. I do not say that the solution is more spending, more borrowing and more debt, because guess who that would affect most out of all the generations?
I and fellow Norfolk MPs set out other options that the county council could have considered. The student union deserves praise for having got young people together to campaign on this issue. Young people need to be involved in politics, because not being there to present their arguments can lead to other people making decisions for them. It is wrong for the Labour-controlled county council to impose a 55% increase in ticket prices, which would hit the poorest students the hardest.
Chloe Smith
I will give way if the hon. Lady has something important to say about what the Labour-controlled county council has done.
Luciana Berger
Will the hon. Lady tell the House what cuts her Government have imposed on her Labour council locally? Has she reflected on the fact that her Government have cut support for transport—including buses—by 17% in real terms since 2012-13? What is her Labour county council supposed to do in those circumstances?
Chloe Smith
It is supposed to man up and not ask for more spending, more borrowing and more debt, which—as far as I can tell from this debate—is what the hon. Lady and many of her hon. Friends are still doing. Young people must not be told that borrowing will sort out the problem, because they will only have to pay for it in due course. I have been clear on that point and am happy to be clear about it again. A county council has to balance choices between the generations, and that is what the debate was about.
Let me move on to the other generation that needs to use bus services, and give a brief mention to the pensioners with whom I have campaigned on Spixworth road in my constituency. We must ensure that elderly people can get around, and buses are particularly important to them.
I shall close my remarks by mentioning two constructive schemes that hon. Members may be surprised but pleased to hear involve Norfolk county council. One is a total transport scheme in which the council and the East of England ambulance service are working together to give people access to health services, and the second is a smart-ticketing pilot run in conjunction with the council and the Department for Transport. Many other Members wish to speak on this important subject, so in conclusion: buses do matter.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Before I call the next speaker, it will be obvious to the House that a large number of colleagues wish to participate in the debate and there is only one hour left. I therefore impose a six-minute time limit on speeches.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
I am grateful for the opportunity to speak in this important debate. With two thirds of all public transport journeys made by bus, we are right to talk more about the importance of local bus services, although the issue is often overshadowed by debate on rail and infrastructure. Unfortunately, my constituents do not enjoy the benefits of a rail or light rail service, and many are entirely reliant on local bus services. I hear from older residents who are left cut off and isolated, unable easily to access GP or hospital appointments, from shift workers who simply cannot get to work, and from employers who find it difficult to retain staff as a result. Families who are still struggling to make ends meet face above inflation fare rises year on year.
In 2010 I first began to campaign on the issue when local parents asked for my help to try to protect a route that had served the community for decades, but which was about to be cut, making it difficult for their children to get to school. Despite the fact that operators receive more than 40% of their income from the taxpayer, local people found that they had little to no say. The operator made it clear that although we could raise our concerns, it was under no legal obligation even to consult on changes.
The decision to deregulate local bus services in the 1980s is the primary reason for the poor state of bus services in Tyne and Wear and my constituency. The Transport Act 1985 did not deliver on its promise to increase the use of public transport, bring in lower fares, and lower the cost to the taxpayer. Instead, in the north-east a small number of operators cherry-pick the most profitable routes, and set the fare structure and bus timetables with little or no regard for integration or best value for the passenger and taxpayer. The 1985 Act marked the beginning of a great divide in our country between areas of regulated and deregulated local bus services. Since bus services were deregulated outside London, the two different systems have produced very different outcomes in passenger growth. Figures show that since deregulation passenger journeys on local bus services outside London have fallen by 37%, whereas in London bus patronage has increased by 105%. In Tyne and Wear, the position could not be clearer. Deregulation has failed: fares go up above inflation, pricing people off buses; routes are cut and needlessly changed; and whole areas are left cut off.
An investigation in 2011 by the Competition Commission was highly critical of deregulated bus services. It found limited competition between operators, which tended to result in higher fares and lower quality for passengers. The report also found that head-to-head competition for services was unlikely because of the dominance of a small number of operators. In fact, there was heavy criticism because some bus companies were accused of colluding to avoid direct competition altogether, resulting in geographic market segregation, including in my area.
Last month in Tyne and Wear, the north-east combined authority voted to press ahead with the quality contract scheme. This will create a level playing field and allow new entrants to break into the market. Part of the profits made will be reinvested into improving local services and reducing the subsidies paid by local taxpayers, while at the same time increasing passenger numbers. Over a decade, this will result in £272 million in economic benefits to the region. There will be a simple fare structure with Oyster-style integrated ticketing. Fare rises will be capped with extra help for families with children.
For three years the bus operators have been scaremongering about the prospect of a quality contract scheme in Tyne and Wear. Stagecoach’s Brian Souter claims that those of us who want a better local bus service are “unreconstructed Stalinists” and has threatened to pull out of the region altogether. Stagecoach is, however, happy to run services under London’s regulated system and there is no good reason why it could not do the same in Tyne and Wear. This is typical of the bluster and the negative campaign of scaremongering that has characterised its opposition to change. It has frequently threatened legal action in the hope that it could bully councillors into giving in. Its threats have so far failed, but it has not gone away. It is time the operators respected this democratic decision and contemplated exactly why it is that people are so dissatisfied and so angry with the service it offers.
Where Tyne and Wear is leading the way I want other areas and cities to follow. Even the Chancellor now appears to accept this case. Today, however, the Secretary of State has unfortunately refused to back the decision of the North East combined authority. In fact, in the past four years his Department has repeatedly failed to do so. What should the people in the north-east take from that? Surely if it is good enough for Greater Manchester it is good enough for us in Tyne and Wear too, where local councils have come together to work to deliver better value and a better system for the taxpayer? The quality contract scheme has been a long drawn out and complex process. I am pleased that the shadow Secretary of State has made it clear we should simplify the process and avoid vested interests being able to frustrate it.
The north-east has so much to offer but there are many challenges ahead, with the highest rate of unemployment and some of the lowest paid workers in the country. We have the capacity to make a greater contribution to the nation’s economy, but we need a transport network that supports businesses, growth and job creation. Today’s motion, and the quality contract scheme we are pressing ahead with in Tyne and Wear, is the change that our region needs to take that forward.
Martin Horwood (Cheltenham) (LD)
I am sure we all have our own examples of local bus services we would like to see improved. The F bus leaves from the bucolically named “Foot of the hill” bus stop a couple of hundred yards from my house in Leckhampton. I would like it to run later than 6.15 pm, as my surgery finishes at 7 o’clock. There are many other examples. My constituent Margaret Martin explained that the last P and Q bus from the hospital in Charlton Kings is at 15.55 pm. If she has to take a bus after that time to her house it is another hour’s walk, even in urban Cheltenham. My constituent Paul McCloskey has alerted me to the B bus service, where the Sunday service starts at 9.55 am. That is pretty hopeless for those working on a Sunday, or even for those who want to get to church come to that. However, we need to look at the big picture too.
The overall statistics are very encouraging. I intervened earlier on the Opposition Front Bench spokesman to point out that almost all the most important statistics between the most recent year, 2013-14, and 2009-10, when this Government came to office, are positive. The figure for passenger miles on local bus services was 18,200; it is now 18,500. Average bus occupancy in England was 11.6; it is now 12.4. In England outside London it was 9.3; it is now 9.9. In 2009-10, the figure for passenger journeys was 5.2 billion. It was dropping from the previous year and continued to drop the next year, but it is now back up to 5.233 billion. The figure for passenger journeys just in the south-west was 202.3 million; now it is 211.3 million. The figure for Gloucestershire was 21.5 million; now it is 21.6 million. The statistics vary from year to year—they did under the last Government and they do under this Government—but, if you will pardon the pun, Madam Deputy Speaker, the direction of travel is clear.
Those statistics are very positive and they have come about not by accident, but because this Government, despite inheriting a monumental deficit, which we have made great efforts to reduce, have protected investment in sustainable transport, through measures such as the sustainable transport fund and the green bus fund, as well as by pursuing smart card technology. My constituency of Cheltenham has benefited from £5 million, shared between Cheltenham and Gloucester, from the local sustainable transport fund—I remain indebted to my right hon. Friend the Member for Lewes (Norman Baker) for helping to secure that when he was a Transport Minister. That has led to improved bus shelters in the Promenade, marketing of smartcard tickets, giving bus transport to apprentices—I am told that 70 apprentices have benefited from the initiative, with about 100 trips each—and personalised travel planning, which has engaged with more than 7,000 households, saving them money and reducing pollution and congestion on our streets.
That funding has also led to new pedestrian direction signs to assist visitors to find routes from public transport interchanges and new real-time passenger information systems, which are currently being installed. Most importantly of all, it has led, finally, to integrated bus mapping for Cheltenham. I do not think that hon. Members from London always appreciate how lucky they are to have an integrated system. If I have some complaints about the privatisation process that Mrs Thatcher embarked on, they are about the lack of integration of bus services, which is still a problem for us. It was never really sorted out at the time and we still need to make an effort on it, but, thanks to this Government’s local sustainable transport fund, in my constituency at least we are finally going to get an integrated bus map of all routes, showing how they all interact—although I have to say that local bus companies have not been brilliantly helpful in pursuing that themselves.
The result, Gloucestershire county council tells me, is that on weekdays we have seen an 11 percentage point drop in car usage in the share of transport modes and a 10 percentage point increase for sustainable forms of transport. At weekends, we have seen a 9 percentage point reduction in car usage and a 12 percentage point increase for sustainable modes of transport. That is a positive benefit, although that is not to say that there is not more that we can do. I certainly still have a wish list, which is topped by more integrated transport. Cheltenham borough council and the local chamber of commerce, with my support, are still campaigning for a £20 million investment in Cheltenham Spa station for increased numbers of bay platforms, better access for disabled people, more car parking and better access for buses to the station, so that it is not just a railway station but becomes a genuine transport hub.
Secondly, I really like the proposal in the Liberal Democrat pre-manifesto for a bus pass for 16 to 21-year-olds, who would get a 66% discount on bus travel. That is an important pledge and forms part of Liberal Democrat policy for the next election. Young people deserve and need subsidised bus transport, especially when they are below the drinking age or driving age, because it is an important social thing for them.
Finally, I support other hon. Members who have campaigned for talking buses, and I very much support the Guide Dogs for the Blind Association campaign on that front as well.
John Healey (Wentworth and Dearne) (Lab)
It is good to follow the hon. Member for Cheltenham (Martin Horwood), but I have to tell him that people in our part of South Yorkshire simply will not recognise the picture he draws with selective facts and figures—and it is the same with the picture portrayed by the Secretary of State about bus services in our part of the world and most parts of the country.
Local buses are the main form of public transport in Rotherham. We have no tram, and we have two train stations in a borough with nearly 250,000 people. In Barnsley, we have no tram and a small handful of small stations to serve a borough with 220,000 people. Many people rely on buses—to get to work, to college, to hospitals, to shops and to see family and friends. Many older and disabled people are totally dependent on buses to get out and about and to avoid isolation. It is, of course, the poorest who require and need bus services most.
One of the things I am most proud of during 13 years of the Labour Government is playing a big part in the Treasury in the introduction of free bus travel for all pensioners. We did that in 2006-07, and last year it was worth £37 million to pensioners across South Yorkshire, although that was £3 million less than in the last year of the last Labour Government.
Graham Stringer
My right hon. Friend should be congratulated on introducing free bus passes and concessionary fares. Does he agree with me that the boasting we have heard from Government Members about the lack of decline in bus passengers over the last four or five years is mainly down to the introduction of the free pass?
John Healey
Indeed. My hon. Friend is something of an expert on transport matters. I know he immediately saw through —he told me as the Secretary of State was providing these figures—the bogus and partial picture that was painted by those statistics. Buses matter a great deal in areas such as ours. When routes are cut or changed, or services are cut and bus users complain and sometimes campaign to see the services restored.
It is always a battle in this deregulated system with the bus companies saying on the one hand that “this service is not commercially profitable”, with the local authorities or passenger transport authorities rightly saying on the other hand, “the money has been cut; we simply cannot afford to subsidise or support these services.” Too often, those with no other way of getting around—the youngest, the poorest, the oldest—lose out. I say “too often”, but not “always”.
I want to recognise how our regional director of Stagecoach, Paul Lynch, was ready to meet me to review some, although not all, of the decisions he took on the South Yorkshire routes. He was ready to change the route of the 229 in Wath and to supplement it with a rerunning of the 222 in response to a petition of 150 local residents and the campaigning of local Councillors Atkin and Gosling. He was willing to recognise that changes to the 109 and 108 were required for Rawmarsh and Manor Farm, because people were unable to get to the shops, school, the doctor’s or whatever. That service now runs again on its original route, not least because of the campaigning efforts of Christine Eyre and the Manor Farm tenants and residents association group, as well as those of Councillors Jane and Neil Hamilton.
I want to mention the regional director of FirstGroup, Mr Ben Gilligan who was good enough to meet me at the end of September about the removal of the regular service required between Ravenfield and Wickersley. He has promised to look at the case for restoring that route by flexing the other routes and timetables in the area. I urge him to be as good as his word and do just that. Residents in Ravenfield and I look forward to hearing from him shortly.
Public transport is in part a public service and it does require some public support and subsidy. My hon. Friend the Member for Wakefield (Mary Creagh) said that support for bus services had been cut by 17% in the last three years in real terms. No wonder 1,300 routes have gone as a result. The House of Commons Library gave me figures that showed that, in the last year we have figures for, the Government were prepared to give bus services only £810 million of support in total, not including concessionary travel—and £500 million of that goes to London. To put that into perspective, Mr Deputy Speaker, and you follow these things closely, this year the cost of the tax cut for top-rate taxpayers is £3.3 billion, over four times more than what the Government are prepared to spend to support bus services in England.
I pay tribute to Rotherham council, the bus companies and the passenger transport authority for their efforts to put together a quality partnership in Rotherham, but that cannot guarantee services, reward bus companies that run good services, penalise those that do not, bring in a simple, single through-ticket system such as the Oyster card in our area, or ensure that buses are fully integrated with other forms of public transport. I know the bus companies’ case and counter-argument, but I say to them and to the House that services in south Yorkshire are not good enough at present. That is why I back, for Rotherham and Barnsley, the plan that my hon. Friend the Member for Wakefield has announced to legislate for city regions such as South Yorkshire and county regions elsewhere to have greater control over local bus services, and powers to determine routes, to set fares and to integrate public transport properly. The motion says that London-style powers and a London-style service are required elsewhere. That is exactly what we need in South Yorkshire.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
I join other hon. Members in thanking the right hon. Member for Wentworth and Dearne (John Healey) for what he did on concessionary fares. We all acknowledge the success of that. Many people in my constituency could benefit from it.
My constituency is extremely large, with two urban centres at each end and a large rural bit in between. Fleetwood is Britain’s biggest town without a mainline railway. A modernised tram system has been completed there, but many Fleetwood residents cannot travel on it because the subsidy has been removed by Labour-controlled Lancashire county council. I want to come back to that in a minute.
Clearly, buses are key, particularly in the rural areas of my constituency. Hon. Members have talked about technology. In many rural areas in my constituency, people cannot even find a timetable for the very few buses that run. That is incredible in the 21st century. I have some sympathy with the motion because of the need to bring in technology to get the modal shift we want.
Hon. Members have talked about the needs of the young, the old and the disabled. That is even more true for the young, old or disabled people and the shift workers who live in one of the villages in my constituency and who rely on the one or two buses that do run. The problem is—I mentioned technology—knowing when the bus is coming, as people do in London, what the cost is and where the bus is going. Therefore, people do not use the buses.
How will we achieve the shift? The key to the London revolution—I pay tribute to Ken Livingstone, who realised this at the beginning—was to transfer people from private cars to buses. Not just the elderly and the subsidised but everyone else in London can see when the bus is coming at most stops and can use the Oyster card.
To be fair—Labour Members did not mention this—Boris Johnson, a Conservative Mayor, continued that bus revolution, brought in an integrated transport system through the Oyster card and brought overground mainline train services into that system. He has continued to work on that. Therefore, the system has developed and there has been success, but as hon. Members have said, that is down to the powers that existed in London, which were taken away from other areas. In that regard, as I say, I have a lot of sympathy with the motion.
I am grateful for what the Secretary of State said about the need to look at common-sense solutions, as the Chancellor has done in relation to Greater Manchester. I hope that other areas will come forward with proposals and are given some of those powers so we can get something moving. The bus service is the easiest way of transferring people from private to public vehicles. It is the most flexible method, and it provides the way in which the biggest increases can be seen. I support that, but I have a problem when it comes to supporting the motion.
Between December 2013 and January 2014, Labour-controlled Lancashire county council proposed to cut £4 million from subsidies, thus removing evening and Sunday bus services such as the 2C from Knott End to Poulton, the 40 from Lancaster to Preston, the 42 from Lancaster to Blackpool, the 74 from Blackpool to Fleetwood, the 82 from Fleetwood to Poulton, the 84 from Fleetwood to Blackpool, the 86 from Knott End to Fleetwood—and so it goes on. That was done by a Labour-controlled council. I hope that the shadow Secretary of State’s secret meeting this morning was attended by Councillor John Fillis, Lancashire county council’s transport member, and that it discussed the 89 from Lancaster to Knott End, the 7 from the Marsh estate on the edge of Lancaster to the centre of the city, the 10 from the Ridge estate to Lancaster, and the 81A and 81B from Lancaster to Wray, Caton or Hornby. All those routes are critically important to shift workers.
Pat Glass (North West Durham) (Lab)
Does the hon. Gentleman not see the irony of his walking through the Lobbies to make massive cuts to his local council’s budgets and then criticising it for making cuts?
Eric Ollerenshaw
Does the hon. Lady not see the irony of proposing a motion which suggests that other councils should be
“able to make use of London-style powers”,
but contains not one cent of financial commitment? How would the Oyster cards be paid for? What about the massive amount that would have to be invested in machinery? This is pie in the sky. It is great pie in the sky, but money would have to be found from somewhere to pay for it. What would Lancashire do if such a system were introduced? How could the county council deal with it, given that it already wants to cut bus services?
Following a massive campaign led mostly by the parish councils but also by— obviously—myself, along with members of every political party except Labour, including my hon. Friend the Member for Wyre and Preston North (Mr Wallace), the county council has withdrawn its original proposal. However, it will now review each bus route separately.
I acknowledge that there is a problem with the use of rural buses, partly because of the inability to invest in technology, and I share the dream of rural bus services becoming like those in London,. However, a party less than six months away from a general election is not prepared to say how it would make the initial huge investment. If we agreed to the motion, would we be expected to pay for it by means of increased fares or increased borrowing, or to ask county or city councils to introduce even more cuts? Where is the finance to support this scheme? Although I have massive sympathy for it, I prefer the Secretary of State’s step-by-step approach. It will enable us to do what we should have done years ago and start to introduce a bit more regulation, but, before we do so, let us make clear how we will pay for it.
Mr Tom Harris (Glasgow South) (Lab)
Earlier this evening, my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) offered us a quotation which she wrongly, but understandably, attributed to the late Baroness Thatcher, about the man who, finding himself on a bus beyond the age of 26, can count himself a failure. As I pointed out at the time, it was actually said by—we think—Loelia, Duchess of Westminster, but it is, as I say, understandable that it has been attributed to Mrs Thatcher over the years. I have made the same mistake myself in the past. I have a long-standing interest in transport issues, and that was one of the quotations that I gave to illustrate the dastardly Conservative attitude to public transport users.
The fact is that there is a class element in this debate, and we should recognise that. When I was a Transport Minister, it was often said, although never minuted, that suits did not use buses. That was meant to remind me how important it was for us to persevere with the Government’s programme of encouraging the growth of tram services in parts of the country. Trams were seen as a halfway house between a train and a bus. Wealthy professional people would use a tram, but would not use a bus. The problem is that over the years, especially since deregulation in 1986, bus services have become the poor relation of public transport. According to the latest Government figures, 60% of public transport journeys are made on a bus, but I suspect the figure is much higher; it certainly has been in the past. The trains and the railways get far more press coverage than the buses, however, and trains get far more attention in this House, too, and the trains receive far more public subsidy than the buses ever have, and rightly so—we all understand the reasons why.
Importantly for this debate, buses are the poor relations once again when it comes to regulation. The disparity between bus services and railway services is no more explicitly clear than in successive Governments’ approaches to regulation, and I include the last Labour Government in that, in which I served. Trains are, of course, necessarily heavily regulated, but there is not so much regulation for buses. The Confederation of Passenger Transport said last week that it opposed Labour’s plans
“for the further regulation of bus services.”
I question that word “further”, because buses are completely unregulated. There is no regulation in the bus industry. The only requirement for any Member of this House who might want to run a bus service is to be able to afford to buy a bus, and it must be roadworthy. After that, they can run a bus service along any route they wish.
Mr Spencer
A number of cities have gone down the route of having trams, such as Edinburgh, Nottingham and Sheffield, but they are very expensive. Does the hon. Gentleman agree that that money would have been better spent on supporting local bus services, which, of course, can vary or change their route rather than have to follow tram tracks?
Mr Harris
I agree with the hon. Gentleman. The tram in Edinburgh was a disaster from start to finish. I was in Edinburgh over the Edinburgh festival period, and I saw for myself the much-heralded trams and was extremely excited that there was a passenger on one of them; that encouraged me. I do not think trams are the solution, therefore, but bus services are absolutely vital, because buses are the transport mode of choice of most people. They are flexible and relatively cheap compared with the infrastructure we have to invest in for trams and trains.
Outside the capital, there is no regulation of the bus services at all, however. The bus industry has done a good job. I do not want my party to jump on the bandwagon of attacking the whole bus industry because it is entirely private. It is entirely private, and it should remain entirely private. Nobody on this side of the House is saying we should return to the ridiculous old days when local authorities owned bus companies. We do not want to go down that road.
What we are saying is that, because it is such an important mode of transport, it should be regulated. There is nothing wrong with that. The private industry has done some very good work on fares and smartcard ticketing, although I have to say I think the Secretary of State was just a little ungenerous in his comments about the progress that the last Labour Government made on smart-ticketing and on accessibility of vehicles.
Since the railways were privatised in 1995, the number of passengers using the railways, during what was a period of economic growth, has gone up to a remarkable extent—I cannot remember the precise figure, but the rise in that time is between 40% and 50%. It has been a real success story, at least in terms of the number of people using the trains.
Why has that not happened for the bus services? The hon. Member for Cheltenham (Martin Horwood) and the Secretary of State were incredibly complacent in saying, “Ah, well, in the last year there was a 1% increase in passenger numbers.” What is the number of people using the buses today compared with 1985? That is the figure we should be looking at. With a 1% increase a year, how many years will it take to get back to the level we were at in 1985? That is what we have to explain to our constituents.
Why have passenger numbers on the buses not been increasing at the huge rate the trains have been enjoying? After all, bus services are flexible. If a bus company wants to increase capacity, it buys a bus, whereas doing the equivalent in the train industry is massively complicated with massive lead-in periods. The bus industry is far more flexible, so why has it not taken advantage of economic growth to increase the number of passengers, as the train industry has done? The simple answer is because it is not run well and because it is not regulated outside the capital. The passenger increases that have happened since 1986 have happened exclusively in the capital, where deregulation did not take place.
Martin Horwood
I have a lot of sympathy with what the hon. Gentleman is saying, but I do not think those of us who were pointing to the increased numbers overall were being complacent. I quoted statistics from the south-west and Gloucestershire which suggested that things are at least heading in the right direction. However, the hon. Gentleman is right that we should all be more ambitious for bus travel.
Mr Harris
I wonder whether those figures would be moving in the right direction were it not for the introduction of free bus travel for pensioners. Take those figures out and where are we with passenger numbers? I suspect that even last year’s 1% increase would be non-existent.
I want to say one last thing. This is not a debate about Scotland, but I stand here envious of my English colleagues. We have the prospect of a Labour Government next May, and of regulated bus services throughout England. If only that were the case in Scotland. Successive Scottish Executives, led by the Labour party and now by the Scottish National party, have refused to re-regulate the buses. In Scotland, for some reason, SNP Ministers do not want to introduce regulation. I cannot imagine why. What is it about the anti-regulation arguments of multi-million SNP donor Brian Souter that Scottish Ministers find so persuasive? I hope the example the next Labour Government will produce will cause Ministers in Scotland of whatever political colour to change their minds.
Martin Vickers (Cleethorpes) (Con)
It is clear that the hon. Member for Glasgow South (Mr Harris) is an optimist, looking forward to a Labour Administration next year. I cannot say I share his optimism on that.
Opposition day debates inevitably result in Opposition parties choosing a subject for debate in which they can make what they hope will be points that resonate with their voters, and attack the Government. I have to say that if that was the aim today, it has been a pretty weak attempt. We all recognise the importance of bus services: they provide access to work, hospitals and leisure facilities; and it is important that we mention that they provide essential services in rural areas and are vital to the countryside economy.
Do we need more regulation in order to achieve a solution? Of course, the Labour solution is always to produce more regulation. I am not wholly opposed to regulation—I recognise that some is necessary, and as long as the system works and is affordable, that is fine by me—but the key to better bus services is surely co-operation between local authorities and the private sector: it is partnership working.
I query the reference that was made to the loss of 1,300 bus routes. I suspect that some routes have in fact been merged, and I can give a number of examples. One of my own local authorities, in co-operation with Stagecoach, has just gone through that process.
We have heard that Opposition Members want London-style powers to make improvements. Of course, one cannot plan bus services in Cleethorpes, Barton-on-Humber or Fleetwood in the same way as those in our big cities, most notably London. Big cities are very different from the provinces and rural areas, and need different solutions. Is it seriously suggested that bus services under the control of cash-strapped local authorities will produce stable or even lower fares, better services and newer vehicles? What we need is bus operators that are prepared to innovate with ticketing initiatives and fare schemes.
Partnerships do work. I was a North East Lincolnshire council cabinet member for a number of years, and my brief included transport. I was involved in a number of quality partnership arrangements and here, I congratulate the previous Labour Government. One of those initiatives was the Kickstart scheme, which I believe was initially developed by Stagecoach and taken on board by that Government. A Stagecoach document states that the Kickstart scheme was
“driven by the entrepreneurial expertise of bus operators, who carry the business risk and have an incentive to grow passenger volumes, rather than by local authority planners.”
The document acknowledges:
“Central and local government already play a key role in developing non-commercial, socially necessary bus services by working in partnership with bus operators and providing public support.”
In that way, improvements can be made. It goes on to describe Kickstart as a concept involving
“a contract between the bus operator and Government which commits to a specified level of service linked to an agreed public investment profile”
and the risk being
“carried by the bus operator, rather than perpetual subsidy”.
I am sure that we have all had experiences in our constituencies of battles to get a grant to keep a particular service running for two or three years, knowing that we will get the political brickbats when the grant runs out. Such services are usually unsustainable without some cost to the public purse. Schemes such as Kickstart, which put the onus on the operator, are therefore crucial. The Stagecoach document goes on to state:
“The Kickstart fund would cover the difference between the projected revenue and cost of the project. However, the risk would be borne by the bus operator, so that if passenger volumes and revenue do not rise in line with projections…the bus operator would…absorb the loss.”
That is key, particularly in these cash-strapped days.
There are risks attached to subsidy. Any form of subsidy could tempt the less-than-scrupulous operator to, shall we say, adjust the figures to show a less profitable or unprofitable situation. The operator could then go to the local authority, which would feel obliged to say, “Yes, we can’t do without that service because the village would be cut off”. The subsidy would duly arrive, and a year or two later—or perhaps just months later—the operator would come back and say, “I’m afraid we’re going to have to stop the service in the evenings and on Sundays because the subsidy just isn’t enough.” This would, in effect, be a form of blackmail for the local authority.
We are all familiar with phone-and-ride and dial-a-ride schemes. These are community initiatives that are usually set up by local authorities, sometimes in partnership with bus operators. They are an essential lifeline for members of the public, particularly those who are disabled or who have difficulty accessing essential facilities. Certainly—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Gentleman’s time is up.
Graham Stringer (Blackley and Broughton) (Lab)
On 31 October, when the leader of the Labour party made a speech about buses, it was the first speech that a Labour leader had made on the subject that anyone could recall. I certainly cannot recall any such speech being made by a Conservative leader. Given the importance of buses to our communities, I do not think that anyone on either side of the House has had a great deal to be proud of over the past 30 years since deregulation. When Nick Ridley brought in the Transport Act 1985—the buses were deregulated in 1986—I think he genuinely believed that it would result in lower fares and competition on the roads. He had before him the example of the coach industry, whose recent deregulation had led to an improved service and lower fares.
Unfortunately, it quickly became evident that, for a number of reasons, bus deregulation had not worked, particularly in the major metropolitan areas. For example, Greater Manchester quickly found itself in a situation in which 96% of bus services were being provided by just two operators. Bus fares went up by dramatically more than the rate of inflation, and dramatically more than they did in London. In the first 20 years after deregulation, passenger numbers plummeted from 355 million journeys to 218 million, a fall of 137 million journeys. It was obvious at that point that deregulation was not working in the major metropolitan areas. I agree with the Secretary of State that we cannot have a one-size-fits-all solution. The bus services in Oxford, Cambridge and the other historic cities seem to work quite well, but in major metropolitan areas such as South Yorkshire, Tyne and Wear, Leeds and Birmingham, the system has not worked.
Andrew Gwynne
My hon. Friend will know that Greater Manchester Buses was split into two companies, one in the north and the other in the south of the conurbation. In his constituency, the buyer was First Bus and in my part of the conurbation it was Stagecoach. We now have, in effect, two private monopolies.
Graham Stringer
We do indeed, and I will deal with why the deregulated system does not work. Partly it is because on-road competition cannot work, as there simply is not enough space for the buses. When competition has been tried, it has led to massive congestion.
Let us look in detail at what has happened in the major metropolitan areas. The bus companies have gamed the system. They have not responded as one would expect in a competitive private sector area, by responding to what the customer wants; they have responded to where the subsidy is. So networks have contracted, as the companies could make a bigger profit on the major routes; and services have been withdrawn, so that the companies could get direct subsidy in franchised systems and larger amounts of money. It is a fact that every bus that goes out of a depot has a 50% subsidy attached to it, one way or another. This is not a private competitive market responding to customers; it is a private market responding to a subsidy regime.
So I am not surprised when Martin Griffiths, the Stagecoach chief executive, says something like the following, although his nose must have grown a great deal when he did so:
“The truth is that England’s city regions have significantly lower fares and higher customer satisfaction than London, as well as having access to frequent, integrated bus services and smart ticketing.”
I do not know what he was on when he said that; the bus fares are higher, and they have regularly increased by more than inflation and by more than increases in London. We know why Stagecoach is happy: it has been extraordinarily successful at gaining the subsidies.
I have no objection to business people making a profit for providing goods and services, and doing it well. The fact is that Brian Souter and his sister have made £1 billion. Does anybody think that has come from providing a better service and improving our bus services in the major metropolitan areas of this country? Of course it has not. It has come from knowing how to get to the subsidy and how to move the bus services in order to get there. That partly shows the answer to the point raised by the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) about where the money will come from. The capital return on investment in buses in the English regions is twice what it is in London. Why should the people I represent in north Manchester be giving Stagecoach and First Group twice the profit because they are operating in a deregulated system? If we put this out to proper competition in a franchised system that was open and fair, so that the more competitive bus company won, those profit levels would go down to a level similar to that in London, and with some of that money we would be able to improve the service. The only evidence we have of a franchise system within England, Wales and Scotland is the one in London, and it managed for the first 13 or 14 years after deregulation, when the companies were regulated, to run services with very low fare increases and maintain the number of passengers, whereas in the rest of England the numbers decreased by 50%. Those companies managed that without subsidy, so I think that in the metropolitan areas we, too, would have a better service and we would not be going to the Exchequer for more money.
I will finish with a plea. I was delighted with the Chancellor of the Exchequer’s announcement about Greater Manchester and what he was saying about re-regulating the buses. This is not an ideological battle and nor should it be one. The fact is there is a simple way of improving services in the major metropolitan areas, which is by making it easier to have a London-style system and allow franchises. That would help everybody.
Mike Thornton (Eastleigh) (LD)
Interestingly, we seem to be hearing arguments in favour of quality contracts being imposed by central Government. I am not sure whether that is what the Opposition are after, but it seems rather odd to take away local authorities’ decision making. Buses are extraordinarily important, as everyone who has spoken today has said. The question is: what are we going to do? I was interested to hear the hon. Member for Wakefield (Mary Creagh) express her admiration for TfL, but the idea that we could somehow magically roll out that model across the rest of the country seems a little ambitious to me.
As we know, people are usually disabled more by their environment than by their physical condition. We have seen in rural areas a disabling of young people who do not have much money; they are unable to go anywhere or do anything because they cannot afford to drive a car. That is why it is so important to promote the policy of making it affordable for young people to be able to take a bus, which my hon. Friend the Member for Cheltenham (Martin Horwood) talked about so ably.
However, there are difficulties. How do we provide a bus service in an area where one large bus might have to travel several miles with only one passenger on board, and how do we make that affordable? That is the difference between subsidies for London buses and subsidies for rural buses. A subsidy for a London bus means that most of the time it will have a significant number of passengers, whereas the same subsidy for a rural bus means trying to make up for the fact that at times it will have no passengers on board. The situations are so different that they cannot possibly have the same solution. The further we get from a major town, the truer that becomes, and when we get to some parts of Somerset and Cornwall the whole situation has changed completely.
There are some answers: more bus shelters; bus shelters with areas for bicycles; feeder routes, with smaller buses feeding on to larger buses; and using local voluntary groups to try to fill the gap, as my hon. Friend the Member for Cleethorpes (Martin Vickers) explained. However, we definitely need to look at totally different solutions for rural areas, rather than thinking that we can impose a policy that works in urban areas. Part of that is obviously about devolving more decision making to local parish and borough councils. However, we cannot simply sit in this House, click our fingers and have a solution for rural bus services. It is more important to look for a solution there than to look for it anywhere else, because there are no alternatives and the distances are far larger. A person in a city can walk 2 miles for a job, but there is no way someone in the country can walk 10 miles for a job.
Another consideration for disabled people, particularly blind people, is the lack of audio-visual solutions on buses. For some extraordinary reason, every bus company quotes thousand and thousands of pounds for the cost of retrofitting a bus in that way. We know that we can get quite a simple system to make announcements of that sort. My noble Friend Baroness Kramer has set up an audio-visual competition—we will have the results soon—to come up with a solution to make it far cheaper to retrofit buses. That is something the Guide Dogs for the Blind Association supports. I hope that my right hon. Friend the Secretary of State for Transport will take note of the results of that competition and help us roll it out across the country.
Returning to quality bus contracts, they can pose a significant financial risk to local authorities, and it seems that nobody arguing for them today has mentioned that. It could also squeeze out small companies, and I think that it is vital that we encourage small companies to take part in this. My personal preference is for quality partnership schemes to allow for the best aspects of a quality contract without the risks and reduced competition for smaller companies. I commend many of these ideas to the House. I would like to see a cross-party investigation into how buses can be improved, rather than argue about whether to have a quality contract, a quality partnership, less regulation or more regulation. We need a solution, not an argument.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I call Pat Glass. It would be helpful to Front-Bench spokesmen if she could shave a minute off her time.
Pat Glass (North West Durham) (Lab)
I thank my Front-Bench colleagues for securing this debate, which is incredibly important to people in constituencies such as mine. We spend a lot of time in the House talking about important things that do not have a direct or immediate impact on the lives of constituents, so it is good today that we are talking about something that is having such a disabling impact on the everyday lives of my constituents. They simply would not recognise the rosy picture that the Secretary of State and some Government Members have tried to portray today. The more I speak in or listen to debates in the House, the more I realise that we are living in two countries here. Ministers either live in or think in terms of London and either do not recognise or do not care about what is happening in the rest of the country.
I listen every week to the Prime Minister talking up the economy, saying that unemployment is reducing, but the gap between his rhetoric and the reality for my constituents is immense. The number of people who are unemployed or under-employed continues to rise in my constituency and in the north-east generally. To tackle the issue of jobs in the north, we need a transport infrastructure that supports job creation. That is not just large, grandiose schemes that Ministers like to talk about in the House and love to be seen opening. It is about things like buses that make people’s everyday live workable and stops older people becoming increasingly isolated.
Government cuts in the north have hit councils such as mine massively. My county council has lost a third of its budget. If we lost a third of our budgets, we would lose the roof over our heads. It is ironic that a number of Government Members have criticised their local councils while going through the Lobby to cut council budgets massively. In counties such as mine, as soon as the cuts were announced subsidies on buses went. That meant that communities in largely rural constituencies were left with no buses at the weekend and after 6 o’clock in the evening. If a bank holiday falls either side of a weekend, some communities can be left without a bus for almost a week. That cripples people’s lives.
Constituents have told me that they have been sanctioned by the Department for Work and Pensions because they cannot get to a job interview because there are no buses. That is just cruel. That is the sort of downward spiral that affects people’s lives every day. Far too many of my constituents are on zero-hours contracts and one lady told me that she can be called into work at any time. Often that means working the shift from 10 o’clock in the evening until 6 the next morning. If she wants to get there, she has to walk 3 miles. She does her shift and then has to wait either three hours for a bus or walk home again. That is the daily reality of people in constituencies such as mine.
Having no buses has a daily and negative impact on people’s lives in large rural constituencies. People cannot get to work if they do not work 9 to 5, Monday to Friday. Young people cannot get to school and colleges and take the courses that they need and which our economy needs them to take. They cannot socialise in the evenings and at weekends, and that does not just apply to young people. Local health services and GPs are worried about older people becoming more and more isolated in their homes. They have free bus passes but they have no buses to use them on.
Our neighbouring authority has decided that enough is enough, and Tyne and Wear voted in the last couple of weeks to have a quality bus contract. I understand that the Government fought it every inch of the way on this, and penalised it at every point. The bus companies in my part of the world know exactly where the Government’s allegiances lie—they lie with the bus companies that are making massive profits, and not with the people who use those buses.
The Government should be on the side of the people and not of the massively profitable bus companies. Like the big six energy companies, the rail companies and the water companies, the bus companies are making massive profits out of the British public, and they know that they can rely on the support of the Government in that. The people of this country need a Government who stand with them. Let us hope they get one in 2015.
Mr Gordon Marsden (Blackpool South) (Lab)
Despite the Secretary of State’s rather Panglossian presentation, the contributions to today’s debate have shown up the failings of our bus network outside London—failings that need correcting now. Members outlined the challenges that we face, and endorsed this party’s belief in the great potential that an energised, accountable bus network could offer people across England, bringing some relief to their cost of living and transport crises.
We have heard excellent contributions from those on the Opposition Benches today, not least from the Chairman of the Select Committee who skilfully deconstructed the myths of deregulation; from my right hon. Friend the Member for Wentworth and Dearne (John Healey) who has passionately raised issues with his local operators; from my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) who has done likewise; and from my hon. Friend the Member for North West Durham (Pat Glass) who pointed out that a third of Durham’s budget has gone missing under this Government. In a measured and thoughtful contribution, my hon. Friend the Member for Glasgow South (Mr Harris) talked about the decrease in the number of bus journeys since deregulation in 1985. I say with some hesitancy that the Secretary of State has simply got his figures for outside London wrong. In 2010, the figures were 2,401 billion, compared with 2,291 billion in 2013.
The previous Labour Government started the process of revaluing the bus services that had been deregulated and largely disregarded by the Thatcher and Major Governments. I remind him that in 1997, the Government subsidy for bus services stood at less than £1 million. By the current decade, it had risen to more than £2.3 billion. This Government did not inherit a situation in which buses were a second-class service with a disintegrating network and fleet of vehicles. Sadly, the coalition Government’s double whammy—savage cuts in Department for Transport spending, the 20% cut in operators’ and local government grants—shows that they have been indifferent to those effects. They have retreated to a silo vision of what the bus can do rather than see it as the inclusive driver of economic growth that it should be.
In most areas across England, this coalition Government’s strategy is failing. I have already said that outside London, bus use has reduced and fares have risen by 25%. On-road competition is effectively non-existent in many cases, and the Competition Commission has estimated that the broken market is costing taxpayers up to £300 million a year. Rather than different private companies, or even Whitehall, taking decisions about public transport, our plans would put local areas in the driving seat. Currently, no one is able to provide consistent information to passengers on their bus services or to monitor the performance of bus operators effectively since this Government stopped the Vehicle and Operator Services Agency collecting data on punctuality and left transport commissioners with restricted powers to penalise operators who do not provide such data.
Local co-ordination could include measures to support disabled passengers in franchising agreements, but while this Government have dragged their feet on that process, we will have to do that at local level and build on the excellent accessibility campaigns of Guide Dogs for the Blind, Leonard Cheshire Disability, Whizz-Kidz, the Royal National Institute of Blind People and others.
My hon. Friend the Member for Blackley and Broughton (Graham Stringer) a former distinguished leader of Manchester council, gave the Government a timely reality check on the issue of hunt the subsidy. That is the answer to Members on the Government Benches: they should start believing in the principles of competition instead of supporting and succouring people who run the present system on subsidy. That is the issue before the House today. I brought this matter up in a debate in Westminster Hall less than a month ago, and my hon. Friend the Member for Hartlepool (Mr Wright) provided us with an example. The deregulation system often promotes crude, crazy cartels or de facto monopolies with inefficient bunching on the most used routes and little is done to expand usage on new routes. As my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) said, 45% of that is dependent on subsidy. My hon. Friend the Member for Denton and Reddish (Andrew Gwynne) echoed that point in a series of excellent interventions.
My hon. Friend the Member for Ashfield (Gloria De Piero) outlined the case of a local woman studying for a degree in hospitality who is unable to take a job in the city’s hotels because the bus services finish so early that she would not be able to get back home. That built on what my hon. Friend the Member for Corby (Andy Sawford) said in his excellent debate in Westminster Hall in June when he quoted a constituent whose local buses stop at 7 o’clock:
“you can’t go to the theatre, adult education, swimming…visit friends, support elderly relatives…anything!”
The constituent added that even though there are medical centres open late in town,
“you can’t have a late appointment if there isn’t a bus running that late. It’s like living under curfew”.—[Official Report, 17 June 2014; Vol. 582, c. 34WH.]
I heard a similar story when I visited Staffordshire this year and heard from our local campaigners about the people who are losing out the most.
Often it is not just individuals but whole communities who are left isolated by inadequate bus services. I have heard from our candidate in Redcar, Anna Turley, about the village of Lazenby. The village used to be one stop on a profitable route, though it required a detour from the main road to reach it. The bus operator has decided to cut out this inefficiency, and with it, the village. Local people on the minimum wage who are having to hire taxis are now paying the price. Those are just the kinds of short-sighted, damaging decisions that communities in charge of their local transport will be able to overturn. Profits will be pooled and reinvested so that, in the interests of all local people, we can unlock the economic growth that comes through access to skills and jobs.
Mr Marsden
I do not have time, I am afraid.
Access to affordable transport shows up time and again as a major concern for young people, whether in National Union of Students surveys or in what they have told me in Blackpool in schools and colleges, and at listening events.
Our policies will promote opportunities for people to shift from using cars for short journeys to public transport—that can be a key element in our climate change commitments. They will help in rural areas, where the elderly often experience services being cut and, as a result, have to pay for a taxi to the theatre, which costs 10% of their weekly pension. They will help to bring local authorities and local enterprise partnerships together and engender a real localism, alongside our bold pledge to deliver £30 billion of devolved funding to local authorities in the next Parliament. By engaging with business at every stage, we will make sure that transport, and buses in particular, help to create this virtuous circle, working with LEPs, chambers of commerce and others in a common endeavour. Greater local controls over services such as transport are part of our fundamental response to the English question. Unlike this Government, we do not believe in just one or two initiatives to cover up the reality that their Departments continue, too often, to work in centralised silos.
Labour’s proposals also offer opportunities to communities and local authorities whereby outside visitors—be it to seaside and coastal or rural and inland attractions—are key ingredients of their economic prosperity. These changes will boost people’s confidence in inputting their views. Thanks to the previous Labour Government, and particularly my hon. Friend the Member for Glasgow South, we are seeing the benefit of this—in Blackpool, for example—and we will see it even more under the new system.
Luciana Berger
I am sorry that I did not get to make this point in the debate. Does my hon. Friend share my concern that young people in particular are incredibly affected because this Government took away the education maintenance allowance? The cost of buses in Liverpool is so prohibitive that young people are unable to make choices about their education as they cannot choose colleges that are, in effect, too far away because too many bus routes are involved.
Mr Marsden
My hon. Friend is absolutely right. She makes a point that she and other Labour Members have been fighting for.
Let me linger for a moment on the word “bus”, which derives from “omnibus”, the great innovation of the Victorian city. “Omnibus” means “for everyone”, but apparently the bus is not omnipresent in the hearts or minds of this Government. Their DFT business plan does not even mention buses by name, and the Transport Secretary’s recent speech to the Tory conference had just a two-word reference to the bus. That is the difference between them and us, and the difference between their policies and the biggest initiative to devolve power and opportunities to communities across England in 100 years. We get it; they do not. They do not see the transformational power that could come with integrated local transport systems. They have not seen the bus as a key agent of change to revitalise our public spaces. Our devolved vision is not only more integrated, but comes with more money—three times as much.
This Government are bequeathing the people of England a fractured landscape in the NHS, in skills and in transport, but we are embarking on a journey to empower people and places across England to work together, and we are placing the bus at the centre of that, as has been done so well in London. Ours is a promise and an opportunity for all—for coast and countryside, for small towns as well as large cities, for north and south, for rural areas and suburbia—and the Labour party will deliver it.
The Minister of State, Department for Transport (Mr John Hayes)
As I survey the Labour Members, particularly those on the Opposition Front Bench, I do not do so in anger or even in sorrow; I do so in pity. I know that many Government Members will think that I am being too generous—they would like me to be more critical—but I would say that surely all but the hardest of hearts can see the Opposition’s pitiful past record, their pitiful performance and their pitiful prospects.
That brings me to the motion, which was moved and given life—I would not say that it was given light, but it was given life—by the shadow Secretary of State, the hon. Member for Wakefield (Mary Creagh). I have always liked her since she was a Back Bencher. I remember that in those days she still had promise.
The motion might have referred to the £930 million provided by this Government for concessionary travel entitlement every year. It could have referenced the Government’s £600 million local sustainable transport fund. It should have mentioned that bus fares in England have had an average annual increase of 1.51% under this Government compared with 2.25% each year under the previous Labour Government. It might even have mentioned that the Government funded more than 900 new low-carbon buses during our first two years compared with just 350 in the 13 years that Labour was in power.
Mr Spencer
Is the Minister aware that Labour-controlled Nottinghamshire county council is about to cut £720,000 from its bus budget? What impact will that have on people in north Nottinghamshire and the coalfields who are trying to get access to employment?
Mr Hayes
My hon. Friend will know that Nottinghamshire is dear to my heart; indeed, some would say that it is etched on my heart. He will know that the Trent Barton 141 bus, which runs between Sutton, Mansfield and Nottingham and stops at Blidworth, has been reduced, and that the N28 bus from Blidworth has a revised timetable and, outrageously, no longer stops at Newark hospital. Nottinghamshire county council—now under Labour control—has brought about that eventuality. Oh my goodness, how we look back with awe and regret at the passing of the benevolent county council controlled by the Conservatives under Mrs Kay Cutts, my former colleague on that council.
Benjamin Disraeli may have been prescient when he lamented
“how much easier it is to be critical than to be correct.”
In trying to be correct, the hon. Member for Cheltenham (Martin Horwood) did us a service. He made it absolutely clear that, directly contrary to what the motion indicates, bus occupancy has risen and passenger miles on local bus services are up, yet the motion is predicated on the very opposite assumption.
We fully understand that buses are essential to many of our fellow citizens. We are of course conscious of the difference they make to access to opportunity. The shadow Secretary of State was absolutely right about that. When I heard the hon. Member for North West Durham (Pat Glass) say that she lived in one world and I lived in another and that mine was the world of London, I thought she should come to South Holland in Lincolnshire because it could not be less like London. My rural constituents depend on buses to get to work, school or other facilities for their very well-being. The kind of people who depend on buses are those like my mother-in-law in Nottingham. She has never been able to drive and has used a bus all her life. Do not tell us that we do not know or understand. Not only do we represent people who rely on buses, but our families and friends rely on buses too.
Robert Jenrick (Newark) (Con)
Does my right hon. Friend agree that if the Opposition care so passionately about buses, they will encourage their colleagues on Labour-controlled Nottinghamshire county council, whom I am meeting next week, to reverse some of their striking cuts to rural bus services throughout my constituency and that of my hon. Friend the Member for Sherwood (Mr Spencer)? Those cuts are isolating people in rural areas, and they are finding it difficult to get to school and work—exactly the problems that Labour is trying to address.
Mr Hayes
I know that that Labour county council has cruelly cut the bus services to places such as Dunham-on-Trent, Egmanton and East Bridgford—villages that I know well and that are ably represented by my hon. Friend, who has made such a stunning impression since he was elected to this House. Buses are critical for people without access to a car. Some 49% of bus trips outside London are made by people with no access to a car—a point made by my hon. Friend the Member for Cleethorpes (Martin Vickers) and the Secretary of State, who spoke so ably at the beginning of the debate. A well-run bus service is crucial for older and disabled people, and I take on board comments from across the House about disability, and particularly about talking buses. I make a commitment to the shadow Minister that I will look again at that matter and do all I can to put right what is wrong, if further steps can be made.
The Government’s expenditure on buses reflects our commitment to them. In the 2013 spending review we protected bus spending until the end of the 2015-16 year, despite the pressure on public finances and tough economic times. Almost £1 billion has been spent this year on funding concessionary travel entitlement. Four rounds of the Green Bus fund have provided £89 million to support the purchase of 1,240 new low-carbon buses, and some £300 million in funding for major bus projects has been allocated in the past year.
I am almost embarrassed, Mr Deputy Speaker, to go on dismantling, deconstructing and demolishing the Opposition’s arguments. [Interruption.] Well, I did say “almost”. This year has seen the devolution of £40 million in bus service operators grant funding, which is now paid directly to local authorities rather than bus operators. Again, I hoped the Opposition would have welcomed that because it gives communities more control. As the Chancellor announced this week, in a move welcomed by some Manchester MPs, an elected mayor will be created in Manchester with strong powers in the city region, and they will—one hopes—be able to effect the sort of positive change that the Mayor of London has done for this great city. That is proper devolution, not mere rhetoric, and the Secretary of State described it as a massive and positive step to allow for a more integrated, co-ordinated transport strategy in the region.
I take the point made by the Chair of the Transport Committee that we need to look more closely at the integration of services—as various reports by that Committee have argued—and we hope that Manchester will be just the first of the major cities to take advantage of a greater devolution of powers.
Investment in technology, improved ticketing, new infrastructure, and concessionary travel—giving passengers more of what they want.
Let me conclude this debate in the spirit of Christian pity with which I began—I signal my conclusion so that the excitement can build as I move to my exciting peroration. I know that opposition can be a testing business and that there is a temptation to exaggerate. I appreciate that Opposition parties facing failure are likely to become less reasonable, but I cannot believe that Labour could not do better than the meandering hyperbole of this motion. It is a kitchen sink motion that has cracked and needs plunging. As the Minister responsible for maritime skills week, allow me to throw the Opposition a lifeline: don’t go down with the ill-fated captain on a sinking ship.
Ms Rosie Winterton (Doncaster Central) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I have received a report from the Tellers in the Aye Lobby from the earlier Division at 4.11 pm. They inform me that the number of those voting Aye was erroneously reported as 248 instead of 238. The Ayes were 238; the Noes were 287.
Dover Medical Practice
Charlie Elphicke (Dover) (Con)
I rise to present a petition organised by my constituent, Susan Fox, and supported by 800 residents of Dover to protest about the closure of the Dover medical practice. They demand that NHS England put patients first and that primary health services are secured for the patients. The patient list should be kept together as a whole. For a large number of people, English is a second language, so translation services are important to them. Many patients have particular health needs related to their background, for which specialism is required. For this reason, the petitioners demand that if a practice is to close, there must be an orderly transition of the patient list to a practice set up to cope with the health and support needs of this group of people—my constituents.
The petition states:
The Petition of residents of the UK,
Declares that the Petitioners believe that Dover Medical Practice, situated in Dover Health Centre on Maison Dieu Road, should remain open; further that the Petitioners believe that it is the duty of NHS England to make sure all existing services continue to be available to its patients and to ensure that there are adequate staff for this to happen; and further that a local Petition on this matter in the Dover constituency received 803 signatures.
The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that Dover Medical Practice will not close; and further that the House of Commons urges the Department of Health to guarantee that NHS England continues to provide the present staff and services at the Dover Medical Practice for the benefit of the local community.
And the Petitioners remain, etc.
[P001396]
Ebola
(10 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Stephen Phillips (Sleaford and North Hykeham) (Con)
On 18 June, before the House rose for the summer recess—and in part prompted by the better half of team Phillips then working in the Ministry of Finance in Sierra Leone—I asked my right hon. Friend the Secretary of State for International Development about the then little known issue of an outbreak of Ebola haemorrhagic virus in west Africa. It is a topic I had already mentioned to her informally, as she acknowledged in her response. I wanted to know what the Government were doing to deal with what I described, with a prescience in which I take no pleasure, as a very serious issue for the affected countries and, given the risks to us here, for the citizens of the United Kingdom. So it was that, in June this year, the House received assurances from my right hon. Friend that a great deal was being done, specifically in properly funding the World Health Organisation and in the provision of other support to raise awareness, and to ensure the containment, of the Ebola outbreak.
Five months have passed. When I raised the issue, fewer than a hundred cases a week were being reported to the WHO in the principally affected countries of Guinea, Sierra Leone and Liberia. In the last week of October, more than 3,000 new cases were reported. Not only are there more infections but the rate of infection in most regions of the principally affected countries is accelerating.
These are not mere assertions. They are the data and, if things continue as they are, they tell us the horrifying story of what is going to happen. On 14 October, the WHO assistant director-general, Dr Bruce Aylward, warned the international community that, by December, infection rates may well be running at 10,000 cases a week. The outbreak is, in the words of the WHO,
“the most severe acute public health emergency seen in modern times.”
The WHO is in part responsible for this. The outbreak has laid bare the incompetence of too many of its senior staff appointed because of political influence in Africa, an issue that we will need to tackle when we have dealt with the outbreak.
Initial WHO estimates that the total number of cases could be contained at around 20,000 have therefore proven to be woefully wrong, as just about every epidemiologist said they would when they were first made. If the international community acts now, as it has begun to do, it will be at best months before the outbreak is under control, but there will have been, I venture to suggest, many more than 20,000 cases. Indeed, many tens of thousands of people may be dead.
Clearly, therefore, despite our best efforts, the action that has been taken by us and by our international partners so far has proven ineffectual. So that we are clear, that threatens not only those living in the three principally affected countries and their neighbours—some of the very poorest people in the world—but us here, too.
Although the UK is now playing its part in ensuring that we try to contain the outbreak, the first thing I want to hear from the Minister tonight is what, precisely, he and his colleagues in the Foreign Office are doing to ensure that our international partners are playing their part. In so far as I was not clear in June, I want to be clear now: the issue threatens not just west Africa; it threatens us all. This is only the third time the WHO has declared a disease outbreak as a public emergency of international concern, and if that does not give hon. Members pause for thought, I do not know what will.
Jim Shannon (Strangford) (DUP)
I thank the hon. and learned Gentleman for bringing this matter to the House and I did ask beforehand whether I could intervene. Last weekend, I had an opportunity to meet some of the Territorial Army soldiers involved in the medical corps who are going to Sierra Leone. Their job is to show people how to avoid catching the Ebola virus. Due to the lack of vaccination, soldiers have been told to use their “common sense and training” to prevent themselves from becoming sick. Unsurprisingly, their families are deeply concerned, as indeed are the soldiers. I share that concern, and I am sure that the hon. and learned Gentleman does, too.
Stephen Phillips
Of course I share that concern. I think that if soldiers, whether they are reservists or regulars, are being sent to Sierra Leone or, indeed, to any of the affected countries, they must be given proper training so that they do not expose themselves in any way to the possibility of infection.
Although a large section of the media has begun to shift the spotlight to other issues in recent days, I fear, as many do, that things will get worse before they get better. However, there is some good news. Following the Prime Minister’s Cobra meeting to discuss Ebola a month ago, the UK is now helping to lead the international response. That could, of course, have come sooner, but come it has. I understand that we are now one of the largest donors, that we have committed £125 million to the effort, and that we have, in Freetown, not only the Royal Fleet Auxiliary Argus with its hospital facilities, but several hundred military personnel. We have a good reputation in the region, and those heroes—which is what the personnel who have gone to Sierra Leone are—along with everyone else who travels to west Africa to help its people in this dreadful time, deserve our thoughts, our prayers and our support.
No doubt the Minister will tell me whether I am correct, but I assume that France, which I understand is taking the lead in Guinea, and the United States, which I understand is fulfilling a similar role in Liberia, are playing similar roles in the countries where they are leading the efforts. But is that enough? For our part, here in the United Kingdom, it may be, but when we hear of the efforts being made by other countries, it would seem not. The position may well have changed, and I should be glad to hear from the Minister that it has, but to learn that Canada, for instance, has pledged the equivalent of only £18.6 million is profoundly depressing, although it is doubtless a matter for Canadians. We learned this morning that Australia, which had originally given the equivalent of £6.2 million, is now doing rather better, having agreed to commit funds for the construction of a 100-bed treatment centre that the UK is building, but does that mean extra funds, or funds that the UK would have been providing in any event? Perhaps the Minister will tell us.
In September, the Secretary-General of the United Nations indicated that $600 million would be required just to fund the WHO road map to bring the outbreak to an end. No doubt the Minister will wish to update the House on where current international commitments have taken us. However, he will be aware not only that many consider that sum to be an underestimate, but that it is feared that very little of what has been committed appears to have paid for very much in the affected region. It is not just a question of money, or of promises which, all too often, appear to be poorly translated in practice; it is a question of how money is spent.
Pauline Latham (Mid Derbyshire) (Con)
What concerns me about this issue now is that many thousands of people are going to die. We already see hundreds of children being left as orphans. Does my hon. and learned Friend think that some of the money that we are spending in Sierra Leone, and in other countries, should be spent on helping those orphans—who have survived the disease—to come to terms with their position, and to seek a better life for the future?
Stephen Phillips
Of course I agree with my hon. Friend. I shall be dealing with the question of diversion of resources shortly, but I can tell her now that one of one of the great concerns is that funds are now being directed towards Ebola that were formerly used to deal with other health problems in the affected countries.
Significant sums are undoubtedly being channelled through non-governmental organisations, as they have to be, for the simple reason that there is no infrastructure in the region that is sufficient to cope with the outbreak, or with the funds that are being channelled to deal with it. However, we need to know that our money is being well spent, and it is not always clear that that is the case. For example, the International Rescue Committee, an NGO that is laudably trying to help the fight in Sierra Leone, is apparently charging the King’s Sierra Leone Partnership, another NGO, $5,000 a month for the use of each of its vehicles. Why? How can that sum be justified? How can the administrative costs associated with the unnecessary transfer of those funds be justified? Where are the funds coming from in the first place? I do not expect the Minister to be able to answer any of those questions tonight, but they demonstrate that we need to get a grip on the ground, and to ensure that in Sierra Leone, where we are taking the lead, moneys are being properly directed.
Another example is the medical and laboratory facilities that we have constructed in Kerry Town, which opened this morning. I understand that all the out-of-country medical staff are staying at an hotel called The Place. It is one of the most expensive hotels in Sierra Leone, perhaps the most expensive. Save the Children told me today that it has have negotiated a special rate, that rooms are being shared, and that it is necessary for its staff to stay there for reasons of hygiene; but is that really the best use of funds, and what alternatives were considered? I do not know, and if the Minister is handing taxpayer money to Save the Children, he will no doubt want to find out.
Let me turn to the UN Mission for Ebola Emergency Response. It has, I am told, 65 staff in Freetown. What are they doing? I know not and, it seems, neither does anyone else in the country. Here is what someone on the ground said to me in an e-mail:
“Their role is unclear, so far they are just eating money and trying to raise more. Not helping fight Ebola.”
What is needed are health workers, an issue to which I shall shortly come, not administrators spending money on salaries, allowances, accommodation and drivers.
The health systems of all the principally affected countries have been overwhelmed. It is frankly amazing that so many health professionals from here and other countries are prepared to risk their lives to help. They are the real heroes, but there are problems in this area as well.
The first is the disincentive to volunteering that is caused by much of the media coverage surrounding the outbreak. For tabloids to question whether Ebola might become airborne when all the virologists tell us that is highly unlikely is hardly helpful. This is not a film with Dustin Hoffman; it is a real-life situation where responsible reporting is required, including reporting how difficult it is to become infected by the Ebola virus in the absence of contact with an individual displaying symptoms.
Politicians are scarcely blameless. What sort of message, for example, do the Governors of New York and New Jersey think they send out to those who might volunteer by imposing unjustified quarantine requirements on asymptomatic patients which have no basis in scientific fact? What sort of message do the Governments of Canada and Australia think they are sending when they impose travel restrictions on those coming from west Africa which again have absolutely no basis in scientific fact? Cheap scaremongering politics at the expense of lives is not only counter-productive; it is just plain wrong.
Politicians in this country are not immune in this regard. The Minister will know that after British Airways took the unilateral decision to pull its west African routes—another decision which had no basis in medical or scientific fact—the only airline still flying directly to the principally affected countries was Gambia Bird, yet I understand that in early October the Government either ordered or told Gambia Bird to stop its flights. The World Health Organisation has been clear that international air travel is a very low-risk vector for infection, so why did the Government give that direction? Perhaps the Minister can tell us, because a difficult journey involving a long layover in Casablanca or elsewhere en route to the region is scarcely a compelling incentive to dedicated medical staff to volunteer to assist.
Jeremy Lefroy (Stafford) (Con)
I am very glad my hon. and learned Friend has mentioned the question of Gambia Bird, which I have raised in this House before, and I press the Minister to say in his reply when we are going to start to see flights resume from the UK to Sierra Leone. It is surely much better to have people coming into the same place, rather than coming around from various transit points back to this country or out to Sierra Leone?
Stephen Phillips
My hon. Friend is absolutely right. The point I was making, too, is that it offers a massive disincentive to those who want to go and help in the region.
Mark Durkan (Foyle) (SDLP)
I commend the hon. and learned Gentleman for having secured this debate. The most fragile states are those that have proved to be most at risk, which shows the Ebola crisis is about more than Ebola. Resources for other major health-care issues are now depleted because of the concentration on Ebola. What is his information on the battle against malaria and issues such as maternal health care, which are obviously being neglected in this crisis?
Stephen Phillips
I do not have any better information than that which the hon. Gentleman and I probably both read in The Guardian earlier this week. In terms of contraception, for example, we know that pharmaceutical contraception is hugely down at least in Sierra Leone and there is a great worry that there will be very large numbers of teenage pregnancies as a result, overwhelming the health care system in the months and years to come.
Many health-care professionals from this country are travelling to the region despite the difficulties, but where are they? It is said that 659 NHS staff and 130 Public Health England staff have offered to go to the region to help, but no one seems to know where they are, if, indeed, they have arrived in any significant numbers at all. The picture that emerges is therefore of a slightly chaotic and piecemeal response which has likely done nowhere near as much as it could have done to meet the challenges of the situation. It may be that the arrival of RFA Argus and significant numbers of military personnel will change that, but if not clearly somebody needs to get a grip.
The final point the Minister needs to think about is this: the focus which is being given to Ebola is essential, but the effect is that donor and Government funds in all the affected countries are being diverted from other health projects, as the hon. Member for Foyle (Mark Durkan) said. Malaria, dengue and lassa are rife across west Africa, and we should not lose sight of that. Overstretched health systems having to cope with Ebola necessarily cannot provide even basic health care in relation to other essential needs at the same time. As the press has reported, the diversion of Government money from economies already shrinking at an exponential rate because of the scaremongering associated with the outbreak will only make basic health care even more difficult.
We have reached a pivotal point. If the international community had acted sooner, we would not be where we are, and at least one epidemiologist, whom I sincerely hope is wrong, has voiced the view that we now are too late anyway. The United Kingdom has stepped up to the mark and we are playing our part, on which the Government must be congratulated. Perhaps the real message the Minister needs to take away with him tonight to share with his international development partners is that more needs to be done by them, and to be done urgently and sensibly, to address the worst outbreak of a viral haemorrhagic fever the world has ever seen.
If we do not act, potentially, hundreds of thousands of people will die. That would be a tragedy for one of the poorest parts of the world, but it would also threaten our security here. These are young and vibrant countries: they deserve and must receive the help of the whole world in dealing with a situation for which they were ill prepared.
The Minister of State, Department for International Development (Mr Desmond Swayne)
I thank my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) for bringing this issue to the attention of the House this evening. He is right in his analysis that this is a very severe problem. I estimate that by the end of October, we will already have had some 14,000 cases and approximately 5,000 deaths. The current rate of infection 1.7: in other words, for every one patient presenting with the disease, 1.7 people are going to catch it. That will lead to a doubling of cases within four weeks. So we have had some very alarming suggestions. I believe that the United States Centres for Disease Control and Prevention predicted just short of 1.5 million cases in January.
This is absolutely unprecedented in the history of the disease of Ebola. In the past, Ebola has burnt itself out within a few weeks in isolated settlements. It is therefore essential that we isolate it, and for that we need large numbers of foreign medical teams in order to secure that isolation and treatment of the disease. That is why we are stepping up our efforts, and taking a leadership role in encouraging other countries to do the same, and we will not stop: we will carry on until we have beaten this disease.
On the United Kingdom’s response, we are working in partnership with the Government of Sierra Leone. It is a long partnership, one established when that country came out of conflict. We have sought to encourage it from that conflict, and with economic development; but now, we are in partnership with the Government of Sierra Leone in order to beat this disease.
So what is our response? My hon. and learned Friend said that we have committed £125 million; actually, it is £230 million so far, including the previously announced aid matching of the first £5 million of the appeal launched by the Disasters Emergency Committee. We are deploying some 800 military personnel, together with the Royal Fleet Auxiliary Argus and its three Merlin helicopters.
Our strategy can be summed up as: beds, burials and communities. The hospital in Kerry Town opened for business today. Our ambition is that it will treat some 8,800 patients within six months. We are making available 700 beds. We anticipate that within a few weeks, the Kerry Town facility will provide 80 beds for people in the country, with 20 beds reserved for health care workers. It is essential, if we are continue the flow of health care workers, that they be guaranteed British standards of care.
Some 83 burial teams have been established, with our support, and they are making a profound difference in Freetown. Only a few weeks ago, just 30% of victims were being buried within 24 hours, but we have now reached 100% and that experience is going to be rolled out throughout Sierra Leone. A constituent wrote to me to say that he believed that Ebola was being spread by zombies. I had to disabuse him of his belief in zombies, but the irony is that people are most infective when they are dead. One problem is that certain burial traditions involve intimate skin-to-skin contact and the washing of bodies that are highly infectious. We are therefore having to drive social change so that people can understand how they can honour their dead without being infected by them.
We are driving that social change, which leads me to the subject of communities. It is essential to have community care centres where people with symptoms can present and be isolated until we can establish exactly what they have got. For every, say, eight people who present with symptoms, perhaps only one will need to go to an Ebola treatment centre, having been established as having the disease. The others will recover from a bout of malaria, or whatever it was, and go home. We are currently staffing five community centres, and learning the lessons. Within a few weeks we will have 10 of them up and running and, thereafter, it is our ambition to establish 200.
Jim Shannon
I made the point earlier that the Territorial Army soldiers and members of the medical corps who are going out to Sierra Leone from the United Kingdom of Great Britain and Northern Ireland to help to deal with the Ebola outbreak were concerned because they had not been given full training to ensure that they, too, did not catch the disease. Can the Minister reassure us that our TA soldiers are going to be safe?
Mr Swayne
We have 250 personnel who are going out on the Argus specifically to provide the training, so I am confident that the question of training has been addressed. They are going to deliver that training themselves, so I certainly believe that this has been done. If I have got that wrong, I will write to the hon. Gentleman and correct it. This operation is driving social change; it is also a huge logistical operation. It is motivating social change and bringing about the necessary logistical changes to drive the isolation of the disease.
Pauline Latham
One problem in those communities is that they do not have clean water. We often have water and sanitation programmes in those countries. Can the Minister assure me that he is continuing those programmes to help to keep people clean, because that is one of the key things they need to do?
Mr Swayne
My hon. Friend is right; water and sanitation are important, and that will indeed be part of our emphasis.
We are seeking to mobilise social change, but it is also vital—as my hon. and learned Friend the Member for Sleaford and North Hykeham rightly pointed out—that we motivate the rest of the world. The United States is taking responsibility for Liberia, and France is taking responsibility for Guinea and the surrounding francophone zone. We are working closely with the United Nations to help it to address the situation, and we have contributed some £20 million to its trust fund. We are also working with the African Union, not only to secure funds but to ensure a supply of health workers. We are working with other international institutions as well.
On 2 October, my right hon. Friend the Secretary of State chaired a conference in London that secured a further £100 million of funding. The Prime Minister then went to the European Council and came back having motivated those there to double the EU contribution to some €1 billion. The High Representative has been dispatched to draw up a programme, return and report at the next Council meeting.
