House of Commons

Wednesday 5th November 2014 Commons Chamber

Wednesday 5 November 2014

The House met at half-past Eleven o’clock

Prayers

Wednesday 5th November 2014 Commons Chamber

[Mr Speaker in the Chair]

Business Before questions

Committee of Selection

Ordered,

That Jenny Willott be discharged from the Committee of Selection and Tom Brake be a member of the Committee until the end of the current Session.—(Greg Hands, on behalf of the Committee of Selection.)

Oral Answers to Questions

Wednesday 5th November 2014 Commons Chamber

The Secretary of State was asked—

[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.

[Mr Swayne]

I hope that I will be able to give the right hon. Gentleman that assurance. Perhaps he would like to meet me to discuss the work of that non-governmental organisation.

[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?

[Mr Swayne]

We will continue to work with the Halo Trust to dispose of that ordnance. Equally, we have an ongoing commitment to Afghanistan and to providing aid to deal with the problems that my right hon. Friend has mentioned.

[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?

[Mr Swayne]

We have so far succeeded in ensuring that that goal will be included on the post-2015 agenda—I think it is remiss that it does not already exist as part of the development goals—and we are determined to keep it there as the discussions proceed.

[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 Swayne]

It does indeed.

[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?

[Mr Swayne]

I agree with the hon. Gentleman, and we are straining to do that. Principally, Tunisia is very close to Libya, and that presents a significant difficulty.

[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.

The Prime Minister was asked—

[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?

[Hon. Members]

Answer.

[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.

[Mr Bradshaw]

indicated dissent.

[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

Wednesday 5th November 2014 Commons Chamber

Charlie Elphicke (Dover) (Con)

- Hansard - - Excerpts

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)

Wednesday 5th November 2014 Commons Chamber

12:35

[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.

[Several hon. Members]

rose—

[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

Wednesday 5th November 2014 Commons Chamber

13:15

[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.

[Chris Bryant]

Good. Well done.

[Mr Speaker]

I am always grateful for the approbation of the hon. Gentleman.

Armed Forces (Prevention of Discrimination)

Wednesday 5th November 2014 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

13:18

[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.

13:25

[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

Wednesday 5th November 2014 Commons Chamber

[9th Allotted Day]

Income Tax

Wednesday 5th November 2014 Commons Chamber

13:33

[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.

[Mr Jeremy Browne (Taunton Deane) (LD)]

Quite right.

[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.

[Paul Uppal]

rose—

[Frank Dobson (Holborn and St Pancras) (Lab)]

rose—

[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.

[The Financial Secretary to the Treasury (Mr David Gauke)]

rose—

[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.

[Mr Gauke]

I want to be clear about what the hon. Gentleman has just said. He is normally very careful in his wording, but I think that he has just been a little careless. Is he saying that he believes that returning to the 50p rate would raise £3 billion for the Exchequer?

[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.”

[Several hon. Members]

rose—

[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.

[Several hon. Members]

rose—

[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.

[Mr Browne]

Will the hon. Gentleman give way on that point?

[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.

14:02

[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.

[Geraint Davies]

rose—

[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]

The hon. Gentleman got a very straight, and very straightforward, answer from the Chancellor yesterday—by reduced public spending.

[Chris Leslie]

rose—

[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.

[Several hon. Members]

rose—

[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.

14:23

[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—

[Mr Jeremy Browne]

There are more women in work.

[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.

14:30

[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.

14:43

[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.

[Andrew Bridgen]

rose—

[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.

[Mr Jeremy Browne]

Will the hon. Gentleman give way?

[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.

14:55

[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.

[Frank Dobson]

Will the right hon. Gentleman give way?

[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.

14:59

[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—

[Mr Jeremy Browne]

Will the hon. Lady give way?

[Rushanara Ali]

I think the hon. Gentleman has had plenty to say already. I am going to continue, because the time limit—

[Mr Browne]

rose—

[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?

[Ian Swales (Redcar) (LD)]

Will the hon. Lady give way?

[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.

15:11

[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.

15:19

[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.

15:27

[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.

15:30

[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—

[Mark Garnier]

Will the right hon. Gentleman give way?

[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?

[Frank Dobson]

Yes, I give way to my hon. Friend.

[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.

15:39

[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]

I do not understand why so many Members of Parliament have such an antagonistic attitude towards people who start up businesses, create wealth and employ people.

[Mr MacNeil]

Will the hon. Gentleman give way?

[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 MacNeil]

rose—

[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.

[Mr Browne]

I am grateful, Madam Deputy Speaker, but I do not really understand in what way it was inaccurate to say that was misleading, because it clearly was misleading.