Last week, we signed a memorandum of understanding with New Zealand. It will be supplying some 200 technical and health staff to a base camp in Sierra Leone, and my hon. and learned Friend rightly pointed out that yesterday we heard from the Australians that they will supply 100. My understanding is that it is 100 personnel, but I will write to him to correct that if I have it wrong. It is essential that we proceed to isolate and treat the disease. We are clearly going in the right direction now, but there is much work to be done and a long road to go. It is vital that we continue to secure volunteers and international teams of medical staff to drive this disease down and provide us with the capability to isolate it, because isolation is the key.
My hon. and learned Friend raised a number of concerns about non-governmental organisations on the ground. I seriously do not believe that representatives of, and workers from Save the Children, are living it up in the place at Kerry Town. I understand that they are sharing rooms and that they have negotiated a special price of some £60 a night in order to secure that place proximate to the hospital in which they are working. I am confident that we are taking the right measures to secure the proper expenditure of British taxpayers’ money in order to wipe out this dreadful disease.
Question put and agreed to.
Westminster Hall
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Care Workers
(10 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Andrew Smith (Oxford East) (Lab)
It is good to see you presiding over us this morning, Mr Robertson.
They do some of the most vital jobs in our country. They go unsupervised into the homes of the most frail, make sure they take the right drugs, help them with washing and the toilet, prepare their meals and often provide the only human warmth and companionship an elderly person will have all day. For all that, many are paid only £6 or £7 an hour, with no guaranteed work, zero-hours contracts even when they do not want them, and zero respect from some employers. They are home care workers. The way many are treated is an utter and shameful disgrace, and it is the job of the House and the Government to do something about that.
Given the problems, it is amazing that there is so much good home care out there. I have done surveys of my constituents’ experience, and many rate well the service they have had. They talk of caring and compassion at its best, and workers paid for a 15-minute visit staying that bit longer to do a proper job—often a stressful and difficult job. I remember the care worker who apologised for arriving a bit late to look after my mum while I was visiting. She looked a bit stressed, so I asked, “Are you okay?” She said, “Yes, it’s just that the last person I called on died while I was there.” We are not talking about an easy job.
In a privatised and competitive industry, good providers—and there are many—often face the conditions Winston Churchill described in this House 105 years ago, when he said:
“It is a serious national evil that any class of His Majesty’s subjects should receive less than a living wage in return for their utmost exertions…where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad and the bad by the worst; the worker, whose whole livelihood depends upon the industry, is undersold by the worker who only takes up the trade as a second string…where these conditions prevail you have not a condition of progress, but a condition of progressive degeneration.”—[Official Report, 28 April 1909; Vol. 4, c. 388.]
Now, of course, we have the national minimum wage to prevent the progressive degeneration Churchill described, but the scandal is that it is not being enforced. The excellent briefing Unison supplied for the debate brings out the key disgraceful facts. An investigation by Her Majesty’s Revenue and Customs of home care companies between 2011 and 2013 found that half were guilty of non-compliance with the national minimum wage. This year, the National Audit Office reported that up to 220,000 home care workers in England are illegally paid below the minimum wage. Using the dodges of zero-hours contracts and bogus self-employment, more than half of home care companies pay workers only for the exact time they spend in clients’ homes, with no pay for travel time and no travel allowance.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
I am grateful to my right hon. Friend for raising this important issue. On workers not being paid for their travel time, he mentioned the Unison survey in England, but I can assure him that the situation is, regrettably, the same throughout the country. A Unison survey in Scotland found that more than 50% of care workers were not paid for travel time under their contracts.
Mr Smith
My hon. Friend’s point is well made. We are undoubtedly talking about a United Kingdom-wide problem. A Freedom of Information Act request from Unison this year showed that a staggering 93% of councils in England and Wales—I dare say that the situation is not so different in Scotland and Northern Ireland—do not make it a contractual condition that the home care providers that they commission must pay home care workers for their travel time.
David Simpson (Upper Bann) (DUP)
I congratulate the right hon. Gentleman on obtaining the debate, and I declare an interest because my wife is a carer. One of the biggest problems, certainly in my constituency in Northern Ireland, is the recruitment and consistency of staff. They are under so much pressure because of their terms and conditions, but at the end of the day, they save the Department of Health and the Government a lot of money.
Mr Smith
Yes, indeed. The hon. Gentleman makes a good point, and I will say more about that later. Of course, there will be massive increased need for these workers in the future. One reason recruitment and retention are so difficult is that terms and conditions are often so poor.
Let me develop my argument further. Only 21% of councils have ever asked to see documentary evidence relating to the pay of care workers employed by their contractors. In the face of that and the other evidence I have cited, it is appalling that the Government are doing so little to uphold the legal rights of home care workers. It is indefensible that HMRC has stopped carrying out proactive investigations of national minimum wage compliance in home care, despite having revealed the extent of the breaches itself.
Grahame M. Morris (Easington) (Lab)
I congratulate my right hon. Friend on bringing this debate to the Commons at such an important time. In my area, Durham county council has had to implement £135 million of cuts over three years, with another £44 million in the pipeline. It is commissioning home care at £11 an hour, whereas the commissioning rate in some more affluent areas is £15 an hour. Does my right hon. Friend agree that the Government’s cuts in support for local government are compounding the problem?
Mr Smith
Most certainly they are, and I will say more about that later. I support, and the House ought to support, the key action that Unison and others are calling for. First, the Government should make ending illegally low pay for care workers a key priority. Secondly, HMRC should be instructed and resourced to do a proper job in ending the widespread breaches of the national minimum wage. Thirdly, care providers and the councils that commission them should be named and shamed when they do not pay the minimum wage.
It is not just trade unionists, local councillors and those whose loved ones use care services who are concerned about all this. In preparation for the debate, I spoke to local private care providers, and I will share with Members some of the points they made. They told me that care workers’ salaries do not reflect the responsibility they have; that luck and money are all too likely to decide people’s quality of care; that too many staff are on poor contracts, but that often reflects poor profit margins; that zero-hours contracts can be a barrier to recruitment, but that some employees want them; that staff turnover is high because of the high cost of living and shortage of affordable housing, which is an issue in my constituency; and that pressure on council budgets—the point made by my hon. Friend the Member for Easington (Grahame M. Morris)—means that restricted funding is available for front-line care.
Local providers also drew my attention to the fact that in six out of 14 areas in Oxfordshire, the county council is offering rates of funding for front-line care that are below the living wage, even though it has rightly pledged to pay its own staff above the living wage. Providers also told me that upper-tier councils such as Oxfordshire, which are responsible for home care, have their hands tied by the local government squeeze. Members should remember that all these points have been put to me by providers.
Joan Walley (Stoke-on-Trent North) (Lab)
May I, too, declare an interest, as a Unison member, and say how important it is that this issue has been flagged up in the debate? Given the concerns about this issue, should home care not be part and parcel of the discussions about the future of the NHS? We need to keep people out of accident and emergency and out of hospitals. If there is no care in the community, we will put more expense on the NHS and provide worse care. Does my right hon. Friend agree that, in discussions about the future of the NHS, we should make absolutely sure that these workers are paid a proper rate for the job and that travelling time is included? The Care Quality Commission has a vital role in this.
John Robertson (in the Chair)
Order. I ask hon. Members to keep interventions a bit shorter.
Mr Smith
I agree with my hon. Friend on all points. If this country is to get the standard of care we want, social care—home as well as residential—must be regarded as a central part of health service provision. The debate on health provision cannot be confined to the future of the NHS.
Providers made the point to me that 15-minute visits should be banned, except perhaps for check-up visits when other visits are being made to the person on the same day. I am pleased to say that since I raised that issue in our previous Westminster Hall debate about care, Oxfordshire county council has decided to phase them out. Others must do so too. There is a need for sustained funding and a co-ordinated push for training, to bring social care staff up to the standards required for commissioned services.
We need a scheme of accreditation that makes crossover into the NHS and back possible if we are to provide a career pathway to attract young people, and indeed some older people, into the care profession. Training should be part of an overall package that attracts people into care work. A carer who has had training should have certification that they can take with them to another employer. Those are points that providers have put to me. They point out that too many agencies do not even give carers their certificates, so they have no proof, and must go through the assessment—where it is provided—again. We must also have regard to the fact that the public and media perception of care too often stops at the NHS, and does not include social care. Protecting the NHS goes only part way to protecting our care system. We will protect the NHS by protecting social care, and that means that more money must go to local government. That is another point put to me by providers.
On the question of zero-hours contracts, I have been in touch with two local providers who have tried to offer salaried employment as an alternative, but have had little take-up, partly because employees are juggling a second job, and partly because they value the flexibility that allows them not to work, for example, on certain weekends. The zero-hours culture is deeply entrenched in home care work, and it will not be easy to change it, but I believe we must. The key priorities must be to ensure: that the contract does not preclude the employee from taking other work—it is disgraceful that it ever could; that the employee has reasonable freedom to take or refuse work as they like, to have time with their own family, for example; and that an exclusive zero-hours contract is not imposed. Let us also remember, however, the point of view of the person being cared for, the most important person in the debate. They usually want continuity in care, and they are less likely to get that with zero-hours contracts, under which a different carer will be sent to them time after time.
As well as the bigger reforms that I have mentioned, there are practical steps, which may vary a bit from locality to locality, that can make home carers’ jobs a little less of a struggle, and I will talk about some that are relevant in Oxfordshire. In Oxford, we have extensive residents parking zones. Home care workers must find one of the sparse two-hour spaces or get a visitor permit from the client and stick it on their car. That is one third of their 15-minute visit gone. Otherwise, they risk a fine—which is of course levied by the same county council that pays their employer to send them on the call. A way of recognising the value of home carers’ work would be to give them a permit to park in residents parking zones when visiting clients.
Another example, which is probably even more widely relevant, is that people who work in the NHS branch of the care system get a free winter flu jab. A home care worker on the minimum wage often will not get a jab unless they spend two or three hours’ worth of their meagre pay on buying one. Recognition of the value of their work could include giving them a free jab, either on the NHS or by requiring employers to make them available. I checked the 2014-15 Public Health England flu immunisation programme guidance, to which the Minister may want to refer. It states that flu immunisation should of course be offered to health and social care staff who are in direct contact with patients and service users. It states that they should be vaccinated by their employer as part of an occupational health programme. However, that raises the question of what happens when an employer does not offer the vaccination: is it the same as when an employer does not pay the minimum wage, and nothing happens?
I think there is a growing consensus among clients and providers, councils and trade unions, about what needs to be done in the vital service area of care. First, better funding is needed for social and home care. People will not get the standard of care that they need and deserve without it. The NHS chief executive’s vision of more care being provided in the community will be a mirage unless we raise care workers’ status and terms and conditions. Secondly, we need rigorous enforcement of the minimum wage and promotion of the living wage. Thirdly, care workers should have the right not to have a zero-hours contract forced on them. Fourthly, commissioning should encourage responsible providers. Fifthly, there should be investment in training and career pathways for care workers, with proper accreditation of care work. Sixthly, there should be regulation of the social care work force. That could start with the record of those unfit to practise that the Health and Care Professions Council has advocated.
We should all recognise the enormous value of the work that home carers do, and translate that recognition into action to improve their status, pay and training, to nurture good providers who are good employers, and to drive out the rogue operators. We would do well to remember every day that our loved ones, and we ourselves, are likely to need a home carer some day. Much good work is done by front-line carers, but too many of them are treated shabbily. That must be stopped. We must make sure that carers get the status, training and pay that they deserve, so that those who need care and those who give it can enjoy better lives, with dignity and respect.
John Robertson (in the Chair)
Order. If hon. Members will be sensible, there will enough time for everyone to take part. I will not impose time limits at this point.
Paul Burstow (Sutton and Cheam) (LD)
I congratulate the right hon. Member for Oxford East (Mr Smith) on securing the debate, and on the fact that he has pursued the matters in question for some time now, making progress in his own patch by raising them here and, I am sure, back in Oxfordshire. I agree with a lot of his remarks and want to underscore some of the points that he made, but I also want to draw out some opportunities to make progress with this terrible, thorny and long stuck-in-the-mud issue.
The Government published a White Paper in 2012, which acknowledged in stark terms the contracting practice that turns care workers into clock-watchers and that sees their function as purely a transaction in which they turn up, perform a set of tasks and leave—with far too little time given to them even for that. The White Paper made it clear that such commissioning practice had to end. We now have the vehicle by which that can happen. Parliament passed the Care Act 2014, which broadly speaking was supported by all parties. Recently—I am sure that the Minister will expand on this later—guidance covering the matter was issued for local authorities. I want to dwell briefly on that first. It is important to remind the House of it today, and to show how assurance checks will be applied to it, to ensure that it bites on what local authorities do.
The guidance states:
“When commissioning services, local authorities should assure themselves and have evidence that contract terms, conditions and fee levels for care and support services are appropriate to provide the delivery of the agreed care packages with agreed quality of care, that will not undermine the wellbeing of people who receive care and support, or compromise the service provider’s ability to meet the statutory obligations to pay at least minimum wages and provide effective training and development of staff.”
Everything that the right hon. Member for Oxford East has called for is encapsulated in that guidance statement, but how will local authorities assure themselves that it happens? Clearly, part of the answer is what they put in the contract, and part must be their contract monitoring. Another part is the local authority’s proactive role to assure itself and its citizens that the national minimum wage, at least, is being paid.
Helen Jones (Warrington North) (Lab)
Does the right hon. Gentleman remember supporting a Local Government Finance Bill that imposed the most draconian cuts on authorities whose populations were most in need of care? If he wants all this to happen, the finance must follow through.
Paul Burstow
I will come to finance, but I hope that when we have contributions from Front Benchers there will be some indication of commitments for the future and of what has been done so far. For many years under the previous and current Administrations, local government settlements have left local authorities in a difficult position when funding social care. No one disputes that, but we should be honest about the fact that that problem did not start in 2010, although the incoming Administration had quite a bit of difficulty in dealing with the deficit.
I want to draw attention to 15-minute contracts, which are another aspect of this debate that relates to the guidance. During the passage of the Care Bill, hon. Members on both sides of the House, particularly in the Public Bill Committee, were very clear with Ministers that we expected the guidance to be clear on that point, as it is. It says:
“For example, short home-care visits of 15 minutes or less would not routinely be appropriate for people with intimate care needs”,
and goes on to list what that would mean in practice. I hope that the Minister will explain how he intends to ensure that local authorities are both supported and encouraged to ensure that the guidance is put in place.
I wanted to speak in this debate because at a constituency surgery about a month ago, a home care worker came to see me wanting to talk through what was happening to them and the people they worked with concerning their time sheets and pay. They have to pay for work-related calls on their own mobile phone, and for fuel in the car that the organisation provides. That might be thought to be a good thing, but I was told that the care workers have to take the car to be MOT-ed, and if it fails they are encouraged to drive it without. There is some pretty shoddy practice going on, and care workers are at the front.
The right hon. Member for Oxford East was right to highlight the issue of flu jabs, and I hope the Minister will say what is intended. The guidance is clear: health and social care workers should have access to the jab, but if it is not provided free to social care workers, it is likely that it will not be widely taken up.
Paul Burstow
I will give way, but I am conscious that I must keep my remarks short so that other hon. Members may speak.
Mr Anderson
The right hon. Gentleman was a Minister. Does he agree that it is wrong if people are not paid when travelling from one workplace to another?
Paul Burstow
A whole set of practices, of which that is one, result in people being paid less than the national minimum wage. That is why I wrote what I did very clearly in the White Paper on care and support and why, since leaving the Government, I have supported steps to have the guidance in place. I want to hear the Minister say in his response how that guidance will get traction on the ground in how local authorities behave.
The matter is important because we know that the care sector has among the highest rates of staff turnover of any part of our economy: 30% in some parts, and up to 19% to 20% in the care home sector. In the past 12 months, I have engaged with people from across the residential care sector while working with the think-tank Demos and looking at what we can do to address the issues that the right hon. Member for Oxford East has talked about. Domiciliary care workers are all too often hard done by, but we should not ignore those who work in residential care settings and are often paid barely above or even below the national minimum wage.
That is why we need HMRC to continue to engage proactively in this area and why I support the proposition that third parties, such as Citizens Advice, should be able to make referrals to HMRC so that it can trigger investigations when necessary. It is important to call out those who breach their obligations under the national minimum wage. When there is clear evidence that bad commissioning practices are making that happen, the Care Quality Commission should call out the chief inspector for those failures. I hope that Ministers will look at the powers available to allow inspections of local authorities in that regard.
We also need to pick up on the right hon. Gentleman’s point about how to raise public esteem for this work force. They have a deeply trusted role, even if the public are often sceptical because of the stories they hear. The role is important and responsible, and we do not properly honour and reflect that. That is why, in December, the Local Government Information Unit will publish further work looking at those issues and at what we can do to turn what is often seen as a temporary job into a permanent career with opportunities rather than one that goes nowhere, which is all too often how the sector is seen and treated.
There is an economic case for that, apart from the strong moral case that the right hon. Gentleman made. We have a generation in their 50s who are squeezed between caring responsibilities for their parents and their children. At the same time, they are expected to work and need to do so. We often stretch them beyond breaking point, and many leave the workplace. Supporting family carers more effectively and having reliable, cost-effective home care services is the right thing to do by them and by our economy. We recognise that in child care, but we have not recognised it in elder care. We now need to do so and to ensure that people want to work in the sector and see a future in it.
My final comments are about transparency. In my Demos work on the future of residential care, I and my fellow commissioners have said that several things need to happen. We need transparency in the way in which providers operate. There should be open-book accounting so we can see transparently how they are behaving in practice. We also need transparency in the CQC to provide clarity on the rates for care. There should be clear rates. The United Kingdom Homecare Association has produced a formula on its website, and it would be good if local authorities adopted it.
We also need more honesty about the long-term funding of the system, which is why we need the Office for Budget Responsibility to be given a new mandate for reporting on that so that there is more transparency and accountability in this place and we can hold Ministers to account on whether they are properly funding the sector.
Dr Alan Whitehead (Southampton, Test) (Lab)
During the right hon. Gentleman’s term as a Minister or in his work with Demos, has he reflected on the fact that reports have suggested that more than 1 million social care workers will be needed by 2025 to deal with increasing age and disability? Has he reflected on the impossibility of that goal being reached if the practices that we have heard about this morning continue—the turnover and loss of people in the sector and the inability to recruit people into it in future?
Paul Burstow
Yes and yes, which is why I made the point about the economic imperative and why we need to see the sector as an essential part of our economic infrastructure.
I wondered which Minister would respond to the debate. We tend to think of the matter as being about care, but it is also about the economy. It would be great to have Ministers from the Department for Business, Innovation and Skills engaged with the issue, given their responsibilities for the national minimum wage. It is a shame that BIS Ministers do not engage with the sector as much as they should to ensure that it develops as necessary, not least in terms of skills. The national minimum wage is where to start, but we must aspire to more. Demos’s work suggests that we need to move the sector to a living wage, which would mean real benefits for providers because it would drive down staff turnover, which would reduce the frictional cost of employing new people. That would be a saving for businesses and would reduce absenteeism. A study in London, where the living wage is being progressively introduced, estimated a 25% reduction in absenteeism, so there are real benefits to employers paying above the national minimum wage and actually paying a living wage.
For all those reasons, I welcome the debate. It is important, but it is also about recognising the overall quantum of funding going into adult social care—the hon. Member for Warrington North (Helen Jones) is absolutely right about that. I look forward to the Labour Front-Bench spokesman setting out what Labour’s spending plans are. We have heard about the plans for the health service, and the right hon. Member for Oxford East is right; we tend to talk about the health service and neglect social care. I hope that the shadow Minister will not neglect social care and will say what, within Labour’s spending plans, will deal with the funding issues in social care too.
John Robertson (in the Chair)
Order. If Members could keep their contribution to eight minutes, that would be very helpful.
Jim Shannon (Strangford) (DUP)
I will certainly keep to that figure if I can, Mr Robertson. I congratulate the right hon. Member for Oxford East (Mr Smith) on bringing the matter to the House for our consideration. For us in Northern Ireland, the role of care workers is important, as it is across the whole United Kingdom. Every one of us will have personal knowledge from our constituents, and perhaps in some cases from a family point of view, of the good work that care workers do. As the spokesperson for health for the Democratic Unionist party here in Westminster, I am delighted to make a contribution.
There are a great many different kinds of care offered in the UK; a cross-section includes care homes and home care, which we probably all know about as individual MPs. There is also dementia care—we have to recognise that the population is growing older and that there are more cases of dementia and Alzheimer’s—palliative care and care for those with learning or physical disabilities, to name just a few. In the case of palliative care, Britain is the only country in the world where it is a recognised medical specialism with a full four-year training programme. We have the best palliative care in the world, and it is good to recognise that.
In a recent survey by The Economist, Britain was ranked first in the world for quality end-of-life care. The survey took in 40 OECD and non-OECD countries, including the USA, the Netherlands, Germany and France. When we are beating all those countries—many of us look across at them with some awe when we hear some stories about what they can do—and hearing that we are in the front line, that is something we can be proud of, as it is extremely important to provide the best possible care right through a person’s life, and particularly at the end of their life. I stand in awe of how care workers, of every kind, in every type of care, do their jobs. It takes a certain kind of person to be able to do those jobs—I am not sure whether I could do it, but I admire those who can and who do it well.
A variety of organisations throughout the United Kingdom of Great Britain and Northern Ireland offer these vital services. The NHS is, of course, the main one, but Care UK is also one of the leading independent providers of health and social care services across the UK. For those who do not need to go into a respite or care home, home help is available and care workers can help in a number of ways, from domiciliary care to shopping, cooking and cleaning, and driving the person to and from community events.
Mr Gregory Campbell (East Londonderry) (DUP)
Does my hon. Friend agree that there is sometimes a double whammy, in that the standard of care is put at risk because of the often condensed nature of a 15-minute visit, while that also puts stress and pressure on the care worker, because of the severe intensity of trying to ensure that they get there in time knowing that they have a very limited window? That is causing problems doubly, both for the carer and for those for whom they care.
Jim Shannon
I thank my hon. Friend and colleague for mentioning that. Every one of us will adhere to that and will have examples of that as well.
Care workers are responsible for looking after older people, including, as mentioned previously, the provision of dementia care and palliative care, and people with learning disabilities, in order to provide a full and independent life—it is important that we try to make their lives as normal as possible. My hon. Friend highlighted the issue of care workers rushing in for a 15-minute slot, in which they interact with the person verbally and help them physically, or whatever their duties may be. To do that and be out of the house in that time is, I would suggest, impossible.
Care workers also work alongside those with physical or mental health disabilities, as well as people who have acquired a brain injury and are working along the pathway to rehabilitation. On that matter, my brother Keith had a motorbike accident some 10 years ago. He had very serious brain injuries, but care workers gave him attention during their four visits a day. Without those care workers, it is clear that he would not be able to have a normal life at home—as much of a normal life as he could have—so again, everyone is aware of the work that care workers do and the difference that they make.
As was referred to earlier, dementia will affect one in six people over the age of 80. Some 750,000 people in the United Kingdom live with dementia, and having that disease does not always mean that someone goes to a care home. People can stay at home and have a good quality of life at home—that involves not only those who are at home, the family members, but those who call—and undoubtedly, that is due to the fantastic work and support of the care workers who enable men and women with the disease to enjoy an independent and rewarding lifestyle.
Hospice care can run for days, months or years. Most care is provided in people’s homes, but people also visit hospices for day therapy and stay as in-patients. Hospices provide expert care and support for 360,000 people—those are not just figures, they are people. They are individuals and their families, and that is a point I want to hit on as well. The care and support is based on the belief that everyone matters all the way through their life until the moment they die, and that no one should die in avoidable pain, suffering or emotional distress. Such care is very important, as Britain’s older population is set to rise sharply over the next few decades, with the number of people aged 85 and over expected to double in the next few years—some in this room may fit into that category, I suspect, and hope that they will have a good quality of life at that time as well.
Undoubtedly, the job of care workers is not an easy one, and we are deeply indebted to them—people have got to recognise that rather than miss it and not speak of it. However, in recent years, they have not always hit the headlines for the right reasons. Abuse is something that we take extremely seriously, but when we hear of it taking place in care and respite homes at the hands of care workers, who are employed to support and care for them, it is truly sickening. We have heard reports of physical, sexual and emotional abuse. Earlier this year, BBC 1’s “Panorama” did a story on some homes where residents were physically beaten, verbally abused and left in their own excrement for hours.
A Government initiative in England was set up in 2000 called “No Secrets”, aiming to set out the ways in which workers were expected to treat patients with dignity, respect and compassion, as well as ensuring that health and social care services work together effectively. It was a great initiative back in 2000, but given what has come to light in recent months, I feel—perhaps the Minister can respond to this point—that much more needs to be done to ensure that what was set out in the “No Secrets” initiative at that time works better.
The majority of care workers do fantastic work. They do their jobs because they are passionate about helping those who are in less fortunate positions than themselves. However, as with every job, there are those who take advantage, and we have to ensure that vulnerable patients are well looked after and that no abuse takes place. We all recognise the great work that care workers do. They are undoubtedly overworked and do a phenomenal job, and for many people, they are the only contact that they have with the world outside their door.
Paul Blomfield (Sheffield Central) (Lab)
It is a pleasure to participate in this debate with you in the Chair, Mr Robertson. I join others in commending my right hon. Friend the Member for Oxford East (Mr Smith) not only on securing the debate, but on an incredibly powerful opening contribution.
During the conference recess, I carried out a community consultation. I spoke to about 1,800 constituents in 61 meetings over three weeks. The dominant issue that came out of that consultation was low pay and abusive payment practices, particularly from those who told me some fairly horrendous stories about working in the care sector, and particularly about zero-hours contracts and non-payment of travel time. I accept my right hon. Friend’s point that for some people, zero-hours contracts work, but there are too many abusive zero-hours contracts. I thought that I understood the issues: peoples’ uncertainty about what hours they would work from week to week, and the difficulties of navigating the benefit system on low pay. However, people told me stories of getting a phone call on a Sunday night and being told, “Get on the bus. Travel across the city. We have work for you tomorrow morning at 8 o’clock”, only to arrive and be told, “Sorry, there is no work available”, or, “If you would like to hang around till 2 o’clock this afternoon, we might have some work for you.” We really have to address that sort of abusive employment practice.
Another care worker told me of her experience of non-payment for travelling time. She will get one job on one side of the city, a second on the other side, and a third a considerable distance away again. Paid the minimum wage for contact time, she is in effect working eight hours but being paid for four or five—a really abusive practice that we must address.
Mr Anderson
Let me advise my hon. Friend that at a recent meeting with Unison members who work in the care sector, one of them made the point that she worked 27 hours a month travelling between jobs. That was 27 hours a month for which she should have been paid, but was not. That is a disgrace.
Paul Blomfield
I thank my hon. Friend for his intervention. He is absolutely right: it is a disgrace. However, last week on Radio 4’s “Today” programme, I heard a care commissioner and a care provider debating the issue and accepting almost as the norm—indeed, for too many people it is the norm—that travel time is not paid for. That was so accepted in the discussion that I had to check with the House of Commons Library that it is in fact an illegal practice. However, it is accepted across the sector by commissioners and providers. People doing some of the most important work in our society, as my right hon. Friend the Member for Oxford East pointed out, are denied the dignity of being paid even the minimum wage, and it is tough enough to make ends meet from month to month on the minimum wage.
The arguments about the impact on care standards, the increase in hospital admissions because carers are spending less time with people, and the impact on staff turnover are well rehearsed, but we need to get to the bottom line. It is simply wrong that people are being paid an amount that contravenes the law, and too many people are accepting that. Allowing these practices to continue makes a mockery of having a national minimum wage.
Yesterday was the day in 2014 on which women in full-time work in effect stopped being paid—I am referring to women’s wages as a proportion of men’s wages—because of the gender pay gap, which is widening under this Government. Is it any wonder that that gap is widening when abuses such as these in the care sector, in which most workers are female, are just allowed to continue? I use the word “allowed” carefully, because it is not that the Government do not know about the abuses. The Minister’s right hon. Friend the Secretary of State for Business, Innovation and Skills said:
“The problem with domiciliary care is that there is almost certainly an avoidance by companies to pay the minimum wage, and that overlaps with the problem of zero-hours contracts. We recognise that there are some very specific problems for workers in that sector.”—[Official Report, 26 June 2014; Vol. 583, c. 447.]
HMRC, too, knows that that is happening, because an investigation of care providers between 2011 and 2013 found that 50% or half of care providers investigated were guilty of non-compliance with the national minimum wage, yet what are the Government doing to tackle the exploitation of predominantly female carers looking after our frail, vulnerable and disabled relatives? According to the Public Accounts Committee in July 2014, “seemingly little” has been done. I am inclined to agree and, given the nodding heads on both sides of the Chamber, colleagues agree, too.
Having found a 50% non-compliance rate, HMRC has stopped carrying out proactive investigations into minimum wage compliance in the care sector. I hope that the Minister will explain that decision for us today and, more importantly, will commit to talking to colleagues across Government about reversing it, because it is simply not acceptable for the Government to say that they are concerned about this issue but remove the resources for addressing it.
In the same vein, given the overlap between non-payment of the minimum wage and the problem of zero-hours contracts, will the Minister look to give bodies such as trade unions and law centres a formal, third-party role, so that reports of national minimum wage breaches can be treated as formal complaints? I ask that because we know that part of the reason for the incredibly low level of reporting of abuses—there were just 11 complaints to the pay and work rights telephone helpline in 2011-12 from home care workers—is the precarious position in which care workers on zero-hours contracts find themselves. If they put their head above the parapet, they will find themselves with no work next month, so I would also like to hear from the Minister what the Government are doing to promote the pay and work rights helpline for those who do feel confident enough to use it.
Will the Minister assure us that when workers do complain, they will be paid what they are owed? I ask that because written answers to my hon. Friend the Member for Stockton North (Alex Cunningham) suggest that the Government are not in a position to say either way. I therefore urge the Minister to talk to colleagues about collecting the data, because how else will we know the success of HMRC’s intervention?
Care workers do one of the most important jobs in society. They look after those whom we are concerned about most—the most vulnerable—and whom we love the most, and they deserve better.
Mrs Emma Lewell-Buck (South Shields) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my right hon. Friend the Member for Oxford East (Mr Smith) on bringing the debate to the House today. A number of colleagues have already spoken about the minimum wage, so I will try not to dwell on those issues too long, and will address some of the other significant and worrying challenges that care staff face.
Too many care workers are underpaid for the work that they do. Unison estimates that, altogether, 220,000 are not paid the minimum wage. HMRC found that half of care providers fail to pay the minimum wage and, despite the consequences of that for care workers, their families, the overall quality of the care work force and the standard of care that people receive, the Government have continued to fail to act.
The failure to pay for travel time is a common tactic and should not be difficult to fix. Earlier this year, during the passage of the Bill that became the Care Act 2014, I and Opposition colleagues raised the minimum wage issue time and again. We tabled amendments on Report asking Ministers to look specifically at travel time and travel costs. We were told that that would be addressed in the guidance that was published at the end of last month. I think that it is fair to say that the guidance is nowhere near strong enough. It says:
“Remuneration should be at least sufficient to comply with the national minimum wage legislation”.
To me, that says that it should be, but it does not have to be. It says that it would be nice if providers paid their staff a decent wage, but that there is no requirement for them to do so.
The Minister of State, Department of Health (Norman Lamb)
I just point out to the hon. Lady that this is a criminal offence; it is not an option. I totally agree with the points made by the hon. Member for Sheffield Central (Paul Blomfield). It is a criminal offence, and this is not an optional matter. There is no doubt in the law. Employers have to pay for travel time between appointments at people’s homes.
Mrs Lewell-Buck
I thank the Minister for that intervention. If that is the case, why is the guidance not stronger? What I read out is not the language of the minimum wage. The minimum wage is not a target, but a right.
Mr Andrew Smith
Does my hon. Friend agree that it is not good enough for the Minister simply to say “It is a criminal offence”, as though that solves the problem? It is not solving the problem, because hundreds of thousands of workers are not having their legal rights protected. In his speech, he needs to tell us what he is going to do about that.
Mrs Lewell-Buck
I could not agree more. The guidance should include a proper requirement for compliance with the minimum wage law; otherwise it will simply be ignored, as it currently is. I hope that the Minister will commit to strengthening that requirement when he sums up the debate.
Providers might also be convinced to pay their staff a fair wage if they thought that they might suffer consequences for non-payment, but it seems, sadly, that under this Government there are no consequences. The Government told us that they would “name and shame” companies that failed to pay the minimum wage, but so far only a handful have been named and not one of them has been from the social care sector. That is unbelievable when we consider that HMRC believes that half of providers are non-compliant. The Government’s relaxed attitude lets providers know that they can continue to ignore minimum wage laws with no consequences.
In all this, we have to remember that what affects care staff also affects the people they care for. Quality social care needs well trained, motivated staff who are able to build a strong relationship with those they care for. All the evidence suggests that things are moving in the opposite direction. The care sector is not an attractive place to work right now.
The weak requirements on the minimum wage create an unfair playing field for care providers. With the funding pressures facing councils, the incentive to commission on cost is stronger than ever, and as long as the wage is considered a target and not a requirement, providers that pay a fair wage will be at a disadvantage, compared with those that break the rules. The providers that win contracts will be those that are least able to attract and retain well trained staff, and service users will lose out as a result.
Pay is not the only problem. Care workers have told me horror stories about the way in which they are managed and the effect that that has on the people they care for. Timetabling of visits is a disaster. Appointments are booked back to back, so staff do not get to spend the time with clients that they are allocated. If a client needs a little extra help, dedicated care workers often go back in their free time. I have also heard of cases in which incompetent management has meant that multiple staff have been booked to cover the same appointment. After they have all shown up at the client’s home, only one of them has been paid. Not only is that bad for staff, but it means that clients sometimes do not see the same carer twice in a week, and they never get a proper introduction to a new staff member. Clients are expected to let a stranger into their home because they say that they come from an agency. The system owes people better than that.
Staff have told me that the training and supervision offered by some providers is close to non-existent. One employee told me that their training consisted of being given a set of forms to fill in, after which they were given no feedback and no professional advice or support. Not only were they not paid for that training, but they were told that they would be financially penalised if it was not completed in time. Essentially, they were training themselves, and the provider took no responsibility for making sure that its staff were fit to do their jobs.
Even on important matters of safeguarding, some staff received no training, and they were entirely unprepared to deal with situations in which they thought a client was at risk of harm. Worse still, although staff in such a situation should be able to refer the matter to a manager, in some cases even the managers did not appear to understand how safeguarding procedures worked or how to proceed, with the result that at-risk clients were left in serious danger. As many care staff work on zero-hours contracts, they are afraid to speak out. They cannot afford to challenge their employer or properly advocate on behalf of their clients, because if they do, they find that they are denied shifts.
That is why there should be a proper system of oversight, and it is why Opposition colleagues and I tabled amendments to the Care Bill to give the Care Quality Commission responsibility for overseeing the commissioning of services. It is not enough for the CQC simply to inspect services on the ground, because by the time an inspection is carried out, serious failings could have occurred. The CQC should look at the standards on which local authorities commission, to make sure that the providers to which they award contracts can do the job properly.
Between low pay, stressful working conditions and lack of support, it is no wonder that many skilled care staff are leaving the sector as fast as they can. To stand up for vulnerable people in care, we have to stand up for our dedicated and hard-working care staff. If the Government want to show that they value high-quality care, they need to start holding providers to account and making sure that they take their obligations to staff seriously.
Mr David Anderson (Blaydon) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my right hon. Friend the Member for Oxford East (Mr Smith) on securing the debate. He may not remember, but in 2000 he and I sat in a room in Exeter and negotiated for the Labour party manifesto to contain a policy to protect people at every level where there was a two-tier work force—that is, where people were outsourced. We wanted to ensure that even if a worker was no longer employed by a public body, they would suffer no detriment. Where are we now? For a start, where are the 320 Tory MPs? This is a debate about care, and the fact that they are not here shows how much they care. It is an absolute disgrace.
The debate is about the exploitation of those we rely on to take care of the people who did everything for us, wherever we are and wherever we come from. My parents fought the fascists, and they helped to build the welfare state. Other people here might be younger than that, but whoever we are, we know that home care workers look after the people who gave us everything.
I became a care worker 25 years ago. I took a temporary job for 13 weeks, but I was still there 16 years later, before I came to the House. For most of that time, I was employed by Newcastle city council and I was involved in trade union work. One of the great parts of my job was working with home care workers. In the professional side of my job, I was a key worker looking after a number of elderly people. We used to arrange meetings with everybody from the director downwards, and the truth is that the key people were the home care workers. They were the people—almost always women—who went into people’s houses day in, day out and built up a rapport not only with the client, but with their family. A home care worker knew when their clients were feeling off-colour, when they had problems or when the grandbairns were not very well. They knew those things because they had continuity of care and continuity of access to their clients, and that is how proper public services should work.
Even in those days, in 1992, we were paid paltry wages. In the council, we were paid only £4.85 an hour, which was not very much even then. We were, however, paid more than those who were paid by the privatised agencies that were coming to the council at that time, as a direct result of the former Tory Government’s cuts. Home care workers who worked for an agency were paid £3 an hour. It took a lot of digging, but we found out that the agency was being paid £9 an hour, so it was getting 200% more than the person who was actually doing the work.
In many ways, things have not changed, except that those who run outsourced services have found different ways of exploiting people, whether by failing to pay for travelling time or by saying that people have to use their own car. We have heard a disgraceful example of a care worker being encouraged to drive a car that had failed its MOT test, which is absolutely unbelievable in this day and age. The Minister has said that such things are criminal. They are, and we should start treating those who do them like criminals. If we were talking about someone who was fiddling their benefits, the Government would be on top of them like a ton of bricks. Political parties are letting down those who do the most crucial work in our country.
I do not intend to continue to pick up the points that my right hon. Friend the Member for Oxford East made in his speech, which nobody can argue against. He is right to say that social care problems are not confined to councils and the NHS. Later today, there will be a meeting in Committee Room 19 with workers from Care UK, and it would be great if the Minister could come. The hon. Member for Strangford (Jim Shannon), who is no longer here, has mentioned Care UK. Workers in Doncaster have been on strike for three months against Care UK, because they are being transferred to the company and are facing a 40% pay cut. Some of those workers have 30 years’ experience. How on earth can that be right? How on earth can that be fair?
I spoke to a young woman in Gateshead who came to our council to collect money to support her and her family, so that she could try to stay out on strike and make a point against Care UK, which is exploiting its workers. The young woman told me that she was from Newcastle, and she had moved to Doncaster eight years ago to live with her partner. She said that if staff were forced to go back to work under the new conditions, she would have to leave work and come home to live with her mother. That is the sort of thing that was going on 100 years ago. It is a disgrace, in this day and age, that public services are being run by people who have such an attitude towards carers.
I have been advised by Unison that 70 of the workers who were outsourced to Care UK have left the service. We may end up losing people whose experience in the care service totals hundreds, if not thousands, of years. That will be to the detriment of the country, and to the real detriment of those people. Perhaps one reason why the Government have not been very active on the matter is that the chairman of Care UK, John Nash, has given the Tory party some £250,000 over the past few years. Not only has he been awarded contracts, but he is being made a peer along the corridor from where we all work.
We are talking about taking care of people. It is called care, and the Minister will have to show whether he cares for those people or not. If nothing serious comes out of the current situation and the work that was done by my colleagues on the Care Bill, we will have wasted our time. The Minister will not deserve to have any more respect from the people of this country, particularly the carers, whom we need to look to the most.
Helen Jones (Warrington North) (Lab)
I rise to make a brief contribution to the debate. The issues have been set out admirably by my right hon. Friend the Member for Oxford East (Mr Smith) and others. I apologise in advance for the fact that I cannot stay for the wind-ups.
We are facing a scandalous situation. The people who do some of the most difficult jobs in our society are not even reaching the minimum wage because of the scams that are being perpetrated in the care sector. They are not paid for travel, they are on zero-hours contracts, and other scams are perpetrated against them. When I talk to care workers in my constituency, I see that they are decent people who just want to do a decent week’s work, and I can see what that means. They have to rush between appointments, and they feel guilty about not being able to spend time with their clients. They believe that the care they are giving is not of the quality that people should receive.
Care is not just about getting somebody washed and dressed, or giving them their breakfast; it is what it says it is. Care is about spending time with people, listening to them and talking about the problems they face. It says much about our care workers that, as well as worrying about their own wages, as they are entitled to do, they worry about the impact on their clients of what is, frankly, a rotten system.
Let us consider what really happens. If care workers are on zero-hours contracts, they are paid only for their actual appointments, and not for their travelling time. It is estimated that 220,000 people are not being paid the minimum wage. That has been allowed to happen for far too long—those 220,000 people cannot meet their bills at the end of the week, despite working full time. Does the Minister honestly understand what that means? I do, because I remember it from my earlier life. It means running out of money by the end of the week and relying on friends or family to help out. Friends and family bring things saying, “Well, I got it as a two-for-one offer,” or, “This was on sale,” but people know they were not and that their friends and family are trying to spare their feelings. Zero-hours contracts mean that it is a crisis when a child needs a new pair of shoes or grows out of their coat. That is the position that we inflict on people who do some of the most difficult jobs in our society by caring for the elderly and the disabled—the most vulnerable. I suspect that most of us in this room could never do those jobs, except for my hon. Friend the Member for Blaydon (Mr Anderson), who has actually done it.
Her Majesty’s Revenue and Customs found that nearly half of the firms it inspected in the care sector were not paying the minimum wage. Very few of those firms have even been named and shamed. How many of them have actually been prosecuted? As the Minister said, they are criminals. In what other sector of life would we say to a criminal, “We know you are doing it, and we would like you to stop. We are not actually taking you to court, and we are not prosecuting you. We know you are a burglar, but will you just give it up?” We do that with the minimum wage, which is an absolute disgrace. The Government must take responsibility. Yes, some local councils must take responsibility, too. It is true that local councils do not always monitor the contracts that they give out, do not ensure that people are paid properly and do not check workers’ wages, but that is not surprising given the situation in which they find themselves.
It is all very well for the right hon. Member for Sutton and Cheam (Paul Burstow) to tell us about the duties he imposed on local councils, but if we will the end, we have to will the means. It is a fact that the councils that face the most draconian cuts under the Government’s Local Government Finance Act 2012 are also the councils that have the highest levels of long-term disability and the biggest need for social care.
If the Government want to impose duties on local councils, they have an obligation to ensure that those councils have money available to meet those duties, otherwise councils will simply put the responsibility elsewhere and fail to meet their own. We know what happens when such systems are in place, and we know what happens when care workers cannot spend enough time with their clients: health problems go undetected, and people’s feelings of loneliness and isolation increase, driving up mental health problems. There are more falls and more admissions to hospital. There is a cost to the people concerned, and to the NHS, because a good care system cannot be run on the cheap. It requires properly trained, properly paid and properly supervised staff. The most vulnerable people in our society deserve no less. The Government have been trying to run care on the cheap, on the backs of dedicated workers who are being treated shamefully, and it is time that that stopped.
Liz Kendall (Leicester West) (Lab)
It is a pleasure to serve under your chairmanship, Mr Robertson. Like all hon. Members who have spoken this morning, I congratulate my right hon. Friend the Member for Oxford East (Mr Smith) on securing this absolutely essential debate, particularly as this is annual living wage week. As Members of Parliament we all get hundreds of e-mails and letters from people calling for us to speak up for issues. I do not get a lot of e-mails from care workers because they are frantically working, but our job is to speak up for people who do not have a voice, which is what he has enabled us to do today. People have spoken passionately about this issue.
Although I do not have the experience of my hon. Friend the Member for Blaydon (Mr Anderson), one of the first things I did after becoming an MP was to do a shift with a care worker in my constituency. My goodness, was it an eye-opener. Amanda, from New Parks, loved her job, and she desperately wanted to care for people. She said that she never thought that she would make anything of her life, and doing that job gave her a real sense of fulfilment, but she was rushed off her feet. She was trying to fill in for staff who were off sick or who had left. She said to me, “The trouble is that girls get more money at Morrisons than they do doing this, and they get their hours set, so why wouldn’t they go and do something like that?” That was the start of my understanding of just what this means to people. From the other side, I have seen constituents and members of my family receive 15-minute home visits, which are not enough to get someone up, washed, dressed and fed. It is barely enough time to have a proper conversation, which causes problems for people who are left isolated in their own home.
Many hon. Members have spoken powerfully about how home carers are undervalued, underpaid and undertrained. Undervalued because they do not even get the dignity of having a decent contract—nationally, there are more than 300,000 care workers on zero-hours contracts. Underpaid because up to 220,000 care workers do not even get the minimum wage, let alone the living wage, when they are doing some of the most vital work in looking after people whom we care for and love, and who brought us into this world. And undertrained because around a third of care workers receive no ongoing training, yet they are doing some of the most vital, intimate and personal tasks.
We are seeing low staff morale and high turnover of around 20% to 30% annually. Vulnerable people do not even know who is going to come in and help to get them out of bed or take them to the toilet. I would want to know who is coming into my bedroom to get me out of bed, yet that is not the experience of many people. It is not just that the present situation is not good for care workers; it is not good for the people who use care or for taxpayers, either.
We are seeing ever-increasing numbers of elderly people ending up going into hospital when they do not need to be there, and getting stuck there, too. Delayed discharges from hospital are at their highest ever rate, costing more than £260 million in the past 12 months. That would pay for 37,000 people to have a whole year’s worth of home care. Where on earth is the sense in that?
Like my right hon. and hon. Friends, I believe that the Government are not doing enough to tackle the problem. Many hon. Members spoke about the new guidance for local authorities to look at whether their service providers are paying their staff below the minimum wage. I do not think that that is anywhere near strong enough. “Should” needs to be “must”. If people are not paying what they are legally required to, enforcement should be much tougher. It was a profound mistake for the Government to remove the Care Quality Commission’s role in assessing the quality of council commissioning. If the CQC was able to assess whether local councils were commissioning care properly, that would be a key thing to check them on.
In July, the Public Accounts Committee, chaired by my right hon. Friend the Member for Barking (Margaret Hodge), said that it was
“astonished that...seemingly little has been done to rectify”
the scale of non-payment of the minimum wage in the care sector.
In April this year HMRC replied to a freedom of information request that I submitted. It said that half of all the care providers that it had been investigating—more than 100 employers—had been failing to pay the minimum wage in some form, and that more than £1 million was owed to workers. Imagine that. If anyone had stolen—that is what this is—£1 million, action would be taken. I am disappointed that Ministers and HMRC have not named the providers involved. Despite the Minister saying that providers should be named and shamed, that simply has not happened in the care sector. I hope the Minister will explain why not.
Several hon. Members said we need to make sure that HMRC proactively looks at the underpayment of the minimum wage and not simply wait for care workers to ring the pay and work rights helpline. Only 19 workers did so in 2012-13. We know they are not being paid, but they are busy. They are rushing round. They have lives to live. We should have much more proactive measures.
Mr Anderson
My hon. Friend is absolutely right. People are busy, but they are also frightened. They have no protection. Employers have complete control over their lives with zero-hours contracts. If people complain, they will not get any more work. That is the truth.
Liz Kendall
My hon. Friend is absolutely right. I was going to come to that point. If someone is on a zero-hours contract, they will be too terrified to tell their employer that they are not paying the minimum wage. I am not yet convinced that the Minister is working closely enough with Ministers in the Department for Business, Innovation and Skills. According to an answer to a written question from my hon. Friend the Member for Stockton North (Alex Cunningham), the Minister has had just one meeting all year with BIS to discuss underpayment of the national minimum wage in the care sector. That is not good enough. We need more action.
Several of my right hon. and hon. Friends rightly said that £3.5 billion has been cut from local council adult social care budgets. Within that context, the pressures are building.
Paul Burstow
The hon. Lady and her Front-Bench colleagues want to convey the impression that in seven months’ time they will be in government and therefore making decisions about the allocation of resources for adult social care. Will she share her thinking?
Liz Kendall
I will, and I will come on to the extra money that we have committed to putting into health and social care. We are committed to a £2.5 billion transformation fund that will cover both the NHS and social care, and that includes money to pay for 5,000 home care workers. So we have said what we will do in addition to the ring-fenced money to try to kick-start the services in the community that patients and taxpayers need.
We have put care issues and exploitation in the care sector at the heart of our agenda. Baroness Denise Kingsmill conducted an excellent review for us on exploitation in the care sector. I encourage all Members to read it if they have not had a chance to do so already. She has set out tough, credible and realistic proposals, including on how to properly enforce the minimum wage, ban exploitative zero-hours contracts and end inappropriate 15-minute visits. She has called for better training for care workers and also for managers of care providers—that is essential—as well as support for ethical care charters such as that which Unison has promoted.
I want to say a little about what I saw yesterday, which was an inspiring example of a Labour council in Islington putting ethical care into practice. Yesterday I helped to launch and celebrate its new home care service contracts. Those will ensure that all home care staff are paid the London living wage—£8.80 an hour now, rising to £9.15 in January—including for travel time. Exploitative zero-hours contracts have been banned, and people are guaranteed a minimum of 16 hours a week.
The council is also giving far more say to the users of services so that they can decide how and when their hours of care will be provided, and, unless they specifically request a 15-minute visit, such visits will be ended, too. The changes to the contracts will benefit more than 500 home care workers, 9 out of 10 of whom are women. I met one yesterday, called Mary. When I talked to her about the difference the changes will make, she said, “It might not sound a lot for some people, but it means I can pay for my kids’ school lunches and make sure they have a decent hot meal in the evenings.” The changes will also benefit the 900 people whom the home care workers care for.
A Labour Government will back the actions of councils such as the Labour council in Islington. We will increase the fines for non-payment of the minimum wage to £50,000. We will champion the payment of the living wage through “make work pay” contracts, which give a tax break of up to £1,000 per worker to every company that signs up to the living wage. We will end the exploitative use of zero-hours contracts, too. As part of our £2.5 billion transformation fund, we will provide extra funding to support changes in the community and the services provided there, including 5,000 more home care workers.
I will end on a point that Islington council made. The changes cost the council more, but we have to think about the cost of not doing it: the cost to the NHS of avoidable emergency admissions and delayed discharges, and the cost to the taxpayer of people having to have their pay topped up when they want to be earning a decent living wage. There is a different way. Islington has shown the way. We will back its efforts and make sure we have a decent care system for those who work in it, those who use it, and all the families that rely on it.
The Minister of State, Department of Health (Norman Lamb)
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate the right hon. Member for Oxford East (Mr Smith) on securing this debate on an incredibly important subject. I agree with him and the hon. Member for Strangford (Jim Shannon) that there are many great providers of care out there and vast numbers of extraordinarily dedicated care workers. Like the shadow Minister, I went out with a domiciliary care worker in London a while ago. He was from Sardinia, which makes the point that very large numbers of people from other countries, primarily from across the European continent, work in our care system. Without them and the dedicated work of care workers, the system would not survive. We should remember that in our debates about the movement of workers around Europe. Our health and care system depends on those dedicated workers, and the man I saw from Sardinia was a very impressive and dedicated man. He was earning a low income and not being paid for travel time between the stops in his working day, which I totally agree is completely unacceptable and a disgrace. I will come back to that issue a little later.
It is also important that we celebrate great care. I went to the first ever awards ceremony in my county of Norfolk that celebrates examples of fantastic care, and to see care workers who hitherto have never been recognised for the amazing work that they do was inspiring. Every part of the country should have similar exercises to acknowledge and celebrate great care.
Secondly, I wanted to comment on the point made by the right hon. Member for Oxford East that sometimes—indeed, quite often—the only companionship that people receive is from the paid care worker who visits their home once or twice a day. Does that not say that there is something profoundly wrong about our society, and if so, do we not all have to recognise that that must change? I have said this before, but we have inadvertently become a rather neglectful society. As our extended families have been dispersed far and wide, often older people are left rather stranded, living on their own, sometimes many miles—often, indeed, hundreds of miles—away from their loved ones. It is not a good society in which the only people seen by those older people are those who are paid to deliver care to them. The wider community and neighbours need to play a part in addressing this massive challenge that we face, whoever is in Government. There is absolutely a role for the total professionalism of paid staff, but the wider community must play its role, too.
There are amazing schemes such as the Cornwall pioneer project, in which volunteers work alongside GPs to combat people’s loneliness. There is also a brilliant community organisation called Friends and Neighbours in Sandwell, in the west midlands. That is a network in the poorest community in the west midlands, and yet volunteers give of themselves, and give companionship to people to give them their lives back. Those volunteers play a part in meeting this massive challenge we face.
Thirdly, part of the answer is for care workers to be far more embedded in joined-up and integrated teams of health and care workers. The work in Islington that the shadow Minister referred to is another of the brilliant and inspiring integrated care pioneer projects that join up health and care services and enable care workers to work alongside nurses, so that they recognise that they can possibly go on to become a nurse or a health care worker. Such projects give care workers a status and professionalism that they deserve, which can play an incredibly important part in this process.
Fourthly, I commend to right hon. and hon. Members an example from my county. The GP practice in the village of North Elmham, in the middle of Norfolk, has set up a social enterprise that provides domiciliary care to a widely dispersed rural area. As it is a social enterprise, it is able to pay its staff better. When staff stay and demonstrate reliability, they receive more pay. The consequence is that people know who their care worker is, there is continuity of care, and there is not, as the shadow Minister suggested is too often the case, a situation in which someone different turns up each night. I had a case—indeed, it involved Care UK—of an elderly lady finding a different man turning up each night to shower her, which was an assault on her dignity. The concept of locally based social enterprises, tied in closely to GP practices, seems to be an attractive way forward.
Fifthly, there is the issue of pay. To start with, I will say that Unison is right to campaign on pay; I support it in doing so, and I am very happy to work alongside it. The right hon. Member for Oxford East and others made the point that it appears that 220,000 people in the care sector are being paid below the minimum wage. That situation is completely unacceptable, and I hope that all of us in Westminster Hall today acknowledge that we find that practice to be totally unacceptable.
However, it was this Government who decided that Her Majesty’s Revenue and Customs should carry out a dedicated push in this sector to root out employers who are breaking the law in that respect. Indeed, I can confirm to the shadow Minister that I have specifically asked for a further dedicated focus on the care sector, because it is absolutely needed.
Liz Kendall
I am glad that that work is continuing. However, the Minister has said several times in the newspapers that care companies that do not pay the minimum wage should be named and shamed, and yet that has not happened. Why not?
Norman Lamb
I am grateful to the shadow Minister for raising that issue. When I was a Minister in the Department for Business, Innovation and Skills, I specifically pushed for a change in the rules to make it easier to name and shame poor employers. That process was not completed by the time I left BIS to go into the Department of Health, but I continue to push for it. Indeed, the rules were changed, so that whenever there is a notice of underpayment of the minimum wage, the employer is named.
There is a complication in the care sector, in that arrangements are often quite complex and reaching a final decision often requires an investigation to be carried out. However, I can assure right hon. and hon. Members that I anticipate the naming of poor companies within this sector in the relevantly near future. I totally support that process; there should be no hiding places for employers who break the law in that way.
Mr Andrew Smith
What we all want to hear is a commitment that HMRC will proactively go out, uproot and stop these illegal practices. The thought comes to my mind that in other sectors where the Government have been shown to be negligent in regulating areas of activity—such as investment, with Equitable Life and so on—the Government end up having to pay back the victims. Why do the Government not pay back all these care workers who have lost so much money because of the incompetence of HMRC?
Norman Lamb
I thank the right hon. Gentleman for that intervention. However, I repeat the point that it was this Government who arranged for that themed work in the care sector. A substantial sum of money was collected from employers who had broken the law and returned to their employees who had been underpaid. I repeat that I have requested that that themed work should start again. As he will understand, I do not have responsibility for HMRC. However, I have made that request and I will continue to push for that themed work to happen. Where it seems that there is clear evidence that a problem is endemic in a sector, we ought to be prepared to focus on it.
The hon. Member for Blaydon (Mr Anderson) talked about outsourcing. That problem did not start in 2010. Most of the outsourcing—the creation of a predominantly private sector work force—happened before 2010, and we all have to acknowledge that. It is an endemic and deep-rooted problem in the sector, which needs to be challenged effectively.
I will talk briefly about the care certificate, because another issue raised by right hon. and hon. Members is the fact that training standards are often inadequate. I must say that when I came into this job I was rather shocked to discover that there were no proper mechanisms for ensuring that employers were required to provide proper training for their staff. We are changing that situation. We commissioned Camilla Cavendish to produce a report on this issue, and we have now legislated through the Care Act 2014 for a care certificate, which will come into force next April. That certificate will set a national standard for minimum training and competence levels that every employer will have to meet. They will have to ensure that their staff either have the care certificate or something equivalent, and they will have to satisfy the Care Quality Commission that that is the case. If they cannot satisfy the CQC, it can take enforcement action against them. I am proud of the fact that we are taking decisive action to improve training standards.
Hon. Members have also raised the issue of the role of the CQC. It has the power—and Ministers have the power to request it to use that power—to carry out themed inspections of local authorities where there is evidence that commissioning is falling short, resulting in poor care. Part of poor care can sometimes be the terms and conditions offered by employers. I am determined that, if evidence of poor practice emerges, we use those powers to ensure that local authorities, as well as providers, are held to account, in order to raise the standards in this sector. We all agree that that is necessary, and that the underpayment of wages to care workers is not an acceptable practice.
Mobile Phone Companies (Ofcom Supervision)
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Siobhain McDonagh (Mitcham and Morden) (Lab)
I did not know that today was going to be such a big day for the mobile phone industry and its regulation. I want to address the issues of some of my constituents and the customer service that they have received from a number of providers.
The first case is that of Mr C of Mitcham, who contacted me on 17 May 2013—I am sorry, I will give many dates, but they are important. He described how EE was pursuing him for an outstanding telephone bill for the months of November and December 2012. Mr C had taken out two contracts with Orange in October 2010 in the understanding that both had unlimited landline calls. EE claimed that that was not the case and that he only had unlimited landline calls on one line, so for those two months he owed the company £1,341.99 for calls made to UK landlines.
Mr C was distressed by the situation and asked for my help on 17 May 2013. At that stage, EE had offered a discount of 25% as a good-will gesture, but it did not address Mr C’s central point that he was mis-sold the second line. I met with EE’s David Frank, senior public affairs manager, and Dan Perlet, director of corporate and financial affairs, on 11 June 2013 to discuss Mr C’s issue. As a result, I had a letter from EE, dated 26 June, in which it agreed to waive 75% of the outstanding amount. EE made it clear that if Mr C accepted the offer, both sides could consider the matter closed. Mr C accepted the offer and asked for a final invoice confirming the revised amount outstanding so that he could settle the account.
As I said, the dates are important. On 8 May 2013, nine days before Mr C came to see me and a month before I was buying Mr Frank and Mr Perlet of EE cappuccinos in Portcullis House, EE had issued a default notice against Mr C. Furthermore, on 29 November 2013 EE sold the full debt, without the agreed discount of 75%, to Lowell Group, a debt collecting agency. Again, that was done without Mr C’s knowledge.
When Lowell Group staff contacted Mr C early in 2014, he challenged them and explained that an arrangement had been made with the senior public affairs manager at EE. Lowell Group said that EE denied that any meeting between myself and its senior public affairs manager had ever taken place, even though I have a letter—which I can produce now—confirming the meeting and its outcome. I have been trying to contact EE by letter, e-mail and telephone since the beginning of the year. I was, however, unable to obtain a response until eventually, ahead of the debate, I got a reply dated 3 November.
This is a catalogue of poor communication and miscommunication. EE had not been transparent in its communication with Mr C, and placing a default notice against his name had implications that he was entitled to know about. Other credit providers are obliged to communicate such actions, but the first that Mr C knew of the notice was when he applied for a loan and the application was declined. EE had not communicated internally regarding the case. Whoever decided to sell the debt either ignored the agreed settlement arrangement or was unaware of its existence. EE had not communicated all the facts regarding the case to Lowell Group. In selling the full debt and in denying that its representatives had met with me, EE has misled the debt collectors and wasted their time. To cap it all, Mr C is still waiting for the final invoice confirming the reduced balance outstanding, so that he can settle the account and “consider the matter closed”, as stated in the letter from EE to me on 26 June 2013.
That all demonstrates a disregard for the well-being of a customer who has put his trust in a service provider—EE in this instance. The company’s attitude has been relentless and inflexible, with a cavalier disregard for the welfare of a customer who has felt bullied and intimidated for more than 18 months.
In its letter of 3 November 2014, EE apologised unreservedly. It has now called off the debt collection agency and cancelled the debt entirely. It will also take immediate steps to have the default notice removed, although that alone does not repair the damage to Mr C’s credit rating, since he has been declined a loan—which, in the first place, was because of the default notice. It should not have taken the intervention of an MP to resolve the situation.
My second constituency case is that of Ms O of Colliers Wood. Ms O made the mistake of tethering her mobile phone to her new tablet in early July 2014. Her August phone bill showed nothing particularly unusual, but she was hit by a staggering bill of £540 in September. Once aware of it, she was able to avoid a similarly exorbitant bill in October, although it was still £289. As soon as Ms O was aware that a large bill was due in September, after she checked her bill online, she made repeated attempts to speak with someone at Vodafone for advice. Each of the five people she spoke to between 27 August and 9 September, whether in store or over the phone, either referred her to another department or gave her conflicting advice.
As someone who always pays her bill on time, Ms O was concerned about the financial burden of having to pay the whole amount in one go. She wanted to discuss the possibility of remission of some of the bill and the option to pay in instalments. The customer service staff whom she spoke to in the early stages were not entirely helpful. When Ms O asked for an e-mail address for her to contact, she was told to write and post a letter—that was by a mobile phone company!
Not satisfied with the response, Ms O investigated the Vodafone website and was able to deduce the name and e-mail address of the chief executive officer of Vodafone UK—he must have been delighted. She sent him an e-mail on 15 September 2014 and, following her success in contacting the CEO’s office directly, she was more successful in negotiating a partial resolution. Through further dialogue, a “bill shock” reduction of 10% of the data charge, or £70, was agreed, with a further reduction of £106 as a good-will gesture. Ms O’s persistence therefore paid off in the end, but it took just that, persistence, as well as ingenuity and investigation to get through to the right people— people who had authority to make decisions.
That is another example of a large service provider being elusive and difficult to communicate with. Although Vodafone has a variety of ways for customers to track data usage, they mainly depend on the proactivity of the customer. I believe, however, that a mobile phone service provider has a responsibility to support customers in managing their accounts.
The third resident of my constituency to approach me, just last week, was Mr B from Morden. He is an Orange customer and frequently calls overseas using a facility offered by Lycatel, whereby he may call a UK landline number from his mobile phone to gain access to an international line. He called Orange to upgrade his contract to an unlimited calls package. When he mentioned the reason for upgrading to the Orange customer service agent, she advised him that Orange monitors the use of such landline numbers and that if it discovers that he is using one of them it will charge more than 30p per minute for calls.
Mr B contacted me because that contradicts the terms of his contract, which states that he has unlimited calls to UK mobiles and landlines. He is worried that he will end up with a huge bill if or when Orange discovers he is using the services of Lycatel. That does not seem to be a fair, open or transparent way for Orange to behave. In fact, it seems underhand.
Given those cases, I want industry standards monitored by Ofcom whereby a requirement is placed on mobile phone companies to be open and transparent with customers. They should behave reasonably in line with regulated credit providers, which are bound to inform customers about action being taken that may affect their credit rating before it happens. They should alert customers if there is unusual activity on their account, similarly to how banks monitor and notify customers of unusual activity.
I would like to see mobile phone companies acting responsibly and in the interests of their customers by offering recommendations about cheaper tariffs based on past and recent usage. That service is already offered to customers by some energy providers. There are examples of best practice in the industry. Will the Minister request that Ofcom be given the authority to ensure that those examples are made universal and to recommend industry standards that will work in the interests of all customers, however able they are to be detectives and look at what their mobile phone companies are doing to them?
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
It is a pleasure to serve under your chairmanship, Mr Robertson. I thank the hon. Member for Mitcham and Morden (Siobhain McDonagh) for bringing this issue to my attention and the attention of the House. Today is not a good day for EE or Vodafone. I will not mention Orange, because it was swallowed up by EE. I am sorry to hear about the huge amount of time that she has had to spend on these constituency cases, and I am very sorry to hear what her constituents have gone through. She put her case incredibly forcefully, and Anne Robinson should be looking over her shoulder in case her job is under threat from the hon. Lady. As a consumer champion and a constituents’ champion, she is second to none.
It is disappointing to hear of occasions when our constituents receive poor service from organisations. I believe—as, I am sure, does the hon. Lady—that providing excellent customer service is one of the hallmarks of an effective, efficient and competitive company. Goodness knows the amount of hours that we spend in this day and age listening to those terrible recorded automated voices when we yearn to speak to someone with a real voice giving us a common-sense answer to our problems. I cannot believe that most companies do not realise how important that is.
Be that as it may, we are talking specifically about mobile phone companies, what the experiences of the hon. Lady’s constituents say about how such companies deal with their customers, and the vulnerability of customers when things go wrong. Obviously I cannot comment on the specific details of the cases that she talked about, although I am familiar with the outline from her speech and from her briefing to my Department. I hope that she takes this in the spirit in which it is intended, but neither my Department nor the independent regulator, Ofcom, has the remit to investigate and resolve individual complaints. As she pointed out, the mobile network operator EE, which is involved in the dispute with her constituent, has—clearly because of this debate—written to her to confirm that it has withdrawn her constituent’s debt entirely and cancelled any debt recovery action.
The debate gives us an opportunity to discuss general points, as the hon. Lady indicated at the end of her speech. I will make some general points on when someone is sold the wrong contract or when contract terms are not clear, what happens when a customer complains to a mobile network operator, and Ofcom’s role in all this. I have made it clear that it is not within Ofcom’s remit to take up individual complaints about poor service from MNOs. Ofcom monitors complaint volumes, publishes quarterly statistics reports to compare and contrast the customer service of different MNOs, and takes action to enforce its complaints handling rules where necessary. Publishing complaints data is a key part of the work to provide useful comparative information for consumers and to drive improvements in the quality of service.
I am pleased to tell the hon. Lady that Ofcom is talking to mobile network providers, including the three major ones—EE, O2 and Vodafone—to understand in more detail how their customer service practices work, and I hope that that will result in improvements across the board in the standards of customer service. Already she has made progress, not just on behalf of her constituent, but on behalf of many others.
All communications providers must be members of an Ofcom-approved alternative dispute resolution scheme. There are two schemes, and providers must make it clear that customers have recourse to those schemes if they need them. Providers must, however, also make it straightforward for their customers to make and escalate a complaint with a mobile network operating company. Companies must have in place and follow complaints procedures that they publicise in their written and online material. If a customer makes a complaint that is unresolved eight weeks after they first make it, or if there has been deadlock and the provider has said that it will not do anything further about the complaint, it can be referred to the ADR scheme to which the provider belongs. I would expect every MNO to resolve complaints in a speedy and prompt fashion, and I am happy to put that on the record.
Alternative dispute resolution is a powerful piece of consumer protection that works. Figures show that it often works for the consumer’s benefit. It allows customers to take unresolved complaints to an independent body to reach an impartial judgement. The provider has to accept this decision, although the customer does not. It is still open to a customer who believes they have been dealt with wrongly by a service provider to take legal action to seek compensation. ADR does not close off that route, should they choose to use it. Legal action is for many consumers very much a last resort, and often it is difficult for them to follow that path. There is also a mechanism by which a customer who is not satisfied with how a case has been conducted by the ADR ombudsman can have the process by which the ombudsman reached their findings examined independently. Ofcom monitors evidence of compliance with complaints handling rules, and takes enforcement action where necessary to ensure that providers are dealing with customer complaints appropriately and fairly.
I want to cover the mis-selling of services, which is when a customer thinks they have signed a contract for one thing and the MNO claims they have signed up for something else. In 2009, Ofcom introduced a range of measures to combat the mis-selling of mobile services, which included clear requirements about obtaining the consumer’s permission and consent, and specifying the type of information that must be made available at the point of sale. Ofcom monitors and enforces compliance with the rules. That has led to positive results, with an initial sharp reduction in complaint numbers to Ofcom from an average of 600 complaints a month to just over 100 a month. That is still far too many, but the reduction has been sustained ever since the rules were introduced.
Ofcom’s rules on contracts are addressed under general condition 9 of the general conditions of entitlement, which is a regime of rules under which telecoms companies must operate in the UK. It is important for companies to have contracts: they offer certainty about revenue streams and allow companies to offer better value to customers. However, customers must be completely clear from the start of their contracts what terms they are signing up to, and that includes price rises, the minimum length of their commitment to the contract and how they can switch providers, if that is what they want to do. General condition 9.6 provides consumer protection in case the contract is varied while it is running. Under that condition, the telecoms provider must tell the customer that it is changing the contract—normally, that is a price rise—because it is likely to cause material detriment. It must give the customer the right to leave the contract without any penalty in response.
In general, it is Ofcom’s role to ensure that the telecoms market and services work well for citizens and consumers. Looking at the more optimistic side of the picture, competition is delivering a wide choice of competitive tariffs in communications markets. Ofcom works to ensure that consumers are able to take advantage of competition and choice, for example by ensuring that they have clear and accurate information to compare services and can switch providers easily when they want to. Ofcom continues to monitor the market, including compliance with regulatory obligations, price trends and complaints handling. It remains focused on ensuring that consumers can exercise choice to access the best deals.
I was horrified to hear what happened to the hon. Lady’s constituent who was referred to a debt recovery firm. Any reference to a debt collection agency is worrying. When a consumer disputes a bill, having the outstanding amount referred to debt collectors can be extremely upsetting. A service provider, like any other company, is of course entitled to go after money that it thinks is owed, but we would expect it to take the dispute into consideration before taking any action. If someone finds that they have been referred to a debt collection agency during a dispute with a mobile network operator, it is important that they continue to follow the complaints procedure, but they should also contact the agency straight away to explain what has happened. That may allow more time for the dispute to be resolved before further action is taken.
The Steering Committee on Reciprocity, with input from the Information Commissioner’s Office, has issued technical guidance to creditors on the conditions under which information about defaults is filed with credit reference agencies. The ICO advises lenders not to file defaults until the consumer has been in arrears for at least three months. The guidance also states that the customer should be given notice of an intention to file a default through a final demand letter. It seems that that was not the case for the hon. Lady’s constituent, which is pretty poor. Customers should also be given a relevant account statement, which should make clear not only the intention to file, but the date of the intended default. The date should allow the customer enough time to respond properly. If the customer fully meets the terms set out in a notice of intention to file a default, the lender should not file the default. Debt collectors must be licensed by the Financial Conduct Authority, a condition of which is that they must obey the FCA’s guidance. Citizens Advice can also advise on problems with debt collectors.
When dealing with large organisations, which may have hundreds of thousands or millions of customers, things may go wrong on occasion. We all live in the real world and will adopt a common-sense approach. I completely agree with the hon. Lady’s bringing the matter to the attention of the House, because what differentiates good companies from those that merely do their job is whether they can deal with mistakes to the satisfaction of their customers. It is appalling that a mobile phone company’s customer should have to turn to their Member of Parliament to resolve a dispute. It is essential for customer growth and prosperity that they retain and grow the good will of consumers.
I understand that EE has resolved its dispute with the hon. Lady’s constituent, but I am pleased to tell her that EE has informed my officials that it is reviewing its internal procedures, unilaterally, to see what lessons can be learned from her constituent’s recent complaint. We do not have any plans to legislate in this area.
Siobhain McDonagh
I thank the Minister for his generous response. The debt has now been cancelled and the default notice on my constituent’s credit file may have been removed, but its history is still present and it continues to prevent him from taking out the loan that he needs. I do not know whether the loan is for a business or a home, but even though the matter is now over for EE it is not over for him.
Mr Vaizey
The hon. Lady makes a good case. Many hon. Members have experience of constituents having a black mark, as it were, against their credit rating, which, for example, could be due to their bank not putting through a direct debit, so we need to consider the issue to ensure that the hon. Lady’s constituent’s credit rating is restored to its full capacity. I will personally intervene with EE to ensure that it puts its best people on the case and liaises with the hon. Lady’s constituent to make certain that every effort is made to show that he did not bring this debt upon himself and that this black mark is not down to his own actions.
In conclusion, the hon. Lady began her remarks by saying that this is a big day for the mobile operators. We are indeed consulting on whether to introduce national roaming. We have a good system of mobile networks in this country. We have good coverage and are introducing 4G coverage at the fastest rate in the world with the fastest take-up in the world. We have a competitive, keenly priced environment, with people quickly adopting new technology through mobile operators. There are key issues, however, that mobile operators must continue to address. One is customer service and the other is coverage, particularly in rural areas. I look forward to discussing such issues with them. I thank the hon. Lady once again for bringing the matter to the House’s attention.
Dairy Industry
(10 years ago)
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Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
I welcome the Minister to Westminster Hall for the third time in two days. He must be getting used to the warm welcome.
The debate is about one of the most important industries in the UK, the dairy industry, which affects every household in the land. Someone said to me recently, “If we’re lucky, we might need a doctor, an accountant or a lawyer once or twice a year, but we need a farmer three times a day.” That is the background to the debate. The industry has a huge impact on the local economy of constituencies around the land and the health of the industry has a far deeper effect than simply on agriculture. For example, the dairy industry has a huge knock-on effect on the tourism industry in my part of the world in west Wales. The whole UK landscape, in particular in our part of Wales, is heavily and positively influenced by the contribution of dairy farmers and other livestock farmers, often at their own expense.
Agriculture may be a devolved issue—the Minister will come to that—but world markets are not, nor is the role of the groceries code adjudicator or the dairy code of practice. The problem is a UK one, not simply a devolved matter for the Welsh Government. We bring the debate to Westminster Hall this afternoon on behalf of the dairy industry—our friends, our colleagues, our constituents who derive their living from it, our members of the Farmers Union of Wales, the National Farmers Union, the CLA or Country Land and Business Association and Farmers for Action, and many others, some of whom are not members of any union.
Fluctuating prices, tensions between farmers and processors, and criticism of retailers, especially supermarkets, are nothing new in agriculture, but I do not want the debate simply to be a long list of complaints. That is not the purpose of the exercise. We need to understand what is going on in the world market and the relationship between farmers and processors, which has been raised in the House and outside Parliament on many occasions.
Bill Wiggin (North Herefordshire) (Con)
My hon. Friend is quite right, and I am looking forward to the rest of his speech, but four pints of milk for 89p cannot be right. Something surely needs to be done.
Simon Hart
I will be coming to that in due course, but it is particularly galling for a producer to see that kind of offer in some retailers.
I also want to go into the role and powers of the groceries code adjudicator and the voluntary code of practice, which is subject to a review at the moment—or I think it is—and into the role of Government, if indeed they have a role at all, which I believe they do. What is completely unsustainable for the dairy industry, however, is the long-term prospect of having to sell its product for less than the cost of generating it in the first place, and the extraordinarily short notice that some producers get of significant price changes, about which they can do nothing but sit back and take the pain.
Nia Griffith (Llanelli) (Lab)
Does the hon. Gentleman agree that that is the very reason why we need the voluntary code to be strengthened—so that farmers cannot be shocked by sudden price drops by big purchasers? Will he ask the Minister to look again at the voluntary code and at making something much stronger?
Simon Hart
I thank the hon. Lady, who is a near neighbour. Yes, I will be making that point. The code and the adjudicator have been in place long enough now for some positive benefit to have been felt. The farming community has not yet convinced me, however, that the powers of the code and the adjudicator have been exercised as satisfactorily as they might have been.
Roger Williams (Brecon and Radnorshire) (LD)
Does my hon. Friend agree that it is intolerable that producers have to give the buyers of their milk more notice about a customer change than the buyer of the milk has to give about a change in price?
Simon Hart
My hon. Friend makes a good point. Of course that is right, and it is why we need to look at the relationship between producer and processor and between processor and retailer.
My third point, which I was getting to, is that added confusion is provided by the fact that there are so many different contracts for so many different things, written in so many different ways, making it difficult to find any body of farmers of any significant number who have a consistent contractual relationship.
Neil Parish (Tiverton and Honiton) (Con)
It is absolutely right for my hon. Friend to be having this debate. British dairy products and milk are the best in the world, and we need to promote them more. The dairy farmers are paying some £7 million a year in levy, but the money is not getting out there to promote milk properly. Milk, cheese, yoghurt and all other dairy products need to be promoted more. We need to get the money out to the industry to get milk promoted.
Simon Hart
I thank my hon. Friend for his intervention, but I might press on now and not take quite so many interventions, because I will cover many of the points that are being made. I fully accept, however, that people will wish to write their press releases soon, so I will try to be as generous as I can.
The industry recognises that overproduction is a problem and affects price. That is a given. The industry also recognises reduced demand as a result of changing buying habits in China and of Russian sanctions. As a consequence, we are in for what one newspaper described as a long period of low prices, without any indication of what those low prices might bottom out at or of how long is “long”. Analysts are already pointing to considerable uncertainty.
There are those, although not—I am glad to say—many of them, who think that all of that can be dealt with through efficiencies in farmers’ production methods. As we have touched on, however, the short notice that people get about their milk prices cannot necessarily be offset by instant cost reduction measures or alterations to milk production methods. Some such alterations might take one, two, three or even more years to take effect, while the price reduction has an instant effect, so that is a simplistic way of addressing the problem.
An additional problem, which I suspect many Members who represent more isolated parts of the UK feel, is that there are limits to the diversification programmes that farmers can enter into. It is not always possible for people to open a suite of holiday units or a farm shop, because they might be two or three miles off the beaten track, have significant planning problems to overcome or be on a tenanted holding, the landlord of which may have a different view of the sort of developments that can be undertaken.
Guy Opperman (Hexham) (Con)
I congratulate my hon. Friend on securing the debate. I represent the county with the smallest population, where the point that he is making is particularly apposite. Does he agree that it is utterly important for the Government to provide better guidance on how our co-operatives and producers can come together to get a better contractual relationship with the people who are buying their milk?
Simon Hart
I thank my hon. Friend for a contribution that I will add to my list of questions for the Minister. He has put his finger right on a problem that particularly affects the more isolated parts of rural Britain.
That all leads conveniently to the issue of supermarkets. The milk price public battleground always centres on the role of retailers, in particular the better known ones. Some 50% of British milk is not traded globally. We talk about global influences, but we must not forget that the other 50% of our milk is not traded globally and that its price is a straightforward consequence of the relationship between UK-based retailers and the processors. The retailers cannot escape criticism by blaming it on the Chinese or the Russians. A lot of the price is about straightforward UK contractual arrangements between two important parts of the chain.
What can the Government and the processors do? There are some long-term proposals and ideas. They are nothing new, and no one in the Chamber will be unaware of them. We must—this is an easy expression to use—continue to strive for and identify new markets. Of course—that is stating the bleeding obvious, some people might say. It cannot be done in a hurry, and it cannot necessarily be done by Government alone; it has to be done by a combination of processors and Government. Identifying and exploiting new markets is of course critical, but it will not solve the problem facing my constituents in the next few weeks.
Ms Margaret Ritchie (South Down) (SDLP)
I congratulate the hon. Gentleman on securing this vital debate on dairy prices. Is he aware that the Dairy Council in Northern Ireland, which is an offshoot of the UK Dairy Council, has been awarded two EU contracts for the export of milk and cheese from Northern Ireland to third-country markets including south-east Asia? Does he agree that that will be a good stimulus to the local economy and will help with milk prices in a world in which they, like beef prices, are slightly depressed?
Simon Hart
The hon. Lady’s contribution is timely. One advantage of debates such as this is that we can bring to the attention of the public and decision makers examples of where things are working and ideas for best practice. I suspect that that anecdote will resonate with the Minister, and I hope he will deal with it specifically when he sums up.
The hon. Lady might be interested in my next point, which is about accessing more EU funding to promote dairy products. Again, that is slightly simplistic and will have to be a long-term goal, but I suspect that as a nation we are not accessing those funds quite as effectively as we might be for the dairy industry.
My third point, which is another long-term project, is that there should be greater collaboration between farmers. Even in my part of west Wales I speak to numerous dairy producers, all of whom, it seems, have some slightly differing arrangement with their processors. Having quite so many variations on a theme when it comes to marketing a product does not make for a particularly cohesive industry with real marketing clout.
Simon Hart
I am not getting on too well with not taking interventions, am I? I will give up, so I happily give way.
Tessa Munt
I thank my hon. Friend for his generosity. When farmers are asked to open their accounts prior to the arrangement of their contracts, it is no surprise that they are laid bare to the vagaries in behaviour of the people with whom they sign contracts to sell their milk. If they have to expose every single tiny bit of profit, of course the contracts will be screwed right down to the deck.
Simon Hart
My hon. Friend is referring to the cost of production and the guarantee element of contracts between certain producers and supermarkets—I am trying not to name them. That is a unique feature. I am not aware of any other industry that has to expose its accounts to quite that degree of scrutiny. That of course means that the particular customer can set a price that is so marginally advantageous to the producer as to hamper their sustainability. In reality, that arrangement is not as good as it looks or sounds. Perhaps the supermarkets in question, which champion the arrangement and use it as a public relations tool, might emerge from the shadows after the debate and tell us whether they think it is an honourable and moral way forward.
Mr Mark Williams (Ceredigion) (LD)
Returning to the issue of producer organisations and what we could almost call collective bargaining between producers and retailers, does my hon. Friend think there is merit in the example of the Scottish Government, who are funding an organisation called Dairy Farmers Together to develop collective agreements between the diverse types of farms that he has mentioned, so that their bargaining power is increased?
Simon Hart
The short answer is yes. This is a matter of the sustainability and the long-term health and vigour of the dairy industry, which at the moment is facing yet another crisis. I take on board my hon. Friend’s comments, and I will cheerfully pass the buck to the Minister so that we can hear what he has to say about that idea.
Before I sum up, I want to talk about a couple of short-term proposals that could have an instant and positive effect if the Government implemented them. The first is continued improvement of food labelling and procurement policies in the UK. Despite commitment after commitment and promise after promise over a long period, we are probably not where any of us would like to be with procurement and labelling policies. I hope the Minister will concede that we could do better. I know that is his own ambition and an ambition of the Government—I suspect it is an Opposition ambition as well—but there has never been a better time to stop talking and start delivering on procurement and labelling.
The Government should press ahead with implementing the Macdonald review and deregulation. Regulation is simply an added cost to farmers and there are not necessarily any positive benefits. There is layer upon layer of regulation, so the more we can strip away, without compromising food safety or animal welfare, the better.
The Government should continue with measures on the difficult and often controversial issue that we discussed in this Chamber only yesterday, namely wiping out bovine tuberculosis. TB still casts a huge cloud over the dairy farming industry in a few parts of the world, particularly west Wales. I do not want to make a cheap political shot, as that is something that hon. Members will know I am not prone to do, but one or two Members were in here yesterday shedding what seemed to be crocodile tears for the dairy industry over an issue that affects relatively few—albeit a significant few—dairy farmers. Where are those Members today? If they are that committed to the dairy industry, why are they not here today to talk about a subject that affects every dairy farmer and every household? I suspect I know the answer, which is that they are not the slightest bit concerned about dairy farmers; they are concerned about badgers. I do not mind that, but they should at least be honest about it.
Julian Sturdy (York Outer) (Con)
I congratulate my hon. Friend on securing a really important debate for our dairy industry. He is absolutely right to focus on short-term measures, which he has set out articulately. Does he agree that we also have to tackle the long-term problems? In the UK dairy industry, those problems stem from the fact that over half the milk produced goes into the fresh liquid market. The Government can help by allowing farmers to diversify into other schemes. I know that it is not always easy, and that some producers and farms do not have the capability, but we have to tackle the problem: we are over-supplying the fresh milk market.
Simon Hart
That point is accepted by the farming unions, but as my hon. Friend rightly points out, offsetting those difficulties through diversification schemes is often easier said than done. The uncertainty of the future of dairy farming gives rise to the issue of whether farmers can obtain the necessary funding to enter diversification schemes or more adventurous marketing schemes on the back of a dangerously fluctuating short-term horizon. However, I take on board his well made point.
Some solutions have been put forward by the retailers themselves, so there are silver linings to one or two clouds that we have referred to. To cite ideas from one particular retailer—I am trying to avoid naming individual companies, so that I am not bombarded with rebuttals and the like when I leave the Chamber—those solutions include working with processors to create greater transparency in the supply chain, and enabling farmers to see how prices are set in order to create better trust within the supply chain. That is a new way of working that has not been seen before in the industry, and it will create benefits for farmers, consumers and the industry. For example, the price paid to farmers will be worked out every three months, based on a rolling average of indexed butter and milk powder prices. Those commodity prices are publicly quoted, and in each case there is a futures market, allowing farmers to look ahead and hedge or protect themselves against price movements. That will allow dairy farmers better to predict milk prices and plan accordingly.
That idea comes from an e-mail from somebody who took the trouble to contact me recently. However, if I may use a rather clumsy analogy, it aligns what we are discussing with the principle of a fixed-term mortgage. If the industry is prepared to enter into an arrangement in which it can play the futures market, we can have contracts that are perhaps fixed for a longer period. If contracts can be fixed both between retailer and processor and between processor and farmer, we will be able to look at one-year or two-year contracts, or perhaps—maybe I am being over-optimistic—even further ahead than that.
Yes, of course, there are risks. There are risks to each person in the chain, but surely we can inject a degree of certainly into the industry to eliminate the risks and the downside from which people are suffering, which affects not just farmers, but everyone who relies on farmers in some shape or form.
It is a promising way forward if the retailers are beginning to recognise that there is a need for a transparent contract system based on being able to look ahead and take an average price over a future period. There would then at least be recognition that we are looking at the end of the unacceptable practice of simply sending a text message to a producer to downscale their milk price in two or three weeks.
Andrew George (St Ives) (LD)
I assure the hon. Gentleman that there is no press release attached to my intervention. He has got to the nub of a constructive proposal, but at present the groceries code adjudicator is limited in what she can do. Improving the adjudicator’s powers and the code would enhance the solution that the hon. Gentleman is constructively proposing: a direct relationship between the retailer and the producer of the goods coming into the supermarkets.
Simon Hart
The hon. Gentleman plays nicely into the completion of my contribution. I want to quote from a farmer in my constituency, not a particularly large farmer and certainly not a militant one, but someone who has worked hard on his holding for a long time and reinvested every penny in his business:
“The important bit, and the message which we are struggling to get across, is the”
groceries code adjudicator
“needs to use her powers to investigate the relationship between the Retailers & the Processors. If the Adjudicator would look at the paper trail between the likes of”
x and y,
“she would find millions of pounds, which could result in a minimum of 3p per litre back to the producer. This would turn the job round immediately as it would go to the nonaligned producers. If this was followed up & she had the guts, it would open up the biggest can of worms ever in the dairy industry. The problem is the Retailers & Processors will fight this all the way because it's their extra profit that is cleverly hidden.”
That sounds provocative and it was written with passion, but it highlights a belief and a feeling that is probably replicated throughout the UK dairy industry. We now have an opportunity to correct that, thanks, dare I say it, to the price crisis that most farmers are experiencing. We have a chance to correct it with Government, retailer and processor action, and through greater awareness and willingness to accommodate changes from the producers.
I hope that other hon. Members will produce their own anecdotes and views, so that the Minister can form a view that he can put to us at the end of the debate and that will, above all, encourage all those who are struggling, but on whom we rely to secure a longer-term sustainable business for the benefit of UK agriculture.
Mrs Linda Riordan (in the Chair)
Order. Because of the number of Members wishing to speak, with the authority of the Chairman of Ways and Means, I am imposing a time limit of five minutes on speeches. I remind Members that interventions should be short. Depending on how many Members wish to speak, I may later reduce the time limit.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Diolch, Mrs Riordan. It is a pleasure to serve under your chairmanship. I start by congratulating the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this debate. I associate myself with many of his comments.
The Welsh dairy industry contributes about 10% of the milk produced in the UK, and Carmarthenshire is one of the places in Europe most ideally suited to producing milk, due to the plentiful resources of fresh grass. However, the long-term trends in the industry have not been particularly good. Since 1999, the number of dairy producers in Wales has fallen by 51.3%.
Recently, the price of milk has fallen below 27p a litre, with the cost of production being higher than that. First Milk has announced that it will cut its prices even further in December. In the Baltic states, the price of milk is down to 13p a litre; that shows the fall in milk prices throughout the EU and the world. Milk is a highly nutritious product and a vital component of any healthy diet, but in the supermarkets it is cheaper than water, so something is going wrong somewhere.
During the recess, I visited a local farm, Bremenda Uchaf at Llanarthney, in the middle of the Towy valley, with the Farmers Union of Wales to discuss the emerging situation in the dairy industry. As I said recently during Welsh questions, the most recent crisis has been caused by two main factors: another supermarket price war, in which dairy foods and milk in particular bear the brunt as they are gateway products; and reprisal Russian sanctions on EU food products. President Putin introduced a one-year ban in August, and CNN reported that it is worth £1.5 billion to the EU dairy sector. Demand for milk and other products, such as beef, has fallen significantly and over-supply in domestic and EU markets has depressed prices. I read in The Guardian today that the situation in the eastern part of Ukraine is still highly volatile, so the sanctions may remain in place.
Guto Bebb (Aberconwy) (Con)
On the impact of sanctions from Russia, does the hon. Gentleman believe that the Government should act in the same way as the Polish Government, for example, who have encouraged people there to eat apples to stand up to Putin? Should we not encourage people to eat Welsh cheese to stand up to Putin?
Jonathan Edwards
I would certainly encourage people in Wales to eat Welsh cheese and to drink as much Welsh milk as possible. My daughter is on a pint a day, so I am doing my bit for the cause.
The industry also faces other long-term challenges, in particular the end of milk quotas next year. Competitors in Ireland are preparing for this by increasing milk production, and unless there are strategies in place to help Welsh farmers, we could have a long period of milk price instability. I fear that there is a lack of political direction at Welsh Government level. In a recent evidence session of the Welsh Affairs Committee, the new Secretary of State for Environment, Food and Rural Affairs seemed to indicate to me that the current difficulties were likely to be short-term. I invite her to reconsider her position and to put in place interventionist measures to help the industry before we face another serious crisis, like the one we faced a few years ago.
I want to list a series of interventions that are needed, from the Department but primarily from the Welsh Government. We must ensure that all that can be done is done, and that no one in the supply chain is using the current downward price trend as a convenient excuse to make additional cuts to farm-gate prices. We need retailers who use milk as a loss leader to ensure that they fund those deals from their own profit margins and not from the pockets of farmers. It is vital that those retailers put transparent pricing mechanisms in place and ensure that suppliers are compliant with the voluntary code.
Put simply, milk being sold cheaply devalues the product in the eyes of consumers, and this could have long-term negative ramifications for the sector as a whole. It is extremely worrying to every dairy farmer to see milk being used as a battleground between retailers.
Mr Mark Williams
Before the hon. Gentleman continues his list of remedies for the problem, does he agree that a particular problem, which I am witnessing in Ceredigion, as I am sure he is in Carmarthenshire, is the inability of new entrants to join the industry? What we are experiencing is hardly an advertisement for people to invest in family farms and to keep them going, but it is essential to the fabric of rural Wales.
Jonathan Edwards
That point is especially pertinent to the dairy industry, because entering the market requires a huge investment in milk parlours, and without long-term stability, the investment is too high a risk.
Plaid Cymru has called for the voluntary dairy code to be made compulsory to protect the interests of dairy farmers. This is the first big test since the voluntary code came into being following the 2012 milk crisis. If the voluntary approach fails, we will need to move to a statutory code. Competence for that lies with the Welsh Government, and I would like the relevant Welsh Minister publicly to declare her willingness to intervene if necessary.
Plaid Cymru has long campaigned to change EU procurement rules to allow sub-state Governments to strengthen domestic supply chains. We have succeeded in achieving that, but the Labour Government in Wales have not taken advantage of it. They could use the rural development programme, but they are not doing so.
I would also like the Welsh Labour Government to consider creating a dedicated promotion body for Welsh dairy produce, like Hybu Cig Cymru, which promotes Welsh red meat. Given that global demand for dairy is likely to increase, and that one reason for the current difficulties is the loss of Russian markets as a result of sanctions, the dairy sector needs a dedicated body to look for new and emerging markets. While I am on this issue, I would like to ask the Minister to look at the red meat levy, which is paid when animals are slaughtered. Hybu Cig Cymru loses out on an estimated £1 million a year because the levy is collected where the animal is slaughtered. Many animals from Wales cross the border, and that money is lost to Wales and the Welsh farming industry.
Mr Gregory Campbell (East Londonderry) (DUP)
Just before the hon. Gentleman moves away from that point, on the issue of the UK-wide promotion of the dairy industry, does he agree that what we would like to see—and should see—is the UK Government actively promoting our dairy industries across the United Kingdom internationally to try to counteract the problems, and particularly what is happening in Putin’s Russia?
Jonathan Edwards
The hon. Gentleman makes a valid intervention. There are huge opportunities in developing markets across the world that we should be hoping to access.
Returning to the Welsh levy, there is an issue of fairness here. The previous Minister, the hon. Member for Somerton and Frome (Mr Heath), promised to reform the system, and I am glad to see him in his place today. We need the UK Government to act to ensure that Welsh farmers and our promotion agencies receive the appropriate levy for Welsh produce. If a similar levy was introduced for the dairy sector, this issue would be even more pertinent, because the vast majority of Welsh milk is processed outside our country, regrettably. It is a brilliant food source that we should be doing everything at all political levels to support. Diolch yn fawr.
Miss Anne McIntosh (Thirsk and Malton) (Con)
I welcome you to the Chair, Mrs Riordan, and the Minister to his place, and I congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this timely debate. Many dairy farmers in my area are tenant farmers, and they have been acutely affected by the downturn in price. They form the social fabric of the hills and are an integral part of the uplands.
My hon. Friend referred to the groceries code and the adjudicator; it is a commonly held belief that the groceries code applies to the dairy industry, but I point out to him that it does not. The Select Committee on Environment, Food and Rural Affairs is launching an inquiry at the end of the month, and we are asking for evidence, because there are those who would like to see the remit extended and a review of the remit. It is generally accepted that the groceries code has been working well, and that the adjudicator, created under the last Government but brought in by the present Government, is a great asset, and I absolutely accept that it must apply to the dairy chain. The Government, in their defence, will probably say that a change would open the sluice gates to other products, but I believe that there is a common interest in the Chamber today in such a change.
Tessa Munt
Might that be something one could refer to the Competition and Markets Authority, instead of trying to use powers that are not within the remit of the groceries code adjudicator?
Miss McIntosh
I beg to disagree with my hon. Friend; I believe that the groceries code adjudicator should extend to dairy farmers, but I would go further: I believe that there is a role for the Office of Fair Trading in reviewing increased collaboration on pricing and marketing, and on the whole agreement between farmers.
On a Select Committee visit to Denmark—I will declare an interest: I am half-Danish and very proud of that—we were hugely impressed by the amount of exports and marketing opportunities that there have been through its co-operative movement. Arla was one of the first and most successful dairy co-operatives, and we understand that there are now 1,000 producers in this country under Arla. I yield to no one in my admiration of British and north Yorkshire farmers, particularly those who work on the land in my area. They are fiercely independent and fiercely proud of their tradition, but we must do more to help them co-operate and understand that, if state-aid rules are not deemed to be broken in Denmark, we could apply the same collaboration and co-operative movement in this country.
On exports, my hon. Friend the Member for Carmarthen West and South Pembrokeshire set the scene well. We saw a 3p increase in price about two or three years ago, which was very welcome. We have now seen at least a 1p—and potentially up to a 2p or 3p—decrease. I understand that that is partly because of the global situation, partly because of Russian sanctions and partly because of the milk powder scenario in China, but every time the price goes up, people flock to milk production. We then get a glut of milk and two or three years later, the price goes down. There is a circular situation, and if we are not careful, we will have, at some stage in the long term, a potential food security issue.
Another hon. Friend set the scene for me to say that 40% of leftover liquid milk is used for butter and cheese. We produce Shepherds Purse and Wensleydale cheese in north Yorkshire, and Cheddar cheese is world-renowned. Liquid milk and milk products generally are some of the most nutritious products available. We should be doing more not only to generate growth in this country for this market, which is very popular, but to ensure that we are exporting as much as we possibly can.
There is a role for Government. I believe that what the Committee set out in our report in 2011 still pertains today: dairy farmers should be offered written contracts by processors that specify either the raw milk price or the principles underpinning the price, the volume and timing of deliveries, and the duration of the agreement. Unless such contracts are made compulsory, we will continue to be in this circular situation. That is a very good argument for looking at the voluntary code, as mentioned by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards), whom I am delighted to follow. If we have a situation where the voluntary code is not deemed to be working, let us review it and see whether it should be made compulsory. Let us look at why the groceries code and the adjudicator’s remit does not extend to the role of the dairy industry. Let us look at having greater oversight by the Office of Fair Trading. Let us work with the European Commission and our partners, crucially, to underpin the labelling. If we can get the labelling right at an EU level, that would be a great way forward. Let us encourage all consumers to buy the red tractor products.
Gavin Williamson (South Staffordshire) (Con)
One of the key drivers in the creation of the groceries code adjudicator was to try to deal with some of the inequalities that dairy farmers had to deal with all the time. Does my hon. Friend feel it is incumbent on us to do everything we can to address that long-term issue?
Miss McIntosh
I am delighted that my hon. Friend made that intervention. I hope that the Minister, having heard that, will listen to the arguments made by both my hon. Friend and me. I hope that as many people as possible will heed the message and hear the voices that have spoken this afternoon. I believe that we need a greater balance in the relationship between the dairy producer, the processor, and the retailer. Having a four-pint milk bottle sold for 89p is unsustainable. That certainly would not happen in China.
I shall end my arguments by congratulating my hon. Friend the Member for Carmarthen West and South Pembrokeshire, and by saying that I hope the Minister will review the recommendations in our 2011 report, which we stand by, and will review the groceries code adjudicator and the voluntary code, and encourage co-operatives. There must be a role either for the Competition and Markets Authority or, as I would argue, the Office of Fair Trading.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on bringing this matter to Westminster Hall for our consideration. Every one of us in this room has an interest in the dairy industry, so it is important for us to put forward our case—in my case, for Northern Ireland.
The situation in Northern Ireland is different from the situation in the rest of the UK mainland, as I am sure the Minister is well aware. Agriculture is a devolved matter, but the industry is also different, because we export 85% of our dairy products, unlike the UK mainland. I have been contacted by many dairy farmers in my area who are directly involved in this, and by the Ulster Farmers Union and Chris Osborne, who gave me some background to this. I represent the Strangford area and its farmers, and we probably have the sweetest milk and the best cheese in the whole United Kingdom. I say that without fear of anyone saying anything different—well, they might say something different, but the key is in the tastebuds.
Here and across the mainland, it seemed that I could not pass a red bus without someone showing off their milk moustache on the side of it, and back home, the latest campaign has dubbed milk “A force of nature”. Clearly, the campaign for milk across the United Kingdom is of great interest to each and every one of us. Some 75% of primary schools in Northern Ireland receive milk through the EU milk scheme, which shows, again, the importance of the dairy industry for us. In Northern Ireland, there are 3,425 dairy farms, almost 280,000 dairy cows, and 2,318 people involved in the dairy industry. Clearly, dairy is an important farming sector for us. Some 85% of our milk is exported. Pritchitts, in my constituency, exports to all areas of the world, including the middle east, the far east, the United States, Canada and across the United Kingdom. I am not sure whether it is because we have the greenest grass or the best pedigree stock, but our product is well received in all parts of the world.
The difference between the prices received by dairy farmers on the UK mainland and those in Northern Ireland is where our problem is. The decrease in prices is due to a combination of things, including expected market demand and the Russian embargo. In the past few years, Northern Ireland farmers, like farmers on the mainland, have invested heavily in pedigree stock and new dairy cows. They have also invested in the slurry lagoon systems they have to have in place. Those are expensive, and the repayments on them are very long term. That is all because of EU bureaucracy. Many Members—indeed, many of us in the room—will say that that is EU logic gone mad, but we are all none the less subservient to the EU’s rules.
In Northern Ireland, the Ulster Farmers Union milk price indicator, which was launched in May, is the only barometer of local prices available to local farmers. Given the exceptionally volatile market situation, there are noticeable price differences between Great Britain and Northern Ireland. In September, the difference was 5.36p per litre. When commodity prices are good, the gap tends to be narrower; it is wider when they are under pressure, as they currently are.
As things stand, farmers in Northern Ireland are likely to lose 5p per litre just in November. Although many are hopeful that prices have bottomed out, there are fresh concerns about the direction of cheese prices. Of course, not having the correct price for dairy products has an impact on other producers down the line and on the agri-food industry overall. At the moment, the biggest concern for the Ulster Farmers Union is the pressure that this market volatility will put on farm cash flows. Many farmers have large overdrafts, and the impact on their ability to pay them back is great.
Farmers on the UK mainland have held protests about price cuts, despite their farm-gate price continuing to be 5p per litre higher than that of their Northern Ireland counterparts—that is how the market is at this time. When the Minister responds, I hope, from a Northern Ireland perspective, that he will be able to tell us what discussions he has had with the Treasury about a tax break for local farmers, because the situation in Northern Ireland is dire, compared with that in the rest of the United Kingdom. We have to put a marker down for dairy farmers in Northern Ireland, and particularly those in Strangford, which is one of the major milk-producing areas in Northern Ireland. I look forward to the Minister’s response.
Mr Mark Williams (Ceredigion) (LD)
It is a privilege to serve under your chairmanship, Mrs Riordan. I congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this timely debate.
When I found out this debate was to take place, I spoke to farmers in my constituency. I hesitated to use the word “crisis”, but they reminded me that this is, indeed, a crisis, and we have heard of the experience in Northern Ireland. The price fluctuations might seem small, but when someone is running a small family farm, they are very frightening, and they can make the difference between survival and extinction.
In my intervention on my hon. Friend, I talked about the impact on the broader rural economy. There are 600 farms in my constituency. Most of them are on the uplands, but there are large parts of the county where taking away the small traditional family farms would have a huge impact on the viability of the broader rural community. We have heard about the increasing volatility and about the experience in Northern Ireland, and that is the experience in Wales as well—that is the case that the Farmers Union of Wales and National Farmers Union Cymru have put strongly to me.
I will not rehearse the figures, which we have heard from other Members, other than to say that the recent milk price cuts have wiped an estimated £800 million from the annual income of UK dairy farmers. We have heard about the reasons behind that: the increase in dairy production, over-supply globally, the turndown in global commodity prices, the slump in Chinese demand and the residual impact of the Russian ban.
Mr Nigel Evans (Ribble Valley) (Con)
The other reason is supermarkets trying to sell four pints for £1. While most consumers would welcome being able to buy milk so cheaply, they simply do not want to do that on the backs of the farmers who produce the milk. They would far prefer to see the supermarkets pay a decent price for the milk, and to pay a decent price for it themselves, than to get cheap milk on the backs of farmers.
Mr Williams
The hon. Gentleman also represents a rural constituency, and that is certainly the message from consumers in my constituency when they reflect on the prices supermarkets pay. I concur that that is what consumers would think if they understood the pressure such prices put on the family farm.
The Welsh Affairs Committee, of which I am a member, undertook a report into the dairy industry, which was published last autumn. We undertook our inquiry as a result of the major crisis in the summer of 2012, when retailers and processors announced sudden large price cuts. This is not, therefore, something new; it is a recurring theme, which needs to be addressed, and the Government have done that in part.
These issues are a particular concern in west Wales, where our dairy sector employs thousands of people and accounts for a third of all agricultural output. We therefore lobbied for a code, and the Government, including my hon. Friend the Member for Somerton and Frome (Mr Heath) when he was a member of the Government, introduced one.
The code has recently been subject to review by Mr Alex Fergusson. The review has revealed concerns in some parts of the industry that the code is not working to its full potential. Some processors have expressed legitimate worries that those who comply with it are at a competitive disadvantage. The code is thought to cover about 85% of the UK’s milk market, but a major weakness seems to be that it is not equally embraced by all. There is also concern that purchasers are cherry-picking elements of the code and that some producers will be left at a competitive disadvantage as a result. The FUW has also revealed that there are varying levels of confidence in the code among producers, with 9% being extremely pessimistic about it.
As in 2012, all parties in the dairy industry supply chain deserve fair contractual terms and conditions. The FUW said:
“Farmers should have a fair balance of power with their milk purchasers and contracts should be formed in such a way that milk prices will not be dropped without sufficient advance notice.
Elements of the code, such as shorter termination periods, the abolition of retrospective price adjustments and the inclusion of a market-based pricing formula will aid in shifting the balance of power back in the direction of the producer.”
That reflects the situation many farmers in my area are experiencing. Small businesses are unable to plan or invest for the future, to sustain the family farm or to attract youngsters to the industry.
The FUW says that systemic failures in the dairy supply chain mean that the price Welsh farmers receive for their milk is often less than market indicators would dictate, as Members have repeatedly said. Given that the code’s ability to work for all dairy producers is limited, and given that some processors have yet to adopt the code in its entirety, should we be looking at the benefits not of a voluntary agreement, but of legislation?
We have talked about the need to extend the groceries code adjudicator’s powers to include all aspects of the dairy supply chain and the dairy code. The hon. Member for Thirsk and Malton (Miss McIntosh), who chairs the Environment, Food and Rural Affairs Committee, was right to talk about that. There is a perception out there that the issue is dealt with by the groceries code adjudicator, and we need to address that.
Lastly, I would like to return to the point I made in an intervention on my hon. Friend the Member for Carmarthen West and South Pembrokeshire about producer organisations. I remember standing in a farmyard in the village of Tremain, near Cardigan in Ceredigion, at a meeting organised by the NFU at the height of the crisis in 2012. There was huge scepticism about whether farmers would be able, practically, to work together, given the diversity of the arrangements. We need to continue to address that issue, but we also need some Government assistance, as has been provided in Scotland, to ensure that we have properly constructed organisations that can negotiate from strength.
This is a timely, important debate, and the issue is critical for the wider rural community.
Mrs Linda Riordan (in the Chair)
Order. Unfortunately, because of the number of hon. Members who still want to speak, I am reducing the limit on Back Benchers’ speeches to three minutes.
Ian Paisley (North Antrim) (DUP)
I congratulate the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing the debate. The current Parliament has been one of the most supportive of rural debates. More than many previous Parliaments, it has heard the voice of the primary producer, and it should be commended for that.
Many hon. Members have described how important the milk producing sector is to the economy. My constituency has one of the largest bottling plants, and United Dairy Farmers, one of the most successful farming co-ops, operates there producing yogurt, drinks, butter and other milk-based items. It is the backbone of the local economy and jobs, and it is important to support it. However, we must bear in mind in the debate the world pressures on milk produce—over-production of milk worldwide, and the closure of the Russian market to EU-produced milk. Also, Chinese imports are now half what they were two or three years ago. My constituency helped to provide some of the biggest quantities of whey to China. The market needs to be encouraged and expanded, but there is pressure on it. I should certainly appreciate it if the Government could do more about that.
Glyn Davies (Montgomeryshire) (Con)
One of the key issues seems to be the world market and the competition problems that we face. Many farmers tell me that they are concerned about the end of quotas leading to other countries taking losses to the market and expanding hugely into countries such as Portugal, and completely under-mining the market. Does he agree that that is one of the major concerns, if we are to tackle long-term prices?
Ian Paisley
There are a number of fundamental things that need to be tackled. I am going to say something that will probably be quite unpopular, but it is a fact: the consumer must be educated to understand that if they want to eat clean, green, traceable local produce, they will have to pay more for it. All sectors of the industry must support that message, educating children, housewives and consumers about the fact that if they want to fill their basket with local produce it will cost more. We should get away from the notion that we can have cheap mass quantities of foodstuffs; we can have cheap mass quantities of food-like stuffs—but not of food. We must be clear about it, but it is difficult to sell that message to the public, especially in times of austerity. However, we need to address it.
Northern Ireland is more reliant on exports than the rest of the UK, so the effect that the milk sector feels is of course much greater. Cheap imports are pressed on us by our neighbour, the Republic of Ireland, which aggressively sells its milk in Northern Ireland but also aggressively opposes the sale of ours in the Republic. The Government should give that strong scrutiny.
I want to leave two matters with the Government for consideration. UKRep should be encouraged to press in the EU for an increased level of intervention to take surplus off the market. If that were done it would be of considerable help to world prices and local UK prices. The Government must help companies to find new markets. That is easy to say and difficult to achieve, but significant action must be taken, and, as the Chairman of the Select Committee on Environment, Food and Rural Affairs, the hon. Member for Thirsk and Malton (Miss McIntosh), said, pressure must be put on people to buy red tractor-marked goods and local goods. That means aggressive Government encouragement of the sale of those goods; and they can take it right to the line. Many European Community countries break the rules when they sell their local products. I want our Government to bend that line and be as proactive as they can in ensuring that British products are sold to as many British people as possible. The Government could also encourage DairyCo, a statutory body paid for by a farmers’ levy, to do its job, if they gave it more support.
Mr David Heath (Somerton and Frome) (LD)
It is a pleasure to join the debate. I congratulate the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart). It is good at last to have a voice in the debate from the west country of England, where an awful lot of the finest dairy land in the country is. I shall not get into an argument about whether our milk and cheese is better than anyone else’s, because we know the answer to that in Somerset.
The point made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) about the undervaluing of milk is crucial. How can it be that I can go down to the Members’ Tea Room, in this very building, and buy a silly little bottle of water, without even bubbles in it—a pint of water for 85p; and Iceland supermarket can sell 4 pints of milk for 89p? Where is the logic in that? It is outrageous that milk is undervalued to that extent.
There are clearly issues of over-supply and reduction in world demand, but the fact remains that the issue is the relationships between producers, processors, retailers and consumers. We need a supply chain that is fair at every level. I hoped that a voluntary code would achieve that, but at the moment, after appearing to work well, it is failing to do so. We need to look at it again. Is statutory imposition the answer? That has its drawbacks. Making the voluntary code statutory would limit its scope, but perhaps we have to think about that. I certainly agree that the groceries code adjudicator should be able to look at supply chain relationships, rather than simply the producer-to-retailer relationship; that would bring the dairy industry into its ambit.
What else can we do? First, the dairy industry needs to be ambitious. I do not like people saying, “Of course, we will be prey to all these imports.” We have a superb dairy industry and can beat off any competitors if we are sufficiently ambitious; but that means actively marketing dairy and dairy products, as we do, around the world. Anywhere I have been in the world, I have been able to find cheese from my constituency. We also need efficiency. There are marked differences in efficiency between dairy farmers, but it is no good shouting at those who are less efficient that they must invest, if they do not have the money to invest because they do not get a proper return on their product. We need to be able to support efficiency, and perhaps the Minister can give us his evaluation of the use of the £5 million dairy innovation fund, and tell us what more can be used.
The most important thing is for retailers, processors and producers to share the risk. Their relationship must be based on trust, and until that happens we will not have a sustainable dairy industry for the future.
Albert Owen (Ynys Môn) (Lab)
It is a pleasure to follow the hon. Member for Somerton and Frome (Mr Heath). I pay tribute to him for the work that he did as a Minister, and in a previous Parliament when he worked with me on these issues. I congratulate the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) on obtaining the debate. I assure him that I have not prepared a press release, or even written a speech, but I feel passionate about the subject. My first job and my brothers’ first jobs were working on dairy farms. The herds were small in those days, but it was great experience. Sadly, those farms have gone, for many different reasons, and the fields where they were are now full of horses. I love horses, but would prefer to see dairy cows there.
The farming industry has suffered for many years from external factors, which we have heard about today. More recently, high fuel and energy prices and expensive food stock have been added to by the Russian sanctions on the EU. I want to deal specifically with the price war in the supermarkets. I have long campaigned for a supermarket ombudsman, which was brought in as the groceries code adjudicator, but the current arrangement is lacking and needs to be strengthened. That is not a criticism. When we bring in legislation, we always find out later that it needs to be strengthened in response to issues such as the one we are considering.
Some supermarkets are devaluing a great British product. I want the red tractor on milk produce, but also the red dragon, so that people know about the local involvement, time and effort. Dairy farmers work damn hard. It is a tough job, throughout the year, and they cannot just diversify when the price moves up and down, because theirs is a long-term commitment. Producing the stock needed to produce dairy milk does not happen overnight, and it is not possible to cut back and switch on and off with demand.
We need greater localism and food labelling. The Minister has done some good work on food labelling, but it needs to go much further. In my constituency of Anglesey, for instance, local farmers supply a producer in the area.
Ian Lavery (Wansbeck) (Lab)
Does my hon. Friend agree that there are also pressures on, for example, the baking industry, in that the prices of cakes and bread are being driven down, to the detriment of suppliers? Their situation is very similar to that of the suppliers in the dairy industry, and we must tackle the supermarkets on this issue.
Albert Owen
Absolutely. The example that I was going to give is that of Glanbia Cheese, which produces mozzarella for pizzas across the world. That is produced in my area, yet credit is not given to the superb milk that comes from north-west Wales and from Anglesey. That is an important point—the problem feeds into other food industries. My hon. Friend is right to make the point about cakes and so on.
We need to stand up together for British dairy farming, and today’s debate has been very useful, because we are coming to good conclusions. We want to strengthen the groceries code adjudicator’s remit, so that it can look at this issue. We want to stand up for the farmers, who are working damn hard to produce a product that is increasing in importance. Yes, there are external factors, but we want to be proud to be Welsh and proud to be British when it comes to our milk and dairy industry. I feel that this debate will help to move things forward.
The issue is a recurring one, and there are no party political points to be made here. The dairy industry is a difficult one, and it needs long-term support from across the parties—I know that the Minister is listening carefully to what is being said by Members from all parties—because we want Welsh and British dairy farmers to be able to produce the fine product that our children need and that our children’s children will need in the future.
Mrs Linda Riordan (in the Chair)
Order. Quite a number of hon. Members still wish to speak. I intend to call the Opposition spokesperson at 3.40 pm. If remarks are kept brief, I will get in as many Back Benchers as I can.
Guto Bebb (Aberconwy) (Con)
I, too, congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing the debate. It is a pleasure to follow the hon. Member for Ynys Môn (Albert Owen). Most of my prepared speech will be thrown out the window in view of the change in the time limit, but most of the points have already been made, not least by the two Carmarthenshire Members, who have highlighted many of the issues facing the farming industry in Wales. The impact of the decline of the dairy industry is not only on farming communities and rural communities. In my part of north Wales, the fact that the average herd has gone from 40 to 125 cows means that there are fewer family farms, and there has been a direct impact on the Welsh language and Welsh communities as a result, so the issue is not just economic but cultural in our part of Wales.
I want to pick up the point about a price of 99p for 4 pints of milk. I was once asked on the radio what the price of milk was, and I responded by saying that it was possible to buy 4 pints of milk for £1 in a supermarket. I thought that I had done well in answering that question. Most politicians fail to get the answer right on the price of milk, but obviously, as a Member of Parliament for an agricultural area, I was then condemned by the two farming unions for buying my milk in a supermarket.
It is important that we make points such as the fact that milk and bread, for example, have for a long time been loss leaders. The key point is that the loss should be borne by the supermarkets. If they want to have a price war over the price of milk, they should bear the loss.
Ian Lavery
Is it not time that we looked at regulating supermarkets to protect the farmers and suppliers?
Guto Bebb
That is a fair point, but it should be pointed out that there are some supply chain initiatives that we should see as moves in the right direction. For example, Tesco, which is not a company associated with good practice most of the time, has an interesting supply chain for dairy farmers that takes into account the cost of production and the need to create a profit, but it represents only 5% of UK dairy farmers. However, it is an example of what can be done. I understand that another supermarket is going down that road, but I will not name another supermarket just in case people think that I am in the pocket of the supermarkets.
I want to make some key points in relation to the situation in Wales. We need to look at the long-term opportunities as well. The impact of the sanctions on Russia, for example, shows that we are working in a global market. I would like my hon. Friend the Minister to give me some assurances that the potential for a free trade agreement across the Atlantic will be an opportunity for Welsh farmers and British farmers to exploit. It is important to remember that we have a market in north America that could be identified as a possibility for Welsh farmers, but we need to have some progress on the transatlantic trade and investment partnership. When markets are closed to us, there is a direct impact on our communities.
Another issue that I want to touch on is the movement of funding from pillar one to pillar two. The situation in England is that 12% of the money from pillar one is moved to pillar two; in Wales, it is a more draconian 15%. What is key, if that money is moved to pillar two, is what can be done with that funding to encourage diversification and new opportunities for Welsh food producers. I am following the speech from the hon. Member for Ynys Môn, and Ynys Môn has done a fantastic job of promoting local produce. That example could be followed and, indeed, is being followed in other parts of Wales.
I will give one small example from my constituency. By utilising European money in a creative manner, we have created in my constituency the Welsh food centre in Bodnant. Among other things, it has bought the entire milk production of Gerallt Jones, of Tal-y-Cafn Uchaf farm, and created new markets by creating high-premium cheese, butter and cream products. We could take such opportunities with the money going to pillar two.
I will end my speech at this point in order to ensure that someone else can speak.
Mr Geoffrey Cox (Torridge and West Devon) (Con)
I want to make a few swift points in the time available to me. First, it seems to me that much of the problem that we are all addressing today could be helped by a general elevation of farming in the priorities of Government. I would like to see a Secretary of State for Agriculture sitting in the Cabinet. It is time to see that innovation, which would send a clear message to the farming community throughout our constituencies—like my hon. Friend the Member for Somerton and Frome (Mr Heath), I speak as a representative of a west of England constituency. The fields and pastures of Devonshire are synonymous with the finest dairy produce in the world. That community would like to see, if at all possible, a seat at the highest table being attributed to the ministerial representatives of farming and agriculture.
If we started to think about the dairy industry as a strategic industry that contributes to food security in this country, and an industry that should be spoken for at the highest table, in Cabinet, the message would be sent throughout the processing industry and the retail industry that the Government were at last attaching to the dairy industry, and the cattle and livestock industry as a whole, the priority that they deserved.
I agree with right hon. and hon. Members about the methods and techniques that need to be adopted. We cannot do much about global commodity prices, but we can do quite a lot about the domestic market. We can strengthen the voluntary code, which is important, and we should be considering making it a compulsory code, as the Select Committee is. It is clear from the review by the MSP, Mr Fergusson, that that code could do a lot of good. We need it to be extended, and the Government need to fight and encourage people to adhere to it.
I would be failing in my duty if I did not also mention the crisis of bovine TB, which prevails throughout Devonshire and elsewhere. I hope that my hon. Friend the Minister will say something about the need to ensure that the TB eradication strategy is implemented in full. When I was a child, I was told that the animal kingdom was divided into two sorts of animals: the vertebrates and the invertebrates. As it is with the animal kingdom, so it is with Departments of State. I hope that the Minister will prove himself to be a member of a vertebrate Ministry that will discover its backbone.
Mrs Linda Riordan (in the Chair)
With less than two minutes, I call Tessa Munt.
Tessa Munt (Wells) (LD)
I will make very few points, because most of the points have been made already, but it seems a great shame that the advantage of power is all held by the retailers and processors. One thing that I welcome is what has been done by Farmers For Action. Its protests have generated publicity. That sort of thing gets on to the news, and those protests have always proved peaceful and, certainly in my area, have taken place with the agreement of the police. I particularly welcome the move that Farmers For Action has made to produce stickers, posters and leaflets that it will distribute outside supermarkets so that the customers, who are the end of the line, can connect the dots and understand the difficulties faced by the producers, who are at the very beginning of the line. Asking farmers to plan when they are being offered prices that are well below the cost of production seems desperately unfair. I will leave it there, but I endorse everything else that has been said today.
Richard Drax (South Dorset) (Con)
I would be delighted to speak for the last few seconds. I thank my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) for securing the debate. I will briefly speak up for Mr Rob Vearncombe, a dairy farmer from Kimmeridge, which is a beautiful place in my constituency. As fast as I can, I will list the points that he wanted to make directly to the Minister and the Government.
First of all, Mr Vearncombe thinks that the recent milk price cuts will have a devastating effect on the dairy industry in the medium to long term. In the short term, he believes that the industry can ride the storm for six to eight months because of the higher prices that have been achieved. For a dairy farmer who produces 1 million litres a year from 125 cows, the fall in milk prices represents a loss of about £35,000 a year. Colleagues have already mentioned such vast figures, and I do not believe that the public understand that 1p off, or added to, the price of milk makes a vast difference to the bottom line for a farmer, particularly a small one.
There is a huge variation in how farmers produce milk. There are high-intensity systems, and there are low-intensity systems such as those common in New Zealand, and the public do not understand the cost implications of the different systems. The type of land is a large factor.
Mr Vearncombe says that variations in milk price have a dramatic effect on profitability. He claims that farms that are achieving 35p a litre have been “poached” by supermarkets to supply directly, with strings attached—
Angela Smith (Penistone and Stocksbridge) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Riordan. I thank the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart) for securing this important and thoughtful debate. I begin by conveying an apology from my hon. Friend the Member for Ogmore (Huw Irranca-Davies) who is currently on a shadow ministerial visit to Brussels, where he is discussing several topics, including the ongoing dairy crisis, with European counterparts. I assure Members that we take such matters very seriously and consider them to be of the greatest importance.
As has been made clear this afternoon, the recent situation in the dairy industry is extremely worrying for rural communities, tourism and the availability of local food. Britain has a long tradition of dairy farming, which is the country’s largest agricultural sector. The UK is Europe’s third largest producer of milk after Germany and France, and the industry employs more than 50,000 people and contributes £3.7 billion to the British economy. For that reason, the Government must respond to the current dairy crisis by co-ordinating action by European officials to support dairy farmers and restore confidence in the industry.
We need stability in the industry, but consecutive months of high domestic milk production, combined with the ban on dairy imports to Russia and falling returns from global commodity markets, have resulted in an overall fall in milk prices because the largest UK milk processors have reduced payments to farmers for raw liquid milk. Low global dairy commodity prices have been compounded by price wars between major retail outlets, which have used milk as a loss leader to attract customers. Several hon. Members have made that point.
Farmers for Action states that some farmers are selling milk for as little as 25p a litre, which is far below the market price. That results in farmers operating at a loss and not even covering production costs. Not only is that financially unsustainable, but it raises further questions about responsibility in our food supply chain. If the illusion is created that food is cheap, it may damage the agricultural industry and affect how the public view food. That is not at all helpful to achieving our aims. The Government must address long-standing structural imbalances of low profitability in the industry. Farm incomes are still falling, and many farmers have left the industry altogether. We currently have just over 10,000 dairy farmers in England and Wales, and that figure is down 4.1% on the previous year.
Although the dairy industry is not yet self-sufficient, we do not believe that its future is bleak. Population growth, increased wealth in developing nations and changes in dietary habits all point to greater long-term demand for dairy. The Government must ensure that the UK dairy industry is well placed to take advantage.
Glyn Davies
If there had not been such demand today and I had been able to make a speech, I would have liked to make the point that quotas come to an end next year. European countries will expand dramatically to take over the growing market that the shadow Minister is talking about. We need an assurance from the Minister that the instruments in Brussels will not be used to enable other countries to expand their industry at the expense of the British dairy industry.
Angela Smith
That is clearly for the Minister to answer. I made the point earlier that we need to see effective, co-ordinated action from the UK Government in its relationship with Brussels to ensure that the UK dairy industry is properly served.
In June, the industry pulled together and launched a plan called “Leading the Way”, which states that an estimated 2.5% annual growth in global demand for dairy products over the next 10 years will boost UK dairy production through increased exports and import substitution. The hon. Member for Somerton and Frome (Mr Heath) made a point about marketing. My hon. Friend the Member for Ynys Môn (Albert Owen) talked about localism and the need to ensure that people properly understand that cheeses such as mozzarella are sometimes made in Wales. That is an important point, and a lot can be done on that score. In particular, more can be done to encourage British people to eat British cheese. My own favourite is Wensleydale, the great Yorkshire cheese that is produced in Hull.
Angela Smith
I will not give way, because I need to give the Minister time to respond. “Leading the Way” is an important vision for profitable growth for the UK dairy industry, based on economic, social and environmental sustainability. It focuses on the capacity of the dairy sector and the need for it to be competitive in a global context through scale, innovation and efficiency. What are the Government doing to support the industry at every level, and to improve the industry’s international competitiveness?
The industry’s voluntary code of best practice is another encouraging sign that the sector is addressing some of the structural issues of pricing mechanisms and transparency that need to be resolved. As several hon. Members have said, the dairy code provides a useful voluntary model to ensure that producers get a fair deal, and it avoids inflexible legislation and price fixing. However, it must be made to work and it must be rolled out across the dairy sector. Labour supports and encourages the dairy industry’s voluntary code of practice, which has been drawn up by Dairy UK and the NFU, and we believe that it should be adopted by the entire industry. It is absolutely right that milk producers should get improved bargaining power.
We should all welcome transparent contracts between producers and purchasers that set clear prices, which will add much-needed security. That is why the findings of the UK’s independent review of the voluntary code, which was undertaken by Alex Fergusson and recommended that the code be extended up through the supply chain, were encouraging. I commend the Environment, Food and Rural Affairs Committee and its Chair, the hon. Member for Thirsk and Malton (Miss McIntosh), for launching an inquiry into the matter, which is helpful and appropriate.
The hon. Lady recently wrote to the Secretary of State to seek the Government’s views on the potential for the statutory framework provided by the groceries code adjudicator to be extended to help to alleviate the current problems in the dairy industry. Labour, of course, supports the adjudicator, and my hon. Friend the Member for Ogmore was very much involved in getting the Groceries Code Adjudicator Act 2013 through the House. The adjudicator’s remit under the 2013 Act does not extend to the relationship between indirect suppliers, such as farmers, and retailers, nor does it apply to price setting. Labour would be open to exploring whether the adjudicator’s role should be extended to include the relationship between milk producers and milk processors.
To tackle the current crisis, we must take important steps domestically and at European level. We believe that retailers, processors and manufactures must work with dairy farmers to ensure a fair return for their product. They must recognise the cost of production and ensure investment and long-term viability.
What are the Government doing to address the structural imbalances that result in low farm-gate prices? What meetings has the Minister had with European colleagues to ensure that British farmers get a fairer price for the milk they produce? What additional EU measures will be taken to ensure the viability of the UK dairy sector? That point was made by the hon. Member for Montgomeryshire (Glyn Davies) in his intervention. Finally, what are the Government doing to take more proactive steps to promote investment in processing and reduce farmers’ production costs, including support for innovative research and development? Dairy farming plays an integral part in our rural economy, as it has for centuries. The Government must support the sector to overcome the short-term crisis and secure the long-term sustainability of the industry.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)
I congratulate my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) on securing this debate. The over-subscription of the debate, which has necessitated such a tight time limit on contributions, shows the importance of the dairy industry. Many cheese varieties have been mentioned, and the hon. Member for Somerton and Frome (Mr Heath) said that the best cheese is in the west country. I say that the cheese gets better the further west it is made. If people go all the way to Cornwall, they will find the best cheese.
Volatility is the new challenge facing the industry, and I will briefly describe what has happened, because we seem to have gone almost full circle in little more than two years. In June 2012, UK farm-gate milk prices fell to just over 26p a litre, and at that time feed prices were extremely high. The situation was incredibly difficult, and confidence was at rock bottom. Many of us will remember attending a meeting with the then Minister with responsibility for farming, my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice), to highlight the issue and the crisis facing farming. However, we then experienced a much better period and something of a turnaround. Relationships in the supply chain improved drastically following the development of a new code of practice for dairy contracts. By November 2013, prices had gone up to 34.5p a litre. Demand started to grow in China, feed costs fell dramatically and our farmers responded by increasing production. UK milk production increased for the first time in 10 years.
The latest figures from the farm business survey published just last week show that, in the very positive 2013-14 financial year, the average farm business income on dairy farms increased by more than two thirds to more than £87,000 a year, which was driven by both increased prices and increased production. That was perhaps a record year, but as my hon. Friend the Member for South Dorset (Richard Drax) showed when he described the concerns of one of his constituents, many farmers will now feel that that seems a long time ago. Since then we have sadly seen another serious dip in prices, with the latest statistics from the Office for National Statistics showing that the average milk price in September 2014 was just over 30p a litre. Anecdotally, there are some examples of farmers accepting less than 30p a litre. Some projections show that the price could still go down further. In fact, we can probably expect to see another six months of relatively low prices.
Roger Williams
Dairy UK is concerned that some information issued by the Department of Health about the quality and healthiness of dairy products is not true. Will the Minister please talk to the Department of Health to address that concern?
George Eustice
That was an issue about a year ago. We had discussions with the Department of Health, and the Government changed some of the approaches in the advertising to which the hon. Gentleman refers.
There is some good news, in that the average price for forage crops remains low, and the price of protein concentrates continues to fall. The UK farm-gate milk price also remains a bit stronger than in some other European countries, notably Germany and Poland. Some of the Baltic states have been very exposed to the Russian ban. In Latvia, for instance, the average farm- gate price is now less than 20p a litre. Nevertheless, the sharp fall in prices has had a big impact on farmers, and confidence is low. As I said, we seem to have gone full circle.
Fiona Bruce (Congleton) (Con)
I thank the Minister for giving way, as I had hoped to speak in this debate. There was a meeting of Cheshire farmers yesterday, at which I am told frustration reigned. The main question they asked me to put to the Minister was this: what can the Government do to reassure dairy farmers that they have a viable future and so should invest in the future of their businesses?
George Eustice
My hon. Friend makes an important point, which I will address in a moment.
Volatility is, of course, a feature of global markets. The National Farmers Union is showing strong leadership in developing futures markets and other market mechanisms alongside industry partners. Every six months I chair a meeting of the dairy supply chain forum. The next meeting was due just before Christmas, and given the challenges that the industry is facing, I have brought that meeting forward to a little under two weeks’ time. One of the key issues I want to address in that meeting is whether we can do more to support the NFU to develop the mechanisms that help farmers to manage volatility.
Despite the current challenges, as many hon. Members have said, the long-term picture for our dairy industry is very positive. British farmers and dairy producers are producing a range of fantastic products. Over the next decade, global demand for dairy is expected to increase by around 2.5% a year. Earlier this summer, I attended the launch of the industry’s “Leading the Way” growth plan, which sets out some of the opportunities for the industry. We are supporting and encouraging dairy farmers and processors to develop their businesses on the back of growing demand, and over the past year exports of milk powder have grown by 65% to £152 million, and cheese exports are up by 12%.
As the hon. Member for North Antrim (Ian Paisley) said, there has been a particular problem in China, where demand has fallen, which has contributed to some of our difficulties with price. The Secretary of State for Environment, Food and Rural Affairs will be visiting China in December, and I am sure this will be one of the issues on her list. Substantial investments are being made in the UK dairy processing industry, which is testament to its long-term potential, including Arla’s new plant at Aylesbury and plans for the Davidstow creamery in Cornwall.
On the idea of encouraging producer organisations, we have given dairy farmers the opportunity to unite in producer organisations so that they have greater clout in the marketplace. In the past two years the Government have spent £5 million supporting that work. My hon. Friend the Member for Montgomeryshire (Glyn Davies) spoke about quotas, and at virtually every Agricultural Council since January I have resisted calls from Germany, Austria and others to loosen the quota regime ahead of time. Earlier, they were concerned about the risk to them of the super-levy fine, and we have resisted those calls because we did not want to create additional pressure on the market. Many hon. Members have highlighted the dairy code, and Alex Fergusson has now concluded his review. He concluded that the code is working well and has made a positive difference, and 85% of production is currently covered by the code.
A number of people have talked about transparency in the contracting system, which is provided for in the code. Farmers essentially have an opportunity to walk away from a contract with three months’ notice, or if there is to be a clear and transparent basis on which the price is calculated, sometimes linked to production costs, it has to be clearly stated in the contract.
A number of Members asked whether the code should be put on a statutory footing. As the hon. Member for Somerton and Frome pointed out, there are drawbacks to that, because we probably would not be able to include a farmer’s right to walk away after three months. We would end up with a statutory code that is far weaker than the voluntary code.
Co-operatives have also been mentioned. One of the points that Alex Fergusson made in his report is that, although members tend to be very happy in co-operatives and tend to support that approach, he thinks that in some cases they could do more to leverage their power within a co-operative to ensure that they are getting a fair deal, which the farming industry might want to consider.
Many hon. Members, including my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), have mentioned the groceries code adjudicator. It is important to recognise that the Department for Business, Innovation and Skills has committed to reviewing the groceries code adjudicator in 2016, but the dairy code is currently voluntary, and the latest report by Alex Fergusson concluded that it is working well. Farmers are not telling us that the code itself is a problem. The other thing we have to recognise is that the dairy code is most valuable to farmers when markets are tight and prices are rising; it is of less use to them at the moment when, frankly, we have an oversupply, with milk production up by about 10%. Finally, the other issues raised today concern whether retailers should be covered by the code, which the industry is considering because it was recommended by Alex Fergusson. The long-term future is bright for the industry, and we are doing all we can to address the immediate challenges.
Newlands Park (Mobile Home Site)
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Mrs Anne Main (St Albans) (Con)
It is a delight to serve under your chairmanship this afternoon, Mrs Riordan. The debate is very important for my constituents. There are more than 2,000 park home sites in the UK. They are often populated by elderly residents, with many sites having a minimum near-retirement age, so the residents on the sites are often at the more vulnerable end of the spectrum. It is a shame to say that in this day and age the spirit of Rachmanism—a synonym for the exploitation and intimidation of tenants by unscrupulous landlords—is alive and well and stalking some of the mobile home parks of the UK, and certainly the one in St Albans that is the subject of this debate. I suspect that it is not an isolated case, but it is what I want to focus on today. I sent the Minister a list of the points that I wish to raise. In this half-hour debate, I will come up with a shopping list of questions that I would like answers to, and I accept that the Minister may wish to respond to some of them in writing later.
The Government had the best of intentions when they introduced the new Mobile Homes Act 2013 as a result of concerns raised by hon. Members of all parties about abuse by park home owners. It was said that malpractice was widespread across the park homes sector, and that the law was inadequate because it neither deterred unscrupulous park home site owners from exploiting residents, nor provided local authorities with effective powers to monitor and improve conditions. I am still amazed that there are no restrictions on who can own a park homes site, and the issuing of a licence is often a mere formality. Having a long criminal record or even a record of malpractice on other sites does not necessarily bar someone from the industry. When a site owner fails to comply with the conditions of the licence, it is the responsibility of the local authority to prosecute.
Unfortunately, the Mobile Homes Act simply gave powers to a council to prosecute. It did not impose any duties. Today’s debate shows that those powers, if not used, might as well not exist. My residents were hopeful that the Act would deliver improvements for them. Sadly, that has not happened.
I will give the Minister a shopping list of issues that my residents face that they find it difficult to get redressed. The main problem is that the Newlands park residents are routinely described as troublemakers. The residents have banded together to form an association, and they have complied with all the residents association regulations in paragraph 28 of schedule 1, part 3, of the amended Mobile Homes Act 1983. They even sent a letter of their intention to form a residents association, believing that they had fully complied with requirements. However, the Golby family who ran the site, which they inherited from Mr Golby senior, had very different views as to the validity of the association.
On 1 September 2010, the secretary sent a letter informing the family of the association. It stated that
“The...membership list and constitution are available for inspection by appointment with the Secretary”
at the request of the family at any time. The association asked for a formal acknowledgment of its status, but the letter it received was far from a formal acknowledgment. It said:
“Please find...a copy of a letter from your so called Residents Association of Newlands Park.”
It then went on to talk about putting up rents and warned about people who did not pay rents. It concluded:
“We feel certain residents are trying to cause friction on the Park, so please be aware before thinking of joining any sort of Association because we, the Partners...are here for you to speak to...If you feel you need to speak to us in private you can always put a note into the office.
We would like to wish...all the residents at Newlands Park a happy and healthy New Year.”
I do not think that the residents felt healthy when their wish to join a residents association was not acknowledged, and they do not feel happy about their dealings with the Golby family. The letter was received after they sent a politely worded request to have their residents association acknowledged. The residents say they feel intimidated and harassed, and they have reported the matter to the council. The residents then got another letter warning them to disband.
The council says it received allegations that the site owner’s family had not been on site as often as they should, and also
“intermittent recurrent reports of bad language, arguments and intimidating behaviour”.
The residents have a lot of concerns, and the only way that they can get their opinions across is by going through the residents association, but it appears that Mr Golby and his family do not recognise the association’s existence.
I spoke to Mr Golby today. Again, he mentioned troublemakers. He said he did not recognise the residents association, did not know all the names, and did not have enough information, even though the residents association had said it was happy for him to have any names and information that he wished to have. The association did not get a response to its letter, and I do not believe that Mr Golby has ever asked to meet it.
The residents are trying to fight back and assert their rights. They say they are a qualifying residents association, and the park owner is not entitled to discourage or stop any residents who wish to belong to an association. That should be the case. Elderly, vulnerable residents should not be warned against joining associations by the landlord. I cannot think what he has to fear if he is a responsible landlord. Perhaps that is why the few who are interested in having an active residents association and dialogue with the owners are labelled troublemakers.
“Dialogue” is a loose word. There are two lines of communication on the site. Three telephone numbers are posted on a notice board: mobile telephone numbers of family members. The council knows that those numbers are available and believes that that is adequate communication. When residents call, the phones are rarely answered, or the conversation is terminated by the call being cut off. There is also an office, but it acts merely as a drop-box, so letters often go unrecognised or unanswered for a considerable period. When residents raised that point with the council, it said that it was aware of complaints about correspondence:
“We currently await responses to some test correspondence that we sent there and will be taking this up with the owner in due course.”
Three Rivers council, which covers this area of my constituency, looks spineless, as far as I am concerned. It seems to take any assurances given by Mr Golby and his family that everything is absolutely fine. It is not. The council sent test correspondence; Erle Jackson, the officer dealing with the matter, says that the correspondence was sent a month ago and has still not been acknowledged by the partners. That is exactly what my residents experience.
I went to the site and there is a tiny shoebox of an office. Things are not collected regularly. There are no opening times on the office door. If I were a resident and went along at 10 o’clock on a Tuesday, I would not know whether somebody would be there to talk to me about any issues. That should flag up something to the council, which, as of today, has still not had a response to its communication. The lines of communication are not as adequate as the Golbys assured the council—and me, today—they were. It is obvious that they are not adequate, and I am told that Mr Golby and the other partners, who I believe are his sisters, cut off the conversation if it is not to their liking. Today, Mr Golby could be heard by my staff in an adjoining office. He was rather voluble and agitated at being pressed on some of these matters, and he said, “Thank you very much”, and cut off the phone call. I understand that that is common treatment for my residents, and they are at their wits’ end, which is why they came to me.
We should do better by park home residents. The council’s standards state:
“The name, address and telephone number of the site licence holder or their representative...should be prominently displayed.”
Well, there are three mobile phone numbers displayed. The standards also state:
“details must be sufficient to facilitate emergency contact at any time.”
I do not call putting the phone down and taking a month to respond to a letter being in compliance with that licensing detail.