[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.

[Mr Browne]

I am extremely apologetic for implying that somebody who earns £160,000 a year is not a millionaire if they have only just started earning that amount, and—

[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.

15:54

[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.

16:03

[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.

16:10

Division 73

Ayes: 248

---

Labour: 224
Scottish National Party: 6
Democratic Unionist Party: 3
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 1
Green Party: 1

Noes: 287

---

Conservative: 249
Liberal Democrat: 37

Local Bus Services

Wednesday 5th November 2014 Commons Chamber

16:24

[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.

[Martin Horwood]

rose—

[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.

[Iain Stewart (Milton Keynes South) (Con)]

It was a Conservative council.

[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.

[Stuart Andrew (Pudsey) (Con)]

Was it a cross-party summit?

[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.

[Mr Marcus Jones (Nuneaton) (Con)]

Will the hon. Lady give way?

[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.

[Mr Jones]

Will the hon. Lady give way?

[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.

16:54

[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.

[Chi Onwurah]

rose—

[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]

rose—

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

rose—

[Andrew Gwynne]

rose—

[Mr McLoughlin]

I have three choices. I will go to Chesterfield first.

[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.

17:19

[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.

17:30

[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.

[Luciana Berger]

rose—

[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.

[Several hon. Members]

rose—

[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.

17:42

[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.

17:48

[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.

17:54

[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.

18:01

[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.

18:07

[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.

18:16

[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.

18:22

[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.

18:30

[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.

18:35

[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.

18:40

[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.

[Luciana Berger]

Will my hon. Friend give way?

[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.

18:50

[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.

19:00

Division 74

Ayes: 208

---

Labour: 201
Democratic Unionist Party: 3
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Green Party: 1

Noes: 278

---

Conservative: 239
Liberal Democrat: 38

[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

Wednesday 5th November 2014 Commons Chamber

19:13

[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

Wednesday 5th November 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mark Lancaster.)

19:15

[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.

19:30

[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.

19:42

House adjourned.

Westminster Hall

Wednesday 5th November 2014 Westminster Hall

Wednesday 5 November 2014

[John Robertson in the Chair]

Care Workers

Wednesday 5th November 2014 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(John Penrose.)

09:30

[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.

[Several hon. Members]

rose—

[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.

09:39

[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.

[Mr David Anderson (Blaydon) (Lab)]

Will the right hon. Gentleman give way?

[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.

[Several hon. Members]

rose—

[John Robertson (in the Chair)]

Order. If Members could keep their contribution to eight minutes, that would be very helpful.

10:00

[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.

10:07

[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.

10:15

[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.

10:23

[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.

10:29

[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.

[John Robertson (in the Chair)]

I thank hon. Members for their use of time.

10:36

[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.

10:48

[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)

Wednesday 5th November 2014 Westminster Hall

11:00

[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?

11:09

[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.

11:24

Sitting suspended.

Dairy Industry

Wednesday 5th November 2014 Westminster Hall

[Mrs Linda Riordan in the Chair]

14:30

[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.

[Tessa Munt (Wells) (LD)]

Will my hon. Friend give way?

[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.

[Several hon. Members]

rose—

[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.

14:53

[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.

15:01

[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.

15:07

[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.

15:12

[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.

[Several hon. Members]

rose—

[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.

15:19

[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.

15:24

[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.

15:19

[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.

[Several hon. Members]

rose—

[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.

15:31

[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.

15:35

[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.

15:38

[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.

[Mrs Linda Riordan (in the Chair)]

Mr Drax, would you like 45 seconds?

15:39

[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—

[Mrs Linda Riordan (in the Chair)]

Order.

15:39

[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.

[Roger Williams]

Will the hon. Lady give way?

[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.

15:50

[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)

Wednesday 5th November 2014 Westminster Hall

14:00

[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 (Wansbeck) (Lab)]

Will the hon. Lady give way?

[Mrs Main]

Very briefly, as I have a large list to get through.

[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—

16:10

Sitting suspended for a Division in the House.

16:10

On resuming—

[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.

16:34

[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—

[Mrs Linda Riordan (in the Chair)]

Order.

Transient Ischaemic Attacks

Wednesday 5th November 2014 Westminster Hall

16:29

[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.

16:52

[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.

17:04

Sitting adjourned.

Written Statement

Wednesday 5th November 2014 Written Statements

Wednesday 5 November 2014

Intellectual Property Office (Innovation and Growth)

Wednesday 5th November 2014 Written Statements

[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.