Residents tell me that when they have discussions with Mr Golby, it is often at a volume that they find oppressive, and includes language that they find insulting and harassing, and one elderly lady told me that Mr Golby even burst into her unlocked caravan one day, mouthing foul expletives—
Ian Lavery
I thank the hon. Lady for giving way. Can she say whether she has more than one mobile park home in her constituency, and if so, is that a common way for the owners to treat people?
Mrs Main
I have several mobile home parks in my constituency. I have two in the area that I am talking about, which is covered by Three Rivers district council; the other one is perfectly well run. I have three others in the St Albans city and district council area, and they are absolutely fine as well. The one that I am talking about is an example of bad practice in running a park home, as far as I know. I cannot say that I have been to visit every park. There was one park site in my area that had some trees that needed pruning—it was a council site—and eventually those trees were pruned.
As I was saying, one elderly lady at the site said to me that this gentleman—Mr Golby—burst into her caravan, which was not locked, and uttered foul expletives because she had dared to raise a concern. The council acknowledges that there have been recurrent reports of bad language, arguments and intimidating behaviour, but it goes on to respond—
Mrs Main
I spoke to the Minister during the Division, and he is happy for me to exceed the 50% of the debate that would normally be allotted to me, to ensure that I can outline as many of my residents’ complaints as possible. Hopefully, he can think about them and respond to them later. I am grateful to him for that indulgence.
As I said, communication is key to this issue. I hoped that when the new Mobile Homes Act 2013 was passed, residents would no longer feel oppressed by the worst examples of site management. However, if councils are too weak to take action, those residents are no better off now than they were before the Act was passed; in fact, they may be worse off. If the owner of a site knows that a council is unwilling to act because it lacks resources or is worried about costs, they can act with impunity. They know that the council, having been tested, does not intend to do anything on behalf of the residents.
Some of the most vulnerable residents in my constituency fear that their residents association will be bullied and intimidated by the Golby family. As I say, Mr Golby does not recognise the association. I rang the mobile phone number and spoke to Ms Fitzgerald today—I believe she is Mr Golby’s sister. She said that there was some troublemaking on the site, but she would let it pass. She said that I can visit her to talk about these matters. I said that I intend to take up her offer, because the residents cannot get hold of the owners except via a mobile phone number, which means that the owners can terminate a call if it does not suit them or if it becomes difficult, and that nothing is recorded. Many residents say that if their number is recognised as belonging to one of the so-called troublemakers, their calls may not be answered.
The fact that reports have been made to the council should surely raise a red flag that something is thoroughly wrong on the site. An earlier incident in 2012 was reported to the council’s legal services team, which responded by saying that
“the Council’s power to…prosecute is discretionary”,
and that
“other remedies were more readily available to the victim and the Council had no staff or resources”.
My staff have been looking into this issue for the past few days, and the phrase “We haven’t got the staff or the resources” has arisen frequently. Councils are ducking their responsibility to vulnerable residents by saying that they have no staff, no responsibility and no legal obligation to do anything, so it is no wonder that residents are approaching their Members of Parliament.
My residents sought legal advice, but sadly even one meeting made it obvious that it is beyond the means of the elderly people living on the park home site. One resident told me that people live on the site for various reasons, one of which is a lack of money. The homes are a relatively inexpensive way to live—although my residents might beg to differ, given some of the practices on the site.
The council is aware of those issues. It reported that the
“recurrent reports of bad language, arguments and intimidating behaviour”
are
“nearly always…anecdotal, of something that happened to someone else.”
I wonder why that is. I wonder whether it is because the residents do not want Mr Golby turning up in their sitting rooms telling them in no uncertain terms—“effing and blinding”, as it has been described to me—that if they do not like it, they can get out. Perhaps that is why people say, “I heard that—”. It is difficult. The spirit of Rachman is haunting those residents, who are no more protected by the Mobile Homes Act 2013 than they were previously.
It is amazing that, although Mr Golby does not recognise the residents association, his sister does. She gave me a very different version of events. The site agreement states that
“the details must be sufficient to facilitate emergency contact at any time”.
If nobody takes the residents’ phone calls, no office number is provided, the office is rarely manned and it operates as a drop-box from which even the council must wait more than a month for a response, there is a serious problem. What rules govern communication on the site? I ask the Minister whether anything more can be done to give residents the right to have a residents association and to have a better form of communication than three mobile phone numbers pinned on a notice board.
There are rules governing the sale of park homes, but residents on my site find it difficult to sell theirs. A letter from the site office states:
“To all residents of Newlands Park…No sale may take place without the full consent of the park owners.”
Interestingly, not only does the owner of the site require written notice of any prospective purchasers, but they require notice to arrange to meet with the prospective purchaser. It is my understanding—I would like the Minister to confirm this—that a park home owner has no right to request to meet the prospective purchaser. They can check the purchaser’s references, creditworthiness and age, if there is an age condition on the site. However, meeting the prospective purchaser seems overly onerous. Unfortunately, my residents are telling me—this has happened on more than one occasion—that it is difficult to sell their homes to anybody other than the Golby family, and they are sold at a very low rate. I have been told that, particularly if people go into care,
“They force a purchase for about £1000”
for a park home
“on them, or their relatives, when the home is valued at considerably more.”
They then either replace the home, having secured the site for a small amount, or, if the home is in good condition,
“re let the old home at an exorbitant rent.”
That practice is denied to the residents of the site, but the park home owners do it regularly and buy up those properties cheaply.
When somebody had the temerity to display a notice on a board outside their park home, it was ripped down and they were told that they are not entitled to have notice boards on the site. There are other structures on the site, such as gazebos, benches, bird baths and other things, but a small notice board, on which somebody might have the temerity to display something that is not allowed on the official notice board, was not permitted. I asked the council about that, and was told that the Golbys will not allow anything on the notice board that is not of their choosing. That means that, yet again, the residents’ lines of communication are substantially diminished. The residents association is not allowed to put up its own notices anywhere on the site. I find that practice unfair, as it seems designed to isolate people from their ability to communicate.
When I visited the site, I discovered a litany of ongoing problems, such as leaking water pipes from a van that an elderly gentleman was renting from the Golbys. There is a dispute about a water bill, but I will have to leave it there. The water had been running for a considerable period, causing some nearby vans to be on soggy bases. Some of the bases are crumbling away. The council recognises that the Golbys must repair the concrete pitches that are heavily broken up; some of them are only the size of a paving slab. The Golbys refused to do so, although I was told today that they will do it. I have seen letters that attest to the fact that they believe that if they do the repairs, the vans may be damaged due to their age. They feel that that absolves them from having to repair the park home bases. Some of the vans are now propped on bricks or wooden blocks because they are off-level. I am concerned that some people’s vans may be blown over or collapse because they are on such a lean.
Some councils have got more backbone, and perhaps more resources, than Three Rivers. In 2006, Torbay council took Hatchmere Park Ltd, which owns Falcon Park in Totnes road, Paignton, to court. It did not do any ground repairs to the site in 2006, and the caravans were on leaning banking and were shown to be unstable. There was a risk to health and safety, so the council took action against the company. It turned out that the same people had been prosecuted in 2008 and 2010 for similar offences. My council seems not to wish to invoke health and safety, although there are elderly people in caravans that are clearly on a lean. Will it take one of them blowing over or collapsing, or somebody being killed, for somebody to get the backbone to use the powers that have been given to them, although they are not duty-bound to do so?
There is, unfortunately, asbestos on the site. It is in a broken-up shed that is not in the Newlands Park site, but is within the curtilage of the site. It seems that nothing is being done about it. When my staff pressed Three Rivers council, they were told that Mr Golby said he was dealing with it, and that the council did not have the resources to do anything. I find it amazing that the council’s correspondence on 3 November said:
“Water supply and drainage…only requires their provision.”
However, the licence states:
“All parks should be provided with a water supply in accordance with appropriate Water Byelaws and statutory quality standards.”
If my council is not inspecting anything, how on earth does it know whether complaints about leaking pipes and drains, and sewage, are reasonable?
The Golby family accept that they have the responsibility to fix the bases, and the council has accepted that, but no one is making them do it. The residents do not have the money to ensure that it is done, so we have an impasse. The partners—the Golby family—have claimed that they are not required to do any maintenance on the park, because the rent has increased under retail prices index inflation. As I said, Torbay council did not agree that not doing maintenance or making improvements on the park was acceptable. It is not acceptable simply to say, “We will not threaten to put up your rent, which means that we can get away with leaving you with a shoddy site.” Are there any rules governing this issue?
The last electrical certificate for the site was from October 2010. It was acknowledged by the council, and it was recommended that there be another inspection in 2013. The council have yet to see a certificate, and it has taken my prompting to get the council to ask for a copy of the updated certificate, which it now has. Speaking to Mr Golby today, I challenged him on that. He said that a recent electrical certificate was sent to the council for inspection. However, the council confirms that it has not had one. He also said it was on display in the office, but when I went there, the office was locked and people cannot see the certificate, if it is even there. Officer Erle Jackson said that as yet no certificate had been seen.
The council confirmed that the last inspection of the site was in 2011, but in the intervening time, there has been only one visit per year. It is not aware of the concerns about the electricity supplies. The meters are ancient. Someone described them to me as being like Methuselah. The site is not up to date and not up to standard. It seems that park homes are outside a lot of laws. One of the things that I found most amazing was that it is not one circuit breaker per van; they are shared between two vans. At one point, the circuit breakers were shared with the street lighting. A resident who switched off his electricity when he was going away on holiday noticed that the street light went out as well. He tried it a few times and realised that he was providing electricity to light the site as well as his home. When an adjacent park home that shared the circuit breaker had a fault, it switched off all the electrics in the adjoining park home, leaving its residents without freezers and heat. If the weather was cold, that would have left their pipes to freeze.
The park homes fall outside normal building regulations, and it cannot be acceptable that unscrupulous park home owners can link up anything to the meters. The one I looked at was pretty ancient and had a bit of blue tape inside. The meters are not changed as regularly as recommendations require. The park homes do not have their own circuit breakers because they do not have the same status as a home, but these are homes. These are not temporary caravans used for holiday lets, which people may go into regularly to see whether there is a problem; these are people’s homes, and I find it amazing that this is allowed to happen. It is dangerous. Dangerous electrical circuitry in one van could well result in another van setting on fire. I hope the Minister will look into the anomaly.
On energy bills, residents have no confidence that they are paying the correct amount. How on earth do they access age-related discounts such as the warm home discount? The industry recognises that the majority of people on these sites are elderly, but if they are not able to get those discounts, a huge tranche of people are being abused when it comes to the amount they are paying for their heating.
Transparency would go an awful long way in this matter. I hope the Minister will say that there should be an obligation on site owners to do better than my site owners are doing. I ask that the family who own this site—they happen to be a Traveller family—show the same concern for residents that my council shows to Travellers and Traveller sites. I find it amazing that we have a Traveller liaison officer speaking up for concerns about Traveller sites, yet a Traveller family can run a park home site and no officer in Three Rivers feels the need to speak up for the ordinary residents who do not happen to have Traveller minority status. Those residents do, however, have minority status: they are poor, elderly and live in homes that fall way outside any obligations in the law.
The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)
In the four minutes or so that I have, I will try to answer as many of the points that my hon. Friend the Member for St Albans (Mrs Main) made as I can. Right at the beginning, she said that she had a shopping list, and she certainly raised a huge range of issues in the course of her speech. I thank her for the note that she gave me, which had some detailed questions. I undertake to write back to her and answer them all. They cannot possibly be done justice in the course of a half-hour debate.
First, I reiterate that the Government are committed to improving the sector so that those who run a professional, honest business can prosper without unfair competition from the rogues. From what she has said, it sounds like the family concerned may fall into the latter category. We want home owners, some of whom are vulnerable—my hon. Friend mentioned the plight of many of her constituents, some of whom are with us this afternoon—to be assured that their rights are respected, that their health and safety is properly protected and that they will not suffer the bullying and harassment that seems to have been a characteristic of the site’s management.
The Government are determined to root out continuing bad practices in the industry. Local authorities and other agencies should be using their powers effectively to protect home owners. That is why we will be bringing together representatives from across the sector to identify evidence of poor practice and investigate how best to raise standards further and tackle abuse. The Minister of State, Department for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), responded to a debate in the Chamber last week and said that we would look further at these issues. We are hoping to convene a round table of various interested Members and other representative groups shortly, and I am sure that my hon. Friend the Member for St Albans will receive an invite to come along and take part. The work we are doing will significantly help in shaping the review of the Mobile Homes Act 2013 that will be undertaken in just over two years’ time. We are making a start on that now with the round table, and I hope that she and other colleagues from throughout the House who have concerns will participate in that.
As my hon. Friend knows, the Government were pleased to support the 2013 Act, which was introduced by my hon. Friend the Member for Waveney (Peter Aldous), and ensure that it passed through both Houses. The objective of the 2013 Act was to put in place measures that will enable the park home industry to develop on a sustainable footing, so that site operators who run a decent and honest business can prosper while those who abuse their home owners and have no regard for health and safety issues on the site will no longer be able to profiteer. The 2013 Act is the biggest shake-up in park home legislation in 30 years, and it marks our commitment to ensuring that park home owners are protected and their rights respected.
My hon. Friend asked several questions, so I will try to deal with those now rather than continue to refer to my prepared remarks. She specifically asked what would happen if a residents’ association is not recognised by the owner. I understand that if that is the case, the residents have a right to go to a tribunal to ask for that association to be approved. There should be a proper address for home owners to communicate—
Transient Ischaemic Attacks
(10 years ago)
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Helen Jones (Warrington North) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Riordan. I am glad to have the opportunity to debate transient ischaemic attacks, or TIAs. They are also known as mini-strokes, but we should be careful with our terminology, because a TIA is a serious matter; it is a warning of a possible future stroke. Because it is a serious matter, I am a bit perturbed that no one is sat on the Government Front Bench. I hope that the Minister will join us shortly. A possible future stroke could kill or incapacitate someone temporarily or permanently, and the risk is greatest in the first few days after a TIA. In fact, one in 12 people will go on to have a stroke within a week of a TIA, yet TIAs are often not taken seriously by members of the public and are sometimes not recognised by health staff.
We have known for some time, however, that dealing with TIAs urgently can prevent future strokes. In fact, research published in The Lancet in 2007 indicated that 10,000 strokes a year could be prevented if all TIAs were treated urgently, but that still does not happen. Those strokes could be prevented, people could avoid serious disability and the NHS could save a huge amount of money.
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
I intervene only to apologise most profusely for not being here at the start of the debate. We checked with the Doorkeeper following the Division and were advised that a quarter of an hour would be added and that this debate would start at quarter to 5. I would never be so discourteous to the hon. Member for Warrington North (Helen Jones). I really am extremely sorry, but that was the advice that we received. We were only next door.
Mrs Linda Riordan (in the Chair)
Order. The sitting was suspended at 4.15 pm, but Members were back shortly after the vote. The rules are that we start again as soon as the Minister, the Member who proposed the debate and the Chair are back. As long as three Members are here, we can resume, which we did, and the debate finished at 4.38 pm. Helen Jones began her debate then.
Helen Jones
I of course accept the Minister’s apology. I am sure that she would not be deliberately discourteous to any Member of the House.
Part of the reason why action is not being taken is that public awareness of TIAs is low. A 2012 poll for the Stroke Association found that few people understood the symptoms. In a recent survey of people who had experienced TIAs, the association found that 44% had no knowledge of TIAs prior to having had one and, astoundingly, 61% did not know that it was a warning sign of a possible future stroke. Those were people who had already had TIAs, so it is unsurprising that a third of people take no action following a TIA. Others do not realise that it is a medical emergency and wait for appointments. Astonishingly, the Stroke Association found that a quarter of the people surveyed did not take any action even though they had had TIA symptoms more than once. People may not know where to go for help, and some think that nothing can be done.
When people do seek help, however, it is fair to say that the service that they receive is variable. The all-party group on stroke heard from two former patients, one of whom had been treated quickly and efficiently, but the other had had the opposite experience. The Stroke Association found that while many people have a great deal of praise for how they were treated and for the care provided by health care staff—it is important to put that on the record—16% felt that they were not taken seriously and 25% said that their symptoms had been misdiagnosed. One person at the all-party group meeting had actually heard a paramedic say those classic words, “It’s just a funny turn.” Another person told the Stroke Association:
“Our GP has told us not to bother to attend GP surgery or A and E as it is not worth it for TIAs.”
Another said:
“I had numerous TIAs that were misdiagnosed as migraine.”
Such comments are worrying, particularly given that parts of the NHS deal with the matter well and show great examples of good practice. The south-western ambulance service, for example, has pioneered direct referral of suspected TIA patients to a TIA clinic. It has invested in training its staff and all ambulances carry details of TIAs, of the referral pathway and, importantly, information for patients. I have also heard a great deal about what has been done at Southend university hospital, which went from having a Monday to Friday TIA clinic to having an online rapid referral system, using new technology, that helps GPs and health care staff to assess patients and to transmit information directly to the clinic or even to the consultant’s mobile. It trained more clinical staff to do ultrasounds and changed the protocol for MRI scans, so that patients can be accommodated in between the normal list. As a result, its service operates seven days a week and sees all high-risk patients within 24 hours and others within a week, as recommended. That service saves lives and enables tests to be done and treatment to be begun on the same day. If that can be done in Southend, it can be done elsewhere. The first problem is actually getting patients to realise that they need treatment.
Jim Shannon (Strangford) (DUP)
I thank the hon. Lady for giving way, and I appreciate her bringing this matter before the House. The Government run the FAST campaign, which covers symptoms similar to those of TIAs. Could the issues be addressed through that campaign? The Government, officials, GPs and families could use it in the same way. That might be a way forward.
Helen Jones
The hon. Gentleman takes the words right out of my mouth. I was going to put it to the Minister that the FAST campaign has been excellent and has raised awareness of stroke symptoms and of the need to call an ambulance. We need to extend the campaign to TIAs, because people still wait for treatment or do not access it at all. There are also people who go to the wrong person for treatment, such as an optician, because they mistake their symptoms for something else.
Investment in staff training is vital, in particular for front-line staff, because TIAs are difficult to diagnose. Often when a patient is seen, their symptoms have gone and health care workers rely on reports of what happened. It is also true that TIAs can mimic other illnesses, such as epilepsy, migraine or visual disturbances, which is all the more reason why front-line staff—the first point of contact for patients—should be trained to recognise the symptoms. We must also ensure that referral systems are in place, so that people can access treatment rapidly. I hope that the examples I have given show that it is possible to meet the guidelines contained within the national clinical guidelines for stroke, so that people can be treated quickly and easily. However, the Stroke Association found that 22% of people wait more than a week for their first appointment, which is quite outside what the guidelines recommend.
The provision of information is absolutely vital. The Stroke Association’s report, “Not just a funny turn”, contains many examples of people who have changed their lifestyles and diet after being given proper information following a TIA, so that they hugely reduce the risk of a future stroke, but that does not always happen. Some 40% of people say that they are given little or no information following an attack, and some 50% do not know about the risk of a possible future stroke. The report contains some worrying comments. One person says:
“After TIA I had no support or advice or information… I didn’t know about risk of stroke—was not told this by anyone.”
I find that profoundly shocking. It is not even a case of spending a lot of money; it is simply about having information to give to patients. What will the Minister do to ensure that that actually happens?
My next point, which the Minister and I have debated with regard to stroke, is about the provision of emotional support after a TIA. Like a stroke, a TIA is an event that someone does not expect or plan for. Many people lack support afterwards, but with support they can make changes that reduce their future risk. Some people feel that they need counselling, others simply want to talk to someone who has experienced a TIA and others want to be in contact with patients’ groups or organisations such as the Stroke Association. If people are given the right information, they can do all that, but the information is often not given to them at all. That, too, could be done with little expense.
We have some good care in the national health service—some excellent care—but it is patchy. I want to hear from the Minister how she plans to raise public awareness of TIAs and to extend the FAST campaign to cover them, as the hon. Member for Strangford (Jim Shannon) said.
What will be done about training front-line staff so that we bring everyone up to the level of the best? That is a difficult matter. We cannot blame staff for misdiagnosis if they are not trained properly. We need to train them. What will be done to ensure rapid access to treatment everywhere in the country, not simply for those who happen to be lucky and live near an excellent hospital? The NHS works best when its organisations co-operate and learn from one another. We need to ensure that that co-operation takes place.
Finally, what will the Minister do to ensure that people get the right information following a TIA, as well as support afterwards to deal with the emotional issues and to help change their lifestyles to lessen the risk of stroke in future? That would be a sensible investment for the NHS. It would ensure not only that we saved a great deal of money, but that we prevented a great deal of disability and heartbreak and even deaths.
I look forward to hearing the Minister tell us what is to be done about the important issue of TIAs. We could save lives if we invested in it properly.
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
Once again, my apologies to the hon. Member for Warrington North (Helen Jones) for missing the first two minutes of her contribution, because of a misunderstanding on our part.
The hon. Lady is a great expert on the subject and, as she said, we have debated it in the past—in fact, it was the subject of the first debate that I responded to as a Minister, about a year ago. It is good to see her commitment. As the chair of the all-party group on stroke—she is one of Parliament’s great champions of the issue—she also takes great interest in transient ischaemic attacks. The debate is timely, because it was world stroke day last Wednesday, which this year focused on the impact of stroke on women.
As ever, I will try to respond to as many of the points that have been made as I can, but the matter is obviously the responsibility of the NHS. In a debate of this nature, I always undertake to draw to it the attention of the key people in NHS England, in particular the national clinical director—
Helen Jones
I am sorry to interrupt, but Ministers are in the end responsible for what happens. If they are not, there is no point in them being Ministers. A huge bureaucracy has now been set up, but it is still open to a Minister to pull the strings to ensure that the things that need to be done are done. I hope to see the Minister doing that.
Jane Ellison
I note the hon. Lady’s comments. NHS England is the lead on the subject, because it is ultimately a clinical matter. I always draw the attention of our clinical leaders to the views of Parliament and, where I need to underline them, I of course do so, but it is also important to recognise that in a large organisation the views and leadership of senior clinicians are vital. I will refer to that.
Helen Jones
The Minister is gracious to give way, but I am sorry, I had to intervene at that point. The clinical details are not in doubt. We know what works and what best practice is; the problem is that best practice is not always followed.
Jane Ellison
I note the hon. Lady’s comments.
Turning to the Act FAST campaign, when people have a TIA, getting medical attention quickly is key, as the hon. Lady said. Ensuring that the general public are familiar with the signs and symptoms is important. Public Health England continues to run the highly impactful Act FAST stroke awareness campaign, which covers similar signs to those of a TIA—I note that she is right to draw the distinctions—and the simple message to call 999 if such signs are witnessed. The campaign was run again in March this year, and new adverts feature an Afro-Caribbean man to underline the fact that people from some ethnic groups, whether south Asian, African or Caribbean, are at higher risk of TIA and stroke than others. PHE plans to run the adverts again later in the financial year. Over the summer, the Stroke Association also ran a campaign to raise awareness of TIA, “Not just a funny turn”. It was welcome and many of us saw it.
The hon. Lady also referred to front-line staff and to raising awareness of signs and symptoms. Act FAST and the Stroke Association’s campaign were aimed at public and professionals alike to ensure that everyone acts swiftly. PHE plans to run its adverts, which do not only face the public, again before April 2015.
In addition, NHS England has produced a resource for clinical commissioning groups, to support them in setting and delivering on the level of our ambition to reduce premature mortality. TIAs form an important part of that. The resource includes information on the most high-impact interventions that CCGs can consider commissioning to reduce premature mortality, and TIAs fit into that description. One such intervention is to increase the proportion of patients suffering a TIA treated within 24 hours from 71% to 100%. Let us recognise that TIAs sit right at the core of all the resources being distributed to our front-line staff and produced by NHS England.
NHS England has also been working with the 111 service to ensure that the protocols and triaging systems on the phone lines are used to identify as many people with stroke and TIAs as possible. We recognise that there is more to do and that such work is ongoing.
On getting patients the treatment that they need, quite a lot of work is under way in many parts of the country to reorganise services. That involves reconfiguring care for patients with TIAs as well as acute strokes. For example, in Birmingham and the black country, Warwickshire, Surrey and Sussex standards for TIA care have been set and services are being redesigned to ensure that patients with high-risk TIA can be seen and managed within 24 hours.
The reorganisation of vascular surgery services into a smaller number of higher-volume units is also improving the efficiency of the provision of surgery for TIA. There have been huge improvements in TIA patients’ access to neurovascular clinics in recent years. That is important because, as the hon. Lady said, we know that the risk of stroke in the first four weeks after a TIA can be as high as 20%. It is vital that people are seen urgently and their symptoms investigated, and that a management plan is put in place.
The hon. Lady said that services can be inconsistent. We want to ensure that we work towards making all services as good as the best, but part of that work is to define what the best standards are and to disseminate best practice. I will talk about some of the ways in which that is done.
The 2012 national clinical guidelines for stroke recommend that patients who have had a TIA are seen, investigated and treated in a neurovascular clinic within one week. A few years ago, such clinics were relatively unusual and waiting times could run to weeks or months. Information from the latest Sentinel stroke national audit programme organisational audit published in 2012 shows a picture of real improvement. According to the audit, 100% of trusts in England, Wales and Northern Ireland now have a TIA or neurovascular clinic, with a median of 20 clinics held in each four-week period. There has been a really big improvement in access to those clinics.
The same audit also said that there are very few areas of the country where a high-risk TIA patient would need to wait more than a week, and that over half of high-risk in-patients could be seen the same day, seven days a week. We are waiting for an update of that audit, which is due to be published quite soon. I hope to see further improvement.
In the mini-exchange I had with the hon. Lady at the beginning of my contribution, we touched on best practice. The strategic clinical networks are important for that. They bring together clinicians from across health care settings and the wider health and care system in 12 geographic areas. The SCNs share best practice and promote initiatives on their core service areas, which include cardiovascular disease. The networks hold regular meetings to enable communication and information sharing. As an MP for a London constituency, I saw the benefit of bringing that clinical excellence to bear in the reorganisation of stroke services in London. Such work is ongoing, to make sure that best practice is disseminated around the country.
Jim Shannon
One problem I am aware of—I suspect the hon. Member for Warrington North (Helen Jones) is as well—is that TIAs pass in two or three minutes and there is no real understanding of what is happening among friends, relatives or others who are close by when they occur. The hon. Lady is trying to push for raising the level of awareness, and I am sure the Minister would wish to achieve that as well. How can we better achieve that within the Act FAST campaign? That was what I was hoping the Minister would set out.
Jane Ellison
I am happy to put that issue on the agenda for my next meeting with Public Health England, which puts together such campaigns. We all wish to raise awareness of the symptoms of a lot of different conditions, but one has to be realistic about how many public information campaigns we can run and how those can be organised. However, I am happy to have that discussion with Public Health England, because we are pleased with the way in which the Act FAST campaign has been received. There is clearly something to build on. I also know that the Stroke Association feels strongly about the issue. I am happy to discuss it and perhaps feed back in due course.
Hon. Members might be interested to know that the National Institute for Health Research has recently funded research on TIAs to look at the pathways taken by patients, from symptom onset to specialist assessment. That research found that factors contributing to delay included incorrect interpretation of symptoms and failure to involve the emergency services. The research is something else we can build on in order to understand what needs to be put in place so that we can do better.
Work is under way, and I am happy to look at what has been said today about public information. However, we have made a really good start. The picture for stroke care is also really improving. Sometimes I respond to debates on issues where we have not seen improvements of the kind that I set out on specialist clinics and surgery. We can see some real momentum, so it is case of building on that and on awareness of symptoms. I pay tribute to the work of the Stroke Association and its report. I saw the “Not just a funny turn” campaign over the summer, which I thought was well judged and was put across well. It did a good job of attracting publicity to stroke and TIA, so I congratulate the association on the campaign.
I hope that what I have said will reassure the hon. Member for Warrington North that the Government and the NHS both recognise that it is vital to ensure that people who have had a TIA receive the right treatment and care to help them to recover. I have not touched on the issue of psychological support, which was the subject of our debate last year, at which time there were encouraging signs. I will write to her about how those have been built upon over the past year and whether we have continued to make progress.
The picture is improving, but we recognise that there is more work to do. I congratulate the hon. Lady on keeping this issue very much at the forefront of Parliament’s attention. As ever, I congratulate the hon. Member for Strangford (Jim Shannon) for contributing to this debate on health in the way in which he always does. We are all keen to see the best possible services for people to ensure that TIA care is of the highest quality and that we minimise the number of people who go on to suffer a stroke.
Question put and agreed to.
Written Statement
Intellectual Property Office (Innovation and Growth)
The Minister for Culture and the Digital Economy (Mr Edward Vaizey)
My noble Friend the Parliamentary Under Secretary of State for Business, Innovation and Skills and Minister for Intellectual Property (Baroness Neville-Rolfe) has made the following statement.
I am laying before both Houses of Parliament copies of the first annual report on the impact of the Intellectual Property Office’s activities on innovation and growth. Such a report will be required from next year by section 21 of the Intellectual Property Act 2014, which came into force on 1 October 2014.
The Intellectual Property Office’s role is to encourage continued investment in innovation and creativity, through an IP system that supports growth.
The report covers the 2013-14 financial year and sets out what the Intellectual Property Office has done to develop the policy framework better to reflect digital technologies; to improve the efficiency of rights granting; to raise awareness of intellectual property among businesses and consumers; and to tackle IP crime on and offline.
The year has seen changes to the copyright framework. These give third parties increased freedom to use copyright works for a variety of economically and socially valuable purposes, while maintaining safeguards to protect the rights of creators to benefit appropriately from their work. The Intellectual Property Act 2014 made a number of changes to design and patent law which will help small businesses. The IPO has increased its focus on educating businesses and consumers on the value of intellectual property. And we have improved enforcement, for example by funding the police intellectual property crime unit.
These are just a few of the highlights and I am delighted to have the opportunity to present this report to Parliament.
Grand Committee
Consumer Rights Bill
The Deputy Chairman of Committees (Baroness Fookes) (Con)
My Lords, I shall make the usual statement that if there is a Division in the Chamber while we are sitting, the Committee will immediately adjourn for 10 minutes.
Amendment 103
Lord Stoneham of Droxford
“Communications services: change of service provider
In section 3 of the Communications Act 2003 (general duties of OFCOM), after subsection (2)(f) insert—“(g) the maintenance of processes that promote the consumer interest and competition, to include a switching regime that is led by the receiving provider”.”
Lord Stoneham of Droxford (LD)
I rise on behalf of my noble friend Lord Clement-Jones, who has a conflicting commitment this afternoon.
This amendment—I thank the noble Baroness, Lady Hayter, and the noble Lord, Lord Stevenson, for their support for it—is designed to ensure that consumers experience a consistent, simpler and quicker switching process when seeking to switch communication provider, led by the receiving provider.
UK consumers, now more than ever, depend on a range of communication services. Ofcom research has shown that 94% of all UK adults own a mobile phone and that 15% of UK consumers live in a mobile-only household. It is therefore vital that the communication market works well for UK consumers. However, the current switching processes, not just for mobile phones but across the communication sector, are complicated and slow, working against consumers and distorting fair and open competition.
Recent reforms mean that banking and energy customers are able to switch by contacting their new provider—a system known as gaining provider-led switching. However, mobile, pay TV and broadband customers must contact their original provider before switching.
Under current legislation, communications providers operate a losing provider-led switching regime, which forces consumers to contact their current provider to terminate their old contract before being able to switch to a new provider. Not only is this time-consuming and can lead to breaks in service or periods of double-billing when switching between providers but it has a negative impact on competition and pricing.
Consumers who threaten to switch are usually offered preferential deals in order to stay. The retention offers made to these consumers are effectively subsidised by the supplier’s remaining customers, who pay higher prices. Competitive offers are often reserved for new customers or those who attempt to switch, with existing customers often losing out. The existing complicated switching regimes across the communication sectors are leading to real consumer harm. For example, Ofcom data show that of the 9 million UK mobile customers who switch annually, as many as 1.2 million are double-billed or experience a total loss of service. The hassle and confusion for consumers deters them from switching provider. By contrast, the car insurance market has a switching level of 38%, compared with 9% in the mobile and broadband market and just 3% in digital television.
Forcing customers to contact their original supplier often leads providers to operate poor retention practices. The best deals are hidden away and are available only to those who can play the system. This means that the vast majority of UK consumers, including the inactive, the out of contract and the vulnerable, face higher prices while only a minority of savvy customers, willing or able to game the system, get the best deals. A gaining provider-led system forces operators to place their best deal on the open market, accessible to all.
When Ofcom attempted to introduce the gaining provider-led switching system in 2007, it was subjected to appeals from the major mobile networks. Ofcom, in its 2010 strategic review of switching in telecoms, concluded that gaining provider-led switching systems perform better than those led by the losing provider, they are easier for customers to navigate and they are more likely to support competition, yet there has been no progress since then. This amendment would free the path for Ofcom to achieve the outcome it sought as long ago as 2007.
By contrast, last year Ofcom mandated a gaining provider-led switching process on BT’s Openreach network, which supports the services of BT, Sky, TalkTalk, the Post Office and EE’s broadband. This will be in place by June 2015, meaning that customers will need to contact only the provider they are moving to, not the one they are leaving. This will simplify switching for landline and broadband services and will also apply to BT’s Sport TV. In fact, the gaining provider-led system has been acknowledged by both government and the regulator as the best switching system.
In July 2013, DCMS published Connectivity, Content and Consumers, which set out its plans for the communications sector. In it, the department supported a move to gaining provider-led system switching across all communications services. It said:
“We recognise that switching processes work better for consumers when only one call needs to be made to the company the consumer wishes to switch to for the switch to happen, and there is no need for consumers to contact their existing provider … Working with Ofcom, we will do everything we can to move towards a system of gaining provider-led switching across the board. Consumers are increasingly buying services in bundles, for example, phone, broadband and pay TV. This can make switching providers more difficult as there are different switching processes attached to each component of a bundle. We will legislate to give Ofcom a duty to ensure a consistent and effective experience for consumers switching between bundles”.
Given that Ofcom has consulted extensively on switching processes, the Government's subsequent reluctance to legislate is frustrating and baffling for all concerned. On behalf of consumers, Which? has confirmed that it agrees and supports this amendment precisely because it would introduce gaining provider-led switching across all telecommunications markets, drive forward competition and significantly improve the consumer switching experience, enabling people to switch with greater ease and convenience.
This amendment would bring communications providers into line with other markets—including energy and personal current accounts—which operate a gaining system. It would force companies proactively to offer best deals on the open market, rather than withholding the best offers to retain customers threatening to switch. Having a single gaining provider-led switching regime across the whole sector would alleviate confusion around the process of switching, and would help give consumers a consistent experience when switching. Increasingly, consumers view broadband, landline, TV and mobile as complementary services.
If consumers did not have to contact their existing provider before switching, there would be more incentive for suppliers to focus on retaining customers at all parts of the journey rather than at the end point. This would result in more competition and better- value deals for all consumers, with prices harmonising across customers of the same supplier. Gaining provider-led switching in communications markets is already standard practice across most other EU countries, where it works well. I hope that the Government will support this amendment and get this policy moving in the interests of consumers.
Lord Stevenson of Balmacara (Lab)
My Lords, I am sure that I saw the noble Lord, Lord Clement-Jones, only a few moments ago, asking questions in the Chamber, so his conflicting engagement is extremely irritating because we were looking forward to his contribution here. Of course, we now have his parasitic packaging analogue who is gradually inhabiting all of his previous positions on matters to do with this, and we should not complain, because he once again has managed to introduce a very complicated and not very easy to grasp topic with exemplary clarity, and I thank him for that.
We on this side support the amendment in the name of the noble Lord, Lord Clement-Jones; indeed, we signed up to it for very much the same reasons as those just explained by the noble Lord. It is a huge gap in the telecoms area that there is no simple and easy switching regime: such a regime would be the foundation of ensuring a competitive market that would drive down prices, while at the same time empowering consumers. Who could be against that?
The problem we have at the moment is completely the reverse, because in the mobile industry—but also in broadband and pay TV—there are very complicated switching processes. These are huge disincentives to consumers to changing provider and this can lead to very real consumer harm in the form of either double bills—which have been well reported in recent days—or a loss of service when providers are switched, because of the difficulty of making all the ends join up.
We think that the gaining provider-led system across the communications sector will make a huge difference. It puts the customer in charge of the process; it prevents competitors in the market using different and complicated switching processes—which, as the noble Lord said, creates hassle and confusion; and it will make it much more competitive.
At the heart of the issue is an irony that does not happen in many other sectors, such as banking. If you force customers who wish to switch to contact their original supplier, you often get problems and disincentives built in, because it is not in the best interests of the supplier who is losing the customer to ensure that that egress is smooth and uncontested. That inevitably means that consumers get a raw deal, possibly do not get good price comparisons and have a lot more hassle than they otherwise would. I am happy to support the amendment.
Baroness Jolly (LD)
My Lords, a requirement for the switching of communications providers to be receiving provider-led—RPL—is part of the EU Connected Continent package. The European Parliament’s First Reading version would amend the universal services directive to require RPL switching. I assure noble Lords that the UK is engaging actively in those discussions to ensure the best outcomes for UK consumers.
The Government have considerable sympathy for RPL switching in the UK. In the Connectivity, Content and Consumers paper published last year, we emphasised that we want that across the board. I am very pleased to say that, as my noble friend said, RPL switching already operates for fixed-line voice and broadband services delivered over the BT Openreach network, although it does not yet operate for mobile services or for pay TV.
Ofcom has the power to mandate RPL switching for all communications services. In July 2014, it called for inputs from stakeholders on consumer switching. Ofcom announced that it is considering mandating RPL switching for mobile services and bundles of services, including pay TV and services over the Kcom network. The Ofcom work is essential to ensure that we get any new rules right first time, so I welcome my noble friend’s interest in consumer switching but, given the good work done so far, Ofcom’s ongoing consultation and the response to it to be published before the end of the year, I ask him to withdraw his amendment.
Lord Stoneham of Droxford
My Lords, I am encouraged by the news of Ofcom’s consultation nearing completion. I should point out that Ofcom has been trying to do that since 2007. There is a danger that Ofcom and the Government are hiding behind each other. However, I accept what my noble friend said, I am grateful for the support that I have received, and I am happy at this stage to withdraw my amendment.
Baroness Howe of Idlicote
“Duty to provide an internet service that protects children from digital content
(1) Internet service providers must provide to subscribers an internet access service which excludes adult content unless all the conditions of subsection (3) have been fulfilled.
(2) Where mobile telephone operators provide a telephone service to subscribers which includes an internet access service, they must ensure this service excludes adult content unless all the conditions of subsection (3) have been fulfilled.
(3) The conditions are—
(a) the subscriber “opts-in” to subscribe to a service that includes adult content;(b) the subscriber is aged 18 or over; and(c) the provider of the service has an age verification policy which meets the standards set out by OFCOM in subsection (4) and which has been used to confirm that the subscriber is aged 18 or over before a user is able to access adult content.(4) It shall be the duty of OFCOM to set, and from time to time to review and revise, standards for the—
(a) filtering of adult content in line with the standards set out in section 319 of the Communications Act 2003;(b) age verification policies to be used under subsection (3) before a user is able to access adult content; and(c) filtering of content by age or subject category by providers of internet access services and mobile phone operators.(5) The standards set out by OFCOM under subsection (4) must be contained in one or more codes.
(6) Before setting standards under subsection (5), OFCOM must publish, in such a manner as they think fit, a draft of the proposed code containing those standards.
(7) After publishing the draft code and before setting the standards, OFCOM must consult relevant persons and organisations.
(8) It shall be the duty of OFCOM to establish procedures for the handling and resolution in a timely manner of complaints about the observance of standards set under subsection (4), including complaints about incorrect filtering of content.
(9) OFCOM may designate any body corporate to carry out its duties under this section in whole or in part.
(10) OFCOM may not designate a body under subsection (9) unless, as respects that designation, they are satisfied that the body—
(a) is a fit and proper body to be designated;(b) has consented to being designated;(c) has access to financial resources that are adequate to ensure the effective performance of its functions under this section; and(d) is sufficiently independent of providers of internet access services and mobile phone operators.(11) In this section, internet service providers and mobile telephone operators shall at all times be held harmless of any claims or proceedings, whether civil or criminal, providing that at the relevant time, the internet access provider or the mobile telephone operator—
(a) was following the standards and code set out by OFCOM in subsection (4); and(b) acting in good faith.(12) For the avoidance of doubt, nothing in subsections (1) and (2) prevents providers of internet access services and mobile phone operators from providing additional levels of filtering content.
(13) In this section—
“adult content” means an internet access service that contains harmful and offensive materials from which persons under the age of eighteen are protected;
“harmful and offensive materials” has the same meaning as in section 3 of the Communications Act 2003 (general duties of OFCOM);
“material from which persons under the age of eighteen are protected” means material specified in the OFCOM standards under section 319(2)(a) of the Communications Act 2003 (OFCOM’s standards code);
“opts-in” means a subscriber notifies the service provider of his or her consent to subscribe to a service that includes adult content.”
Baroness Howe of Idlicote (CB)
My Lords, I am pleased to move Amendment 104, which requires internet service providers and mobile phone operators to provide default adult content filtering that can be removed if the service user opts in to adult content, demonstrating, as they must, that they are aged 18 years or over.
This is a matter that I have raised before, not least through my Online Safety Bill. As ever, I begin by recognising that progress has been made and that the Prime Minister’s intervention in relation to the big four ISPs has helped to move us forward. However, given the importance of the issue, I must say that, having been initially encouraged, I find myself increasingly disappointed by the Government’s approach. The truth is that children continue to suffer, but there does not seem to be the political will to move beyond the deal that the Government negotiated on filtering with the big four ISPs: a status quo that is simply unacceptable, for reasons that I shall set out.
Lord Alton of Liverpool (CB)
My Lords, in the very best parliamentary traditions, my noble friend has been persistent, dogged, assiduous and determined. I have been privileged to support her on earlier occasions when she raised this issue. I will speak briefly in support of her excellent amendment today.
All of us, especially those with teenage children, know how important the arguments are that she has advanced to the Committee today. Her three basic arguments are incontrovertible. First, it cannot be right to say on the one hand that default-on is an important protection for children and yet to settle for an arrangement where over 10% of households are serviced by ISPs that are not party to the agreement and where some are completely opposed to that form of protection. Those ISPs that object simply will not introduce a protection unless they are obliged to do so by law.
That recalls an argument I had in the 1990s, when a Member of another place had promoted legislation to protect children from video violence. During a meeting with the then Home Secretary and his civil servants, I was pretty shocked to hear one of them say, “Really, this legislation will affect only a small number of people”, as though those people did not really matter. My noble friend made the point that 10% of children will not be covered by the current arrangements. Can the Minister say, when she comes to reply, how many families that means and how many children the Government estimate that 10% represents? If there was only one uncovered household left in this country with children in it, surely it would be our duty to protect those children.
Secondly, it cannot be right that we settle for a form of age verification that is not age verification at all. Anyone seeking to opt in to access adult content and to disable adult content filters must obviously be age verified before doing so, as mandated by this amendment.
Finally, if we care about children and protecting them, we must afford them protection through the law, backed by sanctions. As my noble friend said, it is absurd to have protections offline but not online; there has to be some logical consistency in the way we view these issues. If this issue is important—and it clearly is—we must bite the bullet and place the obligations on ISPs and mobile phone operators to provide default adult content filters that can be lifted subject to prior expeditious age verification on a statutory footing. We do not allow a child to buy an 18-rated DVD offline, so why do we afford them less protection online?
The Lord Bishop of Truro
My Lords, I support the amendment and am grateful to the noble Baroness for providing a comprehensive and excellent introduction to it. I do not want to repeat the important points that have already been made; I simply want to underline one particularly important point.
These days, we all have a responsibility to take child protection and safeguarding very seriously. Your Lordships may or may not be aware that you cannot be made a bishop in the Church of England unless you have had statutory safeguarding training. The most reverend Primate the Archbishop of Canterbury has made that very clear in all that he has said and done, and that seems absolutely right and proper.
It strikes me that, of all areas, this is one where we should do all that we can to protect our children. I sometimes worry about the matters that we are not worrying about now. I fear that in 20 years’ time we will look back and say, “Why on earth didn’t we do something about this?”. I often think back to the days when I would have got in a car and not been bothered that I was not wearing a safety belt. It strikes me that this is an issue that we can take seriously. We are of course dealing with the Consumer Rights Bill and I am concerned that we spend a lot of time worrying about rights but do not think about responsibilities. We have a responsibility to care for and protect our children.
I declare an interest as chairman of the Children’s Society. At every board meeting, we have a representative number of children and young people. I can tell your Lordships that at every single meeting those young people teach me something about the internet and the world wide web which I did not have a clue about. They are far savvier than I will ever be and allegedly I am not as old as some of my colleagues.
Therefore, I very much support the amendment and I stress that we have responsibilities as well as rights. The word “safeguarding” and the fact that we take child protection very seriously do not undermine in any way the important points that have been made. The imbalance between what happens offline and online seems quite extraordinary. Surely this is an area where we should have legislation that regulates and protects all children.
Lord Morrow (DUP)
My Lords, I commend the noble Baroness, Lady Howe, for coming back to this matter and for bringing forward the amendment. The question, “What is more important than our children?”, has already been asked in this debate. The answer to that is surely that nothing is more important. If that is the case, it seems logical that we should adopt the amendment. I implore the Government to consider the amendment carefully and I urge them to adopt it. As far as our children in particular are concerned, safety cannot be overdone. Today, there are many pressures on children and parents. I believe that one day every parent will rise up and thank the Government for including this amendment in the Bill. I thoroughly commend it to the Committee.
Baroness King of Bow (Lab)
My Lords, the Government clearly believe that default-on internet filtering is the best approach to protect children. Common sense tells us that they are right but, as the noble Baroness, Lady Howe, pointed out in her powerful speech, if they are right on this point then they are wrong to take a non-statutory approach. Such an approach leaves possibly 1 million children unprotected and, as the noble Lord, Lord Alton, said, it boils down to the question, “Do the 10% matter or not?”. Do those children matter or not?
The background context to this is well rehearsed: the digital age gives our children more opportunities than they have ever had before, but on occasion it also puts them at grave risk. The NSPCC says that 24% of nine to 16 year-olds in the UK saw sexual images in 2012-13 online or offline. Some 80% of those were worried by what they saw. A recent survey by the Asda Mumdex found that 82% of mums in this country want the Government to tackle child protection online. On top of that, Ofcom reports that over half of parents with children at home do not use parental controls, and I am sure that we are convinced that in the other half of those households the kids would be able to get around those controls in any case.
On a related issue, the blacklisting of child abuse terms by Google and Microsoft was indeed a step in the right direction, but the Government must ensure that police are resourced to deal with child abuse imagery. This cannot be only a voluntary approach when child safety is at risk. It is not only about child safety today; it is about adult behaviour tomorrow. We do not want a generation brought up to think that violent pornography is the norm. That is why we on these Benches support this amendment to require all internet service providers to provide default-on internet filters. Those filters should use British Board of Film Classification standards to define age-inappropriate material. This was the substance of Labour’s Opposition Day debate last summer in the other place.
We recognise that the online world shifts daily, but one thing is for sure: young people today spend more and more time online. Ironically, though, as the noble Baroness, Lady Howe, and one of the other speakers pointed out, the protection that they receive online is less than the protection that they receive offline in the real world. While it would be quite hard for a 12 year-old, say, to buy a pornographic DVD from a shop, it would be relatively easy for that same 12 year-old to buy or download it online, and that is what the average 12 year-old would prefer to do these days. Why are we helping them to damage themselves?
We seem to have a protection regime that is a bit of a nonsense. It has been set up by digital dinosaurs such as ourselves and it provides digital natives—our children—with less protection online than offline. The result is clear. Unfortunately, the Government have been too slow to tackle internet child safety. Their rhetoric, however, particularly that of the Prime Minister, has been off the scale in its attempts to pacify parents. I cannot help but quote the PM’s words that we heard earlier from the noble Baroness, Lady Howe; he said that it was about “protecting childhood itself”. He went on to say:
“That is what is at stake, and I will do whatever it takes to keep our children safe”.
No, he will not. He will not even make default internet filtering a statutory duty. Come on; that is what it takes. It is not asking the earth. As we have heard, in this country everything under the sun can be a statutory duty, but not, it seems, the critical issue of online protection for our children.
Moreover, the protection that the Government have sought to put in place via the ISPs makes digital natives laugh out loud. A 12 year-old trying to access pornography on their parents’ computer will be delighted to find that they do not have to verify that they are over 18 before secretly accessing adult content. This is because the self-regulatory approach championed by the Government has not forced ISPs to introduce proper age verification for those wishing to disable default filters. I should add that there are many areas where I agree with the self-regulatory approach; it is just that online protection for children is not one of them. The risks are too great and the dangers too apparent.
I admit that I remain baffled by the Government’s approach on this issue. I trust that they will not be baffled if and when they lose a vote on this amendment on Report. I thank the noble Baroness, Lady Howe, for tabling this important amendment and I look forward to supporting her on Report.
Baroness Jolly
My Lords, I reassure the noble Baroness, Lady Howe, that the Government remain committed to improving the safety of children online and have a strong track record of working with the internet industry to drive progress. I thank her for her continued interest in this area. I am aware that this amendment is drawn from a Private Member’s Bill and that similar provisions were debated earlier this year as part of the Children and Families Bill. Speaking as a parent and grandparent, this issue is close to my heart. I know that many noble Lords will feel similarly and I am pleased to update the Committee on recent progress in this area.
The Prime Minister’s speech in July last year set out a series of measures, to which he asked the industry to commit, to help parents to limit their children’s access to age-inappropriate and potentially harmful material. We have seen excellent progress in all these. As the noble Baroness said, the four major ISPs, which cover almost 90% of the UK’s broadband market—BT, Sky, TalkTalk and Virgin Media—have delivered on their commitment to provide parents with the ability to easily filter content. They all now present new customers with an unavoidable choice about whether to use free, family-friendly network-level filters. Existing companies are making good headway with the rollout of these provisions. Smaller providers are also stepping up: for example, KC launched a free parental control service for its broadband customers last month. This has been a huge and complex undertaking, but it has seen results.
The noble Baroness might be interested in public wi-fi providers. The six major providers, covering more than 90% of the market, now provide family-friendly public wi-fi wherever children are likely to be. This summer, the Registered Digital Institute launched the Friendly WiFi logo, giving parents the assurance that a particular business, retailer or public space is filtering out inappropriate material.
Three of the UK’s four major mobile network operators already automatically provide adult content filters for pay-as-you-go and contract customers, with the remaining provider, Three, committed to doing so by July 2015. This means that the great majority of mobile customers are already covered by default-on filters. The Government have also been working with mobile virtual network operators to ensure that they are doing the same. These measures could not have been achieved as quickly through legislation, given the pace of change in this complex environment.
I thank the noble Baroness for setting out the reasons why she feels that further action is needed. The Government are of course open to considering different options and it would be appropriate if we had a meeting between now and Report.
Lord Alton of Liverpool
The Minister will recall that I asked her specifically how many people are not currently covered by this legislation. How many families and children do the 10% represent?
Baroness Jolly
I have many answers here to the noble Lord’s questions. It is vital to understand the full implications of any actions that we take and whether they are likely to be effective. I am sure that the noble Baroness will agree that it is vital that we encourage parents to talk about these important issues with their children. Parents told us that they do not always feel aware of the risks that their children face when online. This is why, in May, the four major ISPs launched Internet Matters, a multimillion-pound campaign aimed at helping parents to understand filters and a range of issues related to online safety.
Education is key in all this and we are doing more to educate children. Since the start of the school year in September, the new computing curriculum has included information for five to 16 year-olds—key stages 1 to 5—about how to stay safe online. Some schools are also promoting child safety at special events for parents. As the noble Lord said, children are often savvier than their parents. Ofcom is monitoring progress in this area. Its latest report, published in October, showed that nine in 10 parents mediate their child’s access to the internet in some way, with most parents using a combination of approaches.
Lord Alton of Liverpool
I was just about to ask the noble Baroness that very thing. If she would be good enough to write to Members of the Committee telling us exactly how many families and how many children the Government estimate will not be covered by these arrangements, that would help to inform the debate before we get to Report.
Baroness Jolly
That is a fair point. However, the noble Lord is suggesting that more than 10% of ISPs are opposing child protection, but the four major ISPs cover pretty much 90%. We have also heard that KCOM, which is quite a large player in this market as well, now offers child protection. We are working on it; we are picking off all these ISPs one by one. Perhaps the noble Baroness could let us know which provider sees it as a badge on honour not to do this; that would be useful. However, it certainly is not the case at all that 10% are against this. That is not a fair statement. For the moment, I ask the noble Baroness to withdraw her amendment. We would be more than happy to sit down and talk with her to see where we could meet.
Baroness Howe of Idlicote
My Lords, I thank all noble Lords who participated in the debate, particularly the Minister for her reply. I acknowledged in my speech the progress that has been made, which the Minister not surprisingly emphasised. I do not deny that there has been progress; I was simply trying to highlight the ongoing shortcomings as a means of addressing those shortcomings that still remain. The fact that our online safety provisions might be better than those in some other countries—or even most of the countries in the world—does not and should not release us from an obligation to address the ongoing shortcomings, especially if there is a means for doing so. I heard what the Minister said about the new regulations that pertain to video on demand.
I turn now to the commitment made earlier in the year: I welcomed it then and I welcome it now. Unless, however, the plan has changed, this is a commitment to require age verification on websites based in the UK that are live-streaming R18 material. That is welcome, but it is a quite different proposition from what I advanced in my amendment, which addresses all adult content regardless of whether it is live-streamed video on demand or, crucially, whether it pertains to websites based in this country. The Government’s plan pertains to R18-rated material and depends on whether the websites in question are based in this country or in any other country in the world. This final point is hugely important, since the vast majority of R18 material is live-streamed from websites based outside the UK.
I was slightly surprised that the Minister mentioned Tesco, where there was a little failure on a previous occasion, which I mentioned in March, the last time I spoke of this. I am certain that it will have learnt a bit of a lesson from having had a complaint made about it. Nevertheless, I suspect that it and Starbucks have other things to attend to and perhaps are not paying as much attention as they should to this important matter.
I am sure that other noble Lords who are interested would be delighted to have a meeting on the subject with the Minister before Report, to try to pinpoint what more action could be undertaken. I fear that, in the mean time, I must beg leave to withdraw the amendment, but I think that I shall be back again later.
“Service contracts relating to students: complaints
In cases where there is a contract under Chapter 4 of Part 1 to supply a service between a student (as the consumer) and an institution (as the trader), the following are qualifying institutions for the purposes of Part 2 of the Higher Education Act 2004, insofar as any complaint under the provisions of the 2004 Act relates to that service contract—(a) an institution granted specific course designation by the Secretary of State pursuant to regulation 5 of the Education (Student Support) Regulations 2011 (SI 2011/1986) and section 22(1) of the Teaching and Higher Education Act 1998; and(b) an institution granted degree awarding powers under section 76 of the Further and Higher Education Act 1992.”
Baroness Hayter of Kentish Town (Lab)
My Lords, Amendment 105, in my name and that of my noble friend Lord Stevenson of Balmacara, would widen the scope of the Office of the Independent Adjudicator so that it can include students at alternative providers. This would extend existing rights of redress and review to students who are publicly funded but are at non-university higher education colleges.
The Office of the Independent Adjudicator, which reviews student complaints, was designated under the Higher Education Act 2004. Membership of the scheme is compulsory for qualifying institutions, which basically means universities and their constituent colleges. However, it does not include all higher education institutions receiving public funding, whether from HEFCE or via their students from the Student Loans Company. Because of recent changes to the higher education funding system, student loans are now available for far more students; it is a route for public subsidy of higher education on a much wider basis than was the case when the 2004 Act was passed.
Some non-university private providers of higher education therefore now get public money via students through the Student Loans Company. However, although these private higher education institutions can join the Office of the Independent Adjudicator voluntarily, they do not have to and many do not. Their students are therefore excluded from being able to take their complaints to the adjudicator. We probably all agree that effective complaint-handling is an important part of safeguarding the quality and reputation of the student experience. Happily, the vast majority of students never need to bring a complaint, but the system needs to be accessible to those who feel that they have been let down by their institution.
Part of the success of the OIA is that it provides a single, consistent and independent point of last-resort adjudication for students in higher education. It has considered about 10,000 complaints and appeals since it was set up, with about one-quarter being found justified or partly justified or being in some way settled. This demonstrates the demand for an independent complaints scheme, because, despite the best endeavours of universities, things occasionally go wrong.
Without this amendment, many students would have nowhere to take their cases, such as the following, which the OIA had to find ineligible as their colleges did not happen to belong to the scheme: a student seeking a refund of fees after their course was cancelled; a student complaining that the institution had not followed the UK visa and immigration requirements properly so that he could not follow the course that he had paid for; and the student who complained about timetabling and support on an undergraduate course. These are examples of the sort of situations where, if the higher education institution is not a member, the OIA cannot hear a claim.
Universities UK supports Amendment 105. The Government’s 2011 White Paper, Students at the Heart of the System, included a commitment to bringing these private and alternative providers into the OIA scheme. That welcome commitment would, as they and we both want, create a level playing field between public and private institutions, in addition to extending this right of access to a redress scheme—it is a consumer right, after all—to all higher education students who are in some way in receipt of public money. The Government said that they intended to bring forward legislation to make that change, but they have failed to do so. The Bill therefore provides the opportunity for them to make good their promise. I beg to move.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
My Lords, higher education in this country rightly enjoys an excellent reputation, and we want to continue to ensure that all higher education students enjoy a high-quality experience. The vast majority of students report that they do: the 2014 National Student Survey shows that 86% of students are satisfied with their course, which is up on 85% last year. Statistics support the points that the noble Baroness made.
I, too, think that it is important that effective arrangements are in place for students to raise concerns and formal complaints in the relatively small number of cases that go wrong. Of course, it is absolutely right that responsibility for handling student complaints rests, in the first instance, with the autonomous and independent institutions that deliver education. I reassure the Committee that we have taken steps to ensure that all providers of higher education, including alternative providers, have a complaints policy. This is one of the expectations of the course designation process which permits students to access student support.
Institutions will want to respond to feedback from their students, including complaints. This enables the speediest resolution of issues and helps the institution to improve quality generally—feedback is very important. Where complaints remain unresolved, a good, well established service is offered by the Office of the Independent Adjudicator for Higher Education, to which the noble Baroness referred.
These arrangements were put in place in 2004 and in my view have served the sector very well. They provide students at universities in England and Wales with access to a dispute service and so to an alternative to the courts. However, as the noble Baroness rightly points out with her telling examples, they do not apply to the newer providers now offering education courses. I will reflect on the views expressed today and think very carefully about the arguments that have been put forward. In the mean time, I ask the noble Baroness to withdraw her amendment.
Baroness Hayter of Kentish Town
I hope that those words are as warm as my colleague is suggesting they are. We were, I think, hoping that the Government were going to go a little further and ask us to withdraw so that they could bring forward their own alternative. The numbers of students who would have been caught by this in the year after 2004, when it was brought in, was just over 3,000; it has now gone up to 12,000, so it has become a big issue. Can the Minister perhaps go a little further than she indicated?
Baroness Neville-Rolfe
I confirm to the noble Baroness that my words are extremely warm. We will obviously return to this issue and, if need be, have a discussion with her, but I would be grateful if she would withdraw the amendment on that warm basis.
Baroness Hayter of Kentish Town
I think that I will take my jacket off because of the heat in here. With those words of reassurance, I beg leave to withdraw the amendment.
The Lord Bishop of Truro
“High-cost short-term credit: unsolicited marketing
The Secretary of State must make regulations to prevent the sale of high-cost short-term credit through unsolicited marketing calls.”
The Lord Bishop of Truro
My Lords, Amendment 105C is in my name and those of the noble Lord, Lord Mitchell, and the noble Baroness, Lady Bakewell. I declare an interest: I am chair of the trustees of the Children’s Society, which has co-ordinated this amendment as part of its campaign—of which I am very proud—on the impact of debt on children and families. We produced a report entitled The Debt Trap earlier this year.
In September this year, the Children’s Society launched another report, entitled Playday not Payday, which looked at the effects of the advertising of payday loans on children, and in particular at the telemarketing of payday loans. The report identified a gap in the regulations which allows payday loan companies to use unsolicited marketing calls to offer people payday loans through phone calls and texts. For mortgage products, this type of unsolicited marketing is completely banned by the Mortgage Conduct of Business rules. The Financial Conduct Authority, which regulates payday lenders, said:
“Cold calling can expose consumers to high pressure sales tactics which mean they can end up with an inappropriate or over-expensive product or service. Our investment and mortgage financial promotion rules therefore ban cold calling … unless certain conditions are met”.
Why, therefore, does the Minister feel that this ban should apply only to mortgages and not to other forms of credit such as payday loans? According to a poll by the charity StepChange, a third of its clients have received an unsolicited marketing call offering them a payday loan. The average client said that they received an average of 10 calls per week. Calls at that frequency, if aimed at certain vulnerable parents and families, can have a detrimental effect on a person’s mental health and well-being.
The Children’s Society found that of those parents who had never taken out a loan, only 7% said that they were receiving calls from payday loan companies more than once a day. That increased to 42% for parents who had previously taken out a payday loan. Given that we know that young parents are more likely to take out a payday loan, I share the society’s concern that this suggests that young parents who are already in financial difficulty are receiving the brunt of those calls. Anecdotally, we hear stories of payday loan companies sending “I miss you” texts to parents who have not taken out a loan after a period of time. I am sure that the Minister agrees with me that that kind of behaviour is unacceptable.
I understand that the Department for Culture, Media and Sport has recently launched its long-awaited consultation on nuisance calls, which will also cover unsolicited telemarketing calls. The proposal to make it easier to prosecute and fine firms that break the nuisance calls rules is of course welcome and will in the long term help reduce the number of unsolicited payday loan marketing calls. However, I am concerned that this does not go far enough to protect consumers. An outright ban, similar to that applied to mortgage products, would almost guarantee protection for vulnerable families from harassing and persistent calls from payday loan firms. Will the Minister commit to looking at this issue ahead of Report to consider using the Bill to further protect vulnerable families?
Lord Deben (Con)
My Lords, I support this amendment. It is true that we have already complained about this constant nuisance. However, it is particularly true that many parents of vulnerable children are not at work, and therefore are present when the phone rings on a constant basis to offer people money in this way. It is intolerable, and an insult to family life. I do not understand why we have taken so long to deal with the overall nuisance, which most of us recognise in our own homes and our own places.
On those occasions on which we happen to be at home during the week, there is no doubt that the telephone rings on a regular basis to offer us all kinds of services, none of which we may want. There is no way of stopping them—in particular that annoying habit of a machine talking to you, so you do not even have the chance to be unfairly rude to the person who has rung you up. I try to be polite to the real people at the other end, because it is not their fault—that is the job they were given. However, it is extremely difficult, because this is an intrusion which modern life has not applied itself to. Why should we have the disadvantages of the telephone without doing something to compensate for them?
In general, this is a scandal, and in general it is fair to say that Governments of both parties have been very slow to deal with it. However, in particular what the right reverend Prelate has brought forward is a crucially important problem. Once a family has taken out a payday loan and has paid it off, they are very vulnerable to a repeat performance. These people go on and on at them, and the children are very much affected by that. It is one of those habits that people have to get out of. If they are trying to get out of it, the telephone call is intended to bring them back within the thraldom of the payday loan.
We should be much tougher about payday loans, right across the board. We should be doing a lot more to encourage the provision of the much more respectable and sensible means of people taking small loans and being able to pay them back in proper ways. Credit unions, and the extension of those credit unions, are very important. That is the positive side, but the negative side is that we have to take this seriously. I have tried very hard but I cannot for the life of me think of any logical reason for opposing these amendments.
I hope that my noble friend will not put forward the argument that we are consulting on something else. I have been in politics and in Parliament for 40 years, and I do not believe that argument. It is always used by civil servants who do not want their Minister to listen to the argument; they want them to put it off. Therefore, I hope that my noble friend will not raise that point. If she is able to find another point, I shall be thrilled, because I have not been able to find one myself. If she is either unable to find another point or unwilling to raise the usual answer, perhaps she will be kind enough to say yes to the right reverend Prelate.
Baroness Wilcox (Con)
My Lords, there are far too many of us in this Room who have been through this issue. I look across and see “credit unions” written right across the noble Lord’s forehead. It is a more difficult situation than we are making it sound. First and foremost, we know that we must be very careful not to push people into illegal borrowing or illegal credit. If we do that and they get into trouble, there is no way that we can get at them to save them. The issue of when to lend money to people has always been difficult. You can see that some of them will get into trouble, but at least you can see them and they can come to you for help. Credit unions are a wonderful idea. They are a gathering of people who come together to save money and, when they have done so, they can then take out the small loans that they need—because it is their money; they put it in there.
This is not about payday lending, which is for borrowing quickly when your child needs a pair of football boots, which every other boy has and without which he cannot play in the football match. This issue is not as simple as it sounds. I tried to tackle it, as did the Minister who followed me, and I am sure that this Minister will try again now. I remind us all that, in the best of all possible worlds, we would not want these telephone calls to happen. However, I urge us to be careful in seeing what the Minister can or cannot do because, if it is that easy, the Labour Government—a socialist organisation—would have done a lot more about it when they were in power—and they could not do it, either. I wish the Minister the best of luck today with this one.
Lord Stoneham of Droxford
My Lords, my noble friend Lady Bakewell is unable to be here today, but I am sure that she would like me to associate us with the right reverend Prelate’s amendment. There are two questions that we have to ask ourselves. First, if the selling of mortgages over the phone is banned, why should these loans not be banned as well? Secondly, there is a problem with existing debtors—principally, I suspect, because the company selling the loans has phone information. Given how vulnerable these people are, they are likely to be very mobile in terms of their telephone accounts, and therefore this is particularly dangerous for them. For that reason, the Government have to act. I accept the points that the noble Baroness, Lady Wilcox, very sensibly raised. This is something which seems to have been overlooked and needs action.
Lord Kennedy of Southwark (Lab)
My Lords, I support these amendments. I very much agree with the comments of the right reverend Prelate and the noble Lord, Lord Deben, in particular. There is a real problem here. People are at home, unemployed and quite vulnerable, and they are being harassed over the phone by these people who are offering them all sorts of deals to sort out their problems. We have to deal with that: it is a really serious problem.
I am a big supporter of the credit union movement. It is not the solution to payday lending but is part of a suite of measures to deal with it. We have to deal with this, and it is right that the Government should act. It is not right that we leave people in this situation, which is completely wrong and intolerable. People can be driven into the hands of very unpleasant organisations that lend them money and allow them to get into a mess. They then offer more deals to round it all up, with a “special offer this week”, and so on. We here are very lucky that we are not in that sort of mess. Some people are having a very terrible time and I think that the Government need to take action against the people responsible.
Baroness Hayter of Kentish Town
My Lords, most of the other amendments in this group are in my name and that of my noble friend Lord Stevenson, and I would like to speak to them. Obviously I endorse the first amendment, but I would perhaps widen it to all nuisance calls. Basically, I feel that enough is enough. I am sorry if we made excuses when we were in government; we have to put a stop to it now.
I do not know how many instances we need before we do something. The right reverend Prelate the Bishop of Truro has indicated the size and effect of the calls about payday loans—but, as the noble Lord, Lord Deben, said, there are also claims management companies talking about non-existent car crashes, or missold PPI or some other dubious sale on the phone at all hours, to such an extent that some people do not even answer their phone any more; we know of elderly people who do not. I have seen someone in this House phone for three rings, put the phone down, phone again for three rings and put it down again. I wondered what they were doing, and it was because their parent would not answer the phone until that code had happened. I think that that reflects a real breach of consumer law.
We know that the Information Commissioner’s Office has received 160,000 complaints about unsolicited calls and texts. MPs tell us that it fills their postbag. Ofcom says that it is its number one complaint, averaging over 3,000 a month. Given that most of us would never think to complain to Ofcom, that must be the tiniest tip of the iceberg. Indeed, it is very hard to know where to take a complaint. I looked at my phone bill and on the back, 60 lines down in immensely small print—my noble friend reckons that it is 8-point—there is a heading, “Commitment to our customers”. You then have to work out that that is what complaints come under. It says that you should complain to the provider, BT, and that if you are still unhappy you can go to the ombudsman service. Another 10 lines down it gives the address of Ofcom, though not its phone number, but without saying that you could take the complaint there. So if Ofcom is getting 3,000 complaints a month, that must be a tiny proportion of those who would like to complain.
What is more, Ofcom research shows that it is vulnerable people who are especially at risk, as we have heard, with one-quarter of customers getting at least 10 calls a week. My fear is that there are more than that—but, even worse, some people do not realise that these are scam calls; if anyone says that they have not had a call, I really worry about their likelihood of falling for one. A BT survey found that nuisance calls ranked above queue jumpers, noisy neighbours and rude commuters as the most irritating aspect of their daily life. About half the respondents found these calls so intrusive that they raised their stress levels. About seven in 10 landline calls receive live marketing calls, and that adds up to 7.8 billion a year.
Furthermore, three-quarters of the landlines are registered with the telephone preference service, which shows that that system is not working. Indeed, those on the telephone preference service list still get about 10 nuisance calls a month—my own experience is that it is probably higher than that—and we know that over half the people on the list are not satisfied with what it does. However, for some reason or other, telephone companies remain reluctant to act, despite the fact that we continue to have to pay them to have our phone line, even when we are unwilling to answer a call from it in case it is not from a friend or family.
So we have had reports, recommendations and complaints but no action. The Commons Culture, Media and Sport Committee reported on nuisance calls and recommended legislation to proscribe the unfair process of personal contact data, including telephone numbers, and asked the Information Commissioner to act against companies that call people who have signed up to telephone preference. The All-Party Parliamentary Group on Nuisance Calls, whose work on this I commend, called for a lower threshold for Information Commissioner action, which is particularly relevant after the commissioner lost a case because the appeal tribunal did not consider that substantial distress had been caused.
The Government have said that they will take action, but they seem to be taking their time. In March, the DCMS nuisance calls action plan set out plans to consult on lowering the threshold before the Information Commissioner can act. It took seven months—that is, until last week—for the consultation to be launched, and even then it was only about lowering the threshold from “substantially distressing” to “annoyance, inconvenience or anxiety”. We should remove not only the threshold but the need to show repeated annoyance to allow the Information Commissioner at least to proceed to take a judgment on the issue.
The Government should also ask the telephone providers to play their part. It is a bit like what we have just heard about the internet: the Government seem reluctant to say to the people who could do something, “Do it”. What we are asking for would put an onus on the telephone companies to do something. I was recently contacted by Ian Moss, who told me that for a year after she had a car accident, his wife was getting five to 10 telephone calls a day about it. Nevertheless, even if the threshold is lowered, he would still have to prove that the caller deliberately or negligently breached the Data Protection Act for the ICO to act.
We want to get rid of the threshold and let the Information Commissioner decide on a case-by-case basis. That is what Amendment 105H would do. However, as I said, we should not just leave it to the Information Commissioner, who was set up to do quite a different job. Increasingly, calls come from machines that dial every available number, so it is not even a matter of selling on information collected for some other purpose. We need to look at who is doing the calling, rather than ask some other intermediary to act. We should make it illegal for them to try to sell to people who have not given them permission to phone.
As a first stage, we should ensure that people know who is calling them. Partly, that helps them to know whether to lift the phone at all, but it is also important for stamping out the practice, as it would reveal who is calling, so complaints could be made. Amendment 105G would mandate caller line identification—in other words, knowing who is calling—for non-domestic callers doing any sort of marketing. We also ask that telephone operators make the facility to be able to read the number available free to subscribers. That does not seem much to ask.
When I was young, or even when I was middle-aged, we had to buy a telephone answering machine to add to our phone; now it comes automatically in the phone. So should this; it is what telephone providers should do. It is, after all, the telephone line which is being misused, so providers must stop avoiding their responsibility, take action against those who misuse the lines and help innocent customers avoid those calls.
At the moment, according to trueCall Research, 44% of nuisance calls arrive without caller line identification, so it is impossible even to make complaints about them. Although a quarter of them may be from abroad, even showing that they are from abroad—unless you have a student child roaming the world and wanting money from time to time—you will know that if it is an international number it is probably not for you. Others simply show up as number withheld—and it is that, with a few exceptions, we would outlaw.
The Culture, Media and Sport Select Committee supported proscribing withheld caller identifications, as did the all-party group. Alun Cairns put it so well in moving his 10-minute rule Bill last year in the other place. He said that nuisance calls,
“could be compared to someone knocking at the door wearing a mask or a balaclava. Would we answer the door to such an unknown caller? Of course we would not. Why, then, do we allow the same thing to happen over the telephone?”.—[Official Report, Commons, 28/2/13; cols. 158WH.]
Finally, as we have seen from the numbers I have given, the telephone preference service, which acts on an opt-out basis, clearly is not working. Amendment 105F would make it an opt-in system, so that consumers who want to receive calls should opt in to receive them. Jo Connell, chair of the Communications Consumer Panel, strongly supports the amendment calling for this opt-in for consent to direct marketing, as well as mandating caller line identification and the provision of that facility for free, as it is a service provided by the telephone companies but paid for by consumers that is being abused. Indeed, the panel was surprised and concerned that that was not already the case. As she has said, caller line identification can help report nuisance calls to regulators, as well as enable people to block and filter certain calls.
Ofcom welcomes Amendment 105H, as it would make it easier for the Information Commissioner to take enforcement action, and Amendment 105G, which would make caller line identification mandatory for non-domestic callers. I hope that the amendment in the name of the right reverend Prelate will be accepted, but I hope in due course ours also might be.
Baroness Neville-Rolfe
My Lords, I am very glad that we have been joined by the right reverend Prelate the Bishop of Truro. I will, rather rudely, come to his amendment at the end, because there are some general points that are relevant to that amendment.
Nuisance calls are an important issue; I want to make it very clear that the Government take it seriously. The calls are a scourge to consumers and I think everyone in this room has been troubled by them. We have therefore been working closely with regulators, consumer groups, parliamentarians and industry to take action. Our wide-ranging approach was set out in the Nuisance Calls Action Plan, published in March by my honourable friend Ed Vaizey, the Minister for Culture and the Digital Economy. I can circulate copies if noble Lords have not seen it, because it represented a major step forward.
Amendment 105F would require consumers to opt in to receiving marketing calls, rather than, as under the current system, being required to opt out by registering with the Telephone Preference Service. I am sure that many noble Lords have done that. While nuisance calls are certainly a problem that needs to be addressed, we also need to consider the benefits that can accrue to consumers and to balance the right of business to conduct legitimate direct marketing. Marketing calls can prove to be financially beneficial for many consumers; for example, calls on improved deals or tariffs can potentially save them money. The direct marketing industry provides employment opportunities, particularly in the regions and in support of our economy. The Direct Marketing Association estimates that its industry supports 530,000 jobs, so it is a significant economic operator. Equally important, it enables charities and voluntary organisations to generate essential funding.
Which?, which has contributed a great deal to the work on nuisance calls, agrees with our view that an opt-in system should not be sought, not least because there are many legitimate reasons why such calls might be made. They might be made, for example, by the emergency services, medical practitioners, or companies with whom the recipient has a genuine relationship. If an opt-in system were introduced, it is likely that calls of this nature might not be permissible.
The National Autistic Society, in its response to the CMS Committee, said that the telephone is,
“the single most successful way that—as a charity reliant on public donations—we raise money from individuals”.
Baroness Hayter of Kentish Town
I ask the Minister to check that quote. I checked with the chair of that organisation, which did not expect it to be used in this way.
Baroness Neville-Rolfe
I thank the noble Baroness and, of course, we will check on it. I suppose that the general point is that phone marketing is more successful than street, doorstep, direct mail, and so on. Changing an opt-in system can diminish a charity’s income, and that is our concern. Charities are subject to the same rules as those applying to marketing companies. That point may be of concern to my noble friend Lord Deben, who spoke with such energy on this subject.
Calls to consumers who are registered with the Telephone Preference Service, provided they have not given explicit consent to receive such calls, are already outlawed under the Privacy and Electronic Communications Regulations. The Government’s view is that those breaking the law by calling consumers registered with the Telephone Preference Service are just as likely to ignore any new law that is introduced, regardless of whether the system is opt-in or opt-out. Tackling marketing calls would, in our view, be better addressed in focusing on better enforcement, and we are taking action in this area. We have ensured that the monetary penalties, which the Information Commissioner’s Office and Ofcom can use, have been increased and issued more frequently to those breaking the regulations. Since January 2012, more than £2 million in monetary penalties has been issued by both regulators.
We have also made it clear that regulators need to continue to take strong action to send a signal that those who flout the rules will be caught and punished. Persistent offending companies are now named and shamed on the Information Commissioner’s Office website, so that those who make those marketing calls are made known to the public. Informed consumers are safer consumers.
The noble Baroness, Lady Hayter, said that it was very hard to know how to complain. Ofcom’s website, as she may know, has been revamped to provide comprehensive information for consumers on where to go about nuisance calls. I have talked to Ed Richards about this because he realises how important it is. Ofcom has found that most people go to their service provider in the first instance, which in turn passes them on to Ofcom. There is now much more collaboration between regulators sharing their knowledge and expertise to improve compliance.
Changes have been happening as the Bill has progressed. I mentioned the action plan, and on 25 October Ed Vaizey launched a consultation on lowering or removing the legal threshold for fining firms who make unsolicited marketing calls. The efforts of the Information Commissioner’s Office to impose penalties are currently frustrated by the legal requirement to demonstrate that nuisance calls cause substantial damage or substantial distress—especially given the volume of calls, mentioned by the noble Baroness, Lady Hayter. I am slightly surprised by her comments because, while there are two options in the consultation, which we have to take into account before making a final decision, the Government’s preference is to remove the threshold and give the commissioner the greatest scope to take action. This will help to solve the commissioner’s current frustrations. The consultation ends on 6 December and we expect the secondary legislation to implement the resulting changes to come into force in February—a more rapid avenue than in this Bill.
Amendment 105G would require businesses and other persons making unsolicited calls for direct marketing purposes to provide caller line identification. We are sympathetic to this amendment, as the noble Baroness knows, because we have discussed it, and agree that the current situation can be very frustrating when callers deliberately fail to provide their CLI. Unfortunately, however, mandatory CLI is not permissible under EU law. The EU privacy directive provides that callers, both individuals and businesses, must be allowed to withhold CLI. The directive allows for limited exceptions for the specific purpose of tracing calls, but that would not apply to this amendment, which covers all businesses and individuals making unsolicited calls for direct marketing purposes.
Baroness Hayter of Kentish Town
While we are talking of trying to find reasons not to take action about victims of domestic violence, the Minister will notice that in our amendment we allowed for Ofcom to be able to look at categories, either individual domestic callers or groups of them, that could be exempt, exactly in order to cover women’s refuges and things like that—if we are talking about grabbing excuses. The important issue, though, is that our understanding of the European directive on privacy was that it was about individual privacy, not about corporations, and that the individual within a company or an individual subscriber could be protected. I would be happy if the Minister could clarify that in writing.
The other issue is that no one tells you to go to the Ofcom site, which is not advertised, so there really is no way of being able to complain, particularly if you do not have the caller’s identification number. I ask the Minister to spell out for us why it is not reasonable to ask for all non-domestic callers making marketing calls to have to identify their number. I do not think that she has actually answered that.
Baroness Neville-Rolfe
Perhaps I could try harder; we will have to return to it if I cannot persuade the noble Baroness. The difficulty is that if, for example, someone rings up a domestic violence helpline and that number is public, it will then appear on the bill, so other members of the household will then know that people in their household have been ringing that number. This sounds like a detailed issue, although I think that our hearts are in the same place. My understanding is that this was debated at great length in Brussels at the time of this directive, and that these were the problems that came up. I thought that it was right to share that background with the Committee. I will go away to see whether the point that the noble Baroness has made about individual versus corporate stands; I think it is a legal point that I would need to take advice on. That is the difficulty; it was a combination of behavioural and legal points that reflected the concerns the EU had when it was talking about this, when obviously it was trying to do the right thing.
I turn to Amendment 105C. The Government share the concern of the right reverend Prelate and the Children’s Society about payday lenders using unsolicited calls to market inappropriate products to vulnerable consumers. Indeed, we had a long debate earlier in this Committee on the whole issue of payday loans. Such practices must not be allowed to occur, as the noble Lord, Lord Deben, said. I reiterate that the tough measures that I outlined as part of the nuisance calls action plan will capture the practices of payday firms, among other industries. Such firms will no longer be able to target consumers as they have previously been able to.
The right reverend Prelate asked why, as mortgage calls were banned, payday lenders’ calls could not be banned. I am afraid I must take that question away; I was not aware of the ban on mortgage calls, and I will investigate and write to the right reverend Prelate to see if that provides some new avenue into the debate.
To conclude, the Government take the issue of nuisance calls very seriously, and I have set out a number of ways in which we are tackling the problem and the way in which we have speeded up. The Government will continue to work with consumer groups, regulators and of course industry, which need to make changes to find effective solutions. The work outlined in our action plan is under way—new things are happening all the time—and this will help to contribute towards achieving more long-term solutions to deal with nuisance calls. I have outlined a couple of points of follow-up, which we will pursue before we get to the next stage of the Bill, but in the mean time, I ask the right reverend Prelate to withdraw his amendment.
The Lord Bishop of Truro
I am grateful to the Minister for her response, and I thank all noble Lords who took part in the debate. Clearly, unsolicited calls struck a nerve with most noble Lords here. It was therefore ironic that we should have our own version of an unsolicited call when the Division Bell rang to empty this Room.
By way of response, I thank the Minister very much for the offer of a letter on the point about mortgages, which, as was reinforced in the debate, is a significant issue. I will stress and underline a point on my amendment. I understand entirely the strength of feeling in the Room about the way in which we are affected by unsolicited calls, but I want noble Lords to imagine what it must be like if you are leading a chaotic life in a vulnerable situation, where bizarrely, the phone ringing might be seen as a good thing rather than a bad thing—as many of us would see it. In view of some of the amendments we will come to later, there is almost an addictive quality. Some of these payday loan firms will buy into and hook into these people, who do not have the resilience to resist in the way that I suspect we can. We can joke about it. It might be a nuisance for us—we might be able to shout down the phone at a machine—but for some of the people that we represent in the Children’s Society those strategies are just not available. This is therefore very important. I am grateful to the Minister for her assurance of a letter, and I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
“Public communications by sellers in the high cost consumer credit market
Lenders in the high cost consumer credit market shall not target public communications about their services at people who are engaged in gambling.”
Lord Kennedy of Southwark
My Lords, I will not detain the Committee too long in moving my amendment today. There are a number of other excellent amendments on the Marshalled List. I am particular conscious that the next one is in the name of my noble friend Lady Kennedy of Cradley, who also happens to be my wife, so I will be very brief.
We have discussed many times in Grand Committee and your Lordships’ House the issue of payday lenders, and their practices have come under a lot of scrutiny. I am pleased that the Government finally took some action to curb some of the worst excesses, although they did not do that voluntarily; rather, they were forced to react to a wholly unacceptable situation. The most reverend Primate the Archbishop of Canterbury, other noble Lords, many Members of the other place and campaigners are to be congratulated on the work they did on this, forcing the Government to finally act.
However, my amendment seeks to deal with a particular problem. On some gambling websites there are adverts from payday lenders, which make it possible that while you are gambling you can log on to a payday lender and borrow more money when you may not be in the best frame of mind to do that. You could have lost money and think, “I can win it back in the next game. All I need is a hundred more pounds, but I’m still two weeks from pay day and I’m already overdrawn at the bank”. In front of you is a little thing flashing in the corner telling you to log on and get a payday loan. My amendment seeks to stop gambling websites from accepting payday lender adverts on their sites—it is as simple as that. That is a real problem. I look forward to hearing the Minister telling the Grand Committee what the Government will do to deal with this issue, which needs to be resolved.
Before I conclude, I should have mentioned in the previous amendment that I have a meeting with the Economic Secretary to the Treasury in a couple of weeks’ time. We all hear reports in the media about all these dreadful practices that financial companies get up to, and the Government keep fining them. That is very good; the Government fine them hundreds of millions of pounds. All the money goes to what is called the Consolidated Fund—it is tipped in, disappears, and is never seen again. I am trying to persuade the Government to use a small amount of that money to support the credit union sector, debt counselling, money advice, or maybe an advertising campaign to show that there are alternatives to payday lenders. We would need a tiny amount, perhaps £10 million, rather than it disappearing into that fund. I therefore hope that I will get some positive news from the Government in a couple of weeks’ time, and I will bring that back further on. I beg to move.
Lord Stevenson of Balmacara
I endorse what my noble friend Lord Kennedy has said on this matter. These are new examples of the pernicious behaviour that is often adopted by petty lenders and similar types. It is not just them; it is also other high-cost credit providers. As the Minister indicated, we had a very good discussion on this at our last session, and many of the points there will have resonance for what is being said today.
I have two questions left in my mind after hearing what the noble Lord had to say. First, how did he know about those flashing lights at the corner of the screen? I know that his wife is present so he would not wish to reveal undisclosed secrets, but I think we ought to be told at some point. More seriously, why does it always seem to take pressure from within this House to get movement on this? If the practice were stamped on very quickly, a serious harm would be removed. I hope the Minister, when she comes to respond, will indicate the Government’s willingness at least to investigate this, to assess whether it is something they want to do. Hopefully, they will say that it is something they do want to do.
Baroness Wilcox
I will just add a word at this stage. I am very interested to hear what the Minister says about what the noble Lord, Lord Kennedy, has described, with the money all going into a fund somewhere else and people not getting their hands on it. I winced slightly, because I thought, “The Minister is listening to somebody talking about ring-fencing here”. I wondered how she was going to respond to ring-fencing money like this; I am not quite sure. The Financial Conduct Authority, as I understand it, is this big, new strong regulator that the Government brought have in, so I wondered if the Minister was going to tell us the result of the consultation paper they put out fairly recently. I have not heard too much about that since.
Baroness Jolly
I am grateful to the noble Lord, Lord Kennedy, for raising the issue of payday lenders’ advertisements targeted at people engaged in gambling. The noble Lord, Lord Stevenson, asked how he knew about these things. The answer could be that he had inadvertently fallen into the debate on the gambling Bill, where this sort of thing was raised. We can therefore tell the noble Baroness that there was nothing untoward going on.
As I have outlined previously in this Committee, the Government are fundamentally reforming regulation of the payday market through the Financial Conduct Authority’s new, more robust regulatory system. In January, the FCA will introduce a cap on the cost of payday loans, to protect consumers from unfair costs. The Government are determined to tackle abuse in the payday market wherever it occurs, including in the marketing of these loans. We strongly agree with the noble Lord that it is unacceptable for payday lenders to deliberately target vulnerable consumers with their advertising material. However, it is clear that a robust set of measures is already in place to protect the vulnerable from such practices.
We have heard about the FCA, but payday loan adverts are also subject to the Advertising Standards Authority’s strict content rules. Those apply to broadcast, as well as online, advertising. The ASA enforces the rules set out by the UK code of broadcast advertising. The BCAP code requires that all adverts are socially responsible and that vulnerable people are protected from harm. The social responsibility requirement prohibits lenders from deliberately targeting vulnerable people such as problem gamblers. The ASA has powers to impose scheduling restrictions if it deems it necessary. It also has powers to ban adverts which do not meet its rules, and has a strong track record of doing so: since May 2014, the ASA has banned 12 payday loan adverts. Just today, the ASA banned a payday advert because it encouraged consumers to take out loans to fund frivolous spending. The FCA has introduced tough new rules for payday adverts, including the introduction of mandatory risk warnings and the requirement to signpost to free debt advice. The FCA also has power to ban misleading adverts that breach its rules.
To conclude, there is in place a tough package of measures to ensure that vulnerable consumers are protected from inappropriate advertising and communications from payday lenders. I hope that that gives the noble Lord some comfort. To pick up on a point made by the noble Baroness, Lady Wilcox, the consultation paper on the cap will be published next week, before Report. I hope that the noble Lord now feels able to withdraw his amendment.
Lord Kennedy of Southwark
I first raised the issue of payday lending in 2010, soon after I entered the House, in a Question to the noble Baroness, Lady Wilcox. I remember that when I left the Chamber after that, a Conservative Peer said to me, “That is outrageous. No one ever charged me 4,000% for a loan. How dare you say that in the House? It is wrong”. He had a right go at me. I said, “I’m sorry”. I then sent him the link to the advert, and he came back to apologise. He has since become a good friend. He was shocked that anyone would charge that sort of money. That is how I felt about gambling websites. I could not believe that you can play a lot on those sites and have a sign saying that the money is there. The problem is that the advert may not be misleading; it may just give the name of the company and say that it gives payday loans. That is a matter of fact.
We say that we are trying to protect problem gamblers. How do you know that the person on the computer is a problem gambler? You are sitting there getting desperate, losing money and needing more, and the offer is in front of you. The Government are not going far enough on this. There is a big issue here, which we should look at. Of course I will withdraw the amendment today, but I will probably bring it or a similar amendment back at Report.
On ring-fencing, these companies are being fined a tiny amount—£10 million or £11 million. Hundreds of millions of pounds are going to the Consolidated Fund. I hope that no Minister will be too worried about the amount I am talking about when I get to see them. With that, I beg leave to withdraw the amendment.
“Airline passengers: allergies
(1) When a consumer enters into a service contract under Part 1 of this Act to travel with an airline, the airline must give the consumer an opportunity to state whether they have any allergies about which the airline should be aware.
(2) If the consumer states that they do have an allergy, the airline must take reasonable appropriate steps to avoid the consumer having an allergic reaction while travelling with the airline.”
Baroness Kennedy of Cradley (Lab)
My Lords, many of us are nervous of flying; imagine how nervous of flying you would be if you had an allergy caused by something as common as nuts and you knew that your allergy was so severe that any contact with the allergen would cause you a life-threatening reaction. Although you have done everything that you could to keep yourself safe on the flight—you have your Epipen, your medication and your letter from your GP, and you are even carrying your own food—the airline you are travelling with does nothing to try to reduce your risk of having an allergic reaction. Why? I cite British Airways as an example because it is our flag-carrying airline. It states that that it cannot guarantee an allergen-free environment. Because it cannot guarantee an allergen-free flight, it does little to help to reduce its passengers’ risk.
There are no guarantees for any of us when we travel by road, rail or air, but that does not stop Governments or other authorities putting in place measures to keep us as safe as possible. I know that when British Airways were asked by a passenger with a severe nut allergy to stop giving out nuts on his flight, it refused and therefore directly increased his risk of a life-threatening reaction.
A few weeks ago, the media reported that the father of a young girl with a severe nut allergy felt bullied into leaving a British Airways flight after it had refused to make an in-flight announcement about his daughter’s allergy. In-flight announcements cannot guarantee an allergen-free flight but they can be part of a package of measures to reduce the risk. What was highlighted by that father’s story and by my experience is that there is confusion about the British Airways policy to deal with passengers at risk of severe allergic reactions. At first, they told the father that they would make an in-flight announcement but, once they were on board, the cabin crew refused.
On 16 August this year, British Airways staff told me that passengers,
“can mention to the cabin crew about a nut allergy and the crew can make an announcement on board the flight”.
However, 10 days later they said they were wrong to give that advice and withdrew it. British Airways states on its website:
“We use the recommendations of the International Air Transport Association … for allergen sensitive passengers to make sure your flight is as comfortable as we can make it”.
The problem is that the IATA recommendations say very little. As far as I can see, they only refer to meeting the general standards in terms of first aid kits and cabin crew first aid training. There is no mention of any of the practical operational steps that some airlines carry out, such as in-flight announcements. The policy and practice around how an airline supports a passenger with a severe allergy is therefore completely up to that airline. This policy vacuum leads to a lack of action on the part of some, and confusion for the many airline passengers and staff.
This is despite the huge and growing number of children and adults affected by allergies. According to the European Academy of Allergy and Clinical Immunology, allergies affect more than 100 million people in Europe. One out of every three children has an allergy, and it expects allergies to affect more than 50% of all Europeans in 10 years’ time. We know that for those at greatest risk, the tiniest trace of a food allergen can trigger severe symptoms and, in some cases, fatal or near-fatal symptoms. According to the Food Standards Agency, in the UK about 10 people die every year from food-induced anaphylaxis. Allergies and fear of a severe allergic reaction affect the daily lives of millions of children and adults. It is a growing problem that deserves some attention, especially when a person with a severe allergy is in a closed environment like a plane, where escape is impossible and the medical help you need is not available because you are trapped 35,000 feet in the air. Thankfully, anaphylactic shock on a plane due to an allergy is rare, but it does happen.
Noble Lords may have read over the summer about the case of the little girl, aged four, who went into anaphylactic shock and lost consciousness on a plane due to a severe allergic reaction to nuts. She was saved thanks to an ambulance worker on board who responded to the cabin crew call for medically trained passengers. In this case, Ryanair did make an in-flight announcement—in fact, it was reported to have made three in-flight announcements—but one passenger ignored the warnings, and his actions caused the girl a severe life-threatening reaction.
The two media reports that I have mentioned highlight a number of important issues: the risk of a life-threatening allergic reaction is possible and not as rare as we may think; airlines’ policies vary to a great extent; there is confusion among airline staff on the policy positions held by that airline; and there is a significant lack of passenger awareness of the risks posed to some passengers from allergic reactions, which means that in-flight announcements alone are not a complete solution.
I recognise that no airline can guarantee an allergen-free flight, but the amendment I have tabled today does not ask airlines to give a guarantee; it asks them to take reasonable steps to decrease the risk to flyers with severe allergies when the airline has been informed that an at-risk passenger is aboard. It asks the airlines to help create as safe an environment as possible, and would lead to the development of a set of recommended guidelines that airlines operating in the UK would adopt to help reduce the risk to allergen-sensitive passengers. This would protect not only the at-risk passenger but the airline and all the other passengers on board.
Many airlines are already taking action. For example, some airlines have removed peanut snacks altogether. Others will remove nut-based snacks when notified in advance. Some airlines have introduced a buffer zone—seats around the passenger with an allergy, which they keep as allergen-free as possible. Some airlines allow passengers to pre-board so they can wipe down the seating area. Some advise customers when the aircraft is cleaned, so that passengers can book travel when the aircraft is at its cleanest. Some, as I have stated, make in-flight announcements to ask passengers to stop eating nuts. Because airline meals pose a particular risk for allergy sufferers, some airlines do more by letting passengers know what the meals are in advance—for example, at the time of booking. If some airlines can take steps to mitigate the risks to their passengers, why cannot they all? I think that they can, and should. The amendment asks them to do that.
I hope that the Government will agree and support the amendment, and that they will facilitate a discussion with the Civil Aviation Authority, the International Air Transport Association and any other appropriate authority to develop coherent guidelines on this important matter. I beg to move.
Baroness Wilcox
My Lords, I promise that this is my last intervention but I could not resist this one. Some years ago I was asked to chair a Select Committee on aircraft travel and health and deep vein thrombosis. It was an unusual piece of work because it was based on anecdotal evidence that people were coming off planes and were in hospital shortly after. It was unusual because most of the evidence that we took was from the general public, and we then got the reaction of the airlines, et cetera. So this is an area that I know very well indeed. As to whether it is relevant to this Bill right now I do not know, but at that time, the answer was that you could tell people that you had something wrong with you—the flu, or an allergy, although I am not sure that everybody thought so much about allergies in those days. There was great use of hyperfilters, which are still relied on. The air exchange is so quick and so localised to you that, generally speaking, you are safe because you are only within the range of one or two people. I advise the noble Baroness to get a copy of the Bill because it is quite possible, having listened to her today, that she might want to take this forward herself.
It was interesting to hear her speech. I have no doubt that the Minister has a wonderful answer, but as far as I know all the big airlines used the hyperfilter system and air exchange, which was so fast that it was pretty well the best they could do at the time. Things may have moved on since then. I do not know whether it is relevant to this Bill at this time, but it was excellent to hear the noble Baroness speaking about it. It is the first time I have had an exchange with her and I have enjoyed it, so thank you.
Lord Mendelsohn (Lab)
My Lords, I congratulate the noble Baroness, Lady Kennedy, on introducing this amendment and on her very thoughtful and persuasive speech.
I have an interest to declare. Two of my sons have severe nut allergies. I can still recall when the elder of the two suffered his first anaphylactic shock. He was almost five years-old and had never been diagnosed with an allergy. I think it is almost certainly the case that were it not for the fact that it occurred on a cruise liner with appropriately trained staff available and with the right supplies, our son would have died. My personal experience tells me how fortunate you can be.
The amendment does not ask airlines to guarantee a peanut-free or nut-free flight—no airline could or would ever give such a guarantee—but it does ask airlines to provide a reduction in the risks and to provide safe alternatives. The amendment addresses the key issue of the risk of a major incident on board, and what can be done to minimise that risk.
Let me set out the considerations and context for our views on this issue. First, this is an appropriate measure to be under consideration. We are, naturally, in favour of airlines being responsible and taking reasonable and proportionate steps to protect passengers. Secondly, we also consider that the amendment, while referring to allergies in general, is particularly focused on a distinct and significant area. Most allergic reactions present with mild or moderate symptoms. However, anaphylaxis is a severe allergic reaction that is potentially life-threatening. It is a medical emergency that requires immediate treatment, hospitalisation and observation for up to six hours.
Thirdly, there are very significant increases in diagnosed allergies and the trend line is continuing to rise. Surveys showed that an increase was initially seen in countries such as the UK, Europe and USA, but can now be found in all countries undergoing industrial development. The pattern of allergy is also changing and the distribution of those facing severe allergies is becoming increasingly widespread. I would be grateful if the Minister had some data she could share on the prevalence in the UK—especially in comparison with other OECD countries and how the Government project the likely incidence of such allergies and the trend line towards the future.
Fourthly, there is a clear and distinct problem with air travel. The very nature of the reaction and the treatment requirements mean that an anaphylactic incident is likely to cause a flight to change its route to meet the medical emergency. In the recent incident referred to by my noble friend Lady Kennedy, the flight to New Jersey was compelled to return to Dublin to ensure that proper medical attention was received. The elevated level of risk caused by being airborne means that air travel should be considered as distinct from other environments. I would be grateful if the Minister could provide us with any information the Government have on the number, severity and location of incidents; whether they have had any discussions with other countries on providing an exchange of information; and whether they have any information on the costs associated with plane diversions, or the department’s assessment of the performance of airlines in dealing with incidents.
Fifthly, there are risks that, while they can never be eliminated, could be managed better and where public policy expressed through legislation could help to encourage this. More can be done to ensure that allergy sufferers are not put at risk by particles, or even though the provision of food on the airline. Reasonable management measures and appropriate provision of meals and the like are deliverable. Providing obligations would mitigate the mistakes that can sometimes occur, both with ingredients and provision, in the way that airlines currently treat this condition.
Sixthly, the current advice and guidance places great burdens on passengers, who do have a responsibility—and I suspect that were it not for their vigilance we would be conscious of many more incidents. Advice and guidance are inconsistent between airlines and in particular in airlines’ implementation. There are a number of useful guidance notes and codes, but implementing simple data-capture arrangements, amending contracts with suppliers and introducing compliance checks within the existing oversight of food suppliers—as well as arranging for the effective management of the cabins and the provision of alternatives—seems to be proportionate, readily implementable and not highly fiscally challenging. The fact that some airlines do some of these things already would suggest that they are all able to do so. Can the Minister provide us with more details on how the airlines and her department view the deliverability and affordability of such changes?
I would also be grateful if the Minister could provide the department’s assessment of the guidance notes that are available and in use, and what evaluation or commentary there has been on their continuing practicality or previous effectiveness. Has the Minister’s department held any recent discussions on how they might be improved? What evidence have they received from third parties on their strengths and weaknesses?
Finally, there are already some moves towards legislation and regulation in other parts of the world. I understand that the US Department of Transportation started to look at banning nuts on planes in 2010 and has commissioned, or has called for, peer-reviewed scientific data on these matters. Have the Government discussed this with other international parties—specifically the US Department of Transportation—and have they independently sought and reviewed scientific data on these matters? Do they have any more thinking on the current position in America and on the current thinking of the Department of Transportation? In addition, the New Jersey Senate passed a resolution concerning nuts on planes. Has the Minister any information on the measures it has introduced and on any evaluation on their effectiveness?
It would also be very helpful to know what other authorities, experts and models the Government consider it would be appropriate to consider, and, in addition, whether such moves in countries where incidence is lower than our own is a strong indicator that action and acceptance of the amendment would be appropriate now.
Baroness Neville-Rolfe
My Lords, I, too, am grateful to the noble Baroness, Lady Kennedy, for raising this issue and for tabling the amendment. I am delighted to be able to welcome the noble Lord, Lord Mendelsohn, who I have known for some years, to his maiden contribution at the Dispatch Box, and thank him for bringing his expertise and family experience to this important debate on this very important subject. He is most welcome to our deliberations.
I am very sympathetic to the intention of the amendment in the name of the noble Baroness, Lady Kennedy, which seeks to relieve the suffering of those with allergies. As she said, allergic reactions can be very distressing to those who experience them, not least in the confines of an aircraft cabin, where it can be particularly scary. I know that no carrier would wish that to occur on its services. I am also grateful to the noble Baroness, Lady Wilcox, for sharing her experience on another troubling issue, deep vein thrombosis, and her knowledge of travel filters and air exchanges, which are an important technological part of the debate that we are having today.
I assure the Committee that industry practice is for carriers to request passengers to pre-notify prior to travel if they have any medical conditions, including allergies, and that most passengers do so. Most airlines will then take all reasonable measures to prevent passengers from having an allergic reaction while on board the aircraft. I know that, where given prior notice—and that is an important duty for us as passengers—airlines take steps, such as broadcasting requests to passengers not to eat nuts.
For some allergies, a carrier is unlikely to be able to guarantee an environment totally free of the trigger substance. For example, an aircraft may have been used by another carrier only hours previously, other passengers may bring their own food with them which can contain a trigger substance, or a passenger may be accompanied by an assistance dog, which may be a source of allergic reaction for some people.
I note that the amendment is specific both to airlines and to allergies. While I appreciate that there is a distinction, which the noble Lord has explained, the amendment would place a duty on airlines that is not placed on operators of any other modes of transport such as trains, ships, buses or taxis, or the airport operator responsible for the airport environment. However, there may well be steps that operators in those modes could take to reduce the risk of a person with an allergy having an attack during their journey. Furthermore, there may well be conditions other than allergies where an operator could take reasonable steps to reduce the risk of an attack during the journey—for example, photosensitive epilepsy. Moreover, the majority of airlines already do what the amendment would create a duty for them to do.
I am grateful to the noble Baroness for bringing this issue to our debate, but I do not think that we can justify the addition of this regulation to the Bill. I will ensure that the remarks made on the subject today are conveyed to my right honourable friend the Secretary of State for Transport, and that the points that have been made are considered. I shall also ask the department to pass the comments to British Airways because of the examples that she cited. I know from my own extensive experience of travelling that the company always seems very keen to provide a good service. As the noble Lord said, good management systems make a very big difference in these sorts of cases.
I was interested in the good practice outlined by the noble Baroness and, as I said, in the experiences of my noble friend Lady Wilcox, and in the international developments that have been mentioned, which I was not aware of. I also commend to the Committee the advice that the charity Anaphylaxis Action gives on its website to those with allergies when they travel by air. That advice includes stating their needs to carriers, discussing their proposed flight with their GP or specialist and, if concerned, taking their own food and medication, such as antihistamines or an adrenaline auto-injector, when they fly. In the circumstances, I ask the noble Baroness to withdraw the amendment.
Baroness Kennedy of Cradley
I thank all noble Lords who have spoken today, particularly the noble Baroness, Lady Wilcox, for her intervention. I was very interested to hear about the fast air exchange; I shall take her advice and look it up. I do not see that the fast air exchange helped the little girl aged four who became affected by a passenger who ate nuts a few rows behind her, but it could be that that is not a technical solution that is available to all airlines. I will certainly go and investigate that. Presumably, that is one of the reasons why buffer zones have been created by many airlines, such as Delta Airlines, to create a space where the passenger can sit and feel risk-free from their allergy.
I thank my noble friend Lord Mendelsohn for his contribution and his list of questions, which the Minister did not address. Actually, I was quite disappointed with the Minister’s reply. She said that most airlines do this. Most airlines do but not all of them, and that is the central point of my amendment. We need to ensure that there is a level playing field across the airlines in relation to security. There is good practice but there is also bad practice; there are good initiatives but there are also no initiatives; actions are taken but there is also a refusal to take action.
“Credit broker fees
(1) The Consumer Credit Act 1974 is amended as follows.
(2) In section 160A (credit intermediaries), after subsection (4) insert—
“(4A) Persons engaged in credit intermediary activity under this section or credit brokerage under section 145 shall not charge or take any fee from a debtor in respect of these activities until such time as an introduction results in the debtor entering into a relevant agreement.””
Lord Stevenson of Balmacara
My Lords, I declare my interest as the retiring chair of StepChange, a debt charity which is the UK’s leading independent debt advice and solutions service. StepChange offers free-to-client debt management plans, and the charity estimates that it is administering over a quarter of the total number of DMPs that are currently in place.
We know that people who face unmanageable debt often delay, sometimes for as long as a year, before seeking help. By that stage, they are often so desperate for help that they will enter into a plan with the first provider they happen upon, whether it is telephone or web-based, or whether they have just read about it in the newspapers. In a previous debate, attention was drawn to the volume of marketing calls or texts offering fee-charging debt management services. Of course, there is also the scourge of daytime advertising of such products on television and radio.
In its 2010 review of the debt management plan sector, the OFT concluded that commercial debt management companies,
“are not giving the advice or offering the solution that is in the best interests of the consumer but instead that which is most profitable to them”.
That is quite a serious accusation but, compared with what charities such as StepChange offer all its clients, which is the best independent advice with the client at the centre of the discussion, it is fair to point out that in many cases commercial debt management firms simply do not have the expertise to help resolve people’s debt situations in their best interests even if they want to do so. For instance, out of the hundreds of debt management firms that exist, the Insolvency Service lists only four as able to set up a debt relief order—one of the key tools to help debtors on lower incomes. In contrast, StepChange spends about £2 million a year on DROs for its clients.
The October 2014 report on this sector produced by the newly formed Competition and Markets Authority says:
“We consider that there is … a case for the FCA to conduct a more broadly-based review of the activities of lead generators”,
including,
“the role of fee-charging brokers ... possibly timed to take place during the authorisation process ... that is now getting underway”.
It is estimated that there were about 600,000 DMPs at the start of 2012. Of these, about 350,000 were with commercial fee-chargers. In 2010, the OFT estimated that debt management firms were making some £250 million profit from these plans—from clients who were, by definition, already over-indebted. It must be obvious to all concerned that, if fees are charged by commercial debt management companies to people who are suffering from unmanageable debt problems, the consequence will be that the extra costs taken will divert funds away from the creditor to the fee-charging DMP provider, and that will ensure that the time taken to repay the debt is extended. That cannot be good for consumers. It cannot be good for the creditors, who will wait longer and get less, and it is not good for the economy because it is a drag on GDP and will slow the recovery.
In this Committee we have discussed the role of the FCA and other sectors of the credit market, and have raised similar concerns in other Bills, not least the one that originally set up the FCA. Although I think highly of the FCA and respect the intentions of senior staff I have come across, it is becoming clear that there is a fundamental problem with the way it is established. Although its paperwork states and its staff will assert that the consumer is at the centre of its thinking, in practice the FCA has a different objective, which it takes as a surrogate for consumer welfare but which is not correct. It ensures that, across the financial services sector, markets are functioning well.
This means that we get perverse results. Almost irrespective of the consumer detriment or harm, the FCA appears to be content if a smaller number of well capitalised firms are trading, such that they are making reasonable profits—which I suppose means reasonable in relation to the capital employed. That is why cleaning up the payday loan market will not in fact eliminate payday lenders or other high cost credit operators, and why its tougher, more proactive regulation of the debt management market—while long overdue and very welcome—will not remove the problem of commercial DMP providers. If, for example, the FCA determines that the DMP market is functioning well, the FCA will be happy—even though the existence of fees will make it much harder for clients to repay their debts, and it will take them longer to do so.
A good example of this is the cap the FCA has introduced on charges in the DMP sector. We think fees should be abolished altogether on the ground that all clients’ money should be utilised to repay their debts. However, the cap has been set at a relatively high level: firms can charge a maximum of 50% of a customer’s repayments, although that must decrease once set-up costs have been recovered. Thereafter, however, monthly management charges—as distinct from set-up fees—can be charged at a flat percentage of customer repayments. Most of our clients pay about £200 to £250 per month into their DMP. If 50% of the early payments, and let us say 10% of the rest, go to a commercial operator, you can see how the impact will work out. This is absurd. It means that a client of a profit-seeking debt management company with £20,000 of debts will typically pay hundreds of pounds in set-up fees and thousands of pounds in monthly management fees over the term of the plan—money they cannot afford, which should be being paid to their creditors. Compared with a free debt management plan, this will extend the time it takes to pay down debts by as much as several months, and sometimes more than a year. There is substantial consumer detriment here in this market, and it is hard to believe that such a high level of charges is consistent with promoting good consumer outcomes. Our amendments would ban upfront fees for credit brokerage, and clean up DMPs.
Finally, I will touch on one other issue. As a result of FCA regulation, commercial debt management companies are starting to exit the market, and under the amendment, this would accelerate. There will be some transitional problems; for example, when a fee-charging debt management company closed its doors earlier this year, StepChange Debt Charity was on hand to pick up the pieces—and that was good. It was able to support over 400 people, but it is important to note that in so doing, the charity found that more than half of those people had been sold a debt management plan which was not suitable for their circumstances. As the FCA authorisation process starts to clear out the worst operators in this market, it will be up to charities such as StepChange, working with the regulator, to pick up the pieces and help rebuild people’s lives. That will be a significant amount of work. I have written to the FCA to suggest that a plan needs to be put together with the creditors, StepChange and others in the charitable sector to ensure that clients whose DMPs fold under them can be offered a free DMP or other appropriate debt solution. I hope that the FCA will take up that offer to engage. I beg to move.
Baroness Jolly
My Lords, I thank the noble Lord for raising such an interesting and critical point on this aspect of consumer credit, and I acknowledge the excellent work of StepChange. The Government have fundamentally reformed regulation of the consumer credit market. Consumer credit regulation transferred from the Office of Fair Trading to the Financial Conduct Authority—FCA—on 1 April 2014. The Government have ensured that the Financial Conduct Authority has robust powers to protect consumers. It has a broad enforcement tool-kit to punish breaches of its rules, there is no limit on the fines it can levy and, crucially, it can force firms to provide redress to consumers. The FCA also has flexible rule-making powers to take further action if it is deemed necessary to protect consumers.
Turning to Amendment 105K on the issue of credit brokers, it is clear that there is a real risk in this market of consumer detriment being caused by unscrupulous brokers. FCA rules already require credit brokers to disclose their status and any fees payable before the consumer enters into a brokerage contract. The FCA has made clear that disclosure must also cover the consumer’s right to a refund if no credit agreement is entered into within six months following an introduction. The FCA requires credit brokers to comply with the high-level principle of “treating customers fairly”. However, the Government share the noble Lord’s concern about the continued bad practice in this sector. The Government and the FCA are currently jointly considering what further action is needed to protect consumers, and will provide an update in the coming weeks.
Turning to Amendment 105M on the issue of debt management companies, the Government are concerned about the potential for detriment to occur to vulnerable consumers using debt management plans. Our focus is on comprehensively reforming regulation of this sector, as part of our wider reform of consumer credit regulation. Consumers participating in debt management plans are far better protected under the new FCA regime. The FCA has introduced a range of binding rules designed to protect consumers; it has made it clear that fees should not undermine the customer’s ability to make significant payments to the creditors throughout the duration of the debt management plan.
The FCA is thoroughly assessing every debt management firm’s fitness to trade as part of the authorisation process—a process that is already under way. Firms that do not put their customers’ interests first and comply with the FCA’s threshold conditions will not be authorised. The FCA is also undertaking an in-depth thematic review of the debt management sector. The Government therefore firmly believe that the new FCA regime will deliver—and is already delivering—a cleaned-up debt management market that is able to meet consumers’ needs in supporting them to deal with their debts.
The noble Lord suggested that the FCA review lead generators for debt-management providers. The FCA is undertaking this in-depth review of the sector, including looking at how use of these lead generators may be affecting consumers, so that is all part of the mix. I would be very grateful if the noble Lord would consider withdrawing the amendment.
Lord Stevenson of Balmacara
I thank the Minister for her very considerate response. It is a very complicated area, one that is in much flux, but I do not think that that should just be taken as a given, because the pressures, the pain and the anxiety that all this causes to vulnerable consumers—and also to ordinary people who are not necessarily too vulnerable in the conventional sense—are very substantial. We must always think of them as well as of the broader points that have been made in response to the amendments.
My central point, which, with respect, I think the Minister did not mention, is our increasing concern about the difference between saying that consumers’ interests are at the heart of the operation—which I absolutely accept is like a piece of rock built right through the FCA; you cannot have a conversation without it saying how much it puts consumers at the centre of it—and the reality that the measures that it uses in its day-to-day work are about market efficiency and fairness. I am not saying that that is wrong: I am just saying that I am not entirely sure that this is a one-to-one fit. Establishing a market involving payday lenders that is efficient and fair, may not remove the detriment that the remaining payers will be caused. I do not think that there is an easy answer to that; it is just something that we all should bear in mind when we think about how we regulate these matters.
“Practices of rent-to-own companies
(1) This section applies to credit agreements and consumer hire agreements taken out in respect of household goods specified in rules by the Financial Conduct Authority.
(2) The rules under subsection (1) shall—
(a) include a requirement on lenders to include in pre-contractual information adequate explanations and information allowing prospective customers to compare both the cash price of goods and the total cost of the credit agreement to a representative retail price for those goods;(b) prohibit lenders from requiring customers to take out insurance sold or brokered by the lender as a condition of obtaining credit;(c) set out specific steps lenders must take before taking action to enforce the agreement or recover possession of goods; and(d) set out the steps lenders should take to check that the agreement is affordable and suitable for prospective consumers.”
Baroness Hayter of Kentish Town
My Lords, this House has done much important work in tackling high cost and exploitative credit, thanks largely to the most reverend Primate the Archbishop of Canterbury and my noble friends Lord Mitchell, Lord Stevenson and Lord Kennedy of Southwark.
Amendment 105L concerns a new, unregulated and somewhat exploitative form of loan that has sprung up in the high street—along with other high-cost credit, mostly in low-income or deprived areas. It is known as rent to own: one well known example being BrightHouse. It works by having consumers rent products, which can be from household essentials, such as washing machines and beds, to games consoles, with the rent being eventually used to pay for the product. However, because it is deemed to be rent, there are none of the safeguards that would cover a loan to buy the product—for example, hire purchase or a straight bank loan. There are no checks on the ability to repay. There are no rights over the property. There are no safeguards against the property being repossessed because, until the final payment is made, it is only being rented, not owned by the people in the house. So, although the consumer is theoretically renting the product—in their minds, they are of course in the process of buying it—any failure to meet a payment can lead to it being immediately repossessed. There is evidence that such stores show little forbearance over mispayment and are unwilling to accept a breathing space or to negotiate payments where personal circumstances change. That is despite the fact that the consumer may have already paid well over the true value of the goods—sometimes, several times over.
There also appears to be a degree of heavy-handedness when it comes to repossession, with customers rarely informed of their rights and, in some cases, intimidated. There is no protection for the consumer, who is legally neither the owner of the product nor a borrower of a loan, so none of the normal protections associated with hire purchase apply. Protections apart, let us look at the prices. They far exceed the normal purchase price, even including any interest from a bank, which, if one were buying it with a bank loan, would then be added on to the price. The products include a washing machine. If you bought a washing machine from BrightHouse, a not unrepresentative example would leave you paying £1,404 for the machine, which could be bought somewhere else for £535.70—by monthly instalments in both cases, so I am comparing like with like. That means you are paying almost three times the price. However, if you get the games console rather than the washing machine, you end up paying more than three times the initial price. Buying an Xbox console bundle—I admit that I do not know what that is but I am assured that people buy them—elsewhere would cost you about £400. At BrightHouse it is £1,500 over a 130-week period. The APRs are between 60% and 90%. These are not my calculations; they are from BrightHouse’s own catalogue, where buying an HP Platinum Pavilion touch screen laptop would cost you £1,560, paying an APR of 94.7%. So adding up these so-called rents amounts to far more than the full list price, even adding on the interest if you bought it with a bank loan.
Furthermore, the company—I mention this one because it is the only one that I have found time to go and visit—often stocks absolutely top-of-the-range products, despite its shops being in deprived areas and its business model being aimed at those who want to pay weekly. On top of that, BrightHouse adds in compulsory and expensive insurance, even though the goods still belong to the company as they are being rented, so insurance is probably not needed. Then, just to add insult to injury, the marketing of the goods uses every trick of behavioural economics to tempt in the buyer, highlighting the price per week rather than the total cost or the length of repayment. The laptop that I just mentioned costs £15 per week but the catalogue does not tell you how many weeks you will need to pay off the price of £1,560. As we discussed in Committee last week, this is “drip pricing”, where the first number you see—in this case, the weekly amount—gives little indication of the full price. We know from research that consumers tend to overvalue a benefit that they will receive now, which in this case is a small weekly payment and immediate possession, while underestimating the impact of deferred costs.
Amendment 105L would require such a company to include information about the price of the good; an indication of the price the customer might pay elsewhere; the cost of the credit agreement, which should be in money terms, not percentage terms; and clarity about possible repossession, including any allowance for a breathing space or renegotiation of payment. It would ban making insurance compulsory, as I am sure the insurance itself adds more in cost than it does in value, and you have to pay the interest on it because it is part of the weekly charge. The amendment would also require the lender to check on the consumer’s ability to pay the full price.
This is not an attack on any weekly payments system, which can help those on lower incomes with their household budgeting. However, the business model used by companies like BrightHouse is so stacked against the customer that it is little short of exploitation. I therefore hope that the Government will accept this measured approach, which does not ban this form of credit but introduces greater transparency alongside adequate safeguards. I beg to move.
Baroness Jolly
My Lords, I hope that I shall be able to shed some light on this. Again, we share the noble Baroness’s concern about the risk of consumer detriment in the hire purchase credit market. The rules for the consumer credit market, put in place by the FCA from 1 April this year, were made with the stated aims of, first, ensuring that firms lend only to borrowers who can afford it; secondly, increasing borrowers’ awareness of the costs and the risks of borrowing unaffordably; and, thirdly, ensuring that consumers have access to support if they have financial difficulties.
The noble Baroness suggests that some organisations show little forbearance and are heavy-handed. The FCA specifically requires firms to adhere to debt collection rules, including in treating customers in default or arrears difficulties with forbearance and due consideration; provide pre-contractual explanations and information in line with European requirements, including the total amount payable; assess creditworthiness and affordability, including the potential to impact adversely on the consumer’s financial situation and their ability to make repayments as they fall due; and, where firms sell insurance products, do so in line with the FCA’s requirements around assessing consumers’ eligibility to claim on a product, and the high-level principle of “treating customers fairly”.
The Government believe that the tough and decisive action being taken by the FCA, following its detailed rule-making process, will ensure that consumers are far better protected under the new regime. The Government also recognise the importance of affordable credit, which is why they are supporting the credit union movement, including through investing £38 million through the expansion project. Given the new regime, I wonder whether the noble Baroness would feel her way to withdrawing the amendment.
Baroness Hayter of Kentish Town
I think that the Minister has completely misunderstood. This is not about a loan—this is about credit, not debt. The proposal is completely outwith that regime because it is not a loan. It does not come under the FCA, it is rent. These people are renting the television—if they rent it for three years, they will then be given it and own it. It is not covered by the affordability test, by forbearance or by anything that she is talking about.
Baroness Jolly
I apologise for the misunderstanding. I think that we will probably need to have a conversation fairly urgently.
Baroness Hayter of Kentish Town
That will be helpful. It is called “rent to buy”. You rent the item and own it only at the end, when it is given to you. You are renting it, and there is absolutely no hire purchase agreement or anything like that. In the light of that, and assuming that it will be possible to discuss this to clarify the issue, I beg leave to withdraw this amendment.
Baroness Howe of Idlicote
“Direction by Gambling Commission to block financial transactions of person or organisation without remote gambling licence
In section 33 of the Gambling Act 2005 (provision of facilities for gambling), after subsection (5) insert—“(6) The Commission may give a direction under this section if the Commission reasonably believe that—
(a) a person or organisation who does not hold a remote gambling licence is providing remote gambling services in the United Kingdom; and(b) failure to give such a direction would deprive consumers of remote gambling services in the United Kingdom of the protection afforded by the licensing objectives in section 1 of this Act.(7) A direction under this section may be given to—
(a) a particular person operating in the financial sector,(b) any description of persons operating in that sector, or(c) all persons operating in that sector.(8) A direction under subsection (6) may require a relevant person not to enter into or continue to participate in—
(a) a specified transaction or business relationship with a designated person,(b) a specified description of transactions or business relationships with a designated person, or(c) any transaction or business relationship with a designated person.(9) Any reference in this section to a person operating in the financial sector is to a credit or financial institution that—
(a) is a United Kingdom person, or(b) is acting in the course of a business carried on by it in the United Kingdom.(10) In this section—
“credit institution” and “financial institution” have the meanings given in paragraph 5 of Schedule 7 to the Counter-Terrorism Act 2008;
“designated person”, in relation to a direction, means any of the persons in relation to whom the direction is given;
“relevant person”, in relation to a direction, means any of the persons to whom the direction is given.””
Baroness Howe of Idlicote
My Lords, there cannot be a more basic aspect of consumer rights than protecting British consumers from unlicensed providers. This is particularly the case where gambling is concerned, because of the sad reality of problem gambling and the need to protect the vulnerable from providers who are not subject to the social responsibility conditions associated with securing a UK Gambling Commission licence.
The imperative to properly protect British consumers from unlicensed gambling providers is yet further compounded in the context of online gambling because of its association with higher problem gambling prevalence figures than gambling generally. The 2010 general problem gambling prevalence figure was 0.9%, but it was more than 9% for online on an annual basis and more than 17% on a monthly basis.
When the Government introduced the Gambling (Licensing and Advertising) Bill in another place a few years ago, the point was soon made that it lacked any credible means of enforcement. The Bill proposed a new arrangement whereby online gambling operators based anywhere in the world would, for the first time, be able to access the UK market and advertise here so long as they secured a Gambling Commission licence. The difficulty was that the Bill contained no credible provision for preventing unlicensed gambling sites accessing the UK market. There was, and is, consequently a very real concern that its principal effect will be to allow companies that currently cannot advertise in the UK to do so but without introducing any mechanism to prevent unlicensed providers from accessing the UK market.
Lord Stevenson of Balmacara
My Lords, we should all pay tribute to the amazingly long and trenchant campaign that has been waged by the noble Baroness. I have sat through most of her attempts during the past three or four years to get movement on this. Her arguments grow with every year and add new dimensions. Often, as she has done today, she offers a lifeline to the Government if they want to take it. It is always sad that they do not seem to be able to see the points that she is making or act on them. It occurred to me when she was speaking that it is a big pity that the Bill is arranged as it is. She ought really to appear at Halloween as an eerie ghost rattling her chains and saying, “Remember the financial transactions blocking”. Ministers would all shake and shiver in their shoes and be unable to respond without fear and trembling. I realise that that might apply to us if we are so lucky as to win the next election; she may come back to harass my noble friend or even me if we are in a similar position, so perhaps I shall wipe that away.
This is serious stuff. I recall being given the hope by the Minister in charge of the gambling Bill, when we were pursuing similar lines, that such a measure would be the right approach. The noble Baroness is absolutely right to bring it back at this stage; that is entirely in line with what was said then and the advice that was given.
The gambling Bill was a small, modest measure which was not expected to take up much time in the House or to carry much weight. It was deliberately sold to us as a measure that would be of great advantage to all concerned if it could slip through quickly because it was dealing with the particular issue of bringing back onshore the gambling bodies that had moved offshore. They were offering offshore opportunities for people to gamble; if they were onshore, they would be subject to the regulatory process.
Of course, we were happy to support that, but we were also able to make it a bit better by adding a few things during the process. It was clear in that process that the Bill was largely doing an awful thing that occasionally occurs in government: willing the ends of policy but not the means. The end of the policy is that we do not want people who are not regulated and not operating according to the rules within this country still to reach out to gamblers in United Kingdom. To achieve that, obviously there must be some mechanism by which we can pursue them. That is either by blocking their internet activities—these people operate in small foreign territories without fear of being pursued, so that is completely fanciful—or by ensuring that the financial arrangements, which are the lifeblood of their operation, can be blocked.
It is a matter of some irony that only yesterday we were discussing—in this very Room but on a different Bill—those who have had their intellectual property traduced by other companies in the internet world, otherwise known as copyright theft. We were investigating the best way of ensuring that those who owned intellectual property and had it stolen could seek remedies through the courts to make sure that the abuse was stopped and damages paid. It turned out that there were two pieces of statute that were possible to use. One was brought in long before the internet was as widely used as it is now—the Copyright, Design and Patents Act 1988 —and the other was the not yet fully implemented Digital Economy Act 2011, of great memory. This had specific clauses for regulations to be brought forward to allow the courts to block internet sites that were abusing copyright.
I would argue, on the basis of that experience, that this is something that is coming. Here we have a situation where, we are told, more than 40 blocks of this type were made last year. The Minister who responded to the debate was very proud of the fact that the Government had a mechanism in place to deal with internet abuse of the type specified in relation to copyright. This could be read across to those engaged in illegal or unregulated activity relating to gambling in the UK. Why is it not possible to use the experience that has been gained through this process to answer the questions of the noble Baroness, Lady Howe, about how to make sure that we are able to provide the means of delivery for the desirable policy aims included within the gambling Bill?
Baroness Jolly
I thank the noble Baroness for the amendment. We have met before on this issue, and her involvement and advice on this matter has helped us to make progress, which I am going on to explain. This amendment relates to the enforcement of the Gambling (Licensing and Advertising) Act 2014, which also has consumer protection as its primary focus. The issue of enforcement was extensively debated during the passage of the Act. I wholeheartedly agree that effective enforcement is essential to deliver the consumer protection aims of the 2014 Act.
Earlier this year I announced in the House that the Gambling Commission had reached agreement with major payment systems organisations—MasterCard, Visa and PayPal—to work together to block financial transactions with unlicensed operators. It is worth teasing some of this out for noble Lords, because MasterCard, Visa and PayPal cover the vast majority of relevant financial transactions. The noble Baroness mentioned the others but, although they might not appear in the list, the other payment service providers also use Visa and MasterCard. The branding might not be there but, behind the system, the actual infrastructure will be Visa or MasterCard. Reputable and legally compliant payment service providers are unlikely to have any greater interest in facilitating unlawful activity than the major providers have.
The noble Baroness raised a point about organisations being legally obligated in common law not to process transactions of any illegal provider. The terms and conditions of Visa, MasterCard and PayPal require that all transactions must be legal in all applicable jurisdictions. I hope that that has clarified that issue.
Since then, the Act has come into force, but only a few days ago on 1 November. I am able to confirm that the arrangements for disrupting illegal financial transactions are now in place. We believe that these arrangements offer the best solution and will disrupt revenue to unlicensed operators selling into the British market. They enable the Gambling Commission to take swift action against illegal operators; outside of a rigid legislative framework, these arrangements can adapt to tackle the very latest developments as technology changes.
The Government believe that working in partnership with those organisations towards a common goal of tackling illegal activity is the most appropriate way to proceed. No payment system organisation wants or can afford to be associated with illegal activity. I am sorry if the noble Baroness does not remember that from the previous Bill but it was certainly something that I was aware of; I am almost certain it was mentioned in Committee or in the Chamber on Report. However, we are not complacent on this issue and it is right that it is kept under scrutiny. The Gambling Commission will provide in its annual report to Parliament, which will be tabled each July, an assessment of the effectiveness of these arrangements in enforcing the 2014 Act. That will enable the Government to ensure that the Gambling Commission continues to have all the enforcement tools that it needs.
I thank the noble Baroness for her extensive input on this important issue, but, given the action taken and my reassurances, I ask her to withdraw her amendment.
Baroness Howe of Idlicote
My Lords, I am very grateful to the Minister and the noble Lord, Lord Stevenson, who spoke so eloquently on the background to this issue. I am glad to hear that a lot more has now taken place. I am equally glad that the focus has been not just on the three main financial transaction providers. It is quite clear that we need a legal requirement. I think I am being told that that really does exist and will work. I am delighted to hear it. We will perhaps have to wait a little to see. I will have a further look at the situation and reflect on what has been said. Although I am happy to withdraw my amendment, I cannot promise that I will not be back again at another stage.
“Protection of tenants against retaliatory eviction
In section 21 of the Housing Act 1988 (recovery of possession on expiry or termination of assured shorthold tenancy), after subsection (7) insert—“(8) The Secretary of State must issue guidance on how tenants can be protected from retaliatory eviction through the service of a notice under this section.
(9) For the purposes of this section, “retaliatory eviction” is defined as when a landlord unreasonably issues a notice under this section as a result of the tenant seeking protection of their rights under this Act.””
Baroness Hayter of Kentish Town
My Lords, Amendment 105S, which stands in my name and that of my noble friend Lord Stevenson, seeks to protect tenants who, having made a complaint about their landlord, face being evicted by a Section 21 notice, effectively deterring any tenant from tackling their landlord over any bad practice. We seek not to outlaw the practice of evictions altogether but to require the Secretary of State to issue guidance on how tenants can be protected from the use of Section 21 notices for retaliatory evictions. Sadly, representatives of Citizens Advice and of tenants cite too many examples of threats of retaliatory evictions for this to be a rare occurrence. Indeed, some 200,000 renters have been evicted or served notice because they complained to their local council or to their landlord about a problem. Certain groups are more likely to suffer retaliatory eviction: those in high-demand areas; up to 14% of families in London; and 10% of BME families.
In preparing its report, Creating a Better Private Rented Sector, the relevant all-party group heard witnesses’ fears about this, which inhibited tenants from expressing their concerns. Indeed, one in eight renters failed to ask their landlord to make repairs because of their fear of being evicted. The particular worry for tenants about any complaint leading to eviction is the fact that it is not illegal. Ministers have given this matter their attention, following the report of an industry-wide group in connection with the introduction of the minimum energy efficiency standard, which was causing some of the same issues, and the right to request energy-efficient improvements.
The all-party parliamentary group’s report asked that Ministers keep the operation of Section 21 notices under review. We would like the Government to go one step further and issue guidance to help tenants avoid this disreputable practice. We know that the Government want to take action in this area. After all, they have given their backing in principle to a Private Member’s Bill in the other place to stop the minority of rogue landlords who, rather than meet their legal duty to keep their properties to a reasonable standard and remove health and safety hazards, instead evict tenants simply for asking for essential repairs. Shelter, from the evidence of those it helps, has campaigned on revenge evictions, which the Government undertook to outlaw, ensuring that tenants do not face the prospect of losing their homes simply because they have asked for such essential repairs.
In committing the Government to support the Private Member’s Bill, Communities Minister Stephen Williams said that there were a minority of spiteful landlords, and that he wanted to ensure that hard-working tenants were not afraid to ask for better standards in their homes. If the Government want to see progress, our amendment offers them a useful first step. I beg to move.
Baroness Neville-Rolfe
The noble Baroness’s amendment seeks to deal with the problem of retaliatory eviction. This occurs when a tenant is evicted by the landlord when they report problems with the property. Landlords may then use Section 21 of the Housing Act 1988, otherwise known as a no-fault eviction. The latest evidence suggests that retaliatory eviction affects about 2% of all tenants, so it is a big figure. That figure rises significantly for some groups, with 10% of black and minority ethnicity households and 14% of London families affected by retaliatory eviction.
We have been proactive in this area. In February this year we published a discussion paper on improving property conditions in the private rented sector. We specifically sought views on how to tackle retaliatory eviction and remove the fear that many tenants have about making a legitimate complaint. The Government announced on 11 September their support in principle for the Tenancies (Reform) Bill, a Private Member’s Bill designed to outlaw retaliatory eviction. This Bill will have its Second Reading in the other place on 28 November.
We do not think that more guidance, as proposed in this amendment, is the right solution as we do not believe that the existing law provides tenants with sufficient protection. Our How to Rent guide, which was published in June this year, makes it clear to tenants that if a property is in an unsafe condition and the landlord will not repair it, they should contact their local authority, which can make the landlord deal with serious health and safety hazards. In addition, the industry-led voluntary code of practice, which was published on 11 September, makes it absolutely clear that the sector itself recognises that the practice of retaliatory eviction is unacceptable.
We therefore agree with the need to tackle the problem of retaliatory eviction. We believe that the Tenancies (Reform) Bill will provide the solution, and I ask the noble Baroness to kindly withdraw her amendment.
Baroness Hayter of Kentish Town
I thank the Minister for that response. It seems rather disappointing, perhaps, that something could not be put into the Consumer Rights Bill. Part of the problem with what is happening at the moment is that we are still not sure that tenants know about or are helped in avoiding those evictions. As we said before, this is the Consumer Rights Bill, so it seems a shame that the right for tenants not to be evicted for exercising their own right to ask for repairs is not embedded in a Consumer Rights Bill. We nevertheless welcome the Government’s support for the Tenancies (Reform) Bill and hope that they will push it along rapidly. We will have to see whether we still feel that some reference should be made in this Bill but, for the moment, I beg leave to withdraw the amendment.
Baroness Neville-Rolfe
Baroness Neville-Rolfe
My Lords, as this Committee draws to a close, I will move some technical amendments, beginning with Amendment 106. I start by expressing my gratitude to the Delegated Powers and Regulatory Reform Committee, which scrutinised the Bill earlier this year and which does such a good job for us in this House. Amendments 106 and 107 give effect to one of its recommendations. Amendments 108 to 111 are technical amendments. Between them, they support the implementation of the Bill and are necessary to reflect earlier amendments regarding lettings.
As I may not speak again, I take the opportunity to thank our various Chairmen, the Members of the Committee, the doorkeepers and the Bill team for all their hard work and participation. This has been my first Committee as a Minister and I have been struck by the quality of the debate. It has been wonderful to have both very experienced noble Lords—some of whom are not here with us now—and newer noble Lords, who bring expertise from elsewhere. I have really enjoyed the examples: the beautiful made to measure suit of the noble Baroness, Lady Hayter, the bathrooms, the kitchens and the digital games. Even today there were the graphic examples of nuisance calls and of allergic reactions—very important issues.
I am very pleased with the progress we have made and obviously look forward to further debate on Report. In the mean time, I beg to move Amendment 106.
Baroness Hayter of Kentish Town
My Lords, the Minister says these amendments are technical. I have 74 questions here about them which I would just like to go through if the Committee could hold on. In fact, we are very content with these amendments—that was just my excuse to join the thanks to the Bill team and, indeed, to the Ministers, who have been very willing during this process to meet with us and discuss the Bill. I also want to thank noble friends who have been a tremendous assistance, particularly my noble friends Lord Stevenson, Lady King and Lord Mendelsohn from the Front Bench, as well as my noble friends Lord Harris and Lady Crawley, who have done sterling work. I will just take a moment to talk to them directly—it ain’t finished yet.
Baroness Neville-Rolfe
Baroness Neville-Rolfe
(2) The Welsh Ministers may by order made by statutory instrument make transitional, transitory or saving provision in connection with the coming into force of Chapter 3 of this Part in relation to Wales.”
Baroness Neville-Rolfe
“(2A) Chapter 3 of this Part extends only to England and Wales.”
Baroness Neville-Rolfe
“(1A) Those provisions are—
(a) section 48(5) to (7), (b) Chapter 3 of this Part in so far as it confer powers to make regulations, (c) section 86(5) to (9),(d) this Chapter, and(e) paragraph 12 of Schedule 5.“(1B) Chapter 3 of this Part comes into force—
(a) in relation to England, on such day as the Secretary of State may appoint by order made by statutory instrument;(b) in relation to Wales, on such day as the Welsh Ministers may appoint by order made by statutory instrument.”
House of Lords
Work Capability Assessment
(10 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord McAvoy
To ask Her Majesty’s Government how many people were awaiting a Work Capability Assessment on the latest date for which figures are available.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
As of 30 September 2014, there were around 580,000 cases awaiting work capability assessments at Atos Healthcare, down from 616,000 at the end of August. These figures do not include cases where the claimant has yet to return the claimant questionnaire.
Lord McAvoy (Lab)
My Lords, will the Minister confirm the number of disabled people who are waiting for their first work capability assessment? The figures show that the suffering of hundreds of thousands of disabled people is being increased on a daily basis by a Government who are failing in their duty of care. The Minister is quite keen to say how he is clearing up this mess. Does he not also owe an apology to the people affected?
Lord Freud
The service that we provided is not where we want it to be—we have been clear about that. We are pulling down the backlog; it is down by 20% since February. We announced in March that Atos would be leaving the contract, and we were able to announce last week that Maximus Health and Human Services is taking it up from that date.
Lord German (LD)
My Lords, we now have a new supplier of these work capability assessments. Most of the staff are being transferred using the transfer of undertakings. May I and the House be reassured that the transfer of undertakings will not include a transfer of working practices? In particular, perhaps my noble friend can tell us whether he agrees with the recommendation from the Government’s own assessor of this policy, Dr Litchfield, that less emphasis should be placed on the number of points attained in the test and that the calculation should be used,
“simply to determine whether the threshold for benefit has been reached”.
Surely that is a much fairer way of doing these assessments. Does the Minister agree?
Lord Freud
We are not changing the actual assessments, but we are improving the quality of those assessments; expanding the number of medical professionals, particularly in mental health; understanding how fluctuating conditions work, and so on.
Lord Alton of Liverpool (CB)
My Lords, in his reply to the noble Lord, Lord McAvoy, the Minister said that the new contract between Maximus and the DWP had now been signed. In view of the phenomenal sums of public money which are involved in this, can the Minister tell us when that contract will be placed in the public domain, whether it will be possible properly to scrutinise it and whether it will be possible for the public to see the operating systems and all the other issues involved, in contrast to way in which the Atos Healthcare contract was administered?
Lord Freud
Details of the new contract will be published on Contracts Finder by the end of November.
Baroness Uddin (Non-Afl)
My Lords, only recently, almost half of work capability assessment appeals were successful. New leaked papers tell us that even where eligibility is conceded and faulty work capability assessment decisions are reversed, employment and support allowance is providing less support to disabled people. Can the Minister rule out an announcement of new cuts to ESA in this Parliament?
Lord Freud
If the noble Baroness is referring to a newspaper story about 50p, I can assure her that that is not government policy.
Earl Attlee (Con)
My Lords, what progress is being made in getting more disabled people working, which is so important for their self-esteem?
Lord Freud
We have seen 116,000 disabled people return to the workforce this year. That is a 4% increase and is faster than the 2.6% rate of increase which is the average.
The Lord Bishop of St Albans
My Lords, great concern has been expressed by some people about how work capability assessments are being carried out and whether those undertaking them have the right skills and expertise. Indeed, in one anecdotal case, the health professional who undertook a complex mental health assessment was a physiotherapist. If that is the case, surely it cannot be right. What are Her Majesty’s Government doing to ensure that those undertaking the assessments have the right skills and experience to be able to do them properly?
Lord Freud
The important thing about doing these assessments is that someone assesses correctly in terms of capability of performing functions and capability of working; that is, what people are able to do. As I said earlier, we have more specialist professional support going into the system to make sure that those assessments are done accurately.
The Countess of Mar (CB)
My Lords, is there any foundation to the report in the Independent last week that some 6,000 people with diseases such as Parkinson’s, multiple sclerosis and severe CFS/ME have been put into the work-related activity group? If that is the case, how many of those people have been got into work? What is the point of putting them in the WRAG if they are not going to get better?
Lord Freud
Clearly, I am not able to respond on specific people going into specific places. The whole point of the assessments is to focus on functional capability or needs at the point of assessment.
Baroness Hollis of Heigham (Lab)
My Lords, 40% of people appeal against their assessment, some of them terminally ill. The DWP has added an extra stage to the appeals process, mandatory reconsideration by the department, but—and this is key—there is no time limit for staff to meet. Tiny numbers of appeals are being processed; the rest are being seriously delayed by six months or more. What is the Minister doing to speed up those appeals?
Lord Freud
The noble Baroness is quite right that the rate of appeals has fallen very steeply, by 92% in the latest quarter compared with a year earlier. It is too early to tell the definitive reasons for that. It may well be due to many of the changes that have gone through—75 recommendations have gone through—or to mandatory reconsideration so that we look at it early. However, when you look at the backlog of mandatory reconsiderations, you see that the pure numbers do not seem to be a huge influencing factor in this fall in appeals.
Baroness Manzoor (LD)
My Lords, looking at the number of people who will be moved across under TUPE, can the Minister say what percentage of new staff will be introduced to ensure that we have a faster and more effective service?
Lord Freud
All the providers within Atos were retested in 2013, so those will transfer. Maximus will bounce up the numbers—the precise numbers are not available yet—to do this particular contract.
Ticket Touting
Lord Moynihan
To ask Her Majesty’s Government what assessment they have made of the level of criminal activity related to ticket touting in the United Kingdom.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
My Lords, ticket touting is a criminal offence when tickets are sold for a designated football match. This is set out in the Criminal Justice and Public Order Act 1994. Arrests for ticket touting are recorded per season. There were 104 such arrests during the 2013-2014 season. Prosecutions are recorded annually, and there were 40 prosecutions in 2013. Your Lordships will be glad to know that 35 of those prosecuted were found guilty and sentenced.
Lord Moynihan (Con)
Will my noble friend confirm the figures from the DCMS following the Olympic Games that there were around 1,000 known professional groups involved in ticket crime? Does she also accept last year’s National Fraud Authority report, which estimated that 2.3 million people fall victim each year to online ticket fraud, resulting in losses of £1.5 billion? Will the Government consider, as a matter of some urgency, providing greater protection for theatre and concert-goers and sports fans?
Baroness Neville-Rolfe
My Lords, the Olympics and Paralympics were a fantastic achievement. It took an enormous enforcement effort to police the resale of tickets at that event, which we cannot do for every event. Since my appointment, I have taken a great deal of interest in this issue. I have had meetings with event organisers, including the Rugby Football Union, the England and Wales Cricket Board and UK Music, with online marketplaces and with consumer groups, to hear how the market is working. At present, we have broadly the right balance between consumer protection, with a number of regulations and allowing the market to operate, but I am considering new evidence as it becomes available.
Lord Clement-Jones (LD)
My Lords, my noble friend mentioned the Olympics. Will she take the opportunity of commending the report from Operation Podium of the Metropolitan Police, which so valuably made a number of recommendations about ticket fraud and abuse? Does she agree with its conclusion that self-regulation is unlikely to be successful, given the current lack of transparency, and unscrupulous practices by some? Is the Consumer Rights Bill not the ideal vehicle for reform in this area?
Baroness Neville-Rolfe
My Lords, Parliament has debated this issue for more than 10 hours on the Consumer Rights Bill alone, and we have legislated and produced guidance. New regulations came into force this year in June, which ensure that consumers get the information they need. We have included specific guidance on how the regulations apply to tickets. In terms of the police, consumers are protected by the Fraud Act. Action Fraud is now the single national reporting centre for fraud, and since 1 April, responsibility for that has moved to the City of London Police. They are making good progress.
Lord Hughes of Woodside (Lab)
My Lords, does the Minister accept the figures given by the noble Lord, Lord Moynihan?
Baroness Neville-Rolfe
My Lords, my noble friend Lord Moynihan brings a great deal of expertise to our discussions. It has been very helpful during the discussions on the Consumer Rights Bill to have his knowledge of this subject. There is an issue, but there are also things being done by the Government to tackle what is wrong and make sure that this is a good market for consumers, and that fraud is not allowed to flourish.
Lord Mawhinney (Con)
My Lords, if I understood my noble friend’s original Answer correctly, she told your Lordships that about one-third of those who were arrested for ticket touting at football matches were found guilty. Is that a percentage that my noble friend finds satisfactory?
Baroness Neville-Rolfe
My Lords, I should be careful about moving on to the turf of the criminal justice services. What I will say is that this was a narrow question about ticket touting, which is regulated under the Criminal Justice and Public Order Act, which was specifically set up to help with the terrible problems in football. I think that everyone feels that it has had some success. Clearly, our discussions have been wider, covering what we are doing for the consumers on the general question of ticket touting and how we can make sure that this is a good market, where people can buy tickets and be sure that they are not getting defrauded, while also ensuring that the consumer gets a good deal and can attend sport, the theatre and pop concerts. That is what we all want.
Lord Stevenson of Balmacara (Lab)
My Lords, Operation Podium argues, and the Government need to accept, that ticket fraud is usually,
“committed by organised criminal networks … creating legitimate-looking websites, taking payment for event tickets and then failing to supply them.”
That is the fact, but what is perhaps not realised as often is that many people who suffer from that ticket fraud then discover they are also subject to a scam which means that their credit card details are used again and again, so they are doubly hit. What sort of balance does the Minister find in that?
Baroness Neville-Rolfe
The noble Lord is right to express concerns but I think the House needs to understand that we have brought in new regulations as recently as June, and we have been working with the online marketplaces so that consumers are protected. The four main resale sites now go way beyond what they used to do. They are refunding or replacing unusable tickets and working with the RFU and all the other sporting bodies to make sure that things are okay. I saw the RFU yesterday and was very impressed by the action it is taking for the 2015 Rugby World Cup in using anti-forgery designs and a ballot system. We have to make progress in the real world, where consumers want to get tickets and attend games and concerts.
Lord Foulkes of Cumnock (Lab)
My Lords, will the Minister confirm that the statistics she gave in her original Answer were for England and Wales? What discussions is she having with her counterparts in Scotland—which thankfully is still part of the United Kingdom—about co-operation and exchanging experience?
Baroness Neville-Rolfe
My Lords, I have so far not had discussions with Scotland on the Bill but I am very willing to engage and to do so. I thank the noble Lord for raising that excellent point.
Baroness Heyhoe Flint (Con)
My Lords, perhaps I could ask my noble friend the Minister about secondary selling—that is the posh term for ticket touting, in case people were wondering. Touting nowadays is not carried out on street corners with somebody waving a wodge of tickets in front of you. It is a £1 billion global business. Does the Minister not agree that with this online business, which is taking money out of the game of sport itself, the Government should ensure that the voluntary guidance is being followed?
My noble friend asked for further information. Today, on one of the well known online ticket agency sites, there are 400 tickets listed for the Ashes cricket test match in Cardiff next July. Among those 400, there is not one with any ticket detail. People within the governing bodies of sport and entertainment are looking for a kitemark of assurance that, in future, all ticket purchases will be transparent and responsible.
Baroness Neville-Rolfe
My noble friend shares my passion for this subject and for cricket. We are certainly looking at those sorts of details in the discussions that we have been having.
Unmanned Aerial Vehicles
Lord Lee of Trafford
To ask Her Majesty’s Government what plans they have to encourage the development by British companies of unmanned aerial vehicles for civil and commercial purposes.
Lord Lee of Trafford (LD)
I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare a shareholding in Concurrent Technologies plc, 6% of whose turnover goes into electronics for unmanned vehicles.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)
We are focusing investment on regulation and technology that will put the UK supply chain in a good position to be successful in the global market for unmanned aircraft. For example, through Innovate UK, we are investing £10.3 million in developing technology and supporting UK business to research the safe integration of these aircraft into our airspace.
Lord Lee of Trafford
My Lords, the burgeoning technology of UAVs has a vast range of global applications in archaeology, agriculture, communications, exploration, firefighting, surveillance of pipelines and piracy, and indeed in many forms of delivery systems. It may even be possible to develop a delivery system for Focus leaflets, which I should have thought would be very much appreciated by these Benches. Paul Cremin, the head of aviation safety at the Department for Transport, said recently:
“I hear of a new one—
civilian application—
“almost every day”.
He said that it will lead to a revolution in the way we shop, observe and are observed. Is my noble friend satisfied that UK plc—the Government and the private sector—is sufficiently focused on the huge commercial opportunities for UAV systems, an area where we seem to be well behind the Israelis and the Americans?
Baroness Neville-Rolfe
My Lords, all that we are doing will help the UK to be at the forefront of this emerging sector and I very much like the examples that my noble friend has given. We are already investing £1 billion, matched by industry, in the Aerospace Technology Institute. Its latest £25 million competition is open to projects from a range of civil aerospace technologies, including the unmanned aircraft sector.
Lord Clark of Windermere (Lab)
My Lords, do the Minister and the Government fully accept that there is much use for unmanned vehicles in policing? Will she discuss with the various police authorities the possibility of them working together to provide some cover to give constant monitoring of sensitive sites in the fight against terrorism and in other issues such as emergencies? There is a tremendous opportunity for using drones. I trust that the Government are pursuing this and will encourage the police to work together on it.
Baroness Neville-Rolfe
My Lords, I very much agree with the noble Lord that there is great potential in this area. For example, police searches for missing people can be helped enormously by this sort of technology. We are working with the police, the defence sector and with industry to take forward this important technology.
Lord Glenarthur (Con)
My Lords, I welcome the opportunities that are afforded by unmanned aerial vehicles and acknowledge that my noble friend referred to the regulatory regimes that are going to be necessary to ensure that this can be managed safely. Will she bear in mind that both United Kingdom and European airspace is crowded, both at the lower and the higher levels, and it will require very careful design and enforcement not only by the European Aviation Safety Agency but also by our own Civil Aviation Authority to ensure that these vehicles are safely used and monitored.
Baroness Neville-Rolfe
My Lords, yes. I take great comfort from the fact that unmanned aircraft are closely regulated by the Civil Aviation Authority and are treated in the same manner as equivalent manned aircraft. As with all other aircraft, they need to be safe to be flown and flown safely—an important principle. We recognise, of course, that more needs to be done to make the rules clear, particularly for small, unmanned aircraft, and to help address this the CAA is launching a publicity campaign, “You Have Control, Be Safe, Be Legal”.
Lord Davies of Oldham (Lab)
My Lords, the House will be delighted by the progress that is being made by the industry, but the question of regulation goes far beyond just airspace. There is a question about privacy, the safety of the individual and the extent to which drones, which can be purchased at present for quite small sums of money—under £1,000—have wonderful technology for activities that many of us might find completely reprehensible.
Baroness Neville-Rolfe
My Lords, I agree that operators of unmanned aircraft must comply with privacy laws, which have significant penalties. Of course, in the wrong hands, these things can be damaging. We are working continuously, as is the CAA, to assess threats and make sure that we do not have the problems described. Obviously, government policy on some of this cannot be divulged, but privacy and taking great care in relation to terrorists and so on are very much on the mind of those developing this important technology.
Baroness O'Neill of Bengarve (CB)
Does the Minister agree that if privacy as well as security is to be maintained it is essential that any unmanned aircraft or drone has an identifier so that people can know whose drone it is and have a comeback?
Baroness Neville-Rolfe
My Lords, all of these unmanned aircraft are subject to the air navigation order and appropriate rules are in place.
Mediterranean: Refugees and Migrants
(10 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Roberts of Llandudno
To ask Her Majesty’s Government what plans they have to restore migrant search and rescue facilities in the Mediterranean.
The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)
My Lords, the UK has had no involvement in Mare Nostrum, the Italian search and rescue operation in the Mediterranean. Given that search and rescue is a competence of individual member states, the Government have no plans to call for the restoration or replacement of Mare Nostrum. Instead, we will continue to work with the EU and with countries of origin and transit to address the causes of illegal migration and combat people smugglers and traffickers.
Lord Roberts of Llandudno (LD)
Does the Minister agree with Amnesty International, which says that stopping search and rescue in the Mediterranean is causing the loss of thousands of lives? How many men, women and children need to drown before the Government change their policy?
Lord Bates
I reiterate that we are talking about the Italian Government. It is their decision, which they have taken. We all share a concern about the situation and the safety of people in the Mediterranean. We need to take a long, hard look at the organised crime gangs who are trafficking people, pushing them out to sea with very little protection, in unseaworthy vessels, and giving them the telephone number of the Italian coastguard. That is the regrettable and appalling thing about this whole situation.
Lord Hylton (CB)
Do the Government appreciate that it is likely to take months, and even years, to stop the traffickers, to prevent violence both by states and by Islamists, and to provide work for migrants in their countries of origin? Does this not make it essential to have search and rescue now?
Lord Bates
There is a two-pronged approach to this. First, there is Operation Triton, which the Italians started on 1 November; it is different but will tackle a lot of that. Secondly, there is the work that we are doing with our EU partners under the Rabat process and the Khartoum process, trying to tackle and head off the migration in the first place.
Lord Anderson of Swansea (Lab)
My Lords, it is surely immoral not to rescue those in peril of drowning if we have the capability to do so. Yet at the same time we need a coherent and ordered immigration policy, and cannot offer an open door to anyone who reaches our shores. Has an effort been made to tackle this matter at source by reaching deals with the riparian countries on the south of the Mediterranean, to pay them to destroy the ships and prosecute the traffickers? At least then we can try to deal with this matter at source.
Lord Bates
I agree with the noble Lord that it would indeed be immoral and, of course, not to help someone in distress would be in contravention of our obligations under the UN convention on safety of life at sea. The Khartoum and Rabat processes, to which I referred, and the EU mobility partnerships that we have with Tunisia and Morocco, are trying to tackle exactly the issue that he raises.
Lord Avebury (LD)
My Lords, does my noble friend note the comment made by the UN special rapporteur on migrant rights that it is appalling to bank on a rise in the number in people who drown acting as a deterrent? Does he think that the EU views a steep rise in the number of people killed with complacency, if not with satisfaction, because more people are drowning and acting as a deterrent?
Lord Bates
It is certainly not the case to say that the Government have been passive on this. My right honourable friend the Home Secretary had meetings with her Italian counterparts last month, and will meet them again this month. We have extended our offers of support and of course we have looked at the countries from which most of these migrants are coming, namely Syria and Ethiopia. We are putting large sums of money—£700 million in the first instance, £360 million in the second—to try and help people to give themselves a proper life at home.
Lord West of Spithead (Lab)
My Lords, there is a long-standing commitment that mariners have always had to look after mariners in peril at sea, as the Minister says. It is very difficult to see how those in the vicinity can do anything other than help them, whether the ship happened to be British, Italian or whatever. For those who are actually based down there, surely—by UN law—they actually have to give assistance.
Lord Bates
Absolutely, and there is no change. The obligations are there for any military ships or vessels in the vicinity. They know what they have to do in terms of contacting the maritime rescue co-ordination centre and they will be directed to take those people to a safe port or to have those people passed into safe hands.
Lord Elystan-Morgan (CB)
Can the Minister recollect that last Thursday he gave me a very forthright answer to a question as to what the attitude of the commander of a British naval vessel would be if he was aware that there was a refugee ship in peril within range of his ship? I was told indeed that he would most certainly lend all assistance in accordance with the law of the sea and the highest traditions of the Royal Navy. In the light of that most honest answer, what is the point of giving any impression on the part of the Government that we are gibbing in relation to search and rescue?
Lord Bates
The noble Lord is absolutely right that we need to be clear. There is a grave information message we need to get out here that of course there is no change in our humanitarian obligation. The only thing which is changing is that we are putting more money and resource behind it, but those obligations from a humanitarian point of view remain, in the proud tradition of this country and of seafarers.
Baroness Hussein-Ece (LD)
My Lords, my noble friend the Minister mentioned the increase in refugees from, for example, countries such as Syria. In statements that I have seen, Ministers have said that we encourage those people to stay in their own country. The surrounding countries have taken millions and millions of refugees. Turkey took 250,000 Syrian refugees in one week, more than the EU has done in four years. Is it not time that we stepped up to the plate and set an example, and not let people drown in this way?
Lord Bates
That is so, and we have introduced the Syrian vulnerable persons relocation scheme, which is taking some of those—not enough—but of course the EU can do more. We are donating additional funds into that area but there needs to be more done to tackle the instability which is the cause of migration in the first place.
Modern Slavery Bill
Serious Crime Bill [HL]
(10 years ago)
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Baroness Williams of Trafford (Con)
My Lords, these technical amendments relate to the rights of appeal in Scotland against decisions on seizure and forfeiture of substances used as drug-cutting agents. In Scotland, the appeal from the decision of a sheriff under Clause 60 is to the sheriff principal. The Scottish Parliament has recently passed the Courts Reform (Scotland) Act 2014. Among other things, that Act establishes a new right of appeal from the sheriff to the Sheriff Appeal Court and, in the process, abolishes the current right of appeal from a sheriff to the sheriff principal.
Amendments 1 to 5 to Clause 61 accordingly update the avenue of appeal. The consequential amendment, Amendment 10, to Clause 74 is a transitional provision. As it is not known for definite when the Courts Reform (Scotland) Bill will come into force, this amendment provides a mechanism to refer to an appeal to the sheriff principal, if circumstances arise where this is necessary. I beg to move.
Lord Bates
Lord Harris of Haringey
“Protection of children from sexual communications
After section 12 of the Sexual Offences Act 2003 (causing a child to watch a sexual act) insert—“12A Protection of children from sexual communications and from communications intended to elicit a sexual response
(1) A person (“A”) commits an offence where A intentionally communicates with another person (“B”) in the following circumstances—
(a) A is aged 18 or over,(b) either—(i) B is under 16 and A does not reasonably believe that B is 16 or over, or(ii) B is under 13,(c) the content of the communication is sexual or intended to elicit a response that is sexual, (d) subject to subsection (3) below, A’s purpose in sending the communication or seeking a response is sexual.(2) The communication may be in any form including verbal, written or pictorial (which may include still or moving images) and may be conveyed by any means whatever.
(3) A does not commit the offence in subsection (1) above where the purpose of the communication is for the protection of the child to which the communication is sent.
(4) For the purposes of subsection (3), a person acts for the protection of a child if he acts for the purpose of—
(a) protecting the child from sexually transmitted infection,(b) protecting the physical safety of the child,(c) preventing the child from becoming pregnant, or(d) promoting the child’s emotional well-being by the giving of advice and not for a sexual purpose.””
Lord Harris of Haringey (Lab)
My Lords, on Report I posed the question of whether it would be an offence for an adult to elicit from a child a sexual photograph or to send a sexual message to that child. I posed the example of a young girl in her bedroom on her smart phone, sending messages to her friends, one of whom was someone purporting to be a boy who was in love with her who was actually a man 30 years her senior. I asked whether, if she was encouraged, cajoled and coaxed into sending a sexual image of herself, that would be an offence committed by the older man. I posed that question because it was clear that it would be an offence in Scotland but much less clear that it would be an offence in England, Wales and Northern Ireland.
We had a useful and helpful discussion during Report. The Minister made several points during that debate when he stated that he believed that the offence of an adult sending a sexual message to a child was already covered by existing legislation. He stated, for example, that those convicted of an offence under Section 127 of the Communications Act,
“can be made subject to a sexual offences prevention order”.—[Official Report, 28/10/14; col. 1117.]
In reality, it is a little bit more complicated than that. If someone was convicted under the Malicious Communications Act or the Communications Act, the sexual offences prevention order would have to be applied for as a separate process. To apply for it, the prosecution would have to prove that the defendant posed a significant risk of serious harm. The Court of Appeal has had several cases in the past year in which it has criticised the use of sexual offences prevention orders in a number of sexual cases because the threshold of significant risk was not met.
It is not difficult to foresee a situation in which an adult is communicating sexually with a child and that threshold of serious harm has not yet been met. In the early stages of grooming—for example, when an adult may send a sexual message to a child—it is unlikely that he has actually met that threshold of serious harm. That is what the new clause that I propose today is all about. It is about trying to prevent harm before it is caused to the child.
The Minister made reference to the Obscene Publications Act 1959. The hint is in the title—it is the 1959 Act, which would potentially fail to cover a great deal of verbal communications through systems such as telephone, mobile telephone or Skype. Additionally, as new technology advances, new forms of electronic communication will no doubt further supersede what is dealt with in the Act. Reliance on the Obscene Publications Act would result in a person sending a text being potentially guilty but a person talking over the internet not committing the offence.
The Minister asserted that, under Section 10 of the Sexual Offences Act, it is an offence for a person over the age of 18 to cause or incite a child to engage in sexual activity. However, there are many cases where a charge of incitement may not be met. The question is: what is sexual activity and what is being incited?
Baroness Hamwee (LD)
My Lords, as I did on Report, I support the principle of this amendment. Listening to the last example given by the noble Lord—“Honey, you look hot in your bikini”—if I were a mother with a young teenage child who had received that message and I went to the police, showed them the message and was told, “There’s nothing wrong in law here”, I would have less confidence in our legal system.
I am not convinced that a new offence is not needed, as has been argued. I have not looked at Section 78; indeed, I have not done as much detailed work as perhaps I should. Listening to the noble Lord, however, I find quite a difficulty in a “sexual communication” that comes from someone and “sexual response”. It seems that a sexual response is needed for these offences, but that of course that is not at all how the child sees it. Yes, we are accustomed not to seeing but to knowing that there are a lot of photographs around with people topless on beaches, often celebrities seeking to attract attention. I am not sure that I would like to go down the route of trying to analyse their motives.
If there is to be an amendment, it must be right. The worst thing would be if there were inherent problems within it. I do as I did before and I hope it does not provoke teasing from the noble Lord; I assure him that I am trying to be supportive in this. I thank the NSPCC, with which I had the opportunity to meet briefly at the beginning of the week. I understand that it is consulting more widely on this. I do not want to refer to all the points that I have made, either in the previous debate or with the NSPCC, but I am glad to see that it is now suggested that the offence should be put into the Sexual Offences Act 2003, because that gives the context for penalties. I am not sure that there are penalties attached to this amendment.
I see that the words in proposed new subsection (4) come from Section 73 of that Act. I am not sure whether repeating them in a slightly different way in this amendment does not cause a bit more difficulty. In Section 73, they are a defence against aiding, abetting and so on. I think they may be interpreted there not as an exhaustive list, but there is a question in my mind as to whether in this amendment they are an exhaustive list.
Finally, in the context of online grooming, the terminology of “reasonably believe” in proposed new subsection (1)(b) causes me some concern about the evidential problems. Something like “making reasonable endeavours” to establish whether B is 16 or over would better lend itself to giving evidence to the court.
What all this amounts to is not opposition but urging us to get this right. Whether we get it right today or, as I said on Report, by an amendment during the Commons stages of this Bill, I hope that we end up with something that is workable, acknowledges current technology and is not simply defensive of the offences that are on the statute book at the moment. I am usually the first to say that if there is already something that covers this, we should not be looking for something else, but with this issue we should be looking for something else.
Baroness Benjamin (LD)
My Lords, I rise to speak in support of the amendment in the name of the noble Lord, Lord Harris. As we have heard, the amendment is supported by the NSPCC, with which I have had several discussions. The NSPCC believes that the amendment is wholly necessary because it specifically proposes that a new offence be brought in so that it is always illegal for an adult intentionally to send a sexual message to a child because this is another form of child sex abuse. This proposed new clause seeks to protect children from sexual communications.
I spoke in support of the amendment on Report and I remain committed to making it—I repeat—always illegal for an adult to send a sexual message to a child. We have to understand that the current law, a stand-alone offence as part of the Sexual Offences Act 2003, is inadequate in protecting children from online abuse. What is needed is to ensure that the law is absolutely clear that intentionally sending a sexual communication to a child is illegal. This will help prevent abuse escalating and keep children safe online in this new and dangerous world in which they are being brought up. We have to put all the necessary protections in place for every eventuality. We must make absolutely sure that there will be no place for perpetrators to hide.
The Minister’s response on Report perhaps focused too much on adults possessing indecent images of children. That is not what this proposed new clause is concerned with. My noble friend the Minister was correct to assert that if an adult incites and comes to possess an indecent image of a child, legislation such as Section 160 of the Criminal Justice Act would cover the possession of those images. However, this misses the purpose of this proposed new clause. Section 160 of the Criminal Justice Act makes it an offence only to possess indecent photographs of a child. For instance, it would not be illegal for a 40 year-old adult to send a message to an 11 year-old child saying, “I’d like to see a photo of you in your underwear”.
With regard to other legislation, under the Communications Act, whether a message would be deemed indecent or not is a subjective judgment. If an adult sent a message to a child describing in sexually explicit language what they fantasised about doing together, this would clearly be considered indecent and therefore illegal. However, if an adult sent messages such as, “Send me a photo of yourself, honey”, it is not clear that this could be deemed,
“grossly offensive or of an indecent, obscene or menacing character”,
as described in Section 127 of the Communications Act, but, in context, this clearly has a sexual intent. This is the gap that the proposed new clause attempts to fill. Its purpose is to catch offenders before the child has shared an indecent image because when, and if, a child is persuaded to send an indecent image of themselves, it could have devastating consequences for that child. They can become suicidal, start to self-harm and have low self-esteem, and be made to feel ashamed and dirty. This is what the NSPCC has found. I am sure that my noble friend and noble Lords across the House will agree with me about the risks a child faces once an image has been shared online, for it can be spread ever more widely at great speed without the child’s knowledge. We should do everything that we can to stop this behaviour before it happens.
The noble Lord, Lord Harris, has dealt with how the offence is not captured by various other legislation. Rather than restating his points, I will address the Minister’s belief that the Crown Prosecution Service does not currently feel that there is a gap in the law. In 2012, Phillip Pirrie was convicted for arranging to meet and sexually abuse a 13 year-old girl whom he had first contacted online. During the trial, it was revealed that he had previously contacted a 14 year-old girl through an online game. He sent that girl sexual messages. Luckily, these were found by the girl’s father, who took his concerns to the police. Sadly, no further action was taken as a meeting had not taken place between Pirrie and the girl. Under this proposed new clause, Pirrie could have been prosecuted and convicted in respect of the first victim, the 14 year-old. As a result he could have been placed on the sex offenders register and had a civil prevention order put in place. More importantly, this could have prevented him offending against the second victim, the 13 year-old. Think of the pain and suffering that this could have saved.
As I previously stated, last year ChildLine saw a 168% increase in contacts relating to online sexual abuse. This confirms that online sexual abuse is a new blight on our children’s well-being. Clearly we must do more in this area to enable action to be taken against offenders earlier and keep children safe online. What will we do to safeguard and protect our children in this modern world? I look forward to the Minister’s response on that point.
Baroness Howarth of Breckland (CB)
My Lords, I rise briefly to support the amendment of the noble Lord, Lord Harris. I will not go through all the arguments that have been made already. The Minister can easily read the NSPCC submissions, which are extremely pertinent. I will make three very different points.
I know that the Minister is extremely concerned about child abuse generally, and child sexual abuse and its prevention in particular. We are about to embark on a huge inquiry. We have discussed whether an inquiry looking at past abuse might obscure what is happening today. What we must do—I am repeating this and will continue to do so—is spend our time preventing abuse now. The lessons that we can learn from the past will help us, but it is crucial that we prevent abuse now.
I declare an interest as the vice-chair of the Lucy Faithfull Foundation, where grooming was first defined and understood. In relation to grooming, any of the experts will tell you that the perpetrator clears a number of hurdles to reach the full stature, if you like, of a paedophile. The first thing that they do is test whether they can gain the confidence of a child just through kindness, relationship and involvement. As I understand it, none of the current statutes would intervene at the point where a perpetrator sent a message saying, “I am really fond of you, I would like to see you topless or in your underwear”, or “I would like you to talk about sexual things”, or, as in one recent case, “I would like you to do something to your sister in front of me, so that I can see and understand how your relationship is going”. It gets worse as time goes on. As the perpetrator finds that they can cross one hurdle, they then discover that they are enabled to cross the next one, and the next one, until they are meeting children, and until they are fully abusing larger numbers of children. That is the history of grooming; it is how grooming works.
If we are serious about prevention, we need to prevent at that very first point. What the Minister will hear from the police—I am quite sure that he is in discussions—is that they find it quite difficult to sort out how they move forward among the enormously confusing entanglement of present legislation. I simply hope that the Government will have a look at this. I am not a lawyer; I only know what I experience in my day-to-day contact with the Lucy Faithfull Foundation, the NSPCC and other children’s organisations. They feel that not enough is being done, that one single law is needed to make it absolutely clear that we are serious about protecting our children, and that we should have an amendment—if not this one, something like it—to be able to act at the very first point.
Baroness Butler-Sloss (CB)
My Lords, there appears to be a gap in child protection for the reasons that the noble Baroness has just given. I do not want to repeat them because everything she said was entirely accurate and always worrying. One has only to look at the stories that we have been getting around the country, not of historical abuse but of current abuse and abuse in the recent past—not just in the north but in other parts of the country. Sexual communications and the opportunity to encourage children to behave in a way that they think that they are doing to their peer group, is something that really needs to be sorted. I am no expert in this area of criminal law but if this area is not covered, as I understand to be the case, it is a serious matter that should be covered. I therefore ask the Government to look again, whether by means of this amendment or amendment of other legislation. It is not a matter to push into the long grass; it is urgent. If it is not covered, then it is urgent to cover it.
Another matter arises when a child finds that an adult is involved. If, say, this is stopped and the child finds that they were communicating not with a friend but with a grown-up, the embarrassment and distress to the child of having shown a tantalising photograph of herself or himself—remember boys are also vulnerable —has led children to commit suicide.
Baroness Smith of Basildon (Lab)
My Lords, those who have a sexual, and therefore illegal, interest in children know the law. They know the gaps and complexities in the law and rely on them, given the difficulty and lack of clarity, to set themselves on a path that may not start with, but certainly ends in, abuse. After a typically thoughtful, understated and well argued case from my noble friend Lord Harris of Haringey, I was rather surprised that the Government did not bring back an amendment today, following the meeting with him.
However, today the point was made with absolute clarity across the House: there is a gap in the law; a point is missing. The noble Baroness, Lady Howarth of Breckland, referred to communications between young people. On Report, I referred to a case of which I was aware, in which an 11 year-old girl was communicating with someone she thought was another 11 year-old girl, and sharing the kind of confidences that 11 year-old girls share when embarking on and discovering their own sexuality. However, she found out later that it was a 30-plus year-old man who was communicating with her when the relationship was developed.
There clearly is a gap in the law, which needs to be changed. It needs to catch up with what is happening today. The noble and learned Baroness, Lady Butler-Sloss, and the noble Baroness, Lady Howarth, made the point that abuse is happening now and there is an opportunity here to make changes to the law and do something that will make a difference and protect children today, tomorrow and the day after. I am disappointed that we do not have a new government amendment before us, but I hope that either the amendment from my noble friend Lord Harris will be accepted or we will hear a commitment from the Government to bring something back that addresses this problem, as the noble and learned Baroness said, very quickly indeed.
The Parliamentary Under-Secretary of State, Home Office (Lord Bates) (Con)
My Lords, I thank the noble Lord, Lord Harris, for the way in which he introduced this amendment and, too, noble Lords for their contributions to this debate. In many ways, I thought that this characterised many of the debates we have had, in that—as I am sure my noble friend Lady Benjamin would accept—there is genuine willingness and desire to make sure that all possible loopholes are tightened, and that we take this opportunity to afford every possible protection to the most vulnerable in our society, by sharing information and evidence. I have read the NSPCC’s report and we have talked to the Crown Prosecution Service and to the national policing lead about cases being brought. We will seek to move things forward. If I can, I will comment for the record in response to the very helpful meeting that we had last night with the noble Lord, Lord Harris, and the noble Baroness, Lady Howe. As I am doing so, I will try to touch on some of the points that have been raised.
As the noble Lord, Lord Harris, knows, there is no difference between us in that we agree wholeheartedly that we need to ensure that we have a robust body of criminal law to tackle predatory sexual behaviour by adults against vulnerable children. As I said on Report, this House rightly remains united in its condemnation of the sexual abuse of children. What is more, it is determined to do something about it. I also paid tribute on Report to the National Society for the Prevention of Cruelty to Children, which has proposed this new offence and brought its concerns to this debate.
I shall not repeat the description that I gave last time of all the offences that might be relevant in dealing with this type of behaviour. The House would not thank me for that, because the point is understood. There is a clearer point that the noble Lord, Lord Harris, raised today. However, it may be helpful if I address more specifically a couple of concerns raised on Report by the noble Lord, Lord Harris, and the noble Baroness, Lady Howe.
The noble Lord was keen that anyone seeking to persuade a child to send a naked image of himself or herself should commit an offence. As the noble and learned Baroness, Lady Butler-Sloss, pointed out, this issue affects both male and female children. He was concerned that naked photographs of children might not be caught by the definition of “indecent”. I now have had the chance to look into that particular matter and am pleased to say that the noble Lord’s concerns may be misplaced. Section 10 of the Sexual Offences Act 2003 provides that it is an offence to cause or incite a child to engage in a sexual activity. The noble Lord quoted Section 78 of that Act and that telling word in law, about which, as a non-lawyer, I am trying to get up to speed, although it is a well known test: what could be considered in the eyes of a “reasonable” person, or what people could reasonably conceive of, as sexual intent. Clearly, by any stretch of the imagination, a request to send a photograph of a child would fall within that category of reasonableness. The noble Baroness, Lady Hamwee, also referred to that.
The definition of “sexual” is contained in Section 78 of the 2003 Act. That provides that an act is sexual if,
“it is because of its nature sexual, or … because of its nature it may be sexual and because of its circumstances”,
in which it takes place,
“or the purpose of any person in relation to it … it is sexual”.
In other words, the context is crucially important. Therefore, it is entirely open to the court to conclude that, if a middle-aged man is sitting in front of a computer urging a child to send him a naked photograph—which was an example that the noble Baroness, Lady Smith, gave—or to pose naked before a webcam, his purpose makes the sending of that image by the child sexual, even if the child is not pictured undertaking any overtly sexual activity. The offence can be committed whether or not the victim complies with the request. The courts have convicted on that very basis and imposed substantial sentences of imprisonment; we discussed one case, which was actually a sentencing appeal, where the individual had been sentenced to three years in prison for precisely that offence under the order. In the process, the offender may also commit offences relating to the taking or making of indecent photographs of children.
I repeat my undertaking that the Government are going to take this very seriously. Despite all the legislation that we already have in place, none the less a gap needs to be filled. In particular, we need to explore further how best to deal with contact between a predatory individual and his victim where the messages are sexual in nature but where the victim is not being asked to respond in any particular way. Again, I want to get that wording precisely on the record because I think that is something that we all recognise.
I was particularly interested in the contribution of the noble Baroness, Lady Howarth, who of course through the Lucy Faithfull Foundation does tremendous work in this area. She pointed to the way in which paedophiles prey upon their victims and pass certain stages, and therefore how important it is to be able to tackle things as early as possible. Earlier in the Bill we discussed clauses relating to protection orders and the possession of a grooming manual being an offence. It shows that the direction of travel is recognising that we need to move further upstream in intervening at an earlier stage.
As part of that consideration, the noble Lord, Lord Harris, was kind enough to come to see me yesterday afternoon, together with the noble Baroness, Lady Howe. I was accompanied by my noble friend Lady Williams. I think they will agree that we had a useful discussion, and they have given us much food for thought as the Bill goes to another place. I agreed at that meeting, and I am happy to repeat it here on the Floor of the House, that officials would arrange a further early meeting with the NSPCC to discuss this issue further. The noble Lord is welcome to attend that meeting. We will also explore with the national policing lead and the CPS what additional guidance could be given to the police and prosecutors on the options open to them in tackling such predatory behaviours. My noble friend Lady Benjamin mentioned some scepticism, perhaps, about where the CPS was on this, but it will attend that meeting and I am very happy for her to attend as well. I accept the point that was made; an example was given where the police did not intervene as they could and perhaps should have done in the first instance, which then led to a more serious offence, which is precisely the type of circumstance that we are trying to prevent, and we are united in that. We are very aware of the need to look at this.
We are grateful to the NSPCC for the work it has done in bringing this to our attention. We will have that further meeting and of course there will be that other opportunity, as the Bill progresses through another place, for legislation to be introduced if needed. Of course, this is something that we will be coming back to time and again, particularly as the inquiry gets under way. Without in any way prejudging what it might recommend, it is clear that there is going to be some tightening of the law, probably, in the light of new technology and new evidence that comes to mind.
I say again that I am very grateful to the noble Lord, Lord Harris, for introducing the amendment. As this is possibly the last time I will speak on the Bill, I also pay tribute to all noble Lords who have contributed to its passage, particularly the noble Baroness, Lady Smith, the noble Lord, Lord Rosser, and, of course, the noble Baronesses, Lady Hamwee and Lady Walmsley, who contributed to a reshaping of the Bill.
The large number of government amendments which have been brought forward shows that we recognise the seriousness of this and we are united about it. We want to tackle the issues raised. We are listening and we are responding, and we will continue to do so in this very important area. With that, I wonder if the noble Lord might feel able to withdraw his amendment.
Lord Harris of Haringey
My Lords, I am grateful to all noble Lords who have contributed to this debate. I should express my gratitude to the noble Baroness, Lady Howe of Idlicote, who signed the amendment. She would have spoken to the amendment but she was, as we spoke, moving an amendment to the Consumer Rights Bill. We agreed that I would do this and she would do that, as we both have an interest in the same Bills. I am also grateful to the noble and learned Baroness, Lady Butler-Sloss, to the noble Baronesses, Lady Howarth of Breckland and Lady Benjamin, and even to the noble Baroness, Lady Hamwee, who—despite her desire always to go through the minutiae of an amendment—indicated quite clearly that she supported the principles behind this. I am of course also grateful to my noble friend Lady Smith of Basildon for her support.
I pay particular tribute to the Minister, to whom I am very grateful for the way in which he has approached this. He has shown courtesy, and willingness to listen and to have a dialogue. That bodes well not only for the Bill before us today, but also for other Bills which may come before us with—no doubt—great frequency, given that we are talking about the Home Office. The essence of his argument is that, given what we have at the moment, it is open to the courts to say that the sorts of things we have been talking about are in fact sexual. However, I still hope that some form of words can be found, because I am concerned that if we leave things as they are it will create some lack of clarity as to what is or is not permissible.
Under those circumstances, that may mean that the Crown Prosecution Service—or, perhaps, the police, before they even take it to the Crown Prosecution Service—may set themselves a higher threshold for deciding whether or not they should take action. The noble Baroness, Lady Benjamin, gave us the example of the police having clearly made a judgment that something had not passed the threshold, yet it was on an escalator which could lead to all sorts of other things. In my view, the wording which has been identified as possibly covering these circumstances is convoluted, and it is quite difficult to follow. I would have thought it better for all concerned if the law was clear—which is always a good principle—and made it always illegal to communicate with a child in a sexual fashion or in a sexual way, or to elicit such a sexual response.
However, I am grateful to the Minister for indicating that the Government will take this seriously, and for the commitment that before the Bill progresses through another place there will be further discussions with the NSPCC and the Crown Prosecution Service, involving Members of your Lordships’ House if we are available. I hope that there would also be some involvement of the police, because this may not be an issue only for the Crown Prosecution Service. It may be the issue that has been identified beforehand.
The objective should be clear. We need to be satisfied that the law is clear enough; that people are able to act on it; that they understand what it means; and that it shifts upstream the ability to intervene, so that it is possible to intervene before harm is caused to the child. On that basis and on the basis of the commitment made by the Minister, for which I am grateful, I beg leave to withdraw the amendment.
Baroness Williams of Trafford
My Lords, these drafting amendments simply seek to split Clause 67, which, as amended on Report, now deals with two distinct, albeit related, issues; namely, the extension of the extraterritorial reach of the offences in the Female Genital Mutilation Act 2003 and conferring lifelong anonymity on the victims of FGM.
I look forward to hearing what the noble Baroness, Lady Smith, has to say about her amendment before responding to it. I also understand that the noble Baroness, Lady Meacher, would like to put on the record some further observations about her proposed new offence of encouragement of FGM. For now, I beg to move.
Baroness Smith of Basildon
My Lords, I am sorry not to hear further from the Minister about her amendments. We had a very helpful and productive debate on Report, where it was clear that your Lordships’ House was united in a desire to tackle FGM. The government amendment was welcomed, but it was agreed that the issues raised by our amendments, which I have again tabled today, were both valid and reasonable. There was no policy disagreement; the difference was one of approach and what would be most effective in achieving the aims that we all share.
The noble Lord, Lord Lester, emphasised the need to use civil law and family courts. The noble and learned Baroness, Lady Butler-Sloss, agreed with him and said:
“I would like to see what is good in each set of amendments put together”,
and expressed the hope that,
“the Opposition and the Government will get together … and thrash out what would be the best of everything and get that into one list that could go into Third Reading”.—[Official Report, 28/10/14; col. 1092.]
That explains why we have retabled our amendment here at Third Reading. We felt that the House would want to hear what progress we have made in those discussions.
There were two issues of difference between us and the Government. I say “difference” rather than “disagreement”, as the whole approach on this matter has been consensual. Our intention in tabling amendments is to ensure that the legislation, and its application, is the best it can be. That is why we sought advice not just on policy but from leading practising lawyers in this area. I put on record my thanks and appreciation to Kirsty Brimelow from Doughty Street Chambers and the Bar Human Rights Committee and Zimran Samuel from 42 Bedford Row Chambers. Their considerable practical experience and expertise have been of enormous assistance in understanding all the implications of the proposed legislation. We are grateful to them also for attending the meeting we had with the Minister and her officials. I am also grateful to Catherine Meredith of Doughty Street and Dexter Dias of Garden Court Chambers. I am not a lawyer, but I felt that I needed to be absolutely clear on the implications of the amendments before us—not just how they would be implemented in theory but how much difference they would make in practice. There is old saying: in theory, theory and practice are the same, but in practice they are often different.
As legislators, we must be concerned about practice— the very point made by the noble Lord, Lord Lester, and the noble and learned Baroness, Lady Butler-Sloss— when debating the use of civil law. There are two issues of difference, both relating to the Female Genital Mutilation Act 2003. We welcomed the Government’s support for our calls for FGM protection orders and were grateful to them for bringing forward their own amendment on Report. The issues of difference that merited further consideration were highlighted by the Bar Human Rights Committee, whose members proposed such an order in the first place and are experts in this area.
The first issue relates to where the orders sit in relation to civil and criminal law, and which Act the amendment relates to. It might seem just an academic argument, but if that were that case, I would not raise it today in your Lordships’ House. The 2003 FGM Act, which the government amendment seeks to amend, is a criminal statute and not necessarily familiar to family law practitioners. The Family Law Act 1996, on the other hand, is their first port of call. Forced marriage protection orders, which are used all the time in the family court, are in the Family Law Act and have been successful. Having FGM orders also in the Family Law Act would mean that they would sit beside and complement the existing regime for the protection of children in the Children Act 1989.
I appreciate that the Government’s proposal remains a civil order, but it is a civil order within criminal legislation. Those who are involved in family courts told us of the practical reasons why not all family court lawyers would know, understand or appreciate that they should also look to criminal law statutes for civil measures.
There is the issue of the deterrent factor for those whom we want to come forward, when a civil measure lies within criminal law. The difference may be understood by criminal lawyers or across the Dispatch Box in your Lordships’ House, but it is not necessarily understood by those whom the orders seek to protect.
I totally understand that from the Government’s point of view it makes policy sense to have all the legislation relating to FGM in one place. It sounds logical. But when those who will use this law, and who really care that we get it right, tell us that it could make application for and gaining of an FGM order harder and therefore less likely, I feel obliged to take their views and experience into account. What matters is what works in practice.
The second issue is about the definition. As I explained in Committee, the government amendment uses the definition in the 2003 Act. The Government believe, as was the intention when we reintroduced the legislation in 2003, that this covers reinfibulation. I am not going to test your Lordships’ House again with an exact explanation of what is involved. Last time, “Today in Parliament” put out a warning before I spoke, and gave the programme a G certificate, standing for guidance. I think that is the first time that that has happened, but it does convey some of the brutality and horror of what we are talking about.
The law was intended to include reinfibulation. Any definition or interpretation should include reinfibulation, which involves unnecessary and non-medical restitching to reclose the female genital mutilation following childbirth. However, the Bar Human Rights Committee and Doughty Street lawyers tell us that there is some misinterpretation. That is why we use the World Health Organization definition instead. That would ensure that our law is consistent with recognised international standards and understandings and clarifies any existing confusion around offending conduct such as reinfibulation.
I was reassured on Report by the willingness of Ministers to discuss this further and, as a result, I agreed to withdraw our amendments. The lawyers who advised us attended the meeting with the noble Baroness and her officials. We were looking forward to the meeting, and we were optimistic that we would make the kind of progress that the noble and learned Baroness, Lady Butler-Sloss, and others, had wanted us to make. However, I have to tell your Lordships’ House that we are very disappointed with the outcome. It appeared to us in that meeting that the Government were not prepared to take on board any of the points raised by us or, more importantly, by the barristers who deal with this issue on a regular basis. On the issue of definition the Government are now concerned that such clarification as we have called for could affect any existing or current cases. I am surprised that that was not mentioned on Report. That assessment is questioned, including by senior lawyers who we have spoken to. Perhaps the noble Baroness and I could pursue that at another time.
No one is suggesting that the law is wrong; there is a problem with interpretation. When the Royal College of Midwives and the Royal College of Obstetricians and Gynaecologists say that the definition does not include reinfibulation, that seems to me to be an excellent case for clarification. Despite the clear will of your Lordships’ House that such discussions should take place with the intention of ensuring that whatever was brought forward works well in practice, I deeply regret that I do not consider that we had productive discussions. The Government clearly have no intention of making any modifications or improvements in this area.
I do not intend to press the amendment to a vote. The government amendments are not wrong, but they could be better. We believe that this is a lost opportunity, and I ask the following questions.
First, can the Minister tell us what the Government will do to raise awareness among practitioners and the public that these orders exist? Secondly, will she agree to report to Parliament on the number of orders that have been made after, for example, one year of operation —although that might of course be under a different Government—so that the effectiveness can be considered? Thirdly, will she clarify the legal aid position? My understanding is that legal aid will be made available because these are civil FGM orders, even though they sit within criminal legislation. Without such legal aid, these orders would fail. How does the Minister intend to make that clear, or is my understanding of legal aid wrong? Fourthly, will the Government consult on the interpretation of the definition of FGM?
While we are disappointed that we do not have the best outcome, we feel that we have done all we can to make the case. The proposals from the Government are important, they are a significant improvement and we want to see them be as effective as possible.
Baroness Meacher (CB)
I am most grateful to the Minister for tabling Amendment 7, which enables me to speak briefly about the need to create an offence of encouragement of female genital mutilation, which we discussed on Report. I want to thank the Government for agreeing to have further discussions about the new amendment, drafted by Dexter Dias QC, and about the new evidence from our QC adviser. To be frank, that evidence is extremely powerful and it is a pity that we did not have access to these arguments earlier in our debates. I hope the Government will table the Dias amendment, or something very like it, in the other place, but I understand that they are in no position to make any commitment of that kind at this stage.
I will not repeat the arguments we rehearsed on Report in favour of focusing attention upon those who encourage the practice of FGM rather more than upon the families who practice this appalling form of child torture. I want to put on record only that the Dias amendment would provide an effective legal intervention because it is modelled on what is known to work: comparable powers used to combat the dissemination of encouragement to commit acts of terrorism. FGM is of course an entirely different crime from terrorism but the model for the two types of crime is similar.
The Dias amendment recognises the awful social pressure that parents are placed under by some communities. In traditional societies, which are intensely hierarchically structured, elders and preachers exert enormous influence. I think that most of us are not familiar with that or have not experienced it. We believe that the encouragement amendment will complement the important community work being done to dissuade preachers from encouraging FGM.
Mr Dias QC refers to our international obligations, which more than justify the creation of an offence of encouragement of female genital mutilation to cover anyone who makes a statement that is likely to be understood by some or all of the members of the public to whom it is published as direct or indirect encouragement or other inducement to them to mutilate the genitalia of a girl. That is the essence of his amendment. These international obligations include: the Convention on the Elimination of All Forms of Discrimination against Women of 1979; the UN Convention on the Rights of the Child of 1989, under which the UK has positive obligations in international law to ensure that children are not subjected to cruel, inhuman or degrading treatment; and, finally, the UN Convention Against Torture of 1984, which has been ratified by the UK.
Mr Dias presents four pages of powerful arguments in support of the amendment he has drafted, which I hope very much that the Government will consider most seriously, as I have indicated. I will not repeat all these arguments here today—this is, after all, Third Reading—although I believe that your Lordships’ House would find them extremely persuasive. The only remaining point I want to make is that I am advised that our strong international obligations justify overriding Article 10 of the Convention on Human Rights, the right to freedom of expression. This is a very important point, particularly because we all wish to preserve that right whenever it is appropriate. All that we are saying is that in this very specific case, it is appropriate to override it.
Again, I give my thanks to the Minister for providing this opportunity for me to reiterate certain points. I hope that the Minister can confirm to the House today the Government’s agreement to have further discussions on this important issue.
Baroness Butler-Sloss
My Lords, had the noble Baroness, Lady Meacher, tabled this amendment I would have put my name to it. I do not want to take up time at Third Reading to repeat what the noble Baroness has said, but I ask the Minister to be in touch with those in the Home Office who will be dealing with the Bill in the other place, and not to disregard what she has said. It is really worth having a further look at this serious matter. There are communities which, as the noble Baroness, Lady Meacher, has said, are different from most of us and where there is a degree of not just influence but power among certain elements of those communities. That leads to this appalling FGM taking place on children in this country. I am also supportive of what the noble Baroness, Lady Smith, said. This is a good part of the Bill and the Government are to be congratulated on it. However, they could do better.
Baroness Hamwee
My Lords, the Government have made enormous progress in addressing the legislation so well, to the extent that a Government can in practice respond to FGM. Like others, I encourage the filling of a gap which seems to have been identified. I do not want to say more this afternoon but I wanted to put on record my support for the noble Baroness and my admiration for her keeping going on this issue.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have taken part in the discussions to enable the progress mentioned by my noble friend Lady Hamwee to take place. I think we all want the same thing; there is a slight difference of opinion in how we get there. I thank specifically the noble Baronesses, Lady Smith and Lady Meacher, and my noble friend Lady Hamwee for the time they have taken in the discussions.
The noble Baroness, Lady Smith, raised two substantive points. The first concerned whether there would not be advantages in placing the provisions in respect of FGM protection orders in the Family Law Act 1996 rather than in the FGM Act 2003 and the second concerned whether the statutory definition of FGM should be updated expressly to refer to reinfibulation. I will take the two points in turn. I am very grateful to the noble Baroness and her advisers for discussing with me the issues she raised on Report. On the first point, I believe that the noble Baroness accepted that the Government’s provisions would allow proceedings for FGM protection orders to be heard in the family court or in the family division of the High Court as family proceedings with the full range of the court’s powers. However, she was concerned that civil or family law practitioners might not be able to find the FGM protection order provisions in a criminal statute and that victims would be deterred from availing themselves of them.
As its Long Title indicates, the FGM Act 2003 restates and amends the law relating to FGM. It is not exclusively a criminal statute nor do I think that is a particularly helpful label. We remain of the view that is sensible to have all the provisions relating to this area of the law in one place—that point was made on Report. We will work with the legal profession and others to ensure that the FGM provisions in the Bill are widely publicised when we come to bring them into force. I think this is crucial because it is not just the law but the reinforcement and the engagement with communities that will be so important.
With regard to the definition of FGM, I also had a helpful discussion with the noble Baroness, Lady Smith, and her advisers on whether there should be an explicit reference to reinfibulation in the FGM Act 2003. I have tried to persuade the noble Baroness of the Government’s firm view, which I set out on Report and reiterate today, that reinfibulation is already covered by the wording of the 2003 Act. As infibulation is an offence under that Act, so is reinfibulation. That reinfibulation or resuturing is an offence is clearly stated in the multi-agency practice guidelines on FGM and in the guidance of almost all of the relevant royal colleges. There may of course be a need to communicate this point to practitioners more effectively—I think there will be—but we do not accept that there is currently any need to clarify the law.
The noble Baroness also asked about the legal aid position. The Government are giving this further consideration and will clarify the position on legal aid in due course. The noble Baroness also asked whether there would be a report to Parliament on FGM protection orders after one year. We expect that the provisions of this Bill will be subject to post-legislative scrutiny in the normal way. We will ensure that our report on the working of the Bill gives figures as to the number of FGM protection orders made. I think that will be very important. It will, of course, be open to any Member of your Lordships’ House to table a Question at any time seeking such information.
I will now respond to the points made by the noble Baroness, Lady Meacher. Again, I am grateful to the noble Baroness for the constructive way in which she has pursued her and the Local Government Association’s campaign for a new offence to outlaw statements that encourage the promotion of FGM. As I indicated on Report, the Government remain to be persuaded of the case for such an offence. The Government believe that the provisions added to the Bill at Report stage are a far more targeted, and therefore more effective, way of dealing with the problem.
Of course, as well as this now strengthened body of criminal and civil law, there is more that can and should be done to overcome the culture and attitudes that allow FGM to persist. That is why, at the Girl Summit in July, we launched a declaration condemning FGM, signed by more than 200 faith and community leaders from all major religions. The faith leaders have declared that FGM is not required by their religions and is a form of child abuse. The declaration has it made clear that all religions will work together to end FGM for good. The support from faith leaders has been overwhelming and the Government are committed to turning these signatures into further action through education and community engagement, which, as I have said, are crucial. Our aim must be for all these powerful voices from authoritative and respected local leaders to drown out the minority, to whom the noble Baroness referred, who advocate and encourage FGM.
Finally, we have real concerns about the necessity and proportionality of an offence of encouraging the promotion of FGM, given that it would engage Article 10 of the European Convention on Human Rights which protects freedom of expression. None of us would condone such statements, but it does mean that we have to tread carefully before introducing what amounts to a speech crime. The noble Baroness has briefly touched on these points and has referred to the advice she has recently received from Dexter Dias QC. I am ready and willing to meet both the noble Baroness and Dexter Dias to discuss these issues further. I hope that the offer of a further meeting will go some way to reassure the noble Baroness that we will continue to explore the issues she has raised, although I hope she will understand that I cannot offer her any commitment to bring forward a government amendment on this matter during the remaining stages of the Bill.
I say again that the whole House is united in seeking to eradicate the vile practice of FGM both from this country and across the globe. Your Lordships’ House is sending the Bill to the Commons with a powerful suite of new measures to help achieve that objective. I hope that, having heard the Government’s reasons for the approach we have taken, particularly as regards FGM protection orders, the noble Baroness, Lady Smith, will not press her amendment—as she has stated she will not—and will join me in commending the government amendments to the House.
Lord Bates
Lord Bates
“( ) Before the day on which section 103 of the Courts Reform (Scotland) Act 2014 (abolition of appeal from a sheriff to the sheriff principal) comes into force—
(a) the reference to the Sheriff Appeal Court in subsection (3)(b) of section 61 is to be read as a reference to the sheriff principal;(b) the references to the court in subsections (5) to (7) of that section are to be read as including references to the sheriff principal.”
Lord Bates
Lord Bates
Infrastructure Bill [HL]
(10 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
17:11 - Division on Amendment 86A - Ayes: 195 / Noes: 235 - Amendment 86A disagreed.
Lord Adonis
“National Infrastructure Commission
There shall be an independent National Infrastructure Commission.”
Lord Adonis (Lab)
My Lords, I thank Sir John Armitt for his excellent work in leading the independent review for the Labour Party on long-term infrastructure planning. I also thank Robbie Owen of Pinsent Masons for his invaluable work in preparing a draft national infrastructure Bill since the publication of the report. We have been consulting on the draft Bill and have received a positive response from across the infrastructure sectors. The draft Bill runs to 26 pages. Rather than propose all 26 pages as amendments, the House will be grateful that I have purposefully kept this proposed new clause concise and to the point. However, if the Minister tells us that he is prepared to accept the principle of an independent infrastructure commission, we would be delighted to discuss the provisions of the draft Bill with him with a view to subsequent legislation on a cross-party basis.
The case for an independent infrastructure commission is clear. The UK has historically, over many decades, underinvested in key infrastructure, which is why the World Economic Forum ranks the UK 27th for the overall quality of infrastructure in its 2014-15 Global Competitiveness Report. Our long-term infrastructure planning is weak. There is far too much stop-start decision-making and investment, and forging a political consensus in key areas such as airports and energy has proved notoriously difficult. The role of an independent commission would emphatically be not to replace Government, Parliament and the democratic process, but to inform and strengthen them. Under the Armitt plan, an independent national infrastructure commission would carry out an evidence-based assessment of the country’s infrastructure needs over a span of 25 to 30 years, focusing on nationally significant infrastructure —as defined by the Planning Act 2008—and consulting relevant stakeholders. The key economic infrastructure sectors—energy, transport, water, waste and tele- communications—would be considered in parallel, allowing the interdependence between sectors to be thoroughly examined. Projections of economic growth, population and technological change would inform this cross-sector approach. Environmental issues and obligations would be respected and recommendations made by the commission would need to be consistent with achieving the UK’s long-term climate change targets. The result of the commission’s considerations would be a national infrastructure assessment submitted to the Chancellor, who would have a statutory duty to bring it before Parliament within six months, accompanied by any amendments that the Government might propose. We anticipate that the first assessment would be produced within three years of the establishment of the commission.
The national infrastructure assessment would therefore come forward with the Government’s full authority. Ministers would not be bound by the independent commission but changes made by the Government to the commission’s assessment would be clear and transparent and subject to full public and parliamentary debate. The plan would be fully updated every 10 years but it would be open to the Government or a new Government to seek earlier reconsideration, again on an open and transparent basis. The assessment would be debated and voted upon in both Houses. If approved, there would then be a 12-month period in which individual government departments would be required to produce sector infrastructure plans outlining the specific schemes and projects that the Government would promote to meet the needs identified in the assessment. Proposed sources of funding, timeframes for project implementation and preferred delivery vehicles will be required in the plans in order to provide real delivery momentum, credibility and confidence for investors.
Before a vote on each sector plan in Parliament, the commission would provide a statement commenting on the consistency of the Government’s proposals with identified infrastructure needs, highlighting areas where departmental sector plans fell short, which together with the 12-month deadline for producing the plans would act as a significant new discipline for Government to get on with implementation and delivery. Together these sector plans would form a national infrastructure plan for the UK—not a wish list like the current national infrastructure plan, but a statement of priority national projects with key milestones, delivery targets and vehicles and sources of funding set out in each case.
We have shown in recent years that we can deliver on major national infrastructure. The Olympics were delivered on time and on budget and the Crossrail project continues to progress well. Financial institutions are generally keen to invest in British infrastructure so long as risk and return are well balanced, but in key areas decisions have not been timely and investment has been poorly planned, inefficient and inadequate. To take just transport, the history of the railway system and airports in the south-east of England over the past 50 years is a running commentary on the failure of long-term strategic planning. There is a real danger that energy, water and flood prevention infrastructure could soon become so. The problem clearly lies with the quality and timeliness of planning and political decision-making as much as with the delivery. The current Davies commission on airports is a kind of mini-infrastructure commission, set up precisely because of the failure to resolve airport capacity issues in south-east England over the past 15 years under both this and the last Labour Government. We are proposing a similar approach applied more broadly.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)
My Lords, first, I thank the noble Lord for his amendment, which allows us to outline again the Government’s position on national infrastructure. I must admit that when he started talking about the Armitt review, I was concerned for a moment, as I was settling down, as to whether the word was Armitt or Ahmad. That threw me a bit—but we are clear which report we are talking about here.
We believe that the national infrastructure plan already delivers unparalleled levels of investment. The Government recognise—and the noble Lord acknowledged this—that infrastructure projects have been delivered on time and on budget. He referred to the Olympics. It is noteworthy that the person responsible for delivering the Olympics on time and on budget is the current Minister for Infrastructure in our Government, my noble friend Lord Deighton. I believe that all noble Lords will agree that he has great expertise in this area.
Of course the Government recognise the importance of the long term in looking at infrastructure investment. Investing in infrastructure is a central part of the Government’s long-term economic plan to build a stronger and more competitive economy. For this reason, the Government have introduced the national infrastructure plan, which has brought together our approach to investing in energy, transport, telecoms, water and waste networks into one place. This has brought a step change in delivering UK infrastructure. We are introducing an ambitious new energy strategy to incentivise additional electricity capacity for the UK and support low-carbon electricity generation. In road and rail networks, we are seeing new investment at rates not known for several decades. Our plan provides sound justification for infrastructure projects that have secured buy-in from a broad range of stakeholders.
We have set out long-term capital settlements to align with the national infrastructure plan. These commitments have led to new investment out to 2021, in sectors such as roads and flood defences, and long-term funding plans for projects such as High Speed 2. This has all helped to ensure stability and continuity of infrastructure investment in the decades to come.
I turn to the issue of the independent infrastructure body. The Government disagree with this amendment and have reservations about introducing an independent body without a clear understanding of the impacts of the change. Failure to understand this would create greater uncertainty and risk the successful delivery of UK infrastructure. We believe that resourcing requirements to support a commission have not been fully established or costed. Establishing a new authority for infrastructure would involve significant complexities and would distract from the business of providing the infrastructure that the country needs now and in the future.
It is essential that the Government focus on delivery. The central issue is to ensure that the UK has a robust plan to address the challenges facing our networks in the future. The Government have developed a strategy to meet current and future demand through the renewal of existing infrastructure and to grow a global economy with modern infrastructure networks. In doing this, we have sought to address climate change and energy security. This investment is vital for future economic growth. However, it is not clear how introducing a national infrastructure commission would address these pressing issues.
The Government already have a strong track record in major infrastructure delivery. While a national infrastructure commission is an untested and, as yet, unproven idea, the Government take delivering infrastructure extremely seriously. The latest infrastructure pipeline shows that £383 billion of investment is planned for infrastructure networks over the course of the next Parliament and beyond. The noble Lord mentioned specific transport projects. We have had 45 major road and local transport projects since 2010, and the start of construction on flagship projects, such as Northern Hub and the Mersey Gateway Bridge, as well as substantive progress on Crossrail, provides good examples. In addition, more than £45 million has been invested in electricity generation networks between 2010 and 2013 and contracts have already been signed under the electricity market reform, with a further allocation currently under way. The UK is rated as the most energy-secure country in the EU and is fourth in the world.
I believe that we are in a good place when it comes to infrastructure and investment in infrastructure for the current, medium and long term. With the reassurances I have provided, I hope that the noble Lord is minded to withdraw his amendment.
Lord Adonis
My Lords, I am grateful to the Minister for his response. He offers me a tantalising prospect that, if we were to rename the Armitt report the Ahmad report, then he might be prepared to accept the amendment. I offer him that potential deal across the Dispatch Box, though Sir John Armitt might want some hybrid name attached to the report in consequence.
I am disappointed by the response of the noble Lord. In many other areas, such as fiscal and competition policy, we have independent bodies which advise Ministers. Looking at the history of this country over the last two generations, it is clear that we have had serious problems in the planning of our national infrastructure. This is not just in bringing objective evidence to bear on the debate, but in the establishment of cross-party consensus in areas of high priority. We believe that a commission of this kind could significantly contribute to the process.
The area I know well—transport—is a testimony to the problems of failure to address long-term infrastructure planning on an independent and consensual basis. Airports policy has been a yo-yo since the 1960s. There has been stop-start on Maplin, then at Heathrow, and it has taken 15 years to make decisions about increased airport capacity in the south-east of England. Electrification of the railways has been delayed for the best part of a generation because of the lack of any long-term plan. The noble Lord mentioned HS2 and I am glad that a cross-party consensus has been reached on it. However, it was only five years ago—a generation after most of continental Europe and large parts of Asia started to develop high-speed rail networks—that we even started to consider the potential for high-speed rail in this country because there was no medium and long-term planning.
The Minister mentioned roads and the roads programme. As many noble Lords with major road developments in their areas know, this is a classic case of stop-go. Every time there is a downturn, there is a massive slashing of projects, only for them to have to be revived again a few years later at significant additional expense because there is no agreed medium-term plan. In 2010, when the present Government came in, there were huge reductions in the roads programme for strategic roads, which have since had to be partly reinstated. A system of national infrastructure planning of the kind that we propose could only strengthen the bringing to bear of objective evidence, strengthen cross- party consensus and give a louder voice to capital spending and infrastructure projects within the government machine itself.
The noble Lord referred to the resourcing requirements of the commissioners, but they would of course be a fraction of the cost of the projects themselves and there are already significant staff who develop infrastructure in individual departments. This would enable them to be pulled together to operate more effectively with some clear central direction.
It is only a matter of time before a commission of this kind is established. As I said, in so many other areas of critical policy, the bringing to bear of expert advice reporting to Ministers and Parliament to provide a basis on which decisions can be taken has been a course that has been followed. I believe it will be followed in due course in the case of infrastructure. I would therefore like to test the opinion of the House.
Lord Adonis
“National infrastructure projects: new towns
(1) The objects of a development corporation established for the purpose of creating a new town shall be to secure the physical laying out of infrastructure and the long-term sustainable development of the new town.
(2) In this section, “sustainable development” means managing the use, development and protection of land and natural resources in a way which enables people and communities to provide for their legitimate social, economic and cultural wellbeing while sustaining the potential of future generations to meet their own needs.
(3) In achieving sustainable development, development corporations should—
(a) positively identify suitable land for development in line with the economic, social and environmental objectives so as to improve the quality of life, wellbeing and health of people and the community;(b) contribute to the sustainable economic development of the town;(c) contribute to the cultural and artistic development of the town;(d) protect and enhance the natural and historic environment;(e) contribute to mitigation and adaptation of climate change consistent with the objectives of the Climate Change Act 2008;(f) promote high quality and inclusive design;(g) ensure that decision-making is open, transparent, participative and accountable; and(h) ensure that assets are managed in the long-term interest of the community.(4) In this section “infrastructure” includes—
(a) water, electricity, gas, telecommunications, sewerage and other services;(b) roads, railways and other transport facilities;(c) retail and other business facilities;(d) health, educational, employment and training facilities;(e) social, religious, recreational and cultural facilities;(f) green infrastructure and ecosystems;(g) cremation and burial facilities; and(h) community facilities not falling within paragraphs (a) to (f); and“land” is defined as including all the matters set out in the definition of “land” in Schedule 1 to the Interpretation Act 1978, and also housing including (where the context permits) any yard, garden, outhouses and appurtenances belonging to, or usually enjoyed with, the building or part of building concerned.”
Lord Adonis
My Lords, the building of new towns and major urban extensions is a critical national issue in the face of Britain’s acute housing shortage. The designation of Ebbsfleet as a new town and the recent Wolfson Prize competition for a new town scheme demonstrates the enthusiasm and capacity that there is for developing the concept in modern conditions. All three of the major parties in the House are committed to new town or garden city developments, and I take these to mean the same thing, given the importance of green and sustainable development as part of any new town or urban extension.
This amendment intends to capture the spirit of the post-war rebuilding of the country that was spurred on by the original New Towns Act 1946, creating places that today are part of the fabric of our country, such as Milton Keynes, Stevenage and Welwyn Garden City. However, although previous new town legislation provided powers to deliver new towns, the towns that were built did not always conform to the highest design and quality standards. The objectives set out in this amendment update the existing legislation in the New Towns Act 1981—which has barely been used—to ensure protection for the natural and historic environments, to require high-quality and inclusive design and to contribute towards a low-carbon future. The aim is that no part of a new town will be eligible for the Carbuncle Cup, an annual award from Building Design magazine for the ugliest building in the United Kingdom completed in the last 12 months.
Developing places in which people love to live is a topic gathering increasing attention as we look to substantial new settlements. The winner of this year’s Wolfson Prize, David Rudlin, proposes a six-point “social contract” for the development of garden cities. The participative decision-making proposed in this amendment is reflected in Mr Rudlin’s winning entry, which proposes that existing towns and cities should be able to bid for new garden city status to build substantial high-quality and sustainable urban extensions. This includes not only high quality standards, but the requirements that new garden cities include major institutions of learning; that they be well connected by public transport and cycleways; and that for every acre of land developed, another will be given back to the city as accessible public space, including forests, lakes and country parks.
When my noble friend Lord McKenzie of Luton raised in Committee this issue of promoting sustainable and liveable communities in new towns, the government response was odd. The noble Baroness, Lady Stowell, said it was “absolutely essential” that good-quality design and the other key elements of the amendment—open decision-making, cultural and artistic development, and enhancement of the natural and historic environment—be built into new town development, but the Government were worried that to say so explicitly in statute would be “unhelpful”. But how can it be unhelpful to specify things that are so essential but are not in fact contained in the New Towns Act 1981? If they are not specified, that could lead to what David Rudlin calls “mere dormitory suburbs”.
When the Government say it is unhelpful to specify essential features of new towns, I believe they are confusing being concise with being brief. Being concise shows an excellent grasp of the issue, while being brief can demonstrate a lack of understanding of an issue. This amendment clearly and concisely prescribes the factors that development corporations should consider to achieve sustainable development, from environmental considerations to economic ones. The amendment is therefore helpful, not unhelpful. If the Government are to object on the grounds of brevity, I ask them: which factors set out in the amendment do they think should not always be considered when building sustainable new communities? I beg to move.
Lord Jenkin of Roding (Con)
My Lords, I will be brief. The two amendments—the one we have just voted on and the one just moved by the noble Lord, Lord Adonis—are starred amendments. It is treating this House with contempt to raise two serious issues at the very last moment for consideration in today’s business. I am not in the least surprised that in the previous debate only the noble Lord and my noble friend Lord Ahmad spoke. No one had a chance to consider what it was about and take advice. Now we have another one.
This is an important issue. As a former Environment Secretary, I dealt with planning matters, and have lived near some of the post-war new towns. I will not weary the House by repeating what I said in Committee about the appalling mistakes made, for instance in Harlow, which turned out to be a byword for the misery of large numbers of citizens who moved from the city centres out to a town that was full of lakes, parks and everything but failed to have any sense of community at all—certainly for decades. I do not in any way underestimate the need for substantial improvements in the system, and I like to think that in recent developments there have been considerable improvements; we have not had a repetition of those experiences.
However, these are important matters and one has to ask oneself: why did the noble Lord leave it until only yesterday to table this amendment and asking my noble friend to give a considered view of the matters that he raises in it? I say again: it is treating this House with contempt.
Lord Adonis
I should point out to the noble Lord that this amendment was tabled and debated in Committee.
Lord Jenkin of Roding
Why leave it until the last moment on Report? Why did he not put it down it a week or 10 days ago, when most of the other amendments were tabled, so that people would have a chance to look at it and consult? That is my complaint. I have great respect for the noble Lord’s ability, but sometimes he gives the impression that he walks on water.
Lord Ahmad of Wimbledon
My Lords, I thank my noble friend for his intervention and the noble Lord for his amendment. I feel somewhat spiritually awakened by my noble friend’s final comment about walking on water. I hope I can provide clarity on why the Government are not in a position to accept the amendment at this time.
I shall start with our common ground. I agree wholeheartedly with the noble Lord, Lord Adonis, that creating well designed, sustainable communities should be at the heart of any new development. In Amendment 86B, tabled by the noble Lord, two main objectives are proposed for a development corporation to be established for the purpose of creating a new town and for the physical laying-out of infrastructure and long-term sustainable development of the new town.
However, I do not think that prescribing the objects of a new town development corporation in detail would help to achieve that objective in a way that allowed for sufficient flexibility locally. There is much to be said for the simplicity of the current objective of new town development corporations, as indeed set out in statute: to secure the laying out and development of the new town.
The amendment proposes that sustainable development should be included in the objects of new town development corporations. Let me emphasise that the Government strongly support the principle of sustainable development. Indeed, that principle is central to the document National Planning Policy Framework, which provides a clear view of what sustainable development means in practice. We believe that creating an additional statutory definition of sustainable development could serve to reduce that very clarity.
I note that no new town development corporations have been created since 1970. However, I am clear that any future new town development corporations, as well as urban development corporations, such as the one the Government are proposing to establish at Ebbsfleet, should have a strong focus on securing sustainable development in a way that reflects local circumstances and needs. I look forward to Her Majesty’s Opposition supporting the creation of the new town at Ebbsfleet, as we seek to establish it in another Bill.
I hope that the clarity I have provided, with brevity, gives the noble Lord sufficient comfort to withdraw his amendment.
Lord Adonis
My Lords, I am grateful to the noble Lord for putting on record the Government’s commitment to sustainable development and high-quality design, which is of key importance.
If I may, I shall respond further to the noble Lord, Lord Jenkin. The amendments were tabled on Monday, which was the day before yesterday, so there was certainly time for noble Lords to engage fully with the issues—and, indeed, for the noble Lord to have read the Armitt report, which was published some months ago. It is not a recent document, by any means.
Lord Ahmad of Wimbledon
They say, “Once a Whip, always a Whip”. We are on Report, and no other interventions would be appropriate.
Lord Adonis
I was very willing to give way to the noble Lord, because I did mention him. I think that I had a right of reply to his points, given that he said there had been almost no notice of these amendments.
Amendment 86B was tabled by my noble friend Lord McKenzie in Committee—it is exactly the same amendment. The reason we regard it as so important that the law takes account of the issues specified in the amendment, that sustainable development should,
“contribute to the cultural and artistic development of the town … protect and enhance the natural and historic environment … promote high quality and inclusive design … ensure that decision-making is open, transparent, participative and accountable … and ensure that assets are managed in the long-term interest of the community”,
and so on, is precisely because of the point that the noble Lord, Lord Jenkin, raised: our last experience of developing new towns in this country was not wholly happy. There have been many very positive elements to the new towns and most of them now function extremely well. However, in some cases the quality of the initial design was not high enough. The Minister said that no new town development corporations have been set up since 1970, but we are just about to begin the process of developing new towns and major urban extensions again. The Government have named Ebbsfleet as the first. It is very likely that others will follow, given the need at least to double the rate of national housebuilding. Therefore, it seems to us, and probably to most people in the House, that having a proper set of criteria for the development of new towns is timely. If it cannot be done in this Bill—and we do not intend to press this amendment today—it should be done before we embark on the next new era of garden city development. I beg leave to withdraw the amendment.
Baroness Whitaker
“Sustainable development and design
In section 10(3) of the Planning Act 2008 (sustainable development), omit the words “the desirability of”.”
Baroness Whitaker (Lab)
My Lords, Amendment 87 is in my name and those of the noble Lords, Lord Jenkin of Roding and Lord Tyler, and the noble Earl, Lord Lytton, who regrets that he is unavoidably absent. I am also honoured to have the support of the Town and Country Planning Association and the Royal Town Planning Institute. We think that this amendment is crucial to realising the aspirations of the national policy statement, which lie behind and above infrastructure development, and to furthering public consent to the essential provision of new transport and energy infrastructure.
First, I welcome the many revisions in the strategic highways company draft licence, in particular paragraph 5.22, which says:
“The Licence holder must have due regard to relevant principles and guidance on good design, such as those set out by the Commission for Architecture and the Built Environment (Cabe) and the Design Council, to ensure that the development of the network takes account of geographical, environmental and socio-economic context”.
I salute the Minister on this progress. I hope it is not churlish to do an Oliver Twist act and ask for more. Oliver Twist did, after all, ask for more necessary sustenance. The problem is that the licence does not carry nearly the same weight as the statute. It is the national policy statement that is the critical decision-making document. My plea is for explicit recognition of the crucial role of design on the face of the relevant statute, in this case the Planning Act 2008, where it sets out the obligations of the Secretary of State in preparing the national policy statement. The change that we propose is a modest one. While it strengthens and simplifies the obligation with regard to climate change—extremely important, too—and good design, it makes no change to the overarching and heavily qualified obligations in Section 10(2) that govern the section I propose to amend.
We need to look back to see why this amendment is so important. We need to remember those miles of urban highway that have created lasting problems, which my noble friend Lord Adonis referred to, by dividing communities, by ignoring the beauty element and by despoiling some of our most cherished landscapes; these include the M8 in Glasgow and the M3 in Belfast. Closer to the present time, we can think of High Speed 2’s path through the National Trust’s Hardwick Hall. Although this will be dealt with by the hybrid Bill, the issue illustrates the enormous concern we must have to ensure the right design outcomes for infrastructure with a life of many decades.
The purpose of the amendment is in a non-prescriptive way to ensure that design issues are taken more seriously by decision-makers in the preparation of policy. It does that by strengthening the Planning Act 2008’s obligation to consider good design and adaptability to climate change in the achievement of sustainable development. The 2008 Act says only that the Secretary of State must,
“have regard to the desirability of … mitigating, and adapting to, climate change”,
and “achieving good design”. We think that the words “the desirability of” must go. They make good design desirable rather than necessary, which is a misreading of the function of design. The obligation already includes a significant degree of flexibility, because of the words “contribute to” in the primary obligation of achieving sustainable development.
Lord Jenkin of Roding
My Lords, I am very happy indeed to add my name to the amendment tabled by the noble Baroness. This is partly because I have long had an admiration for the persistence with which over many years she has pursued this objective of achieving better design for our buildings and structures in this country. She deserves our support.
I referred briefly in my previous intervention to the time when I was Environment Secretary, and as such found on my desk a number of very major projects. Not all of them would have been described as infrastructure, but nevertheless one was very conscious indeed of the enormous importance of design as a criterion for desirability and for making sure that something was going to last. Indeed, there was a view in the department at the time that if a building was really bad, it would not last more than 50 years. However, 50 years is more than half a lifetime—perhaps it is less than that now, but it was then. One needs to do one’s best to avoid those bad buildings.
One particular decision with which I have always been rather pleased—which was not infrastructure except in the broadest sense of that word—concerned what is now the Sainsbury Wing of the National Gallery. That decision turned entirely on the design that had originally been proposed, which was so memorably castigated by His Royal Highness the Prince of Wales in a remarkable speech. I must say that it made me very angry at the time, because this planning decision was sitting on my desk and yet I received no advance warning at all that he was going to say anything about it.
When I then had to deal with it, I tried to see whether he was right. I came to the conclusion that, yes, of course he was right. That design was deplorable, as the recent account published by the National Gallery itself has indicated. As a result, we got an entirely new initiative from the Sainsbury brothers, and the Sainsbury Wing is now a very considerable adornment to that part of Trafalgar Square and to the National Gallery itself, based entirely on design. I therefore attach very great importance to this.
One of the important points made by the noble Baroness in her speech concerned the very limited extent to which the criterion of design has been imported into the national planning policy statements. She said that some of them gave the impression of having been cut and pasted, because they simply took the same words. If one looks, for instance, at the National Policy Statement for Ports about this, it really does not add anything to what has been said before about other forms of development. There is nothing specifically regarding ports. From time to time, I have found myself sailing past the Felixstowe dock, which is a tremendous container port. It is actually rather a fine structure when seen from the River Orwell. Then you go further up the River Orwell and there is a perfectly lovely bridge, the Orwell Bridge. We are perfectly capable of choosing first-class designs, but it needs to be at the centre. Sharpening up the obligation to put design at the heart of the planning system and planning criteria, which the amendment moved by the noble Baroness, Lady Whitaker, would achieve, seems to me a very valuable thing to do. I support her amendment and I hope that she will continue to bang away at this issue. She has made great progress in other quarters and she needs to do it in this one as well.
The Earl of Clancarty (CB)
My Lords, I support Amendment 87 in the name of the noble Baroness, Lady Whitaker. As she said, good design is not just desirable but necessary.
The noble Baroness talked about beauty and despoliation of the environment. They are aesthetic concerns which are aspects of wider cultural concerns, themselves a significant and necessary component of good design. I would therefore go further in paragraph 5.22 of the draft licence which the noble Baroness quoted, because I think that the absence of the word “cultural” is an omission. The relevant wording might then state that “the development of the network takes account of geographical, environmental, cultural and socio-economic context”. However, I acknowledge the work that the noble Baroness and others have put in to get as far as they have with the wording as it stands.
This is not about function, operation and maintenance versus culture or design. The precise function or functions of our highways, road networks and the built environment are themselves cultural issues. For instance, if we take into consideration initiatives very different from the norm in this country such as shared space schemes, which are intended to encourage more co-operative rather than competitive spaces, it becomes more objectively clear how form and function reflect each other in a very particular cultural sense. Good design needs to be thought of as central to planning and not as an add-on, not least because there needs to be a wider discussion about what good design is and means in relation to the precise nature of the changes which we have made and continue to make to our environment.
Lord McKenzie of Luton (Lab)
My Lords, I am very happy to support my noble friend Lady Whitaker’s amendment and to support those other noble Lords who have spoken in favour of it. Like the noble Lord, Lord Jenkin, I am a great admirer of the way in which my noble friend Lady Whitaker has persistently championed the cause of good design and always the enlightened approach to planning.
As I understand it, the change in wording that is proposed is quite modest, but its impact could be quite profound. The 2008 Act, rather than stating that,
“the Secretary of State must … have regard to the desirability of … achieving good design”,
would state that “the Secretary of State must have regard to achieving good design”. The former, as my noble friend said, suggests that good design is somehow optional. The amendment would make sure that it was not. I hope that the Government are able to accept this small but important amendment.
Lord Mawson (CB)
My Lords, I, too, support the amendment. When I arrived in the East End of London 30 years ago this year, I was very conscious of the poor quality of design of large infrastructure. As you spent time in one of the most challenging housing estates, you saw the effect of some of that on ordinary people’s lives. At the Bromley by Bow Centre, we began to challenge that logic of poor-quality design. When we built the first integrated health centre in Britain, we did so from hand-made bricks—like those used at that time at Glyndebourne opera house. There followed a beautiful cloister facing a park and bringing together health, education and enterprise in what is now a rather beautiful environment, in the middle of a housing estate, that has affected many things around it.
I have noticed over the years how people are the environments that we live, work and play in. If you create certain sorts of environment, you get certain sorts of human behaviour. In our park on the housing estate, we do not have any cameras; local people have taken a lot of ownership of it. We have probably one of the few wooden playgrounds that are not burnt every night. If you put numbers around all that, you see that the value of it to people and the Exchequer is considerable. We are following similar principles in the Olympic Park—where I am a director and sit on the planning committee—and trying to ensure that we do not repeat the tacky stuff that has gone on before but build a very beautiful environment that begins to have a major catalytic effect on the quality of design that is starting to happen in the lower Lea Valley. It is interesting to watch how local people and others, and children running through the beautiful fountains, respond to all that. If one looks at the quality of what is being built and the lack of graffiti and other things, one gets a sense of how these things affect human life and their financial implications.
Yes, I suspect that it is difficult to measure in numbers terms; it is difficult to know which box you tick; but my 30 years of experience suggests that quality of design has a massive impact. I suggest that we ignore it at our peril.
Lord Ahmad of Wimbledon
My Lords, I, too, acknowledge the work that the noble Baroness has done in this respect. I agree with what she said about good design being necessary. While she acknowledged the steps that the Government have taken in this regard—for which I thank her—she cited Oliver Twist and said that she might be perceived as being churlish in asking for more. I would never accuse the noble Baroness of being churlish. I recall that the response to Oliver Twist asking for more was, “Do you want more?”. That will certainly not be my response at this juncture, but I wish to set out the Government’s position. I also thank other noble Lords, including my noble friend Lord Jenkin, for their contributions.
I should stress from the outset that the Government are committed to tackling issues such as climate change and the mitigation of, and adaptation to, the impacts of such change, as well as good design for new developments. Where I suspect we will differ is on the extent to which this amendment would bring any discernible change if an infrastructure project was brought forward for consent under the Planning Act.
Part 2 of the Planning Act sets out the legislative requirements where a Secretary of State brings forward a national policy statement. National policy statements form the prime basis for deciding whether a project should be granted development consent. Given this very important role, such statements, as noble Lords will know, are scrutinised by Parliament and subject to public consultation before being finalised. This process of scrutiny provides the most appropriate means of ensuring that matters such as design and climate change are appropriately covered in a national policy statement.
All national policy statements that have been prepared to date have taken into account the issues set out in Section 10 of the Planning Act. Parliament has been given the opportunity to help shape these before they were finalised. That process of scrutiny will continue when new policy statements come forward and existing ones are reviewed. The final version of the policy statement on national networks will be designated soon and the next policy frameworks to be produced will be after the Davies commission has reported in 2015. I therefore suggest to the noble Baroness that the best place in which to seek the changes and improvements that she proposes is in the wording of national policy statements when they are subject to parliamentary scrutiny before they are designated. With those assurances and the clarity that I have provided, I trust that the noble Baroness will be minded to withdraw her amendment.
Baroness Whitaker
My Lords, I am extremely grateful to all noble Lords who have supported this amendment and indeed adding the concept of culture, which was implicit in our amendment but ought to have been explicit. I am grateful for the kind words of the noble Lord, Lord Jenkin, and his encouragement. I am half reassured by the words of the Minister. I can see that the close-woven tapestry of the structure that he has outlined could indeed offer opportunities to push the importance of design. I think that that is not as good as having it on the face of the Bill, but let us suspend judgment until we see the next version of the national networks statement. In the mean time, I beg leave to withdraw the amendment.
Lord Ahmad of Wimbledon
“(A1) The Housing and Regeneration Act 2008 is amended in accordance with subsections (1) and (2).”
Lord Ahmad of Wimbledon
I beg to move Amendment 88 and shall speak also to Amendments 89 to 95 and Amendment 121. Maximising the release of surplus public sector land is critical to supporting the Government’s ambitions to reduce the deficit, increase the number of houses being built and help to drive economic growth. The new public sector land programme from 2015-16 will mean transferring a significant amount of surplus and developable land from government bodies to the Homes and Communities Agency for onward disposal.
Clause 21 is intended to speed up the transfer of land from arm’s-length bodies to the Homes and Communities Agency by allowing sites to transfer directly using a single transfer scheme, rather than transferring first to the parent department in a separate scheme. However, the Homes and Communities Agency no longer has a remit to operate in London without mayoral delegation. The Greater London Authority therefore has a pivotal role in delivering housing and economic growth in the capital, and we have been working with it to consider how its expertise can best be utilised in the disposal of surplus government land. The GLA has been clear that it wishes to carry out the Homes and Communities Agency’s former functions in London with regard to the disposal of developable land. The Greater London Authority Act 1999 allows for the transfer of central government land to the authority but, as with the Homes and Communities Agency, land from arm’s-length bodies can transfer only via the parent department and not directly in a single scheme.
In Committee, my noble friend Lady Kramer agreed to consider an opposition amendment to enable direct transfers of land from arm’s-length bodies to the GLA. Following our constructive dialogue with the GLA over the past few months, we are now satisfied that there is strong potential for the GLA to have a role in disposing of surplus government land in London. This amendment, which will allow land to be transferred directly to the GLA and its subsidiaries, will help to reduce bureaucracy in the longer term. We are therefore tabling a government amendment to effect this change. Our amendment adds three new sections to the Greater London Authority Act 1999 to allow schemes to be made transferring land to the GLA and for regulations to be made naming the bodies which will be able to transfer land and setting out the tax position for transfers.
We introduced Clause 22 to ensure that appropriate development may happen quickly by bringing the powers of purchasers of land from the Homes and Communities Agency, the Greater London Authority and mayoral development corporations into line with those presently enjoyed by the purchasers of land from local authorities and other public bodies involved in regeneration and development. We have tabled this amendment to ensure that the powers will be fully available in relation to the GLA.
The bulk of GLA land is held and managed by GLA Land and Property Limited, a wholly owned subsidiary of the authority. We need to make sure that the amended powers will apply to land which the subsidiary holds or disposes of in the same way as they will apply to land which the HCA, GLA or an MDC hold or dispose of. These amendments clarify that the powers will be available in relation to land which the subsidiary owns or disposes of, provided that it has been carrying out housing and regeneration functions for the GLA in relation to that land.
Amendment 121 refers to new subsection (12) of Clause 22. Clause 40 is concerned with the territorial extent of provisions. Although Clause 22 is effective in England only, there is only one legal system covering England and Wales, and that system will operate in relation to Clause 22. The legal systems in Scotland and Northern Ireland will not operate in relation to the clause. I beg to move.
Lord Tope (LD)
My Lords, Amendment 93A is in my name. In speaking to his amendments, the Minister referred to an opposition amendment in Committee. The amendment was in my name and, while I understand that the Minister may occasionally feel that I am in opposition, I mostly support the Government in this House and therefore perhaps we could correct that. It was not an opposition amendment; it was an amendment on behalf of the Greater London Authority, moved by a Liberal Democrat Member on the government side of the House.
Lord Ahmad of Wimbledon
My Lords, for the record, I fully acknowledge my noble friend’s contribution in that regard.
Lord Tope
My Lords, I am grateful and my pride is restored. When I received the open-door response from my noble friend Lady Kramer on that occasion, I think I predicted that the two-word amendment which I moved in Committee would come back at this stage of the Bill as a two-page amendment. I did not anticipate that it would run to eight or nine amendments over five pages, but I am grateful to the Minister and his officials for their work to try to correct what we all recognise was an anomaly.
The Greater London Authority is happy with the amendments to Clause 21 and with Clause 21 when amended, but there are still concerns about Clause 22. The Government’s proposals are welcome, but they do not go quite as far as they need to in order to correct what the Government intend. That is because the protection afforded by the new clause does not completely cover historic disposals. We are trying to correct an omission from the Housing and Regeneration Act 2008. It is the view of the GLA that to be legally robust and clear to prevent unnecessary blocking of planned strategically important developments, the legal operation of the changes made by Clause 22 needs to be retrospective and to cover historic disposals. My Amendment 93A to Clause 22(11) would ensure that the changes in the clause cover relevant developments in London from the time that Section 11 of and Schedule 3 to the Housing and Regeneration Act 2008 came into force, which was 1 December 2008. That would mean that all relevant land left unprotected by the defective provisions of that Schedule 3 would be covered by the corrections made by this amended Clause 22. It would also cover the appropriate corresponding provision that applied to the London Development Agency prior to its abolition.
That is entirely consistent with the Government’s intentions. I hope that the Minister will be in a position today to accept Amendment 93A. If he is not in a position to do so today, I hope that he will give a commitment to look at this point, which the Greater London Authority rightly feels to be important, and to correct it at a later stage, preferably at Third Reading in this House so that I can tie up the loose ends, but if that is too quick, then at a further stage of the Bill.
Lord McKenzie of Luton
My Lords, we are grateful for the explanation provided by the Minister today and in the letter of 30 October. It follows a commitment made by the Minister when we discussed an amendment from the noble Lord, Lord Tope, which called for the GLA to perform the role of disposal agency in London. This parallels the role designated for the HCA outside London, whereby land from arm’s-length bodies can be transferred directly rather than via the parent department. We support these amendments.
We also support the amendment just spoken to by the noble Lord, Lord Tope, about the cut-off point and the date from which these provisions apply. That anomaly was pointed out in Committee. I hope that the Minister is able to give a positive response.
In Committee, we also probed the prospect of one or more local authorities adopting a similar role, particularly given the prospect of releasing substantial sums of publicly owned land to support housing development. This appeared to find some approval from the Minister, who undertook to explore further. Given that we do not have an amendment from the Government on this point, is this issue still under active consideration?
Lord Ahmad of Wimbledon
My Lords, first, I thank my noble friend for his amendment and I thank the noble Lord, Lord McKenzie. After the various bilaterals that we have had in advance of Report, I also put on record my thanks for their attendance and for the discussions that we have had across a variety of issues. We may not agree in some cases but it has always been done in a spirit of having constructive ways of moving forward on various elements of the Bill.
I turn to the two non-government amendments. Amendment 92A would make provision in Clause 21 to allow land to be transferred directly from the ALBs of central government to the HCA, reducing bureaucracy and accelerating development. Amendment 93A is in the name of my noble friend Lord Tope. I do not believe that it is necessary to amend Clause 22(11) to allow powers to override easements to transfer to sites that have already been disposed of. Our clause aims to accelerate development; the proposed amendment from my noble friend would not help to facilitate this any further. Developers have bought land and entered into agreements clearly aware of what powers were available to them. The conditions that the land was sold with and the price paid will have reflected this. We are satisfied that where the land has been leased but the GLA, HCA and MDCs retain the freehold, the existing powers to override easements already apply and will continue to do so. That is sufficient to support development on most of the sites disposed of. Changing the law now to apply to sites that have previously been sold would be an unusual approach and may have unintended consequences.
I accept that in a small number of cases which I am aware of the freehold may have been disposed of, meaning that the power does not apply. However, there are alternative mechanisms available to address this such as taking out insurance, negotiating with easement owners and making references to the Upper Tribunal Lands Chamber. Given the mechanism already available and the small number of sites that would be affected, we do not believe that this is sufficient to warrant a legislative amendment which may well cause unintended consequences elsewhere.
The noble Lord, Lord McKenzie, talked about local authorities. In our meetings, we said that the situation with local authorities was somewhat different. Beyond the discussions that we have had, the Government are certainly not in a position to provide any further detail or to accept any amendments in that regard.
Lord Ahmad of Wimbledon
“(8) This section and section 53B do not have effect in relation to property, rights or liabilities comprising the whole or any part of the Public Forest Estate.
(9) The Public Forest Estate comprises all the land, property, rights and liabilities acquired by the Minister under section 39 of the Forestry Act 1967, including all such land not needed, or not used, for the purpose of afforestation or any purpose connected with forestry.”
Baroness Royall of Blaisdon (Lab)
My Lords, in moving Amendment 90A, I must thank the right reverend prelate the Bishop of St Albans for his support. He is following in the footsteps of Bishop James, the former Bishop of Liverpool, who did so much to safeguard the future of our woods and forests.
We now turn to concerns that powers within Clause 21 would allow the transfer of land from public bodies to the Homes and Communities Agency and could therefore allow the Government to transfer parts of the Public Forest Estate to the HCA for development. The Public Forest Estate is a precious asset providing us with beauty, space for recreation, space in which to walk and breathe, an environment for flora, fauna and wildlife to flourish and a means of preventing floods and slowing the effects of climate change. For those of us whose home is in a forest, they are part of our culture and heritage. They sustain livelihoods and support our local economy; they are the lifeblood of our communities. That is why I am passionate about protecting the Public Forest Estate.
The Lord Bishop of St Albans
My Lords, I am glad to speak in support of this amendment proposed by the noble Baroness, Lady Royall. I am also glad to pay tribute to her persistence on this matter which I, too, believe is crucial. When the discussions about the future of the forestry estate have come before the public they have made their views absolutely clear that trees, woods and forests are a vital part of the make-up of the English countryside. Although they now cover only 9% of the land area of England, trees have an iconic place in our relationship with the landscape. Whether living in towns, cities, villages or hamlets, many people express affection and deep regard for the well-being of trees in the locality. Protecting the Public Forest Estate will bring many benefits to the public and the environment. I will mention three of them briefly.
First, exempting the Public Forest Estate from development and making that clear in the Bill will help secure some of the timber needs of the UK. We need our woods. They are practical things. Secondly, it would help to ensure continual public access and amenity uses. Forests and woodlands are not just places of access and recreation to be consumed but are places of relaxation and renewal, offering an opportunity to reconnect to the natural world in all its diversity. For Christians, this is part of God’s gracious provision for the well-being of humans and wildlife and should be respected as such. For many individuals, whether Christians or not, trees, woodlands and forests play a deep part in their spirituality, offering a sense of peace or well-being. They form a background to the tapestry of everyday life, from creating meeting points or landmarks for navigation to providing shade and improving the view. Whether in a cityscape or landscape, they contribute significantly to the improvement of life. Thirdly, this protection would also contribute to climate change. Trees are vital for the future of the planet in carbon sequestration—one of the things we are going to come to in Amendment 108.
I believe this is not just a peripheral thing. It is fundamental to the thriving of our communities and the environment in which we live. I shall press the Minister further to honour the commitment made following the report from the Independent Panel on Forestry. Will the Minister agree to consult with interested parties prior to Third Reading and consider including an amendment to bring forward legislation to establish that new public body to hold the Public Forest Estate to account?
Lord Clark of Windermere (Lab)
My Lords, I apologise to the House that I have not participated in the debate on this Bill so far but I have been indisposed. I am now back healthy and prepared to enter the fray once again. I support this amendment from the noble Baroness and the right reverend Prelate because I think it is critical. It also brings back memories. Although I understand that the Minister is very committed to this Bill and to forestry, the coalition does not have the best of records in this respect. I remember this issue being debated during the Public Bodies Bill and the concern that was expressed. I remember the campaigns when thousands of people expressed their views. I do not know what has happened to the signatures that 38 Degrees collected. There is deep concern about forests for the very correct reasons the right reverend Prelate mentioned. I want to pay tribute—like virtually everyone in the House—to James, the former Bishop of Liverpool. He did a tremendous job of re-engaging politicians with the people out there and their love of forests.
I understand that there is a need for the transfer of land, especially for big infrastructure and housing. It would be foolish to deny that. I support this amendment because having read the Bill I am convinced of the intention of the Ministers and have no doubt about their sincerity, but I am not convinced completely that this Bill backs up their intentions. They may not be prepared to transfer land from the Forestry Commission to the HCA, but the Bill, I believe, gives other Ministers, future Ministers and future Governments the powers so to do. It may be a point of dispute or of interpretation. If it is, the amendment from my noble friend Lady Royall makes that quite clear.
As I understand it, one of the assurances that Ministers are giving us is that the forest land is not surplus land, but there is some difficulty with the issue of surplus. When I was chair of the Forestry Commission, I sold quite an amount of forest land, but I did so because I was reshaping the forest estate. In my mind, some of the forest in deep rural areas could be disposed of quite happily to the private sector, which would manage it just as well. On the other hand, we could use the money received to create new forests near the centre of population for reasons such as health, recreation and conservation, as well as for timber. I was very proud that in the time I was there we planted more than 1 million trees in Wigan, more than 1 million trees in St Helens and more than 2 million tress in Warrington because we were reshaping the estate. The argument about surplus is very difficult to define. If we rely on that to safeguard our forests, we could run into difficulties. For that reason, I am very keen to support the amendment proposed by my noble friend this evening.
Lord Phillips of Sudbury (LD)
My Lords, I, too, support the amendment moved so clearly and effectively by the noble Baroness, Lady Royall of Blaisdon, and supported so strongly by the right reverend Prelate. I declare an interest as a patron of a charity in Coggeshall, Essex which runs a large forestry estate. Indeed, I am lucky enough to have a piece of ancient woodland. What has been said about public concern regarding this aspect of this Bill cannot be overestimated. I dare say many Members of the House have had a huge amount of correspondence from people really anxious to get the public forestry estate and, I believe, forestry charities excluded from the Bill as was successfully done during the passage of the Public Bodies Act 2011. They want to do that not because they view the Homes and Communities Agency as a malignant body but because they know only too well that large bureaucracies can lose touch with public feeling and opinion. Indeed there is a march going on at this very moment down in the West Country in the Forest of Dean about this Bill and the potential people think it brings for despoliation. People are deeply anxious in our wonderful country, which seems little by little to be being concreted over, developed and exploited, that we preserve and give special status to what forestry and woodland is left. I think that is at the root of this.
As a talisman of so many people who have written in, I will read a sentence from a letter written by Brian and Michelle Jones, who run an animal charity in the Forest of Dean. They say a good deal, including:
“For your average Brit, the freedom to roam on the beaches, by the lakes and, especially, in the forests, is sacred. It is what being British is all about”.
That would be a pretty universal sentiment.
Lord Judd (Lab)
My Lords, the right reverend Prelate referred to the importance attached to this issue and the strength of feeling within the church. That is significant. What was so impressive the last time this issue was being discussed, while the church played a critical part in the deliberations, was not only the size of the response to the Government’s proposal but the spontaneity and strength across the community as a whole. This was something about which people cared passionately in our society. It is hardly surprising that, in a country that is so increasingly pressurised in material terms, people take very seriously the balance that is needed for creativity, thought, reflection, and spiritual and physical regeneration.
My point is quite simple. My noble friend has said that the Minister has given assurances and that she respects him. I may also respect the Minister—and I do. However, I never understand this point. The Minister and his Government will not be there for ever. If the assurances on something which is crucial, and on which the Minister feels able to give assurances, mount, why on earth should we not put it in the Bill so that it is there as the clear expression of Parliament for future Governments as well as the present one?
Lord Jenkin of Roding
My Lords, I will be brief because I sense that the House wants to reach a decision. In my former constituency of Wanstead and Woodford was quite a large part of Epping Forest. I entirely share the views that have been expressed around the House, by the right reverend Prelate and others, about the extent to which this forms an enormously valuable part of people’s lives and, indeed, is part of their being.
When Winston Churchill fell ill, went into hospital and lost his job—of course, he had a job and therefore had to give up his seat—he ended that chapter of his biography:
“And so I found myself without an office, without a seat … and without an appendix. I came to rest amid the cool glades of Epping Forest”.
Of course, he became the Member for Epping; I inherited part of that constituency.
I listened to the noble Baroness with great interest because I, too, had read the Statement made by my noble friend and published in Hansard on 4 November, and I took comfort from it. However, I have to say to my noble friend that this is what worries me: a Statement, however formally issued, is not the same as an Act of Parliament. The example quoted by the noble Baroness about the particular part of the Forest of Dean, which I had not heard before, has raised doubts in my mind. Whether this or another amendment is necessary to place the intention of the Statement firmly on the statute book, it seems to me that this amendment has a good deal to say for it. I shall listen to my noble friend’s response to this debate with considerable interest.
Lord Berkeley of Knighton (CB)
My Lords, I missed the opening of this debate because I was upstairs at a meeting of the APPG on arts and health, at which a series of experts in mental health said how important people’s surroundings—whether they were in the East End or the countryside—were to their good health and the well oiled working of society. As someone who has the privilege of living a lot of the time in the country and working with foresters, I feel that the transcending quality that people feel the countryside, and forestry in particular, affords them is not something with which we should play fast and loose.
The noble Lord, Lord Clark of Windermere, made some very fair points in recognising what the Government probably want to do here, but I do not think that this is an area where we can take any risks. From what many Members of the House have said, it seems that there is a huge risk attached to the Bill as presently framed, and therefore I would like to support the amendment.
Lord Greaves (LD)
My Lords, I apologise for not having spoken previously on the Bill; at the time, I was out of action as far as the House of Lords is concerned for various reasons. I should remind the House of my registered interests in the areas of local government and countryside recreation.
I was involved in what became the Public Bodies Act, to which I will refer in a minute because there is something about it that is important here. I was very pleased that I tabled the amendments that removed on the forestry commissioners’ clauses from the then Bill. Since then, the Independent Panel on Forestry—to which the noble Baroness, Lady Royall, referred—has made its recommendations and the Government have accepted the recommendation for a new body to look after the forestry estate. That was taken forward within Defra. In particular, my honourable friend David Heath, when he was a Minister there, played an important role in ensuring that happened. It has not been taken forward in legislation in this Parliament, and I think people can come to their own conclusions about why that is the case and the priorities of one of the parties—the Conservative Party—within the coalition. All I can say is that the Liberal Democrat manifesto at the coming election will include a commitment to such a body. I am not saying that is a 100% guarantee that it will happen but if other parties did the same, it would be very helpful.
At Second Reading my noble friend Lady Kramer said that these powers,
“will not be used by bodies such as the Forestry Commission”.—[Official Report, 18/06/2014; col. 840.]
The question is whether it is “will” or “can”? If it is “can”, someone else perhaps could in the future, and people out there certainly think that is a problem. I want to refer to the forestry commissioners. In the then Public Bodies Bill, the forestry commissioners were treated very differently from all the other public bodies mentioned. Those who remember with pleasure debating that Bill three or four years ago will remember that there were pages and pages of schedules that were lists of organisations. The forestry commissioners were not there. They had to have their three separate clauses and be treated differently. If you look at the Forestry Commission website, it says:
“The Forestry Commission is both a Government Department and a statutory body with a board of Commissioners”.
So that sounds as though it is the same. It goes on:
“The board consists of a Chair and up to 10 other Forestry Commissioners”—
I think there are about half a dozen—
“who are appointed by the Queen on the recommendation of Ministers”.
It was very clear that the commissioners were there by some kind of royal appointment or charter, and were different from other public bodies. My question, which I ask the Minister in all honesty and seriousness, is: does this Bill apply to the forestry commissioners or not? When we dealt with the Public Bodies Bill, we were told that they were different and they had to have these separate clauses, so does this apply to them or not? If the Government can say that it does not apply to them, we can all go home.
Finally, why have the Government got themselves into this silly political mess? We, the Government and the Opposition are all saying that we do not want the land that comes under the forestry commissioners—the forestry estate—to be dealt with in this way as a means of transferring it to the Homes and Communities Agency. Everyone is saying that they do not want to do it, so why have the Government got into this? All Governments get into this silly political mess where they write something in legislation and then cannot make simple compromises in the face of opposition when it comes. I think it is institutional stupidity on the part of this Government. It affects all Governments in this way, in that they cannot back down and say they have got something wrong or that they have to clarify it. We all actually agree, so we should put something in the legislation that says what we all agree on and then we can all go home happy.
Baroness Parminter (LD)
My Lords, I thank the noble Baroness for tabling the amendment and for the opportunity to discuss this issue. There is a clear consensus around the House in opposition to the sale of our public forestry estate. I say that as someone who lives in the most wooded county in our country, which I suspect is somewhat surprising to some noble Lords—the county of Surrey.
It is a great disappointment that the promised draft legislation for a new body for the public forestry estate has not yet been provided. That is contributing to the genuine concern, to which my noble friend Lord Phillips referred, that is being articulated by the hundreds of constituents around the country who feel unsure about the Government’s intentions. In the early days of the coalition Government, when there was no Liberal Democrat Minister in Defra, it was a great shame that the possibility of selling off the public forestry estate was proposed. It was a great credit to the campaign in which many noble Lords participated that that was overturned. I should be grateful if the Minister could state what the Government’s position is now because in 2013 we had the Government’s forestry and woodlands policy statement.
In Committee, the Minister clearly set out the settled position of the coalition Government that the forestry estate is not for sale and that we will not transfer the public forestry estate to the HCA. That is the clear intention of this Government. However, future Governments could bring in new pieces of legislation and no one can speak for future Governments. Like my noble friend Lord Greaves, I know that so far the Liberal Democrat party is the only party that has committed to make developments in this area in the future.
In conclusion, I am not entirely persuaded of the need for the amendment. I can see why a belt and braces argument works in one sense, but my worry is that if we accept the amendment there will be a perception among the general public out there that this House does not believe the Government’s intentions for the public forestry estate. Although I am very happy not to agree with my Government and not to accept their position on many, many issues, I feel that on this issue they are acting in good faith. I would therefore be unhappy if the House sent out that message to the general public. Like my noble friend Lord Jenkin, I will listen very carefully to the remarks of my noble friend the Minister and hope that he can reassure us about the intentions of the Government and reassure us that this amendment is not necessary.
Lord Ahmad of Wimbledon
My Lords, first, I thank all noble Lords who have participated in this important debate and thank the noble Baroness, Lady Royall, for tabling the amendment.
The public sector land programme is about bringing disused land currently owned by central government back into productive economic use, supporting homes and jobs, an objective to which I am sure all noble Lords adhere. Where land is no longer needed by government, it will be transferred to the Homes and Communities Agency, which will prepare the land for release to the market and work with local planning authorities to ensure that the land is used in a way that best benefits the community—for example, by supporting local housing needs. We have had many debates, and I am sure that we will continue to have them, about the importance of housing and housebuilding to boost economic growth.
Better reuse of disused land will in turn support our desire—I make it clear that it is the Government’s desire—to protect the green belt and amenity land, such as forests, woodlands and open spaces. Disused government land can and does already transfer to the HCA, but the process is often more bureaucratic than is necessary. This clause is simply about increasing the rate of delivery and efficiency by streamlining internal government procedures.
Let me be clear. The intention behind Clause 21 is not to sell off the nation’s forests. You know what—I have been to a forest or two and I enjoyed a woodland or two as a child, and I want my children to continue to enjoy those very things, as I did. I have made this clear repeatedly, in my meetings with noble Lords—with the noble Baroness in particular—and most recently in a Written Ministerial Statement, published yesterday. I assure all noble Lords that the Government have no plans to dispose of the public forest estate and the powers contained in Clause 21 of the Infrastructure Bill do not present a threat to the future of the estate in public hands. The estate is not surplus, and it is not owned by an arm’s-length body. The Homes and Communities Agency’s objectives are to work with the Government and other public bodies to unlock and accelerate the release of surplus public land for the creation of new homes and employment opportunities, in line with designated government policy. The aim is to make best use of previously used and brownfield land, protecting green belt and amenity land that create and support great places to live.
Lord Greaves
I have been listening very carefully to what the Minister said, but did he say that the estate was not owned by an arm’s-length body? I wonder whether, at some stage, he will answer the question that I asked. Does Clause 21 apply to the forestry commissioners and the forestry estate, or does it not?
Lord Ahmad of Wimbledon
Several questions were raised, and I know that the noble Lord, Lord Greaves, although he has tabled some other amendments, said that we could all go home once I had answered that question. Perhaps that means that he will not move his other amendments. However, he has asked the question again, and let me put the matter to rest. The Bill applies to public bodies. He asked whether it applied to forestry commissioners. The forestry commissioners do not own any land and the PFE is owned by the Government. I trust that that point is clear.
Lord Greaves
This is extremely important. The public forest estate is owned by the Government, but the question I am asking is whether Clause 21 applies to the public forest estate.
Lord Ahmad of Wimbledon
I would ask my noble friend to allow me to finish. Once I have concluded my remarks, his question and other questions may have been answered.
Much of the public forest estate is already protected. Many of the sites are, for example, in national parks and the estate contains almost 200 sites of special scientific interest as well as more than 800 scheduled ancient monuments. However, the Government recognise the strength of people’s concerns about the future security of the public forest estate. Indeed, I know that my honourable friend Mark Harper and the noble Baroness, Lady Royall, hosted an event recently about the Forest of Dean. That is why we have made the following commitments, which I shall reiterate. The Government will not transfer any part of the public forest estate to the Homes and Communities Agency. We are amending our guidance to departments on the transfer of public land to make it clear that the public forest estate is exempted from transfer to the Homes and Communities Agency. We will not include the new public forest estate management body in any future regulations specifying which bodies can transfer land to the Homes and Communities Agency.
I hope that that clear public commitment by the Government provides a degree of certainty and reassurance to noble Lords. Having made these commitments, I must also be clear that the intention of Clause 21 of the Infrastructure Bill was simply to allow the direct transfer of land from central government arm’s-length bodies to the HCA. The noble Baroness asked about the list of arm’s-length bodies. I would be happy to share that with her and the rest of your Lordships’ House. The public forest estate is not owned by any arm’s-length body and, as such, is not covered by the aims or purpose of this policy.
Various questions were asked and my noble friend Lord Phillips raised some specific questions. If I may, in the interests of brevity and to move issues on, I shall write to him specifically on the issues that he raised.
I have listened very carefully to what has been said in the Chamber today and listened attentively to the sentiments expressed by your Lordships’ House. It has become increasingly clear to me during the course of the debate that there is still strong feeling in the House that this is an important issue on which the Government need to reflect further. Therefore, I shall seek to bring an amendment back to the House at Third Reading that will seek to exempt the public forest estate from transfer to the Homes and Communities Agency. I hope that, with that assurance, and the faith that the noble Baroness has in me, for which I am grateful, she will be minded to withdraw her amendment.
Lord Phillips of Sudbury
I thank the Minister for that very conciliatory answer. Will he be as good as to confirm that if, on reflection, he comes to the view that it is not clear that charitable woodland and forests are excluded from the Bill, that too will be covered by the Third Reading amendment?
Lord Ahmad of Wimbledon
My Lords, I feel that I have charity in abundance myself, personally. I gave an assurance to my noble friend about a detailed answer and perhaps we can take that up in the letter. If he has any concerns after that letter, I shall be happy to speak to him.
Baroness Royall of Blaisdon
My Lords, I am extremely grateful to the Minister for listening. As he knows, words are simply not enough. I hold him in good faith, and I know what he wants to do. I look forward to him coming back to put an amendment in the Bill that ensures the protection of the public forests. I am extremely grateful to the Minister.
Lord Ahmad of Wimbledon
Lord Ahmad of Wimbledon
“(3) The Greater London Authority Act 1999 is amended in accordance with subsections (4) and (5).
(4) After section 333D insert—
“333DA Transfer schemes
(1) The Secretary of State may at any time make one or more schemes for the transfer of designated property, rights or liabilities of a specified public body to—
(a) the Authority, or(b) a company or body through which the Authority exercises functions in relation to housing or regeneration.(2) In subsection (1) “specified public body” means a public body which is for the time being specified, or of a description specified, by regulations made by the Secretary of State.
(3) On the date specified by a scheme as the date on which the scheme is to have effect, the designated property, rights or liabilities are transferred and vest in accordance with the scheme.
(4) In this section—
“designated”, in relation to a scheme, means specified in or determined in accordance with the scheme;
“public body” means a person or body with functions of a public nature.
(5) This section and sections 333DB and 333DC bind the Crown, but do not have effect in relation to property, rights or liabilities belonging to—
(a) Her Majesty in right of the Crown,(b) Her Majesty in right of Her private estates,(c) Her Majesty in right of the Duchy of Lancaster, or (d) the Duchy of Cornwall.(6) The reference in subsection (5) to Her Majesty’s private estates is to be construed in accordance with section 1 of the Crown Private Estates Act 1862.
333DB Further provisions about transfer schemes
(1) A transfer scheme may—
(a) create for the transferor interests in, or rights over, property transferred by virtue of the scheme,(b) create for a transferee interests in, or rights over, property retained by the transferor or transferred to another transferee,(c) create rights or liabilities between the transferor and a transferee or between transferees.(2) A transfer scheme may provide for the transfer of property, rights or liabilities that would not otherwise be capable of being transferred or assigned.
(3) In particular, a transfer scheme may provide for the transfer to take effect regardless of a contravention, liability or interference with an interest or right that would otherwise exist by reason of a provision having effect in relation to the terms on which the transferor is entitled to the property or right, or subject to the liability, in question.
(4) It does not matter whether the provision referred to in subsection (3) has effect under an enactment or an agreement or in any other way.
(5) A certificate by the Secretary of State that anything specified in the certificate has vested in any person by virtue of a transfer scheme is conclusive evidence for all purposes of that fact.
(6) A transfer scheme may contain provision for the payment of compensation by the Secretary of State to any person whose interests are adversely affected by it.
(7) A transfer by virtue of a transfer scheme does not affect the validity of anything done by or in relation to the transferor before the transfer takes effect.
(8) Anything which—
(a) is done by the transferor for the purposes of, or otherwise in connection with, anything transferred by virtue of a transfer scheme, and(b) is in effect immediately before the transfer date,is to be treated as done by the transferee.(9) There may be continued by or in relation to the transferee anything (including legal proceedings)—
(a) which relates to anything transferred by virtue of a transfer scheme, and(b) which is in the process of being done by or in relation to the transferor immediately before the transfer date.(10) Subsection (11) applies to any document—
(a) which relates to anything transferred by virtue of a transfer scheme, and(b) which is in effect immediately before the transfer date.(11) Any references in the document to the transferor are to be read as references to the transferee.
(12) A transfer scheme may include supplementary, incidental, transitional and consequential provision.
(13) In this section—
“enactment” includes subordinate legislation within the meaning of the Interpretation Act 1978;
“transfer scheme” means a transfer scheme under section 333DA;
“transfer date” means a date specified by a transfer scheme as the date on which the scheme is to have effect.
333DC Tax consequences of transfers under section 333DA
(1) The Treasury may by regulations make provision for varying the way in which a relevant tax has effect from time to time in relation to—
(a) any property, rights or liabilities transferred in accordance with a transfer scheme, or(b) anything done for the purposes of, or in relation to, or in consequence of, the transfer of any property, rights or liabilities in accordance with such a transfer scheme. (2) The provision that may be made under subsection (1)(a) includes, in particular, provision for—
(a) a tax provision not to apply, or to apply with modifications, in relation to any property, rights or liabilities transferred;(b) any property, rights or liabilities transferred to be treated in a specified way for the purposes of a tax provision;(c) the Secretary of State to be required or permitted, with the consent of the Treasury, to determine, or to specify the method for determining, anything which needs to be determined for the purposes of any tax provision so far as relating to any property, rights or liabilities transferred.(3) The provision that may be made under subsection (1)(b) includes, in particular, provision for—
(a) a tax provision not to apply, or to apply with modifications, in relation to anything done for the purposes of, or in relation to, or in consequence of, the transfer;(b) anything done for the purposes of, or in relation to, or in consequence of, the transfer to have or not have a specified consequence or be treated in a specified way;(c) the Secretary of State to be required or permitted, with the consent of the Treasury, to determine, or to specify the method for determining, anything which needs to be determined for the purposes of any tax provision so far as relating to anything done for the purposes of, or in relation to, or in consequence of, the transfer.(4) In this section—
“enactment” includes subordinate legislation within the meaning of the Interpretation Act 1978;
“relevant tax” means income tax, corporation tax, capital gains tax, stamp duty, stamp duty land tax or stamp duty reserve tax;
“tax provision” means a provision of an enactment about a relevant tax;
“transfer scheme” means a transfer scheme under section 333DA.
(5) References in this section to the transfer of property, rights or liabilities in accordance with a transfer scheme include references to—
(a) the creation of interests, rights or liabilities under the scheme, and(b) the modification of interests, rights or liabilities under the scheme, (and “transferred”, in relation to property, rights or liabilities, is to be read accordingly).”(5) In section 420 (regulations and orders)—
(a) in subsection (7) (instruments subject to annulment in pursuance of a resolution of either House of Parliament) after the entry for section 243(7) insert—“section 333DA(2);”, and
(b) after subsection (8) insert—“(8A) A statutory instrument which contains regulations under section 333DC shall be subject to annulment in pursuance of a resolution of the House of Commons.””
Lord Ahmad of Wimbledon
Lord Ahmad of Wimbledon
“(12) The reference in subsection (11) to land disposed of by the Greater London Authority does not include land disposed of to a company or body through which the Authority exercises functions in relation to housing or regeneration.”
Lord McKenzie of Luton
“(3) This section shall not come into force until the Secretary of State has laid a report before both Houses of Parliament on the effects of the transferral of responsibility for local land charges to the Land Registry, and the report shall include—
(a) an implementation plan;(b) an assessment of the impact it will have on local authorities.”
Lord McKenzie of Luton
My Lords, Amendment 95 would preclude Clause 23 coming into effect until a report had been prepared and submitted to both Houses of Parliament on the effects of the proposed transfer of responsibilities to the Land Registry. In doing so, I shall say more widely why we consider the proposals for the local land charges register to be misguided. We do not object to government Amendments 97, 98 and 99, which are yet to be moved, and we support Amendment 95B tabled by the noble Lord, Lord Greaves.
When we debated the issues of local land charges in Committee, it was very much in the shadow of a parallel proposition concerning a new delivery company for the Land Registry which was widely believed to be a step along the way to the privatisation of the service. The proposals for local land charges were seen as part of a strategy to fatten up the Land Registry to make it a much more attractive commercial proposition. However, just before our Committee deliberations, the Government announced that the Land Registry model would not be changed “at this time”. In the words of the Minister, there would be no change,
“for the rest of this Parliament”.—[Official Report, 15/7/14; col. GC 242.]
We accept this assurance, but it does not go very far; it takes us until only next May.
While our analysis of why the Government are misguided in their proposals for local land charges stands separate from this thread, we would be foolish to disregard the revival of that privatisation risk, should the coalition get its chance. We note that the departure of the current Chief Land Registrar has been announced. What can the Minister tell us about successor arrangements: does a change of leadership signal a different approach? Will the Minister share with us the terms of the job advert and whether it will be part of the role of the appointee to lead a privatised service? Is the aspiration to appoint someone with a background in the Land Registry or, like the departing chief, with privatisation experience? When is the new appointment expected to be made?
That aside, what the Minister has proposed is that, as part of acquiring wider powers, the Land Registry should take over statutory responsibility for holding and maintaining a composite local land charges register. It would be the sole registering authority for local land charges in England and Wales and the sole provider of local land charge official search results. Unofficial searches would continue as now to be provided by personal search companies. The Government’s rationale for the change includes the supposed benefits of standardisation of fees and format of results, improving processing times and our international rating for registering properties and supporting the Government’s Digital by Default agenda.
The Government have consulted on these proposals and have drawn significant opposition. This has come from the Law Society, the Chartered Institute of Legal Executives, the Local Government Association, the District Councils’ Network and the Local Land Charges Institute, as well as from private search companies from the SME sector. An important consideration is that the Government are arguing the benefits of a centralised approach, but they are actually creating further fragmentation.
Local authorities currently have responsibility in respect of two local searches— the local land charges searches and what is known as CON29. The former is divided into 12 parts and includes registering charges or encumbrances to property arising from such matters as planning conditions, Section 106 agreements, tree preservation orders, listed buildings and the like. The information on these charges is included on the register as and when the documentation which creates the charge arises. Such charges might originate in a range of council departments and it is the job of local land charges staff to update the register as soon as notified. Staff also help resolve queries where, for example, property descriptions are imprecise.
CON29 searches have been in operation for about 50 years. They are a non-statutory list of questions agreed between Government, local authorities and the Law Society. They cover a wide range of matters which may affect a potential purchaser of property, such as any pending planning applications, whether the area is about to be declared a conservation area, or if the access road is adopted. These are prospective matters which might affect somebody’s enjoyment of a property. There is no register as such but responses are provided when requests are made. Information may be held in a number of different council departments or, in the case of two-tier authorities, in different authorities.
The task of the local land charges staff is typically to peruse local information sources, including council reports, to keep abreast of developments. Local knowledge is vital and the District Councils’ Network has expressed particular concern that insufficient weight has been given to this. At present, there are 20 million entries on the local land charges register, with 65,000 changes being made each month. We also know that, for some 92% of searches, the inquiry is in respect of local land charges and CON29 searches together. The proposition is for the local Land Registry to receive updates from some 350 local authorities for incorporation on to their sole register—covering only local land charges. CON29 searches would be left as now, with local authorities. It was the intention that the Land Registry would take over both elements but, as the Local Land Charges Institute pointed out, years of trying to work out how this could be accomplished have apparently proved fruitless—unless the Minister could tell us by when these proposals could proceed. It is expected that CON29 searches will be undertaken by the Land Registry. What work is currently being undertaken to this effect?
As far as local land charges are concerned, we have no knowledge as to how often the information received from local authorities will be incorporated on to the register, the process for doing so and the format in which the information is to be supplied. What consideration has been given to data cleansing? When will there be a delivery plan for what the Government propose? What are the expected transitional arrangements in respect of local land charges? In arguing for centralisation, the Government have made much of the varying state of digitalisation of the land charges provision of local authorities. A range of different systems is apparently used by local authorities. Have all these to be standardised—presumably to a new system—before there is any transfer of the local land charges register to the Land Registry? Who is to bear the cost of this? Will it be a new burden on local authorities? Will local authorities be recompensed for investment made to date? Should they put on hold any planned new investment to digitalise their system? How is the Land Registry to cope with all this when they are in the throes of instigating complex online applications and automated processes in respect of their existing business?
The Government have also made much of the variable response times and charging arrangements of local authorities. Responding to the Government’s consultation, the Law Society stated that solicitors were broadly satisfied with the process of obtaining local land charges and other search information. They suggested that there were other issues—for example, consistent processes for discharging charges—which might be more beneficial to conveyancing arrangements.
As for lawyers’ irritation with turnaround times, they point out that the research related to the entire conveyancing process, not just the local land charge information. They say that variation in turnaround times will obviously be affected by the number and the nature of queries in each case. Of course, there will be no overall impact on turnaround times in circumstances where the later piece of the jigsaw is the CON29 process. A recent survey indicated that turnaround times for 96% of local land charge-only searches is less than 10 days, with three-quarters being returned in five days. There may be those outside this range, but surely the focus should be to help the minority of councils improve rather than turn all existing arrangements upside down. As for the variation in the level of charging, it is difficult to believe that it is the most important issue in the conveyancing process, but in any event there was a standard charge until the mid-2000s and there is no inherent reason why that could not be reconsidered for the future.
Where does this leave local authorities? The LGA expressed its opposition to this because it will leave councils with the expense of adjusting systems, breaking existing contracts and paying redundancy costs. The LGA is concerned that the longer-term cost to councils of compiling, checking and verifying data has not been properly accounted for. Of course, some local land charge staff have other duties as well, such as electoral registration, and the knock-on costs of staffing issues need to be considered. As part of this, it is planned to uplift all the existing local authority land charges register to the Land Registry for free, at a time when the Land Registry is seeking wider powers to market services. Has any value been placed on the local authority databases?
Unless there are clear plans to encompass the CON29 process into the arrangement, and there seems to be no prospect of that, all that is on offer from this proposition is a worse service and disruption to the existing arrangements. While there is always room for improvement—and the service has improved, on the testimony of those who use it and know best—why on earth fix something that is not broken and for which there is no support?
Despite the engagement of some local authorities in pilots to see the how this might work—seemingly Merton has not volunteered for this—it is obvious that there is no clear implementation plan and no comprehension of what this will mean for local authorities. These proposed changes to a vital service—vital to the health of the property market—should not proceed unless and until these matters are sorted out. I beg to move.
Lord Greaves
My Lords, I tabled amendments in this group on Monday. Had the noble Lord, Lord McKenzie of Luton, put down his amendment a day earlier, I would simply have added my name to that because it covers the issues.
My interest in local land registers is very recent—a matter of days. This part of the Bill was drawn to my attention by my council officers and particularly by Richard Townson, the democratic and legal services manager, who gave me a quick tutorial. I am not terribly upset that I did not become an expert in the subject a lot earlier, but needs must. I have a number of questions that the Minister may not be able to answer today, but if he cannot, I would be grateful for a reply in writing. I am aware that I should have made this speech in Grand Committee, but as I said earlier today, I was not available for House of Lords duties at the time.
The national Land Registry deals with the register of title—ownership issues—and does not go beyond that. We are told that it is run extremely efficiently and that is certainly my experience of using it. There are then local land registers that tell you that charges on a particular parcel of land exist. Those charges may be a requirement to pay money to someone, but most of them nowadays are constraints on the use of the land due to planning decisions or highways decisions.
Lord Ahmad of Wimbledon
My Lords, I thank the noble Lord, Lord McKenzie, for his support for the government amendments. I turn specifically to Amendments 95A, 95B and 99A, which impact on Clause 23 and Schedule 4, and the questions raised. Clause 23 and Schedule 4 provide for Her Majesty’s Land Registry to maintain a single digital local land charges register for England and Wales. There has been a good deal of discussion on the merits of the government proposals and the perceived drawbacks. I will come to those in a moment, but first we should be clear that maintaining the status quo is not an option.
Many of those noble Lords who have—as I have—served in local government know that some local councils provide a very good local land charges service today. I pay tribute to their staff’s efforts and, as my noble friend Lord Greaves said, to the local expertise that they possess. However, many local authorities continue to operate a system that is wholly, or in part, reliant on paper records. Over time, those records will decay and we need to ensure that these are replaced or the information they contain will be lost. What is the solution? The question is not, “Should the current system change?”; it must do so. The question is whether there should be 348 different changes to develop 348 different digital systems that perpetuate the current inconsistencies in levels of service and cost for the public.
In some authorities a digital service is already available. Bolton Council holds a fully digital register and returns searches within one day. Its aim is to provide an,
“end to end process where every customer has the same experience and that is what we now offer”.
The Land Registry ran a successful year-long prototype with seven local authorities. There is no need to rely on the Government’s word that the prototype was a success. Liverpool City Council has been clear that:
“Together we demonstrated that this could work and that if Land Registry were to roll this out then there could be benefits to the conveyancing process in the UK”.
One need only look at the data currently published by local authorities themselves—for example, Bath and North East Somerset and Castle Point currently quote up to a 20-day turnaround time on their websites for a full search—to see that there is scope for improvement. Customers expect to be able to access government information online without delay or complication. Therefore, the Government are committed to meeting those expectations, and creating a single, digital local land register would be another step towards doing so.
Various questions were raised. I fully understand noble Lords’ interest in how the Government’s proposal would affect local authorities and what the implementation plan would be. I am happy to provide some details this evening.
We have recognised the need to ensure that the new system takes account of local authorities from the start. That is why we have been working with a small number of local authorities, as I have already illustrated, throughout the programme, including prototyping the service with seven of them last year. While I can set out the steps the Government are taking to phase implementation and help local authorities to manage the impact, I reassure your Lordships’ House that those local authorities we have been working with are content with the steps we have taken, as can be seen from the comments by Bolton Council and Liverpool Council, which I quoted a few moments ago.
Turning to the steps we are taking to help local authorities manage the impact, it is important to understand the service they offer at present. Local authorities, we know, will remain best placed to be aware of any changes to charges on land within their area. That is why, under the Government proposals, they will continue to be responsible, as my noble friend Lord Greaves asked, for entering information into the single register and keeping it up to date. They will no longer need to provide the searches, however. There will be no loss of local knowledge under our proposals, simply a more modern, efficient process to help members of the public access that local knowledge. None the less we recognise that there may be some costs that arise because of these proposals, and—to answer a question asked by the noble Lord, Lord McKenzie—the DCLG is in conversation with local authorities on how these are best met.
Turning to the implementation plan—again the noble Lord, Lord McKenzie, asked what the Government’s intention is here—implementation will be phased. For each local authority, the first step will be collating the data it holds and checking that they are accurate. The checked data sets will then need to be transformed into a digital format before being transferred into the central land registry that will be created. The local land charges service will transfer from individual local authorities to the Land Registry only once this process has been completed and is functioning.
Lord McKenzie of Luton
My Lords, I thank the Minister for his reply and the noble Lord, Lord Greaves, for his contribution. I say to the noble Lord, Lord Greaves, “Welcome to the world of local land charges”. He has mastered his brief on that subject, as he normally does, and asked an entirely pertinent series of questions. We have had answers to some, but not all, those questions. The noble Lord stressed local knowledge, which is absolutely key to this.
I do not think that the Minister dealt with the key point that what is proposed to happen will be a fragmentation of a service. We know that currently most people undertake searches of CON29 and local land charges together. It is proposed to peel part of this off to the Land Registry, while the rest stays with local authorities. That seems to me to be the makings of a worse service, not a better one. We await very important information, certainly around the value of the database that local authorities have, which is to be taken over. The noble Lord reiterated the point about privatisation but did not deal with the point about the remit of the successor to the current chief of the Land Registry, the process for which is now under way. Clearly, if it is intended that the service be privatised, the service will be looking for someone with different qualifications from someone who will just administer the register as it is.
There is a beguiling issue about it all being digitised and all on one platform. That looks aside from the complexities of how it will be done and whether it is possible to get there with 348 authorities undertaking their daily work with some 60,000 entries each day. That really has not been addressed. We know that the process is struggling and has effectively given up on trying to take in CON29 as part of it. There are many unanswered questions. I am sure that the Minister will, as usual, be very diligent and look at the record and follow up where we have not had answers tonight. In the mean time, I beg leave to withdraw the amendment.
Baroness Kramer
“(4) Sub-paragraphs (5) and (6) apply to the function of the Lord Chancellor under section 14(1) of the Local Land Charges Act 1975 as amended by this paragraph so far as it relates to the power to make rules for prescribing fees and the manner of payment of fees (“the new function”).
(5) The new function is to be treated as having been transferred to the Welsh Ministers by—
(a) the National Assembly for Wales (Transfer of Functions) Order 2004 (S.I. 2004/3044), and (b) Schedule 11 to the Government of Wales Act 2006, in the same way as the equivalent function of the Lord Chancellor under that section as it had effect apart from this paragraph (“the old function”).(6) A provision made by that Order or that Act in respect of the old function continues to apply to the new function.”
(a) ”
(b) in relation to the operation of any other statutory provision by virtue of which any matter is registrable in the local land charges register,”
Health and Social Care Act 2008 (Regulated Activities) Regulations 2014
(10 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, I am glad, but not surprised, that the noble Lord, Lord Hunt of Kings Heath, has shown such a keen interest in the importance of providing protection for users of health and care services. I thank him for bringing this issue to the Floor of the House. Naturally I am disappointed to understand from his amendment that he feels that the new fundamental standards are not satisfactory and undermine protection of care home residents. I seek to reassure him that that absolutely is not the case.
I begin by emphasising that the Government are serious about improving the protections offered to health and adult social care service users, both through the legislation that we have before us and through the system of regulation of health and adult social care carried out by the Care Quality Commission, of which these regulations form a part. I am sure that noble Lords will agree that the CQC has made enormous strides forward over the past two years, supported by many of the changes that we debated in this Chamber a year ago during the passage of the Care Act. Under the leadership of the three chief inspectors, the CQC’s specialist teams of inspectors are holding providers to account more thoroughly than ever before. The CQC’s inspections now look beyond mere compliance with registration requirements to provide ratings for each provider against five key questions. Are services safe? Are they caring? Are they effective? Are they responsive? Are they well led?
The first of these ratings is now being published. I am sure that noble Lords will agree that the new system provides much valuable information to patients and service users and commissioners, as well as to providers themselves. However, it is axiomatic to say that the key purpose of a regulator is to regulate—to take action where standards of care fall below acceptable levels. The regulations that we are discussing are central to this. They set the requirements for registration with the CQC, the fundamental standards that all registered providers must meet and against which the CQC can use its enforcement powers to protect patients and service users from the risks of poor care.
I will outline briefly how the new fundamental standards are an improvement on the existing registration requirements, before moving on to the detail. We are changing the regulations in order to address the issues raised by Sir Robert Francis, in his inquiry into Mid Staffordshire NHS Foundation Trust. He highlighted that the legislative basis on which the CQC was operating was undermining the effectiveness of the regulator. He criticised current regulations for being “overly bureaucratic” and said that they failed to separate the “essential” from “the merely desirable”. He recommended the introduction of fundamental standards which set the line below which care must never fall. He recommended that there be regulatory consequences for providers who fail to meet these standards, including the possibility of prosecution where breaches result in serious harm.
The new regulations set the following fundamental standards. Patients must receive safe care that meets their needs and reflects their preferences. Patients must be treated with dignity and respect, be properly fed, their views listened to, and be protected from abuse. The environment in which they are cared for must be clean, safe and secure. Care organisations must be well run, properly staffed, and be open with people about their treatment.
In my response to the noble Lord, I seek to reassure him that the fundamental standards do not dilute the current regulations, remove protections or leave people at greater risk of abuse or harm. In fact, they provide much stronger protection for service users from abuse, neglect and unsafe care than the current regulations. They explicitly state that care must be provided in a safe way, that people must be protected from abuse and improper treatment, that care must not be degrading and that is it unacceptable to disregard someone’s need for care and treatment. The requirements covering degrading care and significant disregard of needs are completely new and not covered by current regulations. It will be an offence to breach these standards in a way that causes avoidable harm or presents a significant risk of such harm occurring, and the CQC will be able to bring prosecutions against providers for such breaches without issuing an advance notice, something that is not possible at the moment. This is a major improvement that provides extra protection for patients and service users.
I want to discuss one of the key fundamental standards recommended by Sir Robert Francis: the statutory duty of candour on providers. It is a little over a year since I brought forward an amendment to the then Care Bill that placed an obligation on the Secretary of State to include in the requirements of registration a duty on providers to inform patients and service users where there were failings in care that resulted in harm—the duty of candour. These regulations fulfil that obligation in respect of the NHS by placing a duty of candour on NHS bodies.
In the debate on the duty of candour a year ago, noble Lords made two key challenges: first, that we should give serious consideration to the threshold for the duty of candour; and secondly, notwithstanding any such threshold, that the regulation should enshrine the general principle of being open in all cases. I hope noble Lords will agree that we have met both these challenges. I shall take the second challenge—openness —first. Regulation 20 sets out the duty of candour, its first line setting out the general requirement of candour:
“A health service body must act in an open and transparent way with relevant persons in relation to care and treatment provided to service users in carrying on a regulated activity”.
This is a general duty to be open in all dealings with patients, service users and their representatives. Where a provider does not meet this duty, the CQC will have the power to use its civil enforcement powers. However, a failure to meet this general requirement will not be an offence.
The remainder of the regulation sets out the steps that providers will have to take when a “notifiable safety incident” occurs. Noble Lords were quite right in saying that the key issue here is defining the harm threshold for such an incident that would engage the duty of candour formal notification procedures. The Government took expert advice and gathered a wide range of views before setting this threshold. We asked Sir David Dalton and Professor Norman Williams to lead this work. They published their findings in March, and the department subsequently consulted on draft regulations based on their recommended harm threshold.
In the regulations, a notifiable safety incident is defined as any unintended or unexpected incident that has, appears to have or could still result in death or severe harm, moderate harm or prolonged psychological harm. By following the recommendations of the Dalton-Williams review, I believe we have struck a sensible balance between the need to respond formally to patients when significant things go wrong and the need to keep reporting burdens within manageable proportions.
Building on this work, the regulation sets a series of specific steps that an NHS body will have to take where a notifiable safety incident occurs. These are: to notify the relevant person that the incident has occurred, to advise them what further inquiries will be made, and to apologise. A failure to take these steps will be an offence. This verbal notification then has to be followed up in writing.
This new duty of candour will support and underpin the Government’s ambition to transform culture across the NHS and support openness and learning, both between staff and organisations and to patients and service users. We will extend the duty to all health and adult social care providers from next April. Over time, the duty of candour will contribute to safer care. Noble Lords will also be pleased to learn that this week the General Medical Council and the Nursing and Midwifery Council have published for consultation draft guidance on the professional duty of candour, a measure that complements the statutory duty of candour on providers.
I finish by touching on the other new registration requirement that we are introducing—the fit and proper persons test, a requirement for directors of organisations registered with the CQC. The responsibility for providing safe and acceptable care will always rest with providers themselves. The tone and culture of an organisation is set by those people at its head. No matter how effective, regulation cannot be a substitute for good leadership at a provider level. All too often, individuals at the head of an organisation have been out of reach, even where they have overseen the most shocking standards of care. These regulations put an end to this, giving the CQC new powers to remove directors who are responsible for poor care. For the first time, the regulations place a legal requirement on NHS bodies registered with the CQC to ensure that their directors are fit and proper to fulfil their role. By next April, we plan to extend this requirement to all providers of health and adult social care registered with the CQC. This new measure, alongside the ability to bring prosecutions where failures in care harm patients and service users, will greatly increase the ability of the CQC to hold corporate bodies and their senior officers to account.
Effective regulation of health and adult social care is essential to protect patients and service users from the risks of poor care. The fundamental standards will support the Care Quality Commission in holding providers to account for the quality of care that they provide. Taken as a whole, these regulations improve the legal protections offered to service users, underpin and support a more effective regulatory regime, and champion openness and transparency across the NHS. I beg to move.
Amendment to the Motion
Lord Hunt of Kings Heath
At end insert “but that this House regrets that they undermine the protection of care home residents by removing current requirements in respect of complaints procedures, emergency procedures and choice of food”.
Lord Hunt of Kings Heath (Lab)
My Lords, I should say right away that, overall, I welcome the thrust of these regulations. I am going to raise a number of points covered by my amendment to the Motion. I do so on the basis of broadly accepting the point raised by the Minister in relation to the CQC’s role and the way in which it is performing. However, there is particular concern about residents in care homes and the impact of the regulations which I would like to put to the Minister. My real concern is in respect of the three areas mentioned in my amendment in that, far from enhancing quality and public safety, the regulations actually reduce current protections in relation to complaint systems, food and emergency procedures.
I listened with great care to the Minister. He prayed in aid the remarks of Sir Robert Francis, and I will come back to them in a moment, but can the Minister also confirm that, in a sense, the regulations are a victim of the Government’s desire for lighter-touch regulation? The CQC clearly has a critical role in protecting some of the most vulnerable citizens in our country. This is not the moment for lighter-touch regulation. On any count, knowledge of the complaints system is important, particularly in view of concerns about standards of care in the health service and in many care homes. The current regulation states that the registered person must,
“bring the complaints system to the attention of service users and persons acting on their behalf in a suitable manner and format”.
The regulation goes on to require that,
“service users and those acting on their behalf,
are provided,
“with support to bring a complaint or make a comment, where such assistance is necessary”.
My understanding is that the Minister’s department is briefing that the new regulations are more outcome-focused and less specific about processes. However, if being less specific about processes means not telling people about them, it meets that test, I suppose. I also understand that his department is briefing that having an accessible and open culture is the same as having a specific duty to inform people about the complaints procedure.
However, the point I should like to put to your Lordships is that most residents and relatives have little idea of what to expect from a care home. Surely it is a relief to relatives and advocates when they are informed about these rights. It makes it easy for them to raise questions about care, knowing that that the regulations have the force of law and the matter cannot simply be left to local discretion. Few people comparing the two sets of regulations on rigour about complaints could argue that the proposed replacement is an improvement.
If one considers the tragic case of Winterbourne View—which I suspect a number of noble Lords will refer to—and other reports and the reports of the Health Service Commissioner, they continually emphasise that many providers’ stances on complaints are not fit for purpose. We know in relation to NHS complaints that there are continuous problems about people wondering whether they really can use them effectively. Almost all recent major care scandals have had their roots in people not being listened to or not knowing that they can complain. That is the basis of my major concern about these regulations.
Having emergency procedures in place seems pretty important, too. I do not understand the logic of deleting this important regulation. It may be that the Minister will say that it is covered by the new Regulation 17, but that states merely that, as part of good governance, the provider must establish systems or processes which enable the registered person to,
“assess, monitor and mitigate the risks relating to the health, safety and welfare of service users and others who may be at risk which arise from the carrying on of the regulated activity”.
That could easily be interpreted by providers to mean the normal, day-to-day risk assessments that they are required to carry out. I remind the Minister that care homes are pretty fragile organisations, often with very few qualified staff, and a significant proportion are without managers in place. That is why it would be much better to be absolutely explicit that emergency procedures should be in place.
Baroness Barker (LD)
My Lords, the Minister, the noble Baroness, Lady Greengross, and I have a fair degree of form on this subject, going back over a number of years. Indeed, as I listened to the Minister introducing this matter to the House tonight, my mind wandered back to the dreaded days of the NHS Redress Bill, when the noble Lord, Lord Warner, sought to assure those of us who, in those days, sat on the other side of the Chamber that all would be well in the NHS and there was no need for a duty of candour because a new culture of openness was going to work its way through the NHS.
I have to say that things have changed because back then the professional bodies representing the staff of the NHS fought that duty of candour tooth and nail, so it is rather pleasing to have the news this week that they now have changed their minds and are willing to accept that they should uphold the duty of candour. They are moving to a point of discussing with their members not whether, but how, they do that.
I agree with the Minister that the CQC in its present form is a long way from CSCI and its predecessors in their various guises. It is properly constituted, far better resourced and has a focus to its work. Albeit that it works across a far bigger canvas than it ever did in the past, it is already performing to a much higher degree than before.
However, I return to the point the noble Baroness, Lady Greengross, and I made during the passage of the Care Bill. In that legislation, in relation to care homes and incidents where vulnerable adults may be thought to be at risk of abuse, this House fell short in its legislative function in that it did not give a power of entry to people or bodies who suspected that there might be abuse taking place. It is with that deficiency in the law sitting in place that we have to judge all the regulations and guidance such as this that come before us and ask ourselves whether, if a person was being abused or maltreated in a care home, it would be detected.
Therefore, the noble Lord, Lord Hunt, is right to focus, as he has done, on the issues of complaints procedures and emergency planning. I accept that within the overall framework service providers are now required not only to provide their services but to report on outcomes for individuals and standard of care, but nonetheless, there is something slightly amiss. For me, it goes back to the issue of power of entry. It goes back to the point at which a concerned relative has the power to override things.
I would also like to ask the Minister for a point of clarification. It seems that Ministers are quite clear that the introduction of new basic standards rectifies what was clearly an unsatisfactory position whereby one could not prosecute a provider unless and until an improvement notice had been issued. That was clearly wrong, and a number of providers got off the hook on that technicality. Will the Minister clarify, if he can, that under these regulations a breach of fundamental standards is still not in and of itself a reason to trigger a prosecution and that a reason to trigger a prosecution is a breach of the regulations? I would like to know how the department sees that working in practice to cover the deficiency to which I alluded a moment ago.
Finally, I welcome the fit and proper person test. It is long overdue. It is a good job that it is coming to the statute book as quickly as it is.
Viscount Hanworth (Lab)
My Lords, the quality of the provision in old people’s care homes varies widely. In the best of them, the residents are treated with respect and solicitude. In the worst of them, as we have witnessed recently, they are treated callously and brutally by underpaid and badly trained staff.
The increasing longevity of our population is leading to a rising demand for the provision of care for the elderly. Until recently, the implications of these developments have been ignored by all but a few concerned parties. The matter was brought forcefully to the attention of the public at large by the financial collapse of the Southern Cross enterprise, which was responsible for at least 20% of the national provision of residential places in care homes. It was running 752 homes when it collapsed in 2011 with losses of £300 million.
Southern Cross had been acquired by the private equity firm Blackstone Capital Partners for £162 million in 2004. Thereafter, it expanded rapidly. Through acquisitions, it tripled the number of homes that it was managing. The directors became multimillionaires. Inspections that were conducted during the period of its expansion raised grave concerns over the provision of care by homes within the Southern Cross portfolio. Indeed, the enterprise was warned about failing standards in its homes as it prepared to float on the stock market.
A more dramatic instance of the failure of care was provided by the scandal of Winterbourne View, a public-funded private hospital. A “Panorama” investigation broadcast in 2011 exposed the physical and psychological abuse suffered at the hospital by people with learning disabilities and with challenging behaviour.
The problems besetting care homes have been due, in part, to the inadequacy of their regulatory oversight. They have also been due, in large measure, to the increasing financial stringency under which they are operating. The income received by the homes from fees has been falling. Those fees have been paid on behalf of the great majority of residents by local authorities. Their income has been driven down by the Government’s austerity measures. At the same time, their costs have increased through factors outside their control, such as rising energy prices.
Another adverse condition is that the borrowing of the care home sector averages 75% of its net assets. This abnormally high level of indebtedness has been a result of the borrowings that were linked to the spate of acquisitions that preceded the general financial crisis of the sector. It has been pushed even higher by trading losses. This will expose the sector greatly to the widely anticipated rise in interest rates in the not too distant future.
The Government have reacted to these problems in a manner that many people regard as inadequate. They have not sought to improve the financial circumstances of the care homes. Instead, they have sought to improve the regulatory framework affecting the care homes via amendments to the secondary legislation associated with the Health and Social Care Act 2008, which will come into force in April 2015.
According to the testimony of the Minister of State for the Department of Health in the Commons on 16 October, the new regulations will,
“bolster the power of the regulator to take enforcement action, including bringing prosecutions against providers of poor care”,
and issuing penalty notices.
He remarked that, under the existing regulations,
“a notice had to be served first before moving to prosecution. If the provider complied with the notice, nothing could be done”.—[Official Report, Commons, Sixth Delegated Legislation Committee, 16/10/14; col. 4.]
The essential purpose of the new regulations is, therefore, to encourage improvements in the quality of care by strengthening the sanctions for failures.
Baroness Howarth of Breckland (CB)
My Lords, I will be brief, as I always am. I do not want to repeat what has been said before, much as I would love to be led down the path of talking abut the problems faced by care homes in the present financial climate. I must first declare an interest as a trustee of Livability, which provides a large number of care homes for disabled people and for other groups. I am therefore, as a trustee, in the role of a provider. I also want to speak very briefly on behalf of families and carers.
First, I say to the Minister that I welcome the regulations. I was interested in his spirited defence of them, and I know his great belief in them. There are aspects of the new regulations that strengthen the potential to hold care providers—such as my organisation—properly to account. That is all positive, but I simply want to address myself to the issues around the amendment on the Order Paper, because there is an issue and I would very much like the noble Earl to think about it.
We have been approached by a number of organisations which said that families and residents are very concerned about these three aspects of the regulations. I have looked at the old wording and at the new wording, and I found that the new wording is more elegant but much more obscure for ordinary people to relate to. It is terribly important that ordinary folk in a care home—both the providers and those receiving the service—understand that they have a right to be told about complaints procedures.
Clearly, that is there already. I disagree with those who say it is not. All of it is to be found within the regulations and the follow-up documents by those who actually dig through them. I believe that the noble Earl hoped—as he listened to all the hours of discussion of these issues—that this would be absolutely crystal clear. If these issues are clear, they also help leadership and management. It is much easier for providers to tell their staff how to take things forward if the words are absolutely clear, and if there is some sense of being given flexibility or whatever the expectation is.
When it comes to proper planning for emergencies, providers have an absolute responsibility to ensure not only that they have those plans, but that in the interests of health and safety everybody understands them throughout. Not only the providers but the residents themselves must understand. It is possible to have a great discussion about these issues among those who are receiving care. It is possible to discuss complaint procedures, choice of food and what happens if there is a fire and people can only be got out of certain areas by particular routes.
What I am saying is much simpler than the rest of the discussion. I would like the Minister to look at the wording, because in my opinion this is about language rather than intent. We have excellent regulations but, if families and users are concerned about these three areas, the Government have a responsibility to listen. I know we have a listening Minister.
Earl Howe
My Lords, I am grateful for the questions and comments raised by noble Lords. I will do my best to answer them in the time available. Perhaps I may begin with the issues raised by the noble Lord, Lord Hunt. The noble Lord expressed his regret that certain phrases no longer appear in the regulations, and those concerns were echoed by the noble Viscount and the noble Baroness, Lady Howarth. I should like to reassure the House that, although the regulations do not include express references to the three things highlighted in the amendment tabled by the noble Lord, Lord Hunt—informing service users about complaints procedures, having emergency procedures in place, and offering choice of food—nevertheless providers must still demonstrate to CQC that they are doing those things.
This is possible because the fundamental standards work in a different manner from the current regulations. They set the outcomes about quality and safety that must be met, rather than just the processes that must be in place. They set out the ends, rather than merely the means. Because we describe these outcomes in regulation, we no longer need to spell out a long list of processes in regulation as well. However, all the areas highlighted by the noble Lord nevertheless fall within the scope of the new regulations. For example, planning for emergency procedures is covered by the new safe care regulation, which requires providers to ensure that care is provided in a safe way, and that they do all that is reasonably practicable to mitigate the risks of unsafe care. A provider that had no plans in place to deal with emergencies such as floods or staff shortages could not claim to be meeting the regulation, because they would not be doing all that is practicable to mitigate the risks to the health and safety of service users from emergency situations. In practice, not having a plan in place for emergencies will therefore be a breach of the regulations.
The obligation to offer a choice of food and drink falls within the new person-centred care regulation, and the newly drafted nutrition regulation. We have introduced a new person-centred care regulation which requires that a person’s needs must be met, and that their preferences must be taken into account and, where possible, met. I emphasise that this applies not only to food preferences, but to all other aspects of care as well. This is a significant step towards greater person-centred care, advocated by many over recent years.
In addition, the nutrition regulation states that a person’s nutritional needs must be met, and it will be a criminal offence to fail to meet this regulation in a way that causes avoidable harm or significant risk of such harm. These two regulations work in tandem to require that a person’s individual nutritional needs are met and their individual preferences are reflected wherever possible. This is a stronger position than merely requiring that people be offered a choice. Such a requirement could be met by offering a person a choice of two things that are neither desired nor suitable. On the issue of complaints, the new complaints regulation states:
“The registered person must establish and operate effectively a system for identifying, receiving, recording, handling and responding appropriately to complaints, and requests for action to be taken, by service users and other persons”.
A provider who does not make patients and service users aware of their complaints system could not claim to be making it accessible, or claim they had an effective means of identifying complaints. Therefore, they would be breaching the regulation. CQC’s draft guidance about compliance with the regulations, which is currently subject to consultation, includes more information about all of these areas. It is this guidance that sets out in more detail what CQC will look for when checking whether providers are meeting the regulations. If noble Lords are in any doubt or have anxiety after this debate and after what I have said, I assure them that I would be happy to feed in the concerns which have been raised this evening in the context of the guidance that is now in preparation.
The noble Lord, Lord Hunt, described the regulations as light-touch, and the noble Viscount, Lord Hanworth, suggested that the Government were somehow pursuing a deregulation agenda by introducing these regulations. I must say to the noble Viscount in particular that that is a complete misreading of these regulations. Indeed, his speech indicated to me that he is labouring under a number of serious misapprehensions. Past experience has shown that there are limitations to prescriptive regulation. It is very difficult to make regulation exhaustive. The list might come to be the upper limit of what is provided, rather than the floor below which care should never fall. For example, the old national minimum standards for care homes included very specific requirements that set out the minimum bedroom sizes in square metres. In practice, this minimum became the default normal size for rooms.
The guiding principle behind the fundamental standards is that they set an overall outcome that must be met. The responses to our consultation showed that the vast majority of respondents agreed with this, and thought that the regulations were clearer as a result. I hope that that reassures the noble Baroness, Lady Howarth, in particular. Importantly, this approach allows the CQC to take a more rounded look at quality and safety as it inspects, rather than taking a tick-box approach to inspecting done solely against prescriptive regulations.
Lord Hunt of Kings Heath
My Lords, I am grateful to all noble Lords who have taken part in this short but very interesting debate. I say to the noble Baroness, Lady Barker, that I agree with her on the importance of the duty of candour. We do not really have time to discuss this in detail, but alongside a statutory responsibility on duty of candour there is a need to address culture, particularly within the National Health Service. I am not convinced that the current regulators are helping the duty of candour. I think that we have a blame/risk-averse culture currently operating in the health service which is often driven from the centre. Alongside a duty of candour, we have to look at the need to change the culture to one which is far more collaborative in support of organisations dealing with very difficult issues.
I agree with the noble Baroness, too, on power of entry. Her point on prosecutions being based on breach of regulations was important, which is why the language is so important.
The Minister said that this was not a deregulatory measure. I presume that he is saying that the Department of Health is not chalking it up to the Cabinet Office as an example of deregulatory action. However, we have all had experience of deregulatory approaches taken by Governments and I have to say that some aspects of these regulations seem to have been influenced by a deregulatory approach—I know that the Minister rather chided my noble friend on this point. In the end, some regulations are essential and sometimes advice and guidance alone are simply not sufficient. The noble Baroness, Lady Howarth, acknowledged that there are strengths in the regulations, and I do not disagree with her about that. Sometimes there is a need to use regulations to be absolutely clear to those who are providing services and those receiving them. That is the case when it comes particularly to issues around food choice, emergency procedures and complaints.
The Minister explained why the Government have gone for what they describe as an outcome-based approach—I understand that—and he then quoted to us Regulation 17(2)(e), which states that the providers must,
“seek and act on feedback from relevant persons and other persons on the services provided in the carrying on of the regulated activity, for the purposes of continually evaluating and improving such services”.
That is elegantly written, as one would expect from his department, but it does not say to me that residents are going to be told how to make complaints. Let us think not about the chains but about the individually owned care home. I really doubt whether that would be very clear to the people in charge. It would have been better if it were explicit in the regulations.
I was going to ask the Minister if he would ensure that the CQC read the debate, but I am grateful to him for already giving us that assurance. I hope that when CQC inspectors go into care homes, they are clear that the regulations mean that there should be a proper choice of food, people should have complaints systems signposted to them, and there should be an emergency procedure in place.
This has been a very useful debate. I will withdraw my amendment. I wish the regulations godspeed. I support the CQC in its approach, but, when it comes to care homes, the CQC needs to be explicit both to the homes and the inspectors about the basic standards that need to be provided.
Infrastructure Bill [HL]
(10 years ago)
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Lord Ahmad of Wimbledon
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con)
My Lords, I will also speak to Amendments 101 to 107, 122, 126, 127 and 132, which provide for the off-site abatement of carbon to apply to Wales.
Welsh Ministers share this Government’s desire to reduce carbon dioxide emissions from buildings and have requested that we table amendments to extend the application of Clause 26 to new buildings in Wales. Noble Lords will no doubt be aware that the powers to make building regulations under the Building Act 1984 in Wales are transferred to Welsh Ministers. Clause 26 confers new powers to make building regulations for England on the Secretary of State, but these powers for Wales would not be conferred on Welsh Ministers in the absence of these amendments.
In its 2012 consultation on changes to the energy performance requirements of the building regulations, the Welsh Government recognised the technical and economic limits to reducing carbon emissions through on-site measures only in new buildings. The Welsh Government recognise the potential for off-site carbon abatement as a useful tool in the armoury for tackling emissions in the existing building stock and for supporting investment in renewable energy. Any proposals to use this power would be subject to public consultation in Wales and the Welsh Government have committed to a review of the current energy performance requirements of the building regulations in Wales in 2016. The Government have therefore tabled an amendment allowing for the Secretary of State to make separate commencement of the changes to the Building Act in England and Wales. This recognises that the two Administrations could adopt different timelines for implementation depending on the outcome of the review in Wales in 2016 and allows each to introduce the policy at the appropriate times.
Reducing carbon emissions from the built environment is a challenge that all Administrations must face if the UK is to meet its overall climate change targets. Applying the provisions to Wales will enable the Welsh Government to also introduce cost-effective, flexible legislation to meet their objectives. I beg to move.
Lord Ahmad of Wimbledon
Lord McKenzie of Luton
“( ) The provisions in section 1(1A)(d) of the Building Act 1984 regarding action to be taken as a result of the building’s contribution to or effect on emissions of carbon dioxide shall apply to—
(a) all buildings and developments consisting of ten or more properties, or(b) from 2018 all buildings or developments of any size.”
Lord McKenzie of Luton (Lab)
My Lords, this amendment seeks to limit the small sites exemption to two years from 2016 and to abolish it thereafter and to require the threshold in the interim to be sites with fewer than 10 properties. The Government have sprung their small sites exemption on us with little or no consultation, although they are now consulting on the matter. In the mean time, it remains unclear what is meant by small sites or by the exemption. We were hoping to have some clarity on these issues in time for today, but, alas, no. I thank the Minister for his letter of 3 November, where he said that the Government had endeavoured to publish the consultation document and the government responses on the zero-carbon consultation for the House of Lords Report stage, but were, however, still working on the document. It would be helpful if the Minister could say more about when we will be able to see that.
As we debated in Committee, the rationale for any exemption from the zero-carbon homes standards is a bit thin. The Government have already lowered these standards. If there is any justification for a time-limited exemption for some sites, it is that, having announced it, it might be argued that some time is needed to move back to the single standard. However, the longer the uncertainty about the detail of the exemption continues, the less valid that point is. The Government have argued that the exemption will be of help to small builders who have more difficulty in responding to new regulations. While I am sure that we all wish to encourage small builders, this is not the best way to do that.
We have recently had the benefit of the report from Michael Lyons, covering a whole raft of interesting stuff on housing. Within the package of support for SMEs that he recommends, for example, are these points:
“Legislative change to permit ‘redline’ outline planning applications on smaller sites of fewer than 10 homes. Local authorities should identify small sites in public ownership in local plans, and work with … public landowners to make them available for purchase and development by SMEs. Local authorities and their New Homes Corporations, working with lead developers should offer more packaged … opportunities for serviced sites to help SMEs access the market, including in Housing Growth Areas”.
Therefore, there are other ways in which to help small builders. In any event, it was pointed out in contributions to our debate that it is assumed that only small builders build on smaller sites and that larger builders would not seek to parcel sites to take advantage of the small sites exemption. It is also the case that a significant number of homes are provided on smaller sites.
The Lord Bishop of St Albans
My Lords, in speaking to Amendment 108A, I should like to thank the noble Lord, Lord Berkeley, for co-sponsoring it. I bring forward this amendment out of concern that the standard proposed in the Bill is significantly lower than that already agreed through cross-industry consensus. I fear that an excessive focus on off-site carbon savings will undermine the effectiveness of the proposals and that an exemption for small sites will create confusion by causing the emergence of a two-tiered regulatory system. It is essential that housebuilders meets the carbon compliance standards that have already been agreed through cross-industry consensus. This was endorsed by the Government back in 2011 and strongly supported by around 70% of those responding to their consultation. I am therefore troubled by the proposal of a new on-site energy performance standard for zero-carbon homes that is lower than the one already agreed. It is not clear why this reduction is necessary. The proposed exemptions from the standard for homes built on small sites and for starter homes would also serve to undermine the main purpose behind the zero-carbon standard: namely, that of prioritising carbon reduction. It is to address the lack of measures necessary to realise the Government’s stated commitment to carbon neutrality that I have tabled this amendment which requires the previously agreed carbon compliance standard to be met on-site before allowable solutions can be undertaken. It also requires all homes to meet that standard, ensuring that no exemptions are allowed.
First, I will address zero-carbon standards. Your Lordships’ House will be aware that the zero-carbon homes standard was originally created by the Zero Carbon Hub set up by the previous Government. This involved the green technology industry, developers and the Government. Together the decision was taken to set the standard based on what was technologically available back in 2010-11. As this Bill is addressing homes that will be built after 2016, what is technologically achievable will be far greater than the minimum standard set out back in 2011. The cost and viability of these technologies will have improved along with their accessibility and reliability. It is therefore difficult to see on what basis the Government have drawn their conclusion that the previously agreed standards are now unworkable. Surely standards must be set at the optimal point, which has been previously agreed through intense cross-sector scrutiny, and must be consistent across the board. There should be a common standard regardless of the size of the development.
It is essential that these agreed standards apply to all homes, especially starter homes where tight budgets are more likely to squeeze out energy-saving measures. The proposed exemptions for small sites are problematic as such sites are much more likely to be in rural areas that are off the gas grid and therefore expensive to heat. We must not allow this Bill to be a means of compounding the desperate situation of those households already struggling with fuel poverty. As we have already heard, there is currently a lack of clarity over what comprises a small site. A consultation on small sites was promised before the summer but has yet to take place. It would be very helpful if, in his summing up, the Minister could tell the House when the consultation can be expected. As many as 12.5% of homes a year could come under the small sites exemption if these sites are classified as 10 units or fewer.
It is also as yet unclear which parts of the zero-carbon policy the exemption refers to. Does it refer only to the allowable solutions flexibility mechanism, which can be used to top up the carbon savings from code level 4 to level 5, or will developers of small sites be exempted even from the code level 4 on-site standard? The proposed reduction to code level 4 is in itself damaging and unnecessary. Three of the country’s largest housebuilders have recently shown that code level 4 compliance can be achieved primarily through improved efficiency of the building fabric, in the form of insulation and glazing, and not requiring any expensive renewable energy technologies. Furthermore, these developers have stated that they expect to be able to build these code level 4 homes, when delivering at scale, to the same price as it currently costs to build to the 2010 code level 3 building regulations.
In the immediacy of economic pressures, we must not lose sight of the overriding purpose for which the zero-carbon standard was designed. The recently published IPCC report reiterated the very real dangers of anthropogenic global warming and the concurrent impact on humanity across the world. Carbon reduction is essential to climate change adaptation and mitigation.
Briefly, and in passing, I am also glad to say that my own church, the Church of England, is playing its part. Vicarages and other properties are now normally being built to the highest green standards and more than 400 of our church buildings, many of them medieval, now have some form of renewable energy.
In conclusion, the Bill would lead to confusion in the supply chains and among house buyers, a two-tier regulatory environment and greater fuel poverty. Moreover, the large-scale exemptions signal a retreat from a full-blooded commitment to reducing carbon emissions, the goal on which the future flourishing of our country as part of the global community depends.
Baroness Maddock (LD)
My Lords, I have a great deal of sympathy with the comments of the right reverend Prelate the Bishop of St Albans. I spoke on these issues in Committee. As has been said by both previous speakers, we managed to get such agreement across the building sector and all the organisations that care about these issues as to what the standard would be. When we came in as a coalition Government, we stuck to that. For some reason, we changed our minds. I would really like the Minister to explain what made us question the agreements we had and the standards we had wanted.
I know that two of my honourable friends who have been Liberal Democrat Ministers in the department have pushed to row back from where we were going, and we have now gone forwards again. However, we have not managed to get any farther. We are owned an explanation from the Minister tonight of why we have ended up in this position when we had such a good agreement back in 2010.
Lord Teverson (LD)
My Lords, I welcome both these amendments; indeed, they are very similar to amendments I tabled in Committee. I am grateful to both the noble Lord and the right reverend Prelate for pushing these further to see what response we get from my noble friend the Minister.
I will try not to repeat everything that I said in Committee. On the minimum number of houses to which this would relate, the Bill takes everything the wrong way. It is absolutely clear that smaller builders—whom this clause does not target very effectively, as the noble Lord, Lord McKenzie, said—are more capable of building better-quality homes than the large builders. They are in no way constrained by technology. The clause somehow conveys a government view that small-scale builders are merely jobbing builders with no skills. That is absolutely wrong and sends completely the wrong message. They can deliver a high standard of homes as well as any other building business.
I agree with the right reverend Prelate. I certainly live in a very rural area. A number of the developments there are small scale, and they are all off the grid. I am off the grid. Local developments in villages around me are off the grid. We therefore have the problem that we institutionalise for another 50 to 100 years, or whatever the life expectancy of the property is, potential fuel poverty for those who live in those houses—that or we have an expensive retrofitting programme in the future, which we are already struggling trying to make work. In fact, DECC’s own figure for the cost of retrofitting the current housing stock to get it up to a proper level is £60 billion. That is quite a big sum. We should not be starting to add to that figure.
I welcome the proposal to keep a minimum number of houses; I suggested five in Committee, but 10 is quite reasonable. I welcome that fact that my noble friend the Minister, judging by our conversations, does not see the figure being any greater than that. Clearly, we are having a consultation process at the moment and I am sure that he cannot be specific until that is closed, but I welcome the fact that the Government have recognised that that number cannot be too large. We certainly need a sunset to this clause. I hope that that will come out of this as well.
My noble friend Lady Maddock has gone through the questions surrounding the standards for zero-carbon homes very well, and how that issue appears to have moved backwards and forwards and backwards. I look forward to enlightenment in that area. I again come down to what the right reverend Prelate said about allowable solutions. I am not at all against them in concept, but wherever possible the targets need to be met within the building itself or very close to it. Once again, if we do not do that, the people who live in those houses will have increased energy bills for as long as they live there. We might neutralise carbon emissions globally—ensuring that is much more difficult on allowable solutions than actually on the property itself—but then you still have the problem that that property requires more energy to heat it and to keep it to the right standards.
Lord Ahmad of Wimbledon
My Lords, first I thank all noble Lords who have participated in this debate, and in particular the noble Lord, Lord McKenzie, and the right reverend Prelate for their amendments, which have allowed us to discuss this important issue again.
I am conscious that Amendment 101A has already been discussed in Committee. I am of course happy to revisit the subject because of its importance, and in doing so I ask noble Lords to excuse me if I cover points we have covered before. From our previous discussions, and as my noble friend Lord Teverson has alluded to, I know that a clear consensus was emerging that in designing the zero-carbon homes policy we must ensure that smaller builders are protected from increases in costs that may make it more difficult for them to compete. In seeking to limit the scope of the application of off-site carbon abatement measures to developments of 10 or more dwellings, the amendment recognises that important principle. On that basis it is well intentioned and in line with the Government’s thinking on the issue.
With regard to the Government’s thinking, I am conscious that noble Lords would have expected a consultation paper to have been issued by now and in advance of this debate. Indeed, in various meetings that I have held in advance of this stage of the Bill, this was something we discussed. At this point I can only apologise for the delay which has occurred. I assure noble Lords in that apology that the Government are working very hard on the consultation paper, and we are very aware of the interest on this issue and the need to set out our thinking as soon as possible.
We recognise that achieving the zero-carbon standard could be particularly challenging for small builders. Smaller developers face extra costs in terms of land acquisition and purchasing. They also rely on an ability to identify and redevelop small sites or to assemble small parcels of land into larger opportunities. Research recently published by the National House Building Council on improving prospects for small housebuilders suggests that the availability of suitable small sites—which they indeed prefer—is declining. It also indicates that any extra regulatory costs can impact on the viability of development. We are concerned that if the costs of zero carbon lead to fewer small sites being brought forward, this will further hinder the prospects for small housebuilding firms.
Therefore, while welcoming the intention behind the amendment, it cannot be supported, principally because it would not provide the flexibility that we need on this issue. Putting a rigid exemption in primary legislation would not be the right way forward. There must be flexibility to respond to changing market circumstances and to listen to those people with the main interests in this area, the homebuilders and environmental groups. Our intention therefore is first to seek the views of those interested parties on how the exemption should work. Only after that consultation would we legislate, setting out the scope of the exemption through the building regulations and providing supporting guidance in that respect. Primary legislation is not required to exempt small sites. Section 3 of the Building Act allows for building regulations to make different provisions or to exempt prescribed classes of buildings from the requirements of building regulations. However, I recognise that the key point of the debate is the threshold to be applied.
The amendment proposes an exemption based on sites of fewer than 10 units. I mentioned during Committee that this was one of the options being considered. I say “options”, because we must leave room for respondents to offer up different options or evidence for consideration. We will also consult on the timeframe that should apply to any exemption. It is this area in particular where flexibility is a paramount consideration. What may be right at the time of designing the exemption may not be right further down the line, and the Government must have the ability to review the operation of the exemption appropriately. I hope that it is helpful to clarify these important points and that doing so provides some further reassurance in advance of the consultation being published. We do, of course, welcome noble Lords’ considered opinions and views as part of that consultation exercise, and I assure your Lordships’ House that they will receive a copy at the earliest opportunity.
The noble Lord, Lord McKenzie, asked about a response on allowable solutions from the Government that was published in July and provided to noble Lords ahead of Committee. I am not sure whether there has been a response, or if it did not reach the noble Lord. I specifically asked for it, and was assured that a hard copy was also sent to the noble Lord in this respect. If, again, he requires a further copy of that, I shall be happy to forward it on.
I now turn to Amendment 108A, in the name of the right reverend Prelate. As I said during the discussion on a similar amendment in Committee, this amendment will result in significant problems by prescribing energy performance levels in the Bill. We all share the desire to see energy-efficient homes built that help to reduce carbon emissions and fuel bills. We should not forget that this Government have made significant progress towards delivering on the commitment made by this and the previous Government to ensure that zero-carbon homes are built from 2016 onwards. Since we confirmed our commitment to the 2016 target for new homes to be zero carbon, we have further strengthened the requirements of the 2006 building regulations in 2010, and again in 2014, achieving a 30% total reduction. In fact, the most recent changes we made to the building regulations in 2014 will help to save homeowners an average of £200 on their fuel bills, compared to new homes built before we came to office.
Of course, we are not stopping here. As I have said, we have confirmed that from 2016 all new homes will have to meet even higher standards for on-site measures to be set out in building regulations. These will be set at a level equivalent to that required for a home built to the code for sustainable homes level 4 standard and will save homeowners on average £700 more annually when compared to a typical existing home. The right reverend Prelate talked of building to code 4. This can be done, which is why we think it is a reasonable standard to set. However, as shown by the Zero Carbon Hub’s as-built performance gap programme of work, there are challenges. We should set a realistic and achievable target, not one which pushes the industry to a point where it cannot deliver in practice.
To change the energy requirements for new homes, it is always necessary to consult carefully those affected. We should not forget that we are talking about a technical area that impacts across the whole construction sector. Additionally, the industry reports on building types that this amendment ignores and does not address, such as high-rise flats, because more work is needed. The categories listed in the amendment contain different building types and a rigid standard to cover them all. This may not work in practice. It may, but it is important to take the time to work through it in consultation with the industry. It would not be workable to deliver the proposed standard within six months. Even if it were, it may not be prudent to have such a rigid timeframe for delivery in primary legislation.
The independent Zero Carbon Hub recognises that further technical modelling is required. If, in the light of consultation, even slight adjustments were needed we would not be able to make them without new primary legislation. I assure noble Lords that the Government will strengthen standards and deliver zero-carbon homes from 2016. That is and remains a clear commitment on which we will be held accountable if we do not deliver. Between now and 2016 we will consult widely as to how the new proposed carbon compliance standard can be met. We will share that consultation with noble Lords.
My noble friend Lord Teverson and the right reverend Prelate the Bishop of St Albans asked about exemptions. The number of smaller housing developers competing in the market is significantly lower than it was prior to 2008. Smaller developers often face greater set-up and purchasing costs, compared to larger developers. New regulatory requirements often hit smaller developers earlier, as there are shorter lead times to starting development. With all this in mind, it is vital that the Government give the sector the support it needs, and exemption from the full cost of the carbon requirements is one way of doing so.
Let me also reassure the right reverend Prelate that we work closely with partners such as AIMC4 that have shown that it is possible to build homes to meet a higher level of energy efficiency. The work of that group has helped the Government in deciding to set the on-site requirement at around code level 4, as this should be affordable and achievable for the majority of developers. It is important to recognise that this work was limited in scope and did not extend across the full range of buildings such as flats.
The point was made that the setting of on-site standards could result in a watering down. We worked closely with the Zero Carbon Hub, whose work was hugely influential in helping the Government decide what further action to take from 2016. The hub did not recommend an on-site level for high-rise apartment blocks, recognising that further specialist work was required.
My noble friend Lady Maddock asked some specific questions about rowing forward and rowing back, as she described it, and said that some explanation was needed. I am sure she will appreciate that there are discussions taking place. I hope that my comments have somewhat reassured her that the commitment of the Government to achieve our objective when it comes to zero-carbon homes and to the policy that we have agreed from 2016 remains a priority.
I hope that my responses have been sufficient to reassure noble Lords of the Government’s position on both these amendments and that the approach I have outlined here, as well as in Committee, has demonstrated why these amendments may prove problematic in terms both of increased demands on the home building industry and of the mechanics of delivery. On the basis of these reassurances and accepting that we are still working towards the issuing of the consultation on zero-carbon homes, I hope there is sufficient to encourage the noble Lord, Lord McKenzie, and the right reverend Prelate not to press their amendments.
Lord McKenzie of Luton
My Lords, I thank the Minister for his response to my amendment. I think we recognise that putting material in the Bill reduces flexibility. The point is well made that these things will need to be dealt with in secondary legislation. The purpose of an amendment such as this is to get some debate and discussion going, as the Minister is well aware. He suggested that Amendment 101A, with its recognition of sites of fewer than 10 properties, was an acceptance of the policy. That was certainly not its intent. The key part of that amendment was that there should not be any exemption after 2018.
The consultation that I was probing was the one that was dealt with in the Minister’s letter of 3 November, which was the consultation on the exemption for small sites. If I made reference to allowable solutions it was not my intention. That was the consultation—knowing when it will happen and, more importantly, what is in it.
Baroness Kramer
“(5A) Building regulations made by the Welsh Ministers may make provision for the use, in relation to action taken in respect of a building in Wales, of a register administered by, or by a person acting on behalf of, the Secretary of State.
(5B) Building regulations made by the Secretary of State may make provision about the use of such a register for that purpose.”
“(7A) Building regulations made by the Welsh Ministers may make provision for a payment or payments in respect of a building in Wales to be made to a fund administered by, or by a person acting on behalf of, the Secretary of State.
(7B) Building regulations made by the Secretary of State may make provision about the use of such a fund for that purpose.”
“(6) The reference to the Building Act 1984 in article 2(a) of the Welsh Ministers (Transfer of Functions) (No 2) Order 2009 (SI 2009/3019) is to be treated as referring to that Act as amended by this section.”
Lord Teverson
“Determination of planning applications
(1) In circumstances where planning permission for a development has been granted pursuant to section 70(1)(a) of the Town and Country Planning Act 1990 (determination of applications: general considerations), any building work remaining to be carried out as part of that development after the expiry of six years from the granting of planning permission shall no longer be permitted to be carried out in compliance with the Approved Document Part L in force at the time when planning permission was granted, but shall instead be required to be carried out in compliance with the Approved Document Part L in force at that time.
(2) For the purposes of this section—
“building work” has the meaning given in regulation 3(1) of the Building Regulations 2010 (meaning of building work);
“Approved Document Part L” means a document issued in pursuance of section 6 of the Building Act 1984 (approved documents) for the purpose of providing guidance with respect to the requirements of Part L of Schedule 1 to the Building Regulations 2010 (conservation of fuel and power).”
Lord Teverson
My Lords, this continues a similar theme. I tabled an amendment in Committee to try to get more rigour into ensuring that the building regulations that we have are met and complied with. There is very little point in our legislating if those standards are not met in practice. I quoted the Government’s own adviser, the Committee on Climate Change, which stated that there seemed to be a big gap between what should be happening with the thermal efficiency of homes and what was actually happening. I was not completely reassured by that, but I accept that that is mainly a role of local government.
I am trying move on to address the fact that it often takes—and certainly has over recent years—a long time for a planning permission to become a built-out and lived-in development. We have the situation—I look on it as an anomaly or rather a loophole—whereby the building regulations to which builders must build relate to the date of the planning permission rather than when the development is constructed and completed. If that is only within a couple of years, it makes no difference whatever. We have, however, a number of developments—at certain times more than others—when that stretches over a considerable period. I realise that planning permissions themselves have a shelf life. After three years, if they have not been used, they go into abeyance. However, I remind noble Lords that under that system, as long as you do a certain amount of work—you do not have to complete it—that planning permission remains live. That is something that is done very regularly to make sure that planning permissions are not lost.
I was very impressed by the Minister’s figure of £200 that would potentially be saved per annum by the moving up of building regulations by the Government. Of course, that illustrates very well the extra cost to residents of houses that do not meet those standards—either because they have been exempted under the small development regime that we talked about in the previous amendment or because houses are being built under building regulations that are several years old.
It seems to me that this is something that needs to be fixed—for consumers and certainly for the government strategy on fuel poverty and zero-carbon homes. So I am putting forward an extremely modest proposal that is a longstop: if developments have not been completed within six years of gaining planning permission, at that point they must comply with the building regulations of that time rather than those when the planning permission took place. I have tried to make this amendment as clear as possible. I hope it says that. I very much hope that it is in line with government policy and that this is something of a loophole that we would like to close—particularly when we have periods when building and construction developments take a particularly long time.
Indeed, I would ask whether there is a temptation sometimes to get planning permissions early. Where we have land banks, it perhaps means that construction is delayed but it almost gives a benefit to developers to hang on to undeveloped land. I would like to see this very sensible measure used as an incentive for building, particularly of dwellings when we have such a national housing shortage, to be started and completed within a reasonable period. I beg to move.
Lord McKenzie of Luton
My Lords, we should be grateful to the noble Lord, Lord Teverson, for raising a very important and interesting point about developments that are not completed within six years of the granting of planning permission. As we have heard, it requires the development to be carried out in accordance with current building regulations relating to conservation of fuel and power. This is an attempt to address the very serious point that we have delays in the completion of developments, particularly housing. Given the housing crisis we face in this country, the objective should be to encourage sites with planning permission to be built out as soon as possible.
This is one of the issues that the Lyons report addressed for us. Although this is not the occasion for an extensive discourse on that report, one of the interesting points it makes is that some 80,000 unbuilt homes have planning permission from 2010 or earlier. Some of these will be built to 2006 standards, and so be eight or more years out of date. One of the issues that this amendment raises is how practical it is retrospectively to amend the applicable building regulations. There will obviously be issues around homes that are partially constructed at the cut-off point. Getting homes built earlier is good for obvious reasons, although, of course, it does not necessarily do anything to raise the standards of applicable building regulations.
I might resort to going back to the Lyons report. Obviously, not all these recommendations are yet, or will become, policy, but under the heading “Use it or lose it”, it suggests that,
“the life of a planning permission should be reduced to two years with higher fees applying for renewal of expired permissions”.
That would present an alternative mechanism whereby people have to go back and face updated building regulations. Certainly, more substantive work should be required to count as the commencement of development. That is a problem the noble Lord identified. The report also suggests that,
“councils should have powers to levy a charge equivalent to council tax if land allocated in a plan with or without permission is not brought forward within five years”.
Compulsory purchase powers could be strengthened and streamlined to make it easier for public bodies to acquire land where it is not brought forward and where it is a priority for development, so there are alternative ways to encourage developments to take place and perhaps to realign the nature of those developments with updated building regulations. The noble Lord has raised a very interesting point which I am sure will get a full response from the Minister. One hopes that something could actually flow from this.
Lord Ahmad of Wimbledon
My Lords, I thank my noble friend Lord Teverson for tabling this amendment. I also thank the noble Lord, Lord McKenzie, for his comments.
I should say at the outset that I share the sentiments expressed on the objective of ensuring that more homes are built, and built according to better standards and in line with standards. My noble friend’s proposed amendment sets a six-year time limit on a development being built to the energy performance requirements in building regulations in force at the time that planning permission was granted for the development.
I should start by pointing out that, as noble Lords may be aware, it is not the grant of planning permission that is the trigger for the application of building regulations’ requirements but the submission of a plans application or a building notice, or an initial notice to the building control body. During my time in local government, I remember many applications that were challenging in that regard. Therefore, we think that the amendment as drafted may lead to confusion about what happens under planning as opposed to what happens under building regulations.
However, setting to one side the issues that may arise from the drafting of the amendment, there are important practical considerations about how new building regulation requirements apply to developments already under way at the time that the new regulations are introduced. It can take a long time to plan, design, finance and build a development, as noble Lords know. It is therefore correct that the building regulation provisions in force when the building regulations application is made remain those with which the development must comply. To provide otherwise would lead to unreasonable disruption, perhaps delay, and increasing financial burdens as there would be uncertainty about construction standards and a risk of disruption to the supply chain part way through the development.
For example, large developments such as the famous “cheese grater” building in Leadenhall Street, London, will take many years to build and complete—often longer than six years. If accepted, this amendment would mean that the technical requirements of those developments would need to be changed part way through construction. Forcing a development to change from one set of building regulation requirements to another half way through a project would cause real problems for builders, as I am sure my noble friend would recognise.
However, in saying that, I put on record that I totally understand and appreciate my noble friend’s concern that developers may play the system by submitting a building regulations application and then doing nothing or delaying the development and not having to meet any more up-to-date requirements that may have been introduced in the mean time. From my experience, I have seen that happen, too. The Government have recognised this issue and so building regulations generally require that whenever any changes are made to building regulations, building work in respect of any applications made before the coming into force of the new requirements must commence at the latest within 12 months—otherwise, the new requirements will apply.
This requirement was introduced in 2006. Before then, as noble Lords will know, the time limit was three years. This time limit is set in the building regulations. This gives the opportunity to adjust the time limit in light of the circumstances when new regulations are introduced. If we were to rely on changes to primary legislation, we would then lose the flexibility to respond. If we stated the time limit at an inappropriate point, we could cause real problems for housebuilding, as I have already outlined. It will be for the Government dealing with building regulations changes for 2016 to consider what time limit may be appropriate. I am sure that they will read this debate very carefully to see the issues raised and the views expressed. I believe that my noble friend recognises that the amendment as it stands focuses only on one specific area of building regulations, the energy performance requirements. The time limit which I have just described applies in respect of any change to the standards in the building regulations. Therefore I am sure that my noble friend recognises that it may lead to confusion for developers if different time limits apply to energy performance requirements than to other requirements of building regulations.
The amendment from my noble friend, as the noble Lord, Lord McKenzie, has said, raises an important issue. However, as drafted, it would not work for the practical reasons that I have outlined. I hope that I have set out in some detail the time limit which already operates in building regulations to tackle the risks of developers who seek to just get regulations in place for the sake of it. There will be an opportunity in the consultation on the 2016 regulations for energy performance requirements to be looked at. I hope that, in the light of the assurances and clarifications that I have provided, my noble friend will be minded to withdraw his amendment.
Lord Teverson
My Lords, I thank the noble Lord, Lord McKenzie, for his support and his very good response to the concept that we are discussing. I look forward to the Labour Party developing that policy further. I particularly thank my noble friend the Minister for a very good and useful reply to my thoughts on this. I will read all that he has said very carefully. I bow to his knowledge of this area, which is much more excellent than my own, and which he has both through practical experience and through government. I hope that this might be the start of a further dialogue in this area—one which I will take an interest in, particularly regarding the use of that flexibility that is already there within the legislation. On that basis, I beg leave to withdraw the amendment.
Baroness Worthington
Baroness Worthington (Lab)
My Lords, I begin by apologising to noble Lords for the late tabling of this amendment. It was down to a misunderstanding as to when this group of amendments would be taken.
We now turn to Part 4 of the Bill, concerning energy, and to the community electricity right specifically. Although we discussed this in Committee, the purpose of tabling the amendment is to press the Government again on it. We were not satisfied with the response in Committee and we feel that this needs a considerable rethink in terms of how it is presented in the Bill. I also look forward to debating the amendments that we will come to later today.
The clause heading is “The community electricity right” but it quickly becomes clear from subsection (1) of the clause that this is about not electricity but a subset of electricity that is defined as renewable. That is the point we want to probe. We live in a world where energy markets and the energy system are changing and we are seeing a higher degree of decentralisation of energy, not just in renewable energy but also potentially in gas, both in terms of generation and the extraction of local sources of fossil fuels. Our main concern is that we should not single out a particular group of technologies for what is, in effect, an inflexible proposal from the Government when a much more holistic approach to the issue of community involvement in these projects is needed. There have been examples of local communities being unhappy with proposals for their localities, but there have been many more examples of communities embracing proposals and finding great benefit from the jobs and income that flow to those communities from development in their area.
Although we are fully supportive of the idea of community involvement, we are not necessarily persuaded that a single approach should be applied when considering how to engage communities or help them to benefit from development. The Government’s proposals are restrictive in that sense. Our main concern is that we do not make presumptions about what is going to work in every part of the country. In some parts of the country, rights to buy and ownership stakes will be the interesting issues; in other parts, there may be a simpler formula that enables people to have lower bills for electricity in their local area. We all know that a voluntary approach is being explored to try to identify the best way forward. We will come on to debate the need to allow for a good process and for enough time to come to conclusions before rushing into regulation.
This amendment is not about that but it tries to explore why it is necessary to qualify electricity generation with the word “renewable”. It is defined in law but covers a subset of all types of electricity generation that might attract community involvement and interest. We have seen under the capacity mechanism new development coming forward involving capacity market payments, such as in the small-scale, sub-20 megawatt gas generators that are bidding for 15-year contracts. They may well be located close to communities, which may feel that they would like to have a stake in those projects.
There is an issue here. We fully support more community involvement and better community integration in order to produce much more positive engagement with decentralised electricity production. However, I do not see why the Government have come forward at this time with a narrow proposal applying to a subset of technologies. What is the rationale for this provision relating only to renewables and not to a broader range of technologies that communities might be interested in being involved in or having a stake in? I beg to move.
Lord Jenkin of Roding (Con)
My Lords, I very much share the concern of the noble Baroness. I have an example that I raised at a meeting with the Minister. I am grateful for the trouble she has taken to allow us to engage with her and her officials. I made the point, as the noble Baroness, Lady Worthington, has done, that there are many other worthy forms of community involvement in energy.
The example that I gave at the time was the Plymouth Ovo Energy project—the Plymouth Energy Community, which even contains the word “community”. I was struck by the reply I received from one of the Minister’s officials. Both my noble friend and the official realised that perhaps I deserved a rather fuller reply. I am pleased to say that I received one in a letter from the official, written on the same day. Perhaps I may quote from it because it begins to give an explanation regarding the question that the noble Baroness has just asked. The letter states that there are,
“strong examples of ways in which the community energy sector is innovating, growing and maturing. However, I would say that they focus on different areas of community energy. The Community Electricity Right concentrates on new renewable electricity generation schemes and involves communities as investors”.
Never let us forget that we are talking about the statutory scheme, not the current voluntary arrangements. It is the statutory scheme that is in the Bill. The letter continues:
“On the other hand, Plymouth Energy Community mainly focuses on the supply of electricity from existing schemes and principally involves communities as energy consumers”.
My immediate reaction is: why is this so narrow? The letter goes on to explain:
“Energy supply and generation are dealt with quite differently within the regulatory and policy framework. As such, it would not be appropriate to include the Plymouth Energy Community directly within the scope of the Community Electricity Right”’
The letter then makes what is really the most important point:
“I would just like to add that DECC is taking separate measures to promote local supply. For example, we have formed a dedicated Local Supply Working Group formed of DECC officials, Ofgem, Academics, Local Authorities and community energy groups to explore the regulatory barriers limiting local supply. They will be reporting to the Secretary of State in March next year”.
As I said a moment ago, that goes some way to meet the concern that I expressed. However, I then have to go on and ask my noble friend the Minister this question. What other forms of community involvement are being considered? Here I refer to the task force’s report, which we had only on Monday. On another occasion I expressed my displeasure that it had all come so late, two days before we have to debate the whole subject. That report has a lot to say about various forms of community sharing. They are described in annex A of the report, although at this hour of the night I would not dream of reading it all out.
We must remember that we are at this stage, and the task force is concerned solely with the voluntary system. It had nothing to say—I suspect because it felt that it was outside its terms of reference—about the statutory power for which power is being taken in this Bill. The main point on this amendment is: what other forms are being considered? Yes, the letter is referring to the supply side. The noble Baroness asked about cheaper electricity. When winding up the debate in Committee, I referred to the McAlpine schemes and their proposals to offer cheaper electricity to communities within the reach of the particular scheme that was being developed. It is a very familiar concept in many other areas of the world—notably, nuclear power stations in France. They gained popular consent by being generous with the prices that they charged.
That leads me to my final point. There is no doubt that large parts of the renewable energy industry are dead against any form of statutory straitjacket being imposed on them. They would much rather continue with and demonstrate the success of the voluntary scheme with which they are engaging. I had a very strong statement from the Solar Trade Association. It says that the task force report is an interesting starting point but that,
“it must be given time to be put into practice”.
I think later on we shall say that we have won that argument—we have got more time. Secondly, it says that,
“Government and the community energy sector need to be flexible and proactive in supporting this and in establishing an evidence base”.
Thirdly, it says that,
“no evidence has been provided by the Government that the extensive yet unspecified powers within the proposed Bill are needed or will lead to increased investment”.
Similar points have been made by other parties that have been advising me.
Echoing the noble Baroness, one has to say: what other forms of community involvement are being considered? Will the Government recognise that what they have said is intended to be a backstop provision only if the voluntary system is seen not to be working? Is that still very much their approach on all this? There is no doubt that the provisions of the Bill have worried the industry.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, I thank the noble Baroness for tabling the amendment and my noble friend for his contribution.
The amendment seeks to extend the scope of the community electricity right provisions to include all electricity generation. I listened very carefully to what the noble Baroness said about also looking at different models. I hope I will be able to lay out clearly that what we are trying to do, in the first instance, is to take the positive step of focusing on community-shared ownership of renewables but our drive really is to increase that shared ownership as a positive step in enabling people to take some stakeholding in their local communities and to drive forward a voluntary approach, as has been worked through the Shared Ownership Taskforce.
We have made it very clear that we are not excluding other forms of energy; we are just saying that within the renewables sector we are concentrating on wind and solar, which are two mature sources and therefore it is easy to demonstrate their benefit to local communities. We are absolutely clear that this legislation should apply only to renewable electricity technologies. There are two key reasons for this.
The noble Baroness said that some communities embrace renewables and others do not. We want to bridge that disconnect between national and local benefits for renewable electricity schemes. What we have seen often is that nationally there is great support for the renewables sector but that is not always reflected when it becomes a local issue, where the impacts are felt directly by communities.
What we want to do through this legislation is to seek to redress the imbalance by ensuring that communities have the opportunity to get much more involved and can develop a real sense of ownership of local schemes being developed on their doorstep. This is about promoting decentralised energy generation that is happening in people’s homes and in local communities right across the country.
Renewable electricity generation, particularly from technologies such as wind and solar power, is now well established. This typically translates into lower risk profiles for community investors, which is an important safeguard. It is important to remember that shared ownership is still very much a developing concept in this country. The Shared Ownership Taskforce published its final framework on Monday, and I very much take on board the point my noble friend made that it came a little later than expected. The members of the taskforce have worked long and hard to develop a framework which both developers and local communities can work with. This has been a challenging task, even for the most established renewable technologies where there are successful case studies working on the ground.
To say simply that we need to extend the concept of shared ownership to all forms of electricity generation, without proper consideration of the inherent issues that each faces, therefore makes little sense to me when the voluntary approach on shared ownership to date has been solely developed for, and has focused on, those particular renewable sectors. It is right that, if these powers were ever exercised, we would expect them to focus specifically on established and mature renewable electricity generation technologies, such as solar and onshore wind.
I would like to reassure the noble Baroness again that this is the first step in increasing community shared ownership of renewables. If it is successful, there is nothing to stop us considering extending it to other technologies, because we want lessons to be learnt and to do the proper consultation that everybody would expect to take place when we extend this.
In responding to a couple of questions that were raised by my noble friend, we are encouraging local electricity discount schemes and recognise that they are a valuable initiative which we wholeheartedly support. However, we must remember and recognise that offering reduced-price electricity is giving a gift to the community, not providing the community with the chance to invest in schemes such as community electricity. There is a slight difference there, which we need to be able to recognise.
Lord Jenkin of Roding
A moment ago my noble friend said that there was absolutely nothing to prevent the scheme being extended to other forms of community involvement. However, the word “renewable” is in the first paragraph of the first clause of the part of the Bill which deals with energy. Will extending it to other forms require further primary legislation?
Baroness Verma
It would require proper consultation. We would have to go through the proper consultation processes to ensure that, having seen what has worked or not worked with these initial schemes, when going forward on including other schemes we are able to respond to the needs of those technologies. That is what local communities will ultimately have to face. It is not about primary legislation; it is about looking at how we would be able to add those new schemes through consultation. We have said very clearly that we are not stopping or excluding other provisions of electricity supply. We would have this opened up but we are starting with the focus on the renewable sector. I hope that I have been able to make that a little clearer to the noble Baroness. If I have not done so, I will repeat what I have already stated: these provisions would apply only to renewable electricity schemes. To clarify my noble friend’s point, we would have to readdress it in primary legislation.
Baroness Worthington
My Lords, there we have it. This does not feel to me like appropriate primary legislation. If we have the potential for bringing in new definitions of what these schemes apply to, perhaps we should put it in a schedule or in secondary legislation and have this slightly less draconian in order to give us that flexibility. The Minister has made it clear that this is quite a new thing; it is not tried and tested. I find it quite surprising that this is coming from an anti-regulation Government, and that we should be imposing this quite bizarre new set of regulations on an industry that is growing and developing and delivering great economic benefit to the regions. Yet here we are, imposing this ownership requirement from on high. Although it is obvious that the Government have consulted the industry, it is none the less really unhappy about this—that goes certainly for the solar industry. It does not see the right as something that will help it boost investment; rather, it sees it as an impediment to increasing investment. I am afraid that I am not persuaded.
On which technologies are mature, we have been using various forms of renewable electricity for many decades, including hydro, energy from waste and biomass, but these are excluded. The Government have chosen just two technology types, which happen to be, coincidentally, a little bit contentious politically, and have decided that they are going to impose this ownership right on them.
It is not appropriate to be rushing this measure through with primary legislation at this stage. I have not been persuaded that the definitions are clear. I suspect that this will be an issue that is returned to when this Bill passes to another place. However, at this stage, I do not feel inclined to divide the House, and I am happy to beg leave to withdraw the amendment.
Lord Jenkin of Roding
“( ) Before making regulations under—
(a) subsection (1)(a), the Secretary of State, or another person with the consent of the Secretary of State, must conduct a progress review of voluntary shared ownership and stakes offered to communities, and the Secretary of State or that person must set out the results and conclusions of the review in a report to Parliament.(b) subsection (1)(b), the Secretary of State, or another person with the consent of the Secretary of State, must appoint a panel of experts to review and advise on community stakes and engagement in offshore renewables, and the Secretary of State or that other person must set out the results and conclusions of the review in a report to Parliament.”
Lord Jenkin of Roding
My Lords, that was a very interesting and revealing debate, because we have not always kept clear in our minds the distinction between the innovating and expanding voluntary sector and what would inevitably have to be, on the basis of the Bill, a very rigid, defined and inflexible sector. One has to make it quite clear that we are dealing here with two different approaches to this whole problem. We have all agreed that community involvement is a very good thing; it is simply a question of how.
In the first of these three groups of amendments we have dealt with what is included, and we have had a very interesting answer on that. The second group, which we come to now, poses the question: how? How will the regulations be introduced? The third group, which we shall come to later and to which I think there will be a happier answer, concerns the “when?”.
The previous amendment considered the “what?”. In this group, we debate the whole question of the process and say straightaway that the Bill appears to have nothing whatever to say about any form of review of the developing experience of the voluntary approach. Happily, the task force’s report offers some valuable advice and comment on that. Indeed, in its chapter 5, it talks about implementation and monitoring, and devotes nearly a whole page to the review process. It makes it perfectly clear that in any development of this policy there must be proper reviews at regular intervals, and it suggests in the first place six months from the original report and thereafter annual reviews.
However, one question which is not answered to my satisfaction in the task force’s report is who should do the reviewing. It assumes that it will be itself; that it will be continued either in its current form or as a monitoring group which it would set up. I have had some very firm representations that, if there is to be a different group, it should be the department itself. The argument is put that the task force seems to be wholly committed to one form of participation; namely, shared ownership. I think that we have already established that there can be other forms of community participation which have the same value of promoting community support for a development and giving a community a feeling of involvement in what is going on in its area.
My first amendment in this group, Amendment 109, suggests that the reviews should be carried out either by,
“the Secretary of State, or another person with the consent of the Secretary of State”.
I must ask that, when Ministers publish their formal response to the task force’s report, they make two things absolutely clear. They should make clear, first, that there will be regular reviews of how the voluntary approach to community involvement is evolving and, secondly, who will conduct these reviews.
Lord Wigley (PC)
My Lords, I rise belatedly on the Bill and in today’s debate as well, as I have not had much opportunity since Second Reading to participate in debates relating to these matters. In the context of the amendments that have just been moved and spoken to, I want to put on record the considerable interest in community electricity and voluntary schemes that exists in Wales. I am glad that in speaking to his first two amendments the noble Lord, Lord Jenkin, referred to the need for consultation with Ministers in Wales, particularly on Amendment 110. Indeed, so much interest is there that some have raised the possibility of a Community Energy Wales being created to be somewhat similar to Community Energy Scotland, which already exists.
I plead with the Government that in any development of these schemes, the way in which they are reviewed and the initiatives that are taken centrally, the maximum possible flexibility should be given for initiatives to be encouraged in Wales. We have had a wide range of community efforts in Wales. I see the noble Lord, Lord Bourne, is in his place; he will be very much aware of that from his home area in Ceredigion. Very often, the energy of the people who can be brought together to get such schemes to move forward should be harnessed. I therefore hope that the maximum freedom can be allowed for those in Wales involved in this—at National Assembly level and at community level—and that this will be taken on board in looking at the review procedures for these purposes.
Baroness Worthington
My Lords, it is very late and I do not wish to detain the House. However, I want to add my strong support for the amendments tabled by the noble Lord, Lord Jenkin of Roding. They seem very sensible. I am absolutely convinced that we need to ensure that there is a proper consultation process. It is absolutely right that we should be stipulating that this should not have a retrospective element. I hope that the Minister will be able to put our minds at ease by at least helping us to understand that this should not apply retrospectively. I have looked carefully at the schedule, but it does not seem to be explicit there and it needs to be clear. Should there be any doubt over that, it would set a difficult and unwelcome precedent so we are supportive and we look forward to the response.
Baroness Verma
My Lords, I thank my noble friend for tabling these amendments. The first part of Amendment 109 seeks to include a requirement on government to conduct a progress review of the voluntary approach and report the findings to Parliament before regulations may be made in respect of onshore facilities. The second part seeks to require government to appoint a panel of experts to review, advise and report on community stakes in relation to offshore renewables before regulations may be made in respect of offshore facilities.
To start with the first element of the amendment, as I mentioned in an earlier discussion, the Shared Ownership Taskforce published its final framework on Monday. I appreciate that there has not been much time to consider it, so I will set out today the relevant commitments that the taskforce has made in relation to reviewing and reporting progress. In doing so, I hope to demonstrate that there is already a clear process in place for reviewing and reporting. As such, there is no need to include these additional requirements in the Bill, as my noble friend proposes.
The taskforce intends to set up a monitoring group to ensure that progress is evaluated and reported. It proposes six-month and 12-month reviews and will report its findings to my department. As set out in the Community Energy Strategy, the Government will conduct a review of progress next year. The findings from the taskforce’s progress reviews will be critical to this. The Government wholeheartedly support the work of the taskforce. We will be formally responding to its report early in the new year. In it, we intend to endorse its monitoring and reporting process and confirm that this process will feed into the Government’s review next year. Both the Shared Ownership Taskforce and the Government will be monitoring and evaluating the success of the voluntary approach prior to backstop powers coming into force in line with the Government’s Amendment 129, which we will debate a little later.
Turning to the second part of the amendment on offshore renewables, our focus now is on increasing community shared ownership for established onshore technologies such as onshore wind and solar. These are the technologies covered by the Shared Ownership Taskforce’s voluntary framework. Having said that, the community electricity right powers provide future flexibility to include offshore technologies, but we have been very clear from the start that this would be on a longer timescale. This is not to say that we would not encourage offshore developers to offer a stake to communities where they choose.
The suggestion that my noble friend Lord Jenkin makes in Amendment 109 is sensible. If the Government were ever to consider exercising these powers for offshore renewables, I agree it would make sense to set up a panel of independent experts to provide advice on offshore renewables in advance. This would be a similar approach to the one we have taken for onshore renewables with the Shared Ownership Taskforce, which is comprised of experts from the renewables industry and the community energy sector. However, at this stage our focus is firmly on onshore renewables. It is not our intention to establish a voluntary process for offshore renewables right now. As such it would be premature to commit to this and to restrict ourselves at this point to the wording that my noble friend has proposed. We should therefore wait and consider the option of a panel of offshore experts when we have a clearer position on whether this is needed, and if so, what any panel might look like and report on.
Amendment 110 seeks to introduce an obligation on the Government to consult a range of interested parties in advance of exercising the community electricity right provisions and developing any secondary legislation. I completely agree that consultation is essential to ensure that the Government hear the views of all relevant stakeholders and take them into account before deciding the best course of action. These views will also be critical to the formation of secondary legislation that is fit for purpose and can be implemented successfully. However, I do not believe the amendment is necessary. In Grand Committee I made it clear that the Government intend to conduct a formal consultation before exercising the powers. That position has not changed. The consultation would be open to everyone, including the parties listed by my noble friend in Amendment 110, such as community groups, developers, the Scottish and Welsh Governments and Ofgem. My noble friend’s amendment includes some of the very organisations and bodies that we would expect and encourage to contribute to a public consultation given their clear interest, knowledge and understanding of this area.
I will provide a single response to Amendments 111 and 112 as they are inextricably related. I recognise that this is an extremely important aspect of the provisions, particularly in terms of providing future certainty to the renewables industry. The community electricity right provisions would apply to new renewable electricity projects coming forward in the development process. I confirm that the provisions would therefore not apply retrospectively nor to projects that have already received planning consent. The Government have always been clear that this is our policy intent. For example, the Explanatory Notes to Clause 28(5) explain that this provision ensures that the regulations would not apply retroactively and would apply only to facilities that have not, at that date, reached a specified point of development.
While I am keen to provide these reassurances in the House, it would not be right for me to commit to include in primary legislation a qualification that the regulations may not apply to projects that have applied for, but not yet received, planning consent. That may be an appropriate approach to take, but as I am sure my noble friend will understand, the Government would wish to consult on this matter before making a final decision. In doing so we would look closely at the experiences of successful shared ownership schemes including lessons learnt from the voluntary approach. In conclusion, I hope that I have provided noble Lords with enough reassurance about the Government’s position on these matters and, on this basis, I hope my noble friend Lord Jenkin will withdraw his amendment.
Lord Jenkin of Roding
My Lords, I was grateful for the support of the noble Baroness, Lady Worthington; I hope that she will share my view that we have got almost all that we want. The amendment has not been agreed, but my noble friend on the Front Bench has gone as far as one could possibly expect to say, “Without actually accepting your amendments, we are going to do pretty well everything in them”. It will be for the other place to decide whether that is sufficient or whether it would like to see these included in the Bill. As I explained at the end of my speech, that was the purpose of moving the amendments on Report. Having said that, I thank the Minister for what she said and take much pleasure in begging leave to withdraw the amendment.
Lord Jenkin of Roding
“( ) Sections 27 and 28 and Schedule 5 come into force at the end of the period of two years beginning with the day on which this Act is passed.”
Lord Jenkin of Roding
My Lords, we can deal with this much more briefly. My amendments in this group address when regulations might be introduced. From Second Reading onwards, I was asking for two years. The government amendment has now suggested what is, in effect, 18 months. I have already given a message to the Minister through her department that I am extremely pleased with that. I feel that the argument has been worth while. We now have time to make sure that the reviews really can be reviews of the way in which the voluntary system is working, without the immediate threat of legislation.
The Government have made it clear that this is a backstop power. Sometimes I get the impression from the way in which Ministers speak that they regard the introduction of regulations as inevitable. I certainly do not. The industry certainly hopes not. It hopes that it can satisfy the Government that progress is being properly made, that it can be extended much more flexibly through the voluntary system and that regulations may in fact be unnecessary. Therefore, when Ministers refer to introducing regulations, they should always say “if necessary”, not “automatically”.
I thank my noble friend again, who has brought a substantial concession in answer to the question of when. I beg to move.
Baroness Worthington
My Lords, briefly, I again support the noble Lord’s amendment and welcome the government amendment which will indeed delay the “when” aspect of this question. There remain considerable questions about why these provisions have been brought forward, given that the voluntary approach is moving forward. I still think that we are unfairly singling out two technologies relative to other forms of electricity generation. However, I am happy that we now have more time to think. I absolutely echo the words of the noble Lord, Lord Jenkin, that this should be seen as a backstop power, which we hope should not need to be enforced.
Baroness Verma
My Lords, I am grateful to my noble friend and the noble Baroness for their contributions. We listened carefully to my noble friend in Committee and I have very much taken on board all the views that were expressed on that matter, including those of my noble friend, industry stakeholders and the Shared Ownership Taskforce. I am pleased, in response, to bring forward government Amendment 129 which revises the date of commencement of these provisions to 1 June 2016. That ensures absolute clarity on the minimum amount of time the Government intend to allow for the voluntary approach to take effect. It means that the Government could not exercise these powers before 1 June 2016 at the very earliest. This date allows just over 18 months from the date on which the Shared Ownership Taskforce published its voluntary framework, earlier this week, to when the powers may be exercised. I hope that by bringing forward this amendment I shall allow my noble friend to go home feeling satisfied with his input, which—as much as is possible—is always my intention.
Lord Jenkin of Roding
I am grateful for my noble friend’s graciousness. She has gone a long way to meet us but, as has been indicated in the original amendment tabled by the noble Baroness, Lady Worthington, I think there is a lot more exploration that will need to be done in the other place. In the mean time, I beg leave to withdraw